<PAGE> 1
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 Exchange Act of 1934
Date of Report (Date of earliest event reported): October 29, 1998
FITZGERALDS GAMING CORPORATION
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(Exact name of registrant as specified in its charter)
NEVADA
---------------------------------------------
(State or other jurisdiction of incorporation)
0-26518 88-0329170
------------------------ ---------------------------------
(Commission File Number) (IRS Employer Identification No.)
301 FREMONT STREET, LAS VEGAS, NEVADA 89101
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(Address of principal executive offices) (Zip code)
(Registrant's telephone number, including area code): (702) 388-2400
NA
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(Former name or former address, if changed since last report)
Page 1 of 4
Exhibit Index at Page 4
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ITEM 5. OTHER EVENTS.
SECURED CREDIT FACILITY
On October 29, 1998, Fitzgeralds Gaming Corporation (the "Company")
obtained a $15,000,000 secured credit facility (the "Credit Facility") from
Foothill Capital Corporation ("Foothill"). The Credit Facility was obtained
pursuant to a Loan and Security Agreement, dated as of October 29, 1998 (the
"Loan Agreement"), between the Company and Foothill. The Company's obligations
under the Loan Agreement were unconditionally guaranteed (the "Subsidiary
Guarantees"), jointly and severally, by Fitzgeralds South, Inc., Fitzgeralds
Reno, Inc., Fitzgeralds Incorporated, Fitzgeralds Mississippi, Inc.,
Fitzgeralds Las Vegas, Inc., Fitzgeralds Fremont Experience Corporation,
Fitzgeralds Black Hawk, Inc., Fitzgeralds Black Hawk II, Inc. and 101 Main
Street Limited Company (the "Subsidiary Guarantors"). The Company's obligations
under the Loan Agreement and the Subsidiary Guarantors' obligations under the
Subsidiary Guarantees, respectively, were secured, subject to certain
exceptions, by a first priority security interest in substantially all of the
assets of the Company and the Subsidiary Guarantors, which security interest is
senior to the security interest securing the Company's $205,000,000 aggregate
principal amount of 12 1/4% Senior Secured Notes due 2004 issued December 1997.
The Loan Agreement provides that the Company may use the Credit Facility for,
among other things, general corporate purposes.
-2-
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: December 4, 1998 FITZGERALDS GAMING CORPORATION
(Registrant)
By: /s/ MICHAEL E. McPHERSON
--------------------------------------
Michael E. McPherson
Senior Vice President, Chief Financial
Officer, Treasurer and Secretary
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
10.1 Loan and Security Agreement dated as of October 29, 1998, by
and between the Company and Foothill Capital Corporation.
10.2 Intercreditor Agreement dated as of October 29, 1998, by and
between The Bank of New York and Foothill Capital Corporation.
10.3 Stock Pledge Agreement dated as of October 29, 1998, by and
between the Company and Foothill Capital Corporation.
10.4 General Continuing Guaranty dated as of October 29, 1998, by
and among certain Subsidiaries of the Company in favor of
Foothill Capital Corporation.
10.5 Pledge Agreement dated as of October 29, 1998, by and among
the Subsidiaries of the Company party to the General
Guaranty and Foothill Capital Corporation.
10.6 Security Agreement dated as of October 29, 1998, by and
among the Subsidiaries of the Company party to the General
Continuing Guaranty and Foothill Capital Corporation.
10.7 Trademark Security Agreement dated as of October 29, 1998,
by and among the Company, the Subsidiaries of the Company
party to the General Continuing Guaranty and Foothill Capital
Corporation.
10.8 Copyright Security Agreement dated as of October 29, 1998,
by and among the Company, the Subsidiaries of the Company
party to the General Continuing Guaranty and Foothill Capital
Corporation.
10.9 Environmental Indemnity as of October 29, 1998, by the
Company and the Subsidiaries of the Company party to the
General Continuing Guaranty in favor of Foothill Capital
Corporation.
10.10 Deed of Trust, Security Agreement and Fixture Filing with
Assignment of Rents, dated as of October 29, 1998
(Fitzgeralds Las Vegas).
10.11 Deed of Trust, Security Agreement and Fixture Filing with
Assignment of Rents, dated as of October 29, 1998
(Fitzgeralds Reno).
10.12 Deed of Trust, Security Agreement and Fixture Filing with
Financing Statement and Assignment of Rents, dated as of
October 29, 1998 (101 Main Street).
10.13 Deed of Trust, Security Agreement and Fixture Filing with
Assignment of Rents, dated as of October 29, 1998
(Fitzgeralds Mississippi).
10.14 First Preferred Vessel Mortgage on the Whole of the
Fitzgeralds Tunica, dated as of October 29, 1998
(Fitzgeralds Mississippi).
10.15 Subordination Agreement dated as of October 29, 1998, by
and among the Company, the Subsidiaries of the Company
party to the General Continuing Guaranty and Foothill
Capital Corporation.
</TABLE>
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EXHIBIT 10.1
================================================================================
LOAN AND SECURITY AGREEMENT
BY AND BETWEEN
FITZGERALDS GAMING CORPORATION
AND
FOOTHILL CAPITAL CORPORATION
DATED AS OF OCTOBER 29, 1998
================================================================================
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page(s)
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<S> <C>
1. DEFINITIONS AND CONSTRUCTION...........................................1
1.1 Definitions......................................................1
1.2 ACCOUNTING TERMS................................................19
1.3 CODE............................................................19
1.4 CONSTRUCTION....................................................19
1.5 SCHEDULES AND EXHIBITS..........................................20
1.6 OBLIGORS........................................................20
2. LOAN AND TERMS OF PAYMENT.............................................20
2.1 REVOLVING ADVANCES..............................................20
2.2 LETTERS OF CREDIT...............................................21
2.3 [INTENTIONALLY OMITTED].........................................23
2.4 CAPITAL EXPENDITURE LINE........................................23
2.5 OVERADVANCES....................................................24
2.6 INTEREST AND LETTER OF CREDIT FEES: RATES, PAYMENTS, AND
CALCULATIONS....................................................24
2.7 [INTENTIONALLY OMITTED].........................................25
2.8 CREDITING PAYMENTS; APPLICATION OF COLLECTIONS..................25
2.9 DESIGNATED ACCOUNT..............................................26
2.10 MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF OBLIGATIONS..........26
2.11 FEES............................................................26
3. CONDITIONS; TERM OF AGREEMENT.........................................27
3.1 CONDITIONS PRECEDENT TO THE INITIAL ADVANCE, LETTER
OF CREDIT, OR CAPITAL EXPENDITURE LOAN..........................27
3.2 CONDITIONS PRECEDENT TO ALL ADVANCES, ALL LETTERS OF
CREDIT, AND ALL CAPITAL EXPENDITURE LOANS.......................29
3.3 CONDITIONS SUBSEQUENT...........................................30
3.4 TERM; AUTOMATIC RENEWAL.........................................30
3.5 EFFECT OF TERMINATION...........................................31
3.6 EARLY TERMINATION BY BORROWER...................................31
3.7 TERMINATION UPON EVENT OF DEFAULT...............................32
4. CREATION OF SECURITY INTEREST.........................................32
4.1 GRANT OF SECURITY INTEREST......................................32
4.2 NEGOTIABLE COLLATERAL...........................................32
4.3 COLLECTION OF ACCOUNTS, GENERAL INTANGIBLES, AND NEGOTIABLE
COLLATERAL......................................................33
4.4 DELIVERY OF ADDITIONAL DOCUMENTATION REQUIRED...................33
4.5 POWER OF ATTORNEY...............................................33
4.6 RIGHT TO INSPECT................................................34
5. REPRESENTATIONS AND WARRANTIES........................................34
5.1 NO ENCUMBRANCES.................................................34
5.2 [INTENTIONALLY OMITTED].........................................34
5.3 [INTENTIONALLY OMITTED].........................................34
5.4 PP&E............................................................34
5.5 LOCATION OF INVENTORY AND EQUIPMENT.............................34
5.6 [INTENTIONALLY OMITTED].........................................35
</TABLE>
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Table of Contents (continued)
<TABLE>
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Page(s)
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5.7 LOCATION OF CHIEF EXECUTIVE OFFICE; FEIN........................35
5.8 DUE ORGANIZATION AND QUALIFICATION; SUBSIDIARIES................35
5.9 DUE AUTHORIZATION; NO CONFLICT..................................35
5.10 LITIGATION......................................................37
5.11 NO MATERIAL ADVERSE CHANGE......................................37
5.12 [INTENTIONALLY OMITTED].........................................37
5.13 EMPLOYEE BENEFITS...............................................37
5.14 ENVIRONMENTAL CONDITION.........................................38
5.15 BROKERAGE FEES..................................................38
5.16 KEY LEASES......................................................38
5.17 GOVERNMENTAL AUTHORITY..........................................38
5.18 YEAR 2000 COMPLIANCE............................................39
5.19 LICENSES AND PERMITS............................................39
6. AFFIRMATIVE COVENANTS.................................................39
6.1 ACCOUNTING SYSTEM...............................................40
6.2 REPORTING.......................................................40
6.3 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES.....................40
6.4 TAX RETURNS.....................................................41
6.5 GUARANTOR REPORTS...............................................42
6.6 [INTENTIONALLY OMITTED].........................................42
6.7 [INTENTIONALLY OMITTED].........................................42
6.8 MAINTENANCE OF EQUIPMENT........................................42
6.9 TAXES...........................................................42
6.10 INSURANCE.......................................................43
6.11 NO SETOFFS OR COUNTERCLAIMS.....................................45
6.12 LOCATION OF INVENTORY AND EQUIPMENT.............................45
6.13 COMPLIANCE WITH LAWS............................................45
6.14 EMPLOYEE BENEFITS...............................................45
6.15 LEASES..........................................................46
6.16 BROKERAGE COMMISSIONS...........................................46
6.17 GOVERNMENT AUTHORIZATION........................................46
6.18 LICENSE RENEWALS................................................46
6.19 YEAR 2000 COMPLIANCE............................................47
6.20 LICENSES AND PERMITS............................................47
7. NEGATIVE COVENANTS....................................................47
7.1 INDEBTEDNESS....................................................47
7.2 LIENS...........................................................49
7.3 RESTRICTIONS ON FUNDAMENTAL CHANGES.............................49
7.4 DISPOSAL OF ASSETS..............................................49
7.5 CHANGE NAME.....................................................49
7.6 GUARANTEE.......................................................49
7.7 NATURE OF BUSINESS..............................................49
7.8 PREPAYMENTS AND AMENDMENTS......................................49
7.9 CHANGE OF CONTROL...............................................50
7.10 CONSIGNMENTS....................................................50
7.11 DISTRIBUTIONS...................................................50
</TABLE>
ii.
<PAGE> 4
Table of Contents (continued)
<TABLE>
<CAPTION>
Page(s)
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<S> <C>
7.12 ACCOUNTING METHODS..............................................50
7.13 INVESTMENTS.....................................................50
7.14 TRANSACTIONS WITH AFFILIATES....................................51
7.15 SUSPENSION......................................................51
7.16 COMPENSATION....................................................51
7.17 USE OF PROCEEDS.................................................51
7.18 CHANGE IN LOCATION OF CHIEF EXECUTIVE OFFICE; INVENTORY AND
EQUIPMENT WITH BAILEES..........................................51
7.19 NO PROHIBITED TRANSACTIONS UNDER ERISA..........................51
7.20 FINANCIAL COVENANT..............................................52
7.21 CAPITAL EXPENDITURES............................................53
8. EVENTS OF DEFAULT.....................................................53
9. FOOTHILL'S RIGHTS AND REMEDIES........................................56
9.1 RIGHTS AND REMEDIES.............................................56
9.2 REMEDIES CUMULATIVE.............................................59
10. TAXES AND EXPENSES....................................................59
11. WAIVERS; INDEMNIFICATION..............................................60
11.1 DEMAND; PROTEST; ETC............................................60
11.2 FOOTHILL'S LIABILITY FOR COLLATERAL.............................60
11.3 INDEMNIFICATION.................................................60
12. NOTICES...............................................................61
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER............................62
14. DESTRUCTION OF BORROWER'S DOCUMENTS...................................62
15. GENERAL PROVISIONS....................................................63
15.1 EFFECTIVENESS...................................................63
15.2 SUCCESSORS AND ASSIGNS..........................................63
15.3 SECTION HEADINGS................................................63
15.4 INTERPRETATION..................................................63
15.5 SEVERABILITY OF PROVISIONS......................................63
15.6 AMENDMENTS IN WRITING...........................................64
15.7 COUNTERPARTS; TELEFACSIMILE EXECUTION...........................64
15.8 REVIVAL AND REINSTATEMENT OF OBLIGATIONS........................64
15.9 INTEGRATION.....................................................64
</TABLE>
iii.
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SCHEDULES AND EXHIBITS
<TABLE>
<S> <C>
Schedule B-1 Black Hawk Project Phase 1
Schedule B-2 Black Hawk Project Phase 2
Schedule P-1 Permitted Liens
Schedule R-1 Real Property Collateral
Schedule S-1 Settlement Property
Schedule 5.7 FEINs
Schedule 5.8 Subsidiaries
Schedule 5.10 Litigation
Schedule 5.13 ERISA Benefit Plans
Schedule 5.14 Environmental Condition
Schedule 5.16 Key Leases
Schedule 5.17 Governmental Authority
Schedule 5.19 Licenses
Schedule 6.12 Location of Inventory and Equipment
Schedule 7.1 Permitted Indebtedness
Exhibit C-1 Form of Compliance Certificate
Exhibit I-1 Form of Intercreditor Agreement
</TABLE>
iv.
<PAGE> 6
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (THIS "AGREEMENT"), is entered into
as of October 29, 1998, between FOOTHILL CAPITAL CORPORATION, a California
corporation ("Foothill"), with a place of business located at 11111 Santa Monica
Boulevard, Suite 1500, Los Angeles, California 90025-3333 and FITZGERALDS GAMING
CORPORATION, a Nevada corporation ("Borrower"), with its chief executive office
located at 301 Fremont Street, Las Vegas, Nevada 89101.
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 Definitions. As used in this Agreement, the following terms
shall have the following definitions:
"Account Debtor" means any Person who is or who may become
obligated under, with respect to, or on account of, an Account.
"Accounts" means all currently existing and hereafter arising
accounts, contract rights, and all other forms of obligations owing to an
Obligor arising out of the sale, license, or lease of goods or General
Intangibles or the rendition of services by an Obligor, irrespective of whether
earned by performance, and any and all credit insurance, guaranties, or security
therefor.
"Advances" has the meaning set forth in Section 2.1(a).
"Affiliate" means, as applied to any Person, any other Person
who, directly or indirectly, controls, is controlled by, is under common control
with, or is a director or officer of such Person. For purposes of this
definition, "control" means the possession, directly or indirectly, of the power
to vote 10% or more of the Stock having ordinary voting power for the election
of directors (or comparable managers) or the direct or indirect power to direct
the management and policies of a Person.
"Agreement" has the meaning set forth in the preamble
hereto.
"Amortization Trigger Month" means the earlier to occur of (a)
the 13th month following the Closing Date, and (b) the first month following the
date of substantial completion of Black Hawk Project Phase 1.
"Applicable Amount" means, as of any date of determination:
(a) during the period from and after the Closing Date and up to and including
the second anniversary of the Closing Date, $15,000,000; and (b) thereafter, the
Maximum Revolving Amount.
"Authorized Person" means any officer or other employee of
Borrower.
1.
<PAGE> 7
"Average Unused Portion of Applicable Amount" means, as of any
date of determination, (a) the Applicable Amount, less (b) the sum of (i) the
average Daily Balance of Advances that were outstanding during the immediately
preceding month, plus (ii) the average Daily Balance of the Letter of Credit
Usage during the immediately preceding month.
"Bankruptcy Code" means the United States Bankruptcy Code
(11 U.S.C. Section 101 et seq.), as amended, and any successor statute.
"Benefit Plan" means a "defined benefit plan" (as defined in
Section 3(35) of ERISA) for which Borrower, any Subsidiary of Borrower, or any
ERISA Affiliate has been an "employer" (as defined in Section 3(5) of ERISA)
within the past six years.
"Black Hawk Project Phase 1" has the meaning set forth in
Schedule B-1. [this schedule should describe the initial buildout of the casino,
the expansion of the parking garage, and the construction of new administrative
offices and employee facilities at the Fitzgeralds Black Hawk Facility][please
provide the required information]
"Black Hawk Project Phase 2" has the meaning set forth in
Schedule B-2. [this schedule should describe the construction of a hotel and the
secondary expansion the casino at the Fitzgeralds Black Hawk Facility][please
provide the required information]
"Books" means all of the Obligors' books and records
including: ledgers; records indicating, summarizing, or evidencing the Obligors'
properties or assets (including the Collateral) or liabilities; all information
relating to the Obligors' business operations or financial condition; and all
computer programs, disk or tape files, printouts, runs, or other computer
prepared information.
"Borrower" has the meaning set forth in the preamble to
this Agreement.
"Borrower Collateral" means all of Borrower's right, title,
and interest in and to each of the following:
(a) the Accounts,
(b) Borrower's Books,
(c) the Equipment,
(d) the General Intangibles,
(e) the Inventory,
(f) the Negotiable Collateral,
(g) the Real Property Collateral,
(h) any other assets of Borrower that now or hereafter
come into the possession, custody, or control of Foothill, and
2.
<PAGE> 8
(i) the proceeds and products, whether tangible or intangible,
of any of the foregoing, including proceeds of insurance covering any or all of
the Collateral, and any and all Accounts, Books, Equipment, General Intangibles,
Inventory, Negotiable Collateral, Real Property, or other tangible or intangible
property resulting from the sale, exchange, collection, or other disposition of
any of the foregoing, or any portion thereof or interest therein, and the
proceeds thereof.
Anything in the Loan Documents to the contrary notwithstanding, the Borrower
Collateral shall not include the Excluded Assets.
"Borrower Personal Property Collateral" means all Borrower
Collateral other than the Borrower Real Property Collateral.
"Borrower Real Property Collateral" means the parcels of real
property and the related improvements thereto of Borrower identified on Schedule
R-1 and any Real Property hereafter acquired by Borrower.
"Business Day" means any day that is not a Saturday, Sunday,
or other day on which national banks are authorized or required to close.
"Capital Expenditure Line Commitment" has the meaning set
forth in Section 2.4.
"Capital Expenditure Loan" has the meaning set forth in
Section 2.4.
"Cash Equivalent" means (a) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof), (b) time deposits and
certificates of deposit and commercial paper issued by the parent corporation of
any domestic commercial bank of recognized standing having capital and surplus
in excess of $500,000,000 and commercial paper issued by others rated at least
A-2 or the equivalent thereof by Standard and Poor's Corporation or at least P-2
or the equivalent thereof by Moody's Investors Service, Inc. and in each case
maturing within one year after the date of acquisition, (c) investments in money
market funds substantially all of whose assets compromise securities of the
types described in clauses (a) and (b) above, and (d) repurchase obligations
with a term of not more than seven days for underlying securities of the types
described in clauses (a) and (b) above entered into with any financial
institution meeting the financial qualifications specified in clause (b) above.
"Casino" means a gaming establishment owned, directly or
indirectly, by Borrower or any other Obligor and any hotel, building,
restaurant, theater, amusement park, other entertainment facility, parking
facilities, retail shops, land, equipment, and other property asset directly
ancillary thereto and used or to be used in connection therewith.
"Casino License" means any material license, franchise, or
other approval or authorization required to own, lease, or operate a Casino, or
otherwise conduct gaming in any jurisdiction in which Borrower or any of its
Subsidiaries conducts or proposes in good faith to conduct gaming business,
including any applicable liquor license.
3.
<PAGE> 9
"Casino Square Footage" means, with respect to any Casino, the
floor space of such Casino that is available and used for the generation of
gaming revenues and on which there is conducted (in a manner than is customary
for comparable gaming facilities) table games, slot machines, or other gaming
operations, as applicable, but excluding bingo operations.
"Change of Control" shall be deemed to have occurred at such
time as: (a) a "person" or "group" (within the meaning of Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934) becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly
or indirectly, of more than 35% of the total voting power of all classes of
Stock then outstanding of Borrower entitled to vote in the election of
directors; (b) Borrower shall cease to own and control, beneficially, directly,
and of record, all of the issued and outstanding Stock of each of the
Guarantors; or (c) a "Change of Control" (as that term is defined in the
Indenture) has occurred.
"Closing Date" means the first date on which all of the
conditions set forth in Section 3.1 shall be fulfilled to the satisfaction of
Foothill and its counsel.
"Code" means the California Uniform Commercial Code.
"Collateral" means the Borrower Collateral and the
Guarantor Collateral.
"Collateral Access Agreement" means a landlord waiver,
mortgagee waiver, bailee letter, or acknowledgement agreement of any
warehouseman, processor, lessor, consignee, or other Person in possession of,
having a Lien upon, or having rights or interests in the Equipment or Inventory,
in each case, in form and substance satisfactory to Foothill.
"Collections" means all cash, checks, notes, instruments, and
other items of payment (including insurance proceeds, proceeds of cash sales,
rental proceeds, and tax refunds).
"Compliance Certificate" means a certificate substantially in
the form of Exhibit C-1 and delivered by the chief accounting officer of
Borrower to Foothill.
"Copyright Security Agreement" means a Copyright Agreement
executed and delivered by Borrower in favor of Foothill and in form and
substance satisfactory to Foothill.
"Daily Balance" means the amount of an Obligation owed at
the end of a given day.
"deems itself insecure" means that the Person deems itself
insecure in accordance with the provisions of Section 1208 of the Code.
"Default" means an event, condition, or default that, with the
giving of notice, the passage of time, or both, would be an Event of Default.
"Designated Account" means account number 34112652 of Borrower
maintained with Borrower's Designated Account Bank, or such other deposit
account of
4.
<PAGE> 10
Borrower (located within the United States) that has been designated, in writing
and from time to time, by Borrower to Foothill.
"Designated Account Bank" means Pioneer Systems Bank, whose
office is located at 230 Las Vegas Boulevard, P.O. Box 19260, Las Vegas, Nevada
89132 and whose ABA number is 121201063.
"Dollars" or "$" means United States dollars.
"Early Termination Premium" has the meaning set forth in
Section 3.6.
"EBITDA" means, with respect to any fiscal period, the sum of
Borrower's net earnings (or loss), excluding extraordinary gains, before
interest expense, taxes, amortization, depreciation, and other non-cash expenses
for such period as determined in accordance with GAAP.
"Environmental Indemnity" means an environmental indemnity
agreement, in form and substance satisfactory to Foothill, executed by the
Obligors in favor of Foothill.
"Equipment" means all of the Obligors' present and hereafter
acquired machinery, machine tools, motors, equipment, furniture, furnishings,
fixtures, vehicles (including motor vehicles and trailers), tools, parts, goods
(other than consumer goods, farm products, or Inventory), wherever located,
including, (a) any assets acquired by one or more of the Obligors with the
proceeds of credit extended by Foothill, (b) any interest of any of the Obligors
in any of the foregoing, and (c) all attachments, accessories, accessions,
replacements, substitutions, additions, and improvements to any of the
foregoing.
"ERISA" means the Employee Retirement Income Security Act of
1974, 29 U.S.C.Sections 1000 et seq., amendments thereto, successor
statutes, and regulations or guidance promulgated thereunder.
"ERISA Affiliate" means (a) any corporation subject to ERISA
whose employees are treated as employed by the same employer as the employees of
Borrower under IRC Section 414(b), (b) any trade or business subject to ERISA
whose employees are treated as employed by the same employer as the employees of
Borrower under IRC Section 414(c), (c) solely for purposes of Section 302 of
ERISA and Section 412 of the IRC, any organization subject to ERISA that is a
member of an affiliated service group of which Borrower is a member under IRC
Section 414(m), or (d) solely for purposes of Section 302 of ERISA and Section
412 of the IRC, any party subject to ERISA that is a party to an arrangement
with Borrower and whose employees are aggregated with the employees of Borrower
under IRC Section 414(o).
"ERISA Event" means (a) a Reportable Event with respect to any
Benefit Plan or Multiemployer Plan, (b) the withdrawal of Borrower, any of its
Subsidiaries or ERISA Affiliates from a Benefit Plan during a plan year in which
it was a "substantial employer" (as defined in Section 4001(a)(2) of ERISA), (c)
the providing of notice of intent to terminate a Benefit Plan in a distress
termination (as described in Section 4041(c) of ERISA), (d) the institution by
the PBGC of proceedings to terminate a Benefit Plan or Multiemployer Plan,
5.
<PAGE> 11
(e) any event or condition (i) that provides a basis under Section 4042(a)(1),
(2), or (3) of ERISA for the termination of, or the appointment of a trustee to
administer, any Benefit Plan or Multiemployer Plan, or (ii) that may result in
termination of a Multiemployer Plan pursuant to Section 4041A of ERISA, (f) the
partial or complete withdrawal within the meaning of Sections 4203 and 4205 of
ERISA, of Borrower, any of its Subsidiaries or ERISA Affiliates from a
Multiemployer Plan, or (g) providing any security to any Plan under Section
401(a)(29) of the IRC by Borrower or its Subsidiaries or any of their ERISA
Affiliates.
"Event of Default" has the meaning set forth in Section 8.
"Excess Cash Flow" means, as of the date of the determination
thereof, the sum of (i) the amount of net income of the Borrower, plus (ii) the
amount of depreciation and amortization and other non-cash expenses, minus (iii)
regularly scheduled payments of principal on Indebtedness, in each case,
determined on a cumulative basis from January 1, 1998 through the end of the
fiscal quarter most recently ended prior to the date of the determination
thereof, and on a consolidated basis in accordance with GAAP.
"Excluded Assets" means: (a) the Obligors' cash, deposit
accounts, and other cash equivalents; (b) furniture, fixtures, and equipment
securing Non-Recourse Indebtedness owing in favor of any Person (other than
Foothill, any Obligor, or any Affiliate of an Obligor) and permitted to be
incurred under both the Indenture and Section 7.1(e) hereof; (c) assets securing
Purchase Money Obligations and capital lease obligations, in each case, owing in
favor of any Person (other than Foothill, any Obligor, or any Affiliate of an
Obligor) and permitted to be incurred under both the Indenture and Sections
7.1(l) and 7.21 hereof; and (d) any General Intangible consisting of contract
rights, permits, or licenses (including Casino Licenses) that is now or
hereafter held by any Obligor as licensee or otherwise, solely in the event and
to the extent that: (i) such General Intangible cannot be subjected to a
consensual security interest in favor of Foothill without the consent of the
licensor or other party to such contract, permit, or license; (ii) any such
restriction shall be effective and enforceable under all applicable law,
including Section 9318(4) of the Code; and (iii) such consent is not obtainable
by any Obligor; provided, however, that Excluded Assets does not include (and,
accordingly, the Collateral shall include) any and all proceeds of the assets
described in clauses (b), (c) and (d) above (unless and to the extent such
proceeds constitute the Obligors' cash, deposit accounts, or cash equivalents);
provided further that any General Intangible qualifying as an Excluded Asset
under clause (d) above no longer shall constitute an Excluded Asset (and instead
shall constitute Collateral) from and after such licensor or other applicable
party's consent with respect to the grant of a consensual security interest in
such General Intangible; provided further that, anything to the contrary
notwithstanding, any property or asset acquired by an Obligor for cash or cash
equivalents of the Obligors, or otherwise received by an Obligor in exchange for
cash or cash equivalents of the Obligors, shall not constitute Excluded Assets
so long as such acquired or received property or asset is not an asset described
in clause (a), (b), (c), or (d) above.
"Facility" means one or more of (a) the Fitzgeralds Las Vegas
Facility, (b) the Fitzgeralds Reno Facility, (c) the Fitzgeralds Black Hawk
Facility, and (f) the Fitzgeralds Tunica Facility.
6.
<PAGE> 12
"FAMI" means Fitzgeralds Arizona Management, Inc., a Nevada
corporation.
"FBHI" means Fitzgeralds Black Hawk, Inc., a Nevada
corporation.
"FBHIII" means Fitzgeralds Black Hawk II, Inc., a Colorado
corporation.
"FEIN" means Federal Employer Identification Number.
"FFEC" means Fitzgeralds Fremont Experience Corporation, a
Nevada corporation.
"FI" means Fitzgeralds Incorporated, a Nevada corporation.
"Fitzgeralds Black Hawk Facility" means the Fitzgeralds Black
Hawk Casino, the Real Property related thereto, and the Equipment and other
personal property related thereto.
"Fitzgeralds Las Vegas Facility" means the Fitzgeralds Las
Vegas Casino, the Real Property related thereto, and the Equipment and other
personal property related thereto.
"Fitzgeralds Reno Facility" means the Fitzgeralds Reno Casino,
the Real Property related thereto, and the Equipment and other personal property
related thereto.
"Fitzgeralds Tunica Facility" means the Fitzgeralds Tunica
Casino, the Real Property related thereto, and the Equipment and other personal
property related thereto.
"FLVI" means Fitzgeralds Las Vegas, Inc., a Nevada
corporation.
"FMI" means Fitzgeralds Mississippi, Inc., a Mississippi
corporation.
"FNYI" means Fitzgeralds New York, Inc., a New York
corporation.
"Foothill" has the meaning set forth in the preamble to this
Agreement.
"Foothill Account" has the meaning set forth in Section 2.8.
"Foothill Expenses" means all: costs or expenses (including
taxes, and insurance premiums) required to be paid by any Obligor under any of
the Loan Documents that are paid or incurred by Foothill; fees or charges paid
or incurred by Foothill in connection with Foothill's transactions with any
Obligor, including, fees or charges for photocopying, notarization, couriers and
messengers, telecommunication, public record searches (including tax lien,
litigation, and UCC searches and including searches with the patent and
trademark office, the copyright office, or the department of motor vehicles),
filing, recording, or publication; subject to any applicable restrictions in
Section 2.11(d), appraisal (including periodic Personal Property Collateral or
Real Property Collateral appraisals), real estate title policies and
endorsements, and environmental audits; costs and expenses incurred by Foothill
in the disbursement of funds to Borrower (by wire transfer or otherwise);
charges paid or incurred by
7.
<PAGE> 13
Foothill resulting from the dishonor of checks; costs and expenses paid or
incurred by Foothill to correct any default or enforce any provision of the Loan
Documents, or in gaining possession of, maintaining, handling, preserving,
storing, shipping, selling, preparing for sale, or advertising to sell the
Collateral, or any portion thereof, irrespective of whether a sale is
consummated; subject to any applicable restrictions in Section 2.11(d), costs
and expenses paid or incurred by Foothill in examining Books; costs and expenses
of third party claims or any other suit paid or incurred by Foothill in
enforcing or defending the Loan Documents or in connection with the transactions
contemplated by the Loan Documents or Foothill's relationship with any Obligor;
and Foothill's reasonable attorneys fees and expenses incurred in advising,
structuring, drafting, amending, terminating, enforcing (including attorneys
fees and expenses incurred in connection with a "workout," a "restructuring," or
an Insolvency Proceeding concerning any Obligor), or defending the Loan
Documents, irrespective of whether suit is brought.
"FRI" means Fitzgeralds Reno, Inc., a Nevada corporation.
"FSI" means Fitzgeralds South, Inc., a Nevada corporation.
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States, consistently applied.
"Gaming Authority" means any agency, authority, board, bureau,
commission, department, office, or instrumentality of any nature whatsoever of
the United States of America or foreign government (including Native American
governments), any state, province, city, or other political subdivision thereof,
whether now or hereafter existing, or any officer or official thereof, including
the Nevada Gaming Commission, the Nevada State Gaming Control Board, the
Colorado Limited Gaming Control Commission, the Mississippi Gaming Commission,
and any other agency with authority to regulate any gaming operation (or
proposed gaming authority) owned, managed, or operated by Borrower or any of its
Subsidiaries.
"General Intangibles" means all of the Obligors' present and
future general intangibles and other personal property (including contract
rights, rights arising under common law, statutes, or regulations, choses or
things in action, goodwill, patents, trade names, trademarks, servicemarks,
copyrights, blueprints, drawings, purchase orders, customer lists, monies due or
recoverable from pension funds, route lists, rights to payment and other rights
under any royalty or licensing agreements, infringement claims, computer
programs, information contained on computer disks or tapes, literature, reports,
catalogs, deposit accounts, insurance premium rebates, tax refunds, and tax
refund claims), other than goods, Accounts, and Negotiable Collateral.
"Governing Documents" means the certificate or articles of
incorporation, by-laws, or other organizational or governing documents of any
Person.
"Guarantied Obligations" has the meaning ascribed to such term
in the Guaranty.
"Guarantor Collateral" means all right, title, or interest of
any Guarantor with respect to the following:
8.
<PAGE> 14
(a) the Accounts,
(b) the Books,
(c) the Equipment,
(d) the General Intangibles,
(e) the Inventory,
(f) the Negotiable Collateral,
(g) the Real Property Collateral,
(h) any other assets of one or more of the Guarantors that
now or hereafter come into the possession, custody, or control of Foothill, and
(i) the proceeds and products, whether tangible or
intangible, of any of the foregoing, including proceeds of insurance covering
any or all of the Guarantor Collateral, and any and all Accounts, Books,
Equipment, General Intangibles, Inventory, Negotiable Collateral, Real Property,
or other tangible or intangible property resulting from the sale, exchange,
collection, or other disposition of any of the foregoing, or any portion thereof
or interest therein, and the proceeds thereof.
Anything in the Loan Documents to the contrary notwithstanding, the Guarantor
Collateral shall not include the Excluded Assets.
"Guarantor Personal Property Collateral" means all Guarantor
Collateral other than the Guarantor Real Property Collateral.
"Guarantor Real Property Collateral" means the parcels of real
property and the related improvements thereto of the Guarantors identified on
Schedule R-1 and any Real Property hereafter acquired by one or more of the
Guarantors.
"Guarantor Security Agreement" means that certain Security
Agreement made by the Guarantors in favor of Foothill, in form and substance
satisfactory to Foothill.
"Guarantor Stock Pledge Agreement" means that certain Pledge
Agreement made by the Guarantors in favor of Foothill, in form and substance
satisfactory to Foothill.
"Guarantors" means all of the Subsidiaries of Borrower (other
than the Unrestricted Subsidiaries), including: FSI; FRI; FI; FMI; FLVI; FFEC;
FBHI; FBHIII; and 101 Main.
"Guaranty" means that certain Guaranty, dated as of even date
herewith, made by each of the Guarantors in favor of Foothill, pursuant to which
they guaranty the payment and performance of all present and future Obligations.
9.
<PAGE> 15
"Hazardous Materials" means (a) substances that are defined or
listed in, or otherwise classified pursuant to, any applicable laws or
regulations as "hazardous substances," "hazardous materials," "hazardous
wastes," "toxic substances," or any other formulation intended to define, list,
or classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or "EP
toxicity", (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any radioactive materials, and (d) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (a) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements, and (b) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates.
"Indebtedness" means: (a) all obligations of one or more of
the Obligors for borrowed money, (b) all obligations of one or more of the
Obligors evidenced by bonds, debentures, notes, or other similar instruments and
all reimbursement or other obligations of one or more of the Obligors in respect
of letters of credit, bankers acceptances, interest rate swaps, or other
financial products, (c) all obligations of one or more of the Obligors under
capital leases, (d) all obligations or liabilities of others secured by a Lien
on any property or asset of one or more of the Obligors, irrespective of whether
such obligation or liability is assumed, and (e) any obligation of one or more
of the Obligors guaranteeing or intended to guarantee (whether guaranteed,
endorsed, co-made, discounted, or sold with recourse to one or more of the
Obligors) any indebtedness, lease, dividend, letter of credit, or other
obligation of any other Person.
"Indenture" means that certain Indenture, dated as of December
30, 1997, among Borrower, the Guarantors, and the Indenture Trustee.
"Indenture Trustee" means (a) The Bank of New York, a New York
banking corporation, in its capacity as trustee under the Indenture, or (b) any
successor trustee under the Indenture from time to time.
"Insolvency Proceeding" means any proceeding commenced by or
against any Person under any provision of the Bankruptcy Code or under any other
bankruptcy or insolvency law, assignments for the benefit of creditors, formal
or informal moratoria, compositions, extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.
"Intercreditor Agreement" means that certain Intercreditor
Agreement between Foothill and the Indenture Trustee, in the form of Exhibit I-1
attached hereto.
"Inventory" means all present and future inventory in which
one or more of the Obligors has any interest, including goods held for sale or
lease or to be furnished under a
10.
<PAGE> 16
contract of service and all of the Obligors' present and future raw materials,
work in process, finished goods, and packing and shipping materials, wherever
located.
"Investments" means, with respect to any Person, all
investments by such Person in other Persons (including Affiliates) in the forms
of loans, guarantees, advances, or capital contributions (excluding (a)
commission, travel, and similar advances to officers and employees of such
Person made in the ordinary course of business, and (b) bona fide accounts
receivable arising from the sale of goods or services in the ordinary course of
business consistent with past practice), purchases or other acquisitions for
consideration of Indebtedness, Stock or other securities, and any other items
that are or would be classified as investments on a balance sheet prepared in
accordance with GAAP.
"Investment Property" means "investment property" as that term
is defined in Section 9115 of the Code.
"IRC" means the Internal Revenue Code of 1986, as amended,
and the regulations thereunder.
"Key Lease" means any lease, license, or similar agreement
relative to any Obligor's use or operation of Real Property comprising all or
part of any Facility.
"L/C" has the meaning set forth in Section 2.2(a).
"L/C Guaranty" has the meaning set forth in Section 2.2(a).
"Letter of Credit" means an L/C or an L/C Guaranty, as the
context requires.
"Letter of Credit Usage" means the sum of (a) the undrawn
amount of outstanding Letters of Credit plus (b) the amount of unreimbursed
drawings under Letters of Credit.
"Lien" means any interest in property securing an obligation
owed to, or a claim by, any Person other than the owner of the property, whether
such interest shall be based on the common law, statute, or contract, whether
such interest shall be recorded or perfected, and whether such interest shall be
contingent upon the occurrence of some future event or events or the existence
of some future circumstance or circumstances, including the lien or security
interest arising from a mortgage, deed of trust, encumbrance, pledge,
hypothecation, assignment, deposit arrangement, security agreement, adverse
claim or charge, conditional sale or trust receipt, or from a lease,
consignment, or bailment for security purposes and also including reservations,
exceptions, encroachments, easements, rights-of-way, covenants, conditions,
restrictions, leases, and other title exceptions and encumbrances affecting Real
Property.
"Loan Account" has the meaning set forth in Section 2.10.
"Loan Documents" means this Agreement, the Letters of Credit,
the Mortgages, the Environmental Indemnity, the Guaranty, the Guarantor Security
Agreement, the Guarantor Stock Pledge Agreement, the Stock Pledge Agreement, the
Copyright Security
11.
<PAGE> 17
Agreement, the Trademark Security Agreement, the Tunica Ship Mortgage, the
Intercreditor Agreement, the Obligor Subordination Agreement, any note or notes
executed by any Obligor and payable to Foothill, and any other agreement entered
into, now or in the future, in connection with this Agreement.
"Material Adverse Change" means, with respect to the Obligors, taken
as a whole, (a) the material impairment of the Obligors' ability to perform
their obligations under the Loan Documents, (b) a material adverse effect on the
value of the Collateral or the amount that Foothill would be likely to receive
(after giving consideration to delays in payment and costs of enforcement) in
the liquidation of the Collateral, such materiality to be determined for
purposes of this clause (b) by taking into account the then outstanding amount
of the Obligations, (c) a material impairment of the priority of Foothill's
Liens with respect to the Collateral, (d) a material adverse change of, or other
material adverse development regarding, regulation of the gaming industry in
general or of the Obligors in particular that arises from the National Gambling
Impact Study Commission's Report or recommended legislation and administrative
action and reasonably could be expected to have a material adverse effect on the
Obligors, or (e) if there fails to be free and unfettered public access to the
Fitzgeralds Tunica Facility.
"Maximum Amount" means, as of any date of determination, the
sum of (a) the Maximum Revolving Amount, and (b) the Capital Expenditure Line
Commitment.
"Maximum Revolving Amount" means $10,000,000.
"Mortgages" means one or more mortgages, deeds of trust, or
deeds to secure debt, executed by an Obligor in favor of Foothill, the form and
substance of which shall be satisfactory to Foothill, that encumber the Real
Property Collateral and the related improvements thereto.
"Multiemployer Plan" means a "multiemployer plan" (as defined
in Section 4001(a)(3) of ERISA) to which Borrower, any of its Subsidiaries, or
any ERISA Affiliate has contributed, or was obligated to contribute, within the
past six years.
"NCI" means Nevada Club, Inc., a Nevada corporation.
"Negotiable Collateral" means all of the Obligors' present and
future letters of credit, notes, drafts, instruments, Investment Property,
documents, personal property leases (wherein an Obligor is the lessor), chattel
paper, and Books relating to any of the foregoing.
"Non-Recourse Indebtedness" means Indebtedness of a Restricted
Subsidiary as to which none of the Obligors, other than the Restricted
Subsidiary that is the obligor of such Indebtedness, provides any credit support
or is directly or indirectly liable for the payment of principal or interest
thereof and a default with respect to which would not entitle any party to cause
any other Indebtedness of the Obligors to be accelerated.
"Obligations" means all loans, Advances, debts, principal,
interest (including any interest that, but for the provisions of the Bankruptcy
Code, would have accrued), contingent reimbursement obligations under any
outstanding Letters of Credit, premiums
12.
<PAGE> 18
(including Early Termination Premiums), liabilities (including all amounts
charged to Borrower's Loan Account pursuant hereto), obligations, fees, charges,
costs, or Foothill Expenses (including any fees or expenses that, but for the
provisions of the Bankruptcy Code, would have accrued), lease payments,
guaranties, covenants, and duties owing by Borrower to Foothill of any kind and
description (whether pursuant to or evidenced by the Loan Documents or pursuant
to any other agreement between Foothill and Borrower, and irrespective of
whether for the payment of money), whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising, and
including any debt, liability, or obligation owing from Borrower to others that
Foothill may have obtained by assignment or otherwise, and further including all
interest not paid when due and all Foothill Expenses that Borrower is required
to pay or reimburse by the Loan Documents, by law, or otherwise.
"Obligor Subordination Agreement" means a Subordination
Agreement, in form and substance satisfactory to Foothill, between Foothill and
the Obligors relative to the subordination in favor of Foothill of any and all
Indebtedness owed by an Obligor to any other Obligor.
"Obligors" means Borrower and the Guarantors, or any of them.
"101 Main" means 101 Main Street Limited Liability Company, a
Colorado limited liability company.
"Other Expenses" means cash disbursements to, or cash payments
on behalf of, unconsolidated Affiliates of Borrower to the extent such amounts
do not reduce consolidated EBITDA of Borrower during the period made.
"Overadvance" has the meaning set forth in Section 2.5.
"Participant" means any Person to which Foothill has sold a
participation interest in its rights under the Loan Documents.
"PBGC" means the Pension Benefit Guaranty Corporation as
defined in Title IV of ERISA, or any successor thereto.
"Permitted Disposition" means, in each case, so long as no
Default or Event of Default has occurred and is continuing, (a) any sale, lease,
or other disposition of property or assets (excluding, however, Real Property)
in one or a series of related transactions wherein the property or assets have a
fair market value (or result in gross proceeds) of less than $1 million, up to
an aggregate fair market value and gross proceeds of such sales, leases, or
other dispositions of $5 million, (b) any sale, lease, or other disposition by
the Obligors of the Tunica Road to the County of Tunica, Mississippi, or any
agency thereof, (c) any transfer of slot machines or other gaming equipment in
connection with the acquisition of similar gaming equipment in the ordinary
course of business, and (d) the sale, lease or other disposition of the
Settlement Property by FRI.
"Permitted Investments" means:
13.
<PAGE> 19
(a) Investments in any Obligor (including without limitation,
a guaranty of Indebtedness of any such Person if the incurrence of such
Indebtedness is permitted hereby);
(b) Investments in Cash Equivalents;
(c) Hedging Obligations;
(d) Investments as a result of consideration received in
connection with a Permitted Disposition;
(e) Investments existing on the date of this Agreement;
(f) credit extensions to gaming customers in the ordinary
course of business consistent with industry practices;
(g) Investments paid for solely with common Stock of Borrower;
(h) so long as no Default or Event of Default has occurred and
is continuing, so long as the applicable Obligor is able to (and concurrently
with the making of the Investment does) grant Foothill a first priority
perfected security interest in the property or assets acquired, and so long as
Borrower has not less than $3,000,000 of unrestricted cash, unrestricted cash
equivalents, or availability to obtain Advances under Section 2.1 hereof after
giving effect to such Investment, Investments constituting "Restricted
Investments" (as defined in the Indenture) permitted under Section 4.7(b)(ix) of
the Indenture in an aggregate amount not to exceed $10,000,000 less the sum of
all Other Expense of Borrower for the period (taken as one accounting period)
from the beginning of the first quarter commencing immediately after the date of
the Indenture to the end of Borrower's most recently ended fiscal quarter for
which internal financial statements are available at the time of such
Investment;
(i) so long as no Default or Event of Default has occurred and
is continuing, and so long as Borrower has not less than $3,000,000 of
unrestricted cash, unrestricted cash equivalents, or availability to obtain
Advances under Section 2.1 hereof after giving effect to such Investment,
Investments in options or other rights with respect to the management of Casinos
by one of the Obligors; provided, that the aggregate amount of Investments under
this clause (i) in any calendar year shall not exceed $500,000 plus the portion
of such $500,000 that was not used in the immediately preceding calendar year;
(j) so long as no Default or Event of Default has occurred and
is continuing, so long as Borrower has not less than $3,000,000 of unrestricted
cash, unrestricted cash equivalents, or availability to obtain Advances under
Section 2.1 hereof after giving effect to such Investment, so long as the sole
source of funds used as consideration for such Investment is Excess Cash Flow of
Borrower, and so long as the aggregate amount of the proposed Investment and all
other Investments made under clauses (j) and (k) of this definition does not
exceed 50% of the Excess Cash Flow of Borrower, Investments constituting the
repurchase or redemption of Preferred Stock outstanding as of the Closing Date
in an aggregate amount not to exceed $10,000,000; and
14.
<PAGE> 20
(k) so long as no Default or Event of Default has occurred and
is continuing, so long as Borrower has not less than $3,000,000 of unrestricted
cash, unrestricted cash equivalents, or availability to obtain Advances under
Section 2.1 hereof after giving effect to such Investment, and so long as the
aggregate amount of the proposed Investment and all other Investments made under
clauses (j) and (k) of this definition does not exceed 50% of the Excess Cash
Flow of Borrower, other Investments constituting "Restricted Payments" (as
defined on the Indenture) permitted under Section 4.7(b)(x) of the Indenture in
an aggregate amount not to exceed $5,000,000 at any one time outstanding.
"Permitted Liens" means: (a) Liens held by Foothill; (b) Liens
(other than Liens arising under ERISA) for unpaid taxes, assessments or other
governmental charges that either (1) are not yet due and payable or (2) are the
subject of Permitted Protests; (c) Liens set forth on Schedule P-1; (d) (1) the
interests of lessors under operating leases, and (2) purchase money Liens and
the interests of lessors under capital leases to the extent that the applicable
Indebtedness is permitted under Section 7.21 hereof or Section 7.1(e) hereof;
(e) Liens arising by operation of law in favor of warehousemen, landlords,
carriers, mechanics, materialmen, repairmen, laborers, or suppliers, incurred in
the ordinary course of business of the Obligors and not in connection with the
borrowing of money, consistent with industry practices (other than Liens arising
under ERISA) and Liens on deposits made to obtain the release of such Liens, and
which Liens either (1) are for sums not overdue for a period of more than 30
days, or (2) are the subject of Permitted Protests; (f) Liens arising from
pledges or deposits made in the ordinary course of business in connection with
obtaining worker's compensation, unemployment insurance, and other types of
social security legislation; (g) Liens or deposits to secure performance of
bids, tenders, trade, contracts (other than contracts for the payment of money)
or leases (to the extent permitted under this Agreement), incurred in the
ordinary course of business of the Obligors and not in connection with the
borrowing of money, and consistent with industry practice; (h) Liens arising by
reason of security for surety or appeal bonds in the ordinary course of business
of the Obligors and consistent with industry practice; (i) Liens of or resulting
from any judgment or award that reasonably could not be expected to result in a
Material Adverse Change and as to which the time for the appeal or petition for
rehearing of which has not yet expired, or any such legal proceedings for which
have not been finally adversely terminated, or in respect of which an Obligor is
in good faith prosecuting an appeal or proceeding for a review and in respect of
which a stay of execution pending such appeal or proceeding for review has been
secured; (j) Liens with respect to the Real Property Collateral that are
exceptions to the commitments for title insurance issued in connection with the
Mortgages, as accepted by Foothill; (k) with respect to any Real Property that
is not part of the Real Property Collateral, easements, rights of way, zoning
and similar covenants and restrictions, and similar encumbrances that
customarily exist on properties of Persons engaged in similar activities and
similarly situated and that in any event do not materially interfere with or
impair the use or operation of the Collateral by the Obligors or the value of
Foothill's Lien thereon or therein, or materially interfere with the ordinary
conduct of the business of the Obligors; provided, that such Liens are not
incurred in connection with any borrowing of money or any commitment to loan any
money or to extend any credit; (l) Liens in favor of the Indenture Trustee
relative to the Senior Note Documents, so long as and to the extent such Liens
remain the subject of the Intercreditor Agreement; (m) obligations and duties of
an Obligor as lessee under any lease in respect of any Facility existing on the
date of this Agreement; (n) with respect to any vessel included in the
Collateral, maritime liens for crew's wages, general average, salvage and
15.
<PAGE> 21
damages arising out of maritime torts permitted to exist under the Tunica Ship
Mortgage; (o) Liens that secure Indebtedness permitted under Section 7.1(e)
hereof, which Liens shall not attach to any assets other than the assets
financed thereby; and (p) Liens on assets of the Company and its Subsidiaries
securing Permitted Tunica Debt; provided, that (1) the Indebtedness hereunder is
secured by a first priority Lien upon such assets and the Indebtedness
outstanding under the Indenture is equally and ratably secured by a second
priority Lien on such assets and (2) the lender thereunder, Foothill, the
Indenture Trustee enter into an intercreditor agreement in form and substance
satisfactory to Foothill.
"Permitted Protest" means the right of an Obligor to protest
any Lien other than any such Lien that secures the Obligations or Guarantied
Obligations, tax (other than payroll taxes or taxes that are the subject of a
United States federal tax lien), or rental payment, provided that (a) a reserve
with respect to such obligation is established on the books of the applicable
Obligor in an amount that is reasonably satisfactory to Foothill, (b) any such
protest is instituted and diligently prosecuted by such Obligor in good faith,
and (c) Foothill is satisfied that, while any such protest is pending, there
will be no impairment of the enforceability, validity, or priority of any of the
Liens of Foothill in and to the Collateral (it being understood that the
Obligors can presume that Foothill is so satisfied unless Foothill notifies
Borrower to the contrary in writing).
"Permitted Tunica Debt" means Indebtedness incurred solely to
finance construction of a hotel at the Fitzgeralds Tunica Facility to be owned
by FMI in an aggregate principal amount not to exceed the lesser of (a) $30
million, and (ii) 80% of the total actual out-of-pocket costs of such
construction (including the cost of all permits, approvals, assessments, fees
and other expenses); provided, that immediately after giving effect to the
incurrence of such Indebtedness, on a pro forma basis as if such transaction had
occurred at the beginning of the applicable four-quarter period, Borrower would
be permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Interest Coverage Ratio test set forth in Section 4.9(a) of the Indenture.
"Person" means and includes natural persons, corporations,
limited liability companies, limited partnerships, general partnerships, limited
liability partnerships, joint ventures, trusts, land trusts, business trusts, or
other organizations, irrespective of whether they are legal entities, and
governments and agencies and political subdivisions thereof.
"Personal Property Collateral" means the Borrower Personal
Property Collateral and the Guarantor Personal Property Collateral.
"Plan" means any employee benefit plan, program, or
arrangement maintained or contributed to by Borrower or with respect to which it
may incur liability.
"PP&E" means, with respect to a Person, assets that, in
accordance with GAAP consistently applied, properly are included in the
property, plant, and equipment of such Person.
"Preferred Stock" means the 800,00 shares of Cumulative
Redeemable Preferred Stock, par value $0.01 per share, of Borrower issued in
December 1995.
16.
<PAGE> 22
"Purchase Money Obligations" means Indebtedness representing,
or incurred to finance, the cost (a) of acquiring any property or assets, and
(b) of construction or build-out of facilities (including Purchase Money
Obligations of any other Person at the time such other Person is merged with or
into or is otherwise acquired by an Obligor), provided, that (1) the principal
amount of such Indebtedness does not exceed 80% of such cost, including
construction charges, (2) any Lien securing such Indebtedness does not extend to
or cover any other asset or property other than the asset or property being so
acquired, and (3) such Indebtedness is incurred, and any Liens with respect
thereto are granted, within 180 days of the acquisition of such property or
asset.
"Real Property" means any estates or interests in real
property now owned or hereafter acquired by one or more of the Obligors.
"Real Property Collateral" means Borrower Real Property
Collateral and Guarantor Real Property Collateral.
"Reduced Maximum Amount" means, as of any date of
determination, the sum of (a) the Maximum Revolving Amount, and (b) the then
outstanding aggregate principal balance of all Capital Expenditure Loans.
"Reference Rate" means the variable rate of interest, per
annum, most recently announced by Norwest Bank Minnesota, National Association,
or any successor thereto, as its "base rate," irrespective of whether such
announced rate is the best rate available from such financial institution.
"Renewal Date" has the meaning set forth in Section 3.4.
"Reportable Event" means any of the events described in
Section 4043(c) of ERISA or the regulations thereunder other than a Reportable
Event as to which the provision of 30 days notice to the PBGC is waived under
applicable regulations.
"Restricted Subsidiary" means a Subsidiary other than an
Unrestricted Subsidiary.
"Retiree Health Plan" means an "employee welfare benefit plan"
within the meaning of Section 3(1) of ERISA that provides benefits to
individuals after termination of their employment, other than as required by
Section 601 of ERISA.
"Senior Note Documents" means, collectively, the Indenture,
the Notes (as such term is defined in the Indenture), and the Security Documents
(as such term is defined in the Indenture).
"Settlement Debt" means Indebtedness of FRI in an aggregate
amount not to exceed $2,000,000 issued in consideration for, and concurrently
with, a dismissal with prejudice of all claims against FRI arising out of FRI's
purchase and subsequent sale of Harolds Club.
17.
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"Settlement Property" means that certain parcel of Real
Property described in Schedule S-1 attached hereto and to be acquired by FRI as
part of the payment of the Settlement Debt.
"Significant Casino" means any Casino that has a Casino Square
Footage of at least 9,000 square feet.
"Stock" means all shares, options, warrants, interests,
participations, or other equivalents (regardless of how designated) of or in a
corporation or equivalent entity, whether voting or nonvoting, including common
stock, preferred stock, or any other "equity security" (as such term is defined
in Rule 3a11-1 of the General Rules and Regulations promulgated by the SEC under
the Securities and Exchange Act of 1934, as amended).
"Stock Pledge Agreement" means a Stock Pledge Agreement, dated
as of even date herewith, between Borrower and Foothill, pursuant to which
Borrower grants Foothill a security interest in, among other things, all of the
issued and outstanding Stock of Borrower's Subsidiaries.
"Subsidiary" of a Person means a corporation, partnership,
limited liability company, or other entity in which that Person directly or
indirectly owns or controls the shares of Stock having ordinary voting power to
elect a majority of the board of directors (or appoint other comparable
managers) of such corporation, partnership, limited liability company, or other
entity.
"Trademark Security Agreement" means a Trademark Security
Agreement executed and delivered by Borrower in favor of Foothill and in form
and substance satisfactory to Foothill.
"Tunica Road" means that certain road connecting the
Fitzgeralds Tunica Facility to Highway 304 in or about Tunica, Mississippi.
"Tunica Ship Mortgage" means, collectively, one or more
preferred ship mortgages, each in form and substance satisfactory to Foothill,
relative to that portion of the Fitzgeralds Tunica Facility consisting of one or
more barges or other vessels and related personal property.
"Unrestricted Subsidiary" means FAMI, FNYI, and NCI and any
Subsidiary of Borrower that, at or prior to the time of determination, shall
have been designated by the Board of Directors of Borrower (by written notice to
Foothill as provided below) as an Unrestricted Subsidiary; provided that such
Subsidiary (a) is not a Subsidiary in existence of the Closing Date, (b) does
not hold any Indebtedness or Stock of, or any Lien on any assets of, Borrower or
any Restricted Subsidiary, and (c) does not own or operate or possess any
material asset license, franchise or right used in connection with the ownership
or operation of any material portion of Fitzgeralds Las Vegas Facility,
Fitzgeralds Reno Facility, Fitzgeralds Tunica Facility, or Fitzgeralds Blackhawk
Facility. The Obligors shall be deemed to make an Investment in each Subsidiary
designated as an Unrestricted Subsidiary immediately following such designation
in an amount equal to the Investment in such and Subsidiary and its Subsidiaries
immediately prior to such designation; provided, that if such Subsidiary
18.
<PAGE> 24
subsequently is redesignated as a Restricted Subsidiary, the amount of such
Investment shall be deemed to be reduced (but not below zero) by the fair market
value of the net consolidated assets of such Subsidiary on the date of such
redesignation.
Any designation by the Board of Directors of Borrower
permitted by this definition shall be evidenced to Foothill by filing with
Foothill of a certified copy of the Board resolution giving effect to such
designation and an Officer's Certificate certifying that such designation
complies with the foregoing conditions and is permitted by Section 7.1 hereof.
"Voidable Transfer" has the meaning set forth in Section 15.8.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years (rounded to the nearest
one-twelfth) obtained by dividing (i) the then outstanding principal amount of
such Indebtedness into (ii) the total of the product obtained by multiplying (x)
the amount of each then remaining installment, sinking fund, serial maturity or
other required payments of principal, including payment at final maturity, in
respect thereof, by (y) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such payment.
"Year 2000 Compliant" means, with regard to any Person, that
all software in goods produced or sold by, or utilized by and material to the
business operations or financial condition of, such entity are able to interpret
and manipulate data on and involving all calendar dates correctly and without
causing any abnormal ending scenario, including in relation to dates in and
after the Year 2000.
1.2 ACCOUNTING TERMS. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP. When used herein, the term
"financial statements" shall include the notes and schedules thereto. Whenever
the term "Borrower" is used in respect of a financial covenant or a related
definition, it shall be understood to mean Borrower on a consolidated basis
unless the context clearly requires otherwise.
1.3 CODE. Any terms used in this Agreement that are defined in the
Code shall be construed and defined as set forth in the Code unless otherwise
defined herein.
1.4 CONSTRUCTION. Unless the context of this Agreement clearly
requires otherwise, references to the plural include the singular, references to
the singular include the plural, the term "including" is not limiting, and the
term "or" has, except where otherwise indicated, the inclusive meaning
represented by the phrase "and/or." The words "hereof," "herein," "hereby,"
"hereunder," and similar terms in this Agreement refer to this Agreement as a
whole and not to any particular provision of this Agreement. An Event of Default
shall "continue" or be "continuing" until such Event of Default has been waived
in writing by Foothill. Section, subsection, clause, schedule, and exhibit
references are to this Agreement unless otherwise specified. Any reference in
this Agreement or in the Loan Documents to this Agreement or any of the Loan
Documents shall include all alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, and supplements, thereto
and thereof, as applicable.
19.
<PAGE> 25
1.5 SCHEDULES AND EXHIBITS. All of the schedules and exhibits
attached to this Agreement shall be deemed incorporated herein by reference.
1.6 OBLIGORS. By its execution and delivery of the Guaranty or the
Guarantor Security Agreement, or any joinder thereto, any Obligor that is not
party to this Agreement or any joinder hereto nevertheless shall be deemed to
have agreed to be bound by each provision herein relating to Borrower, the
Guarantors, or the Obligors, as the case may be, or their assets with the same
force and effect as though such Obligor were party to this Agreement or any
joinder hereto, mutatis mutandis.
2. LOAN AND TERMS OF PAYMENT.
2.1 REVOLVING ADVANCES.
(a) Subject to the terms and conditions of this Agreement,
Foothill agrees to make advances ("Advances") to Borrower in an amount
outstanding not to exceed at any one time the Maximum Revolving Amount less the
Letter of Credit Usage and the aggregate amount of reserves (if any) created and
maintained by Foothill under this Agreement and the other Loan Documents.
(b) Anything to the contrary in Section 2.1(a) above
notwithstanding, Foothill may, in its reasonable (from the perspective of a
secured lender) credit judgment, create and maintain reserves against the
Maximum Revolving Amount if any Obligor fails to pay any monies (whether taxes,
assessments, insurance premiums, or, in the case of leased or licensed
properties or assets, rents, license payments, or other amounts under such
leases or licenses, or otherwise) due to third Persons or if Foothill determines
that there has occurred a Material Adverse Change.
(c) Foothill shall have no obligation to make Advances
hereunder to the extent they would cause the outstanding Obligations to exceed
the Reduced Maximum Amount.
(d) Amounts borrowed pursuant to this Section 2.1 may be
repaid and, subject to the terms and conditions of this Agreement, reborrowed at
any time during the term of this Agreement.
2.2 LETTERS OF CREDIT.
(a) Subject to the terms and conditions of this Agreement,
Foothill agrees to issue letters of credit for the account of Borrower (each, an
"L/C") or to issue guarantees of payment (each such guaranty, an "L/C Guaranty")
with respect to letters of credit issued by an issuing bank for the account of
Borrower. Foothill shall have no obligation to issue a Letter of Credit if any
of the following would result:
(i) the Letter of Credit Usage would exceed the Maximum
Revolving Amount less the amount of outstanding Advances and the
aggregate amount of reserves (if any) created and maintained by
Foothill under this Agreement and the other Loan Documents; or
20.
<PAGE> 26
(ii) the outstanding Obligations would exceed the
Reduced Maximum Amount.
Borrower expressly understands and agrees that Foothill shall have no obligation
to arrange for the issuance by issuing banks of the letters of credit that are
to be the subject of L/C Guarantees. Borrower and Foothill acknowledge and agree
that certain of the letters of credit that are to be the subject of L/C
Guarantees may be outstanding on the Closing Date. Each Letter of Credit shall
have an expiry date no later than 60 days prior to the date on which this
Agreement is scheduled to terminate under Section 3.4 (without regard to any
potential renewal term) and all such Letters of Credit shall be in form and
substance acceptable to Foothill in its sole discretion. If Foothill is
obligated to advance funds under a Letter of Credit, Borrower immediately shall
reimburse such amount to Foothill and, in the absence of such reimbursement, the
amount so advanced immediately and automatically shall be deemed to be an
Advance hereunder and, thereafter, shall bear interest at the rate then
applicable to Advances under Section 2.6.
(b) Borrower hereby agrees to indemnify, save, defend, and
hold Foothill harmless from any loss, cost, expense, or liability, including
payments made by Foothill, expenses, and reasonable attorneys fees incurred by
Foothill arising out of or in connection with any Letter of Credit. Borrower
agrees to be bound by the issuing bank's regulations and interpretations of any
Letters of Credit guarantied by Foothill and opened to or for Borrower's account
or by Foothill's interpretations of any L/C issued by Foothill to or for
Borrower's account, even though this interpretation may be different from
Borrower's own, and Borrower understands and agrees that Foothill shall not be
liable for any error, negligence, or mistake, whether of omission or commission,
in following Borrower's instructions or those contained in the Letter of Credit
or any modifications, amendments, or supplements thereto. Borrower understands
that the L/C Guarantees may require Foothill to indemnify the issuing bank for
certain costs or liabilities arising out of claims by Borrower against such
issuing bank. Borrower hereby agrees to indemnify, save, defend, and hold
Foothill harmless with respect to any loss, cost, expense (including reasonable
attorneys fees), or liability incurred by Foothill under any L/C Guaranty as a
result of Foothill's indemnification of any such issuing bank.
(c) Borrower hereby authorizes and directs any bank that
issues a letter of credit guaranteed by Foothill to deliver to Foothill all
instruments, documents, and other writings and property received by the issuing
bank pursuant to such letter of credit, and to accept and rely upon Foothill's
instructions and agreements with respect to all matters arising in connection
with such letter of credit and the related application. Borrower may or may not
be the "applicant" or "account party" with respect to such letter of credit.
(d) Any and all charges, commissions, fees, and costs incurred
by Foothill relating to the letters of credit guaranteed by Foothill shall be
considered Foothill Expenses for purposes of this Agreement and immediately
shall be reimbursable by Borrower to Foothill.
(e) Immediately upon the termination of this Agreement,
Borrower agrees to either (i) provide cash collateral to be held by Foothill in
an amount equal to 105% of the maximum amount of Foothill's obligations under
Letters of Credit, or (ii) cause to be delivered to Foothill releases of all of
Foothill's obligations under outstanding Letters of Credit.
21.
<PAGE> 27
At Foothill's discretion, any proceeds of Collateral received by Foothill after
the occurrence and during the continuation of an Event of Default may be held as
the cash collateral required by this Section 2.2(e).
(f) If by reason of (i) any change in any applicable law,
treaty, rule, or regulation or any change in the interpretation or application
by any governmental authority of any such applicable law, treaty, rule, or
regulation, or (ii) compliance by the issuing bank or Foothill with any
direction, request, or requirement (irrespective of whether having the force of
law) of any governmental authority or monetary authority including, without
limitation, Regulation D of the Board of Governors of the Federal Reserve System
as from time to time in effect (and any successor thereto):
(A) any reserve, deposit, or similar requirement is
or shall be imposed or modified in respect of any Letters of Credit issued
hereunder, or
(B) there shall be imposed on the issuing bank or
Foothill any other condition regarding any letter of credit, or Letter of
Credit, as applicable, issued pursuant hereto;
and the result of the foregoing is to increase, directly or indirectly, the cost
to the issuing bank or Foothill of issuing, making, guaranteeing, or maintaining
any letter of credit, or Letter of Credit, as applicable, or to reduce the
amount receivable in respect thereof by such issuing bank or Foothill, then, and
in any such case, Foothill may, at any time within a reasonable period after the
additional cost is incurred or the amount received is reduced, notify Borrower,
and Borrower shall pay on demand such amounts as the issuing bank or Foothill
may specify to be necessary to compensate the issuing bank or Foothill for such
additional cost or reduced receipt, together with interest on such amount from
the date of such demand until payment in full thereof at the rate set forth in
Section 2.6(a) or (c)(i), as applicable. The determination by the issuing bank
or Foothill, as the case may be, of any amount due pursuant to this Section
2.2(f), as set forth in a certificate setting forth the calculation thereof in
reasonable detail, shall, in the absence of manifest or demonstrable error, be
final and conclusive and binding on all of the parties hereto.
2.3 [INTENTIONALLY OMITTED].
2.4 CAPITAL EXPENDITURE LINE. Subject to the terms and conditions of
this Agreement, Foothill agrees to make a series of term loans to Borrower
(each, a "Capital Expenditure Loan") in an aggregate amount at any one time
outstanding not to exceed $5,000,000 (the "Capital Expenditure Line
Commitment"). Each Capital Expenditure Loan shall be repayable in monthly
installments of principal in the amounts set forth below, such installments to
be payable on the first day of each month commencing with the first day of the
later to occur of the Amortization Trigger Month or the month immediately
following the date on which the Capital Expenditure Loan is made and continuing
on the first day of each succeeding month until and including the date on which
the unpaid balance of the Capital Expenditure Loan is paid in full.
With respect to any Capital Expenditure Loan made prior to the
second anniversary of the Closing Date, each installment of principal of such
Capital Expenditure Loan shall be in an amount equal to 1/60th of the original
principal amount of such Capital
22.
<PAGE> 28
Expenditure Loan; provided, however, that on the second anniversary of the
Closing Date, the aggregate principal balance of all such Capital Expenditure
Loans outstanding as of such date shall be consolidated and reamortized such
that, thereafter, each installment of principal of such consolidated Capital
Expenditure Loan shall be in an amount equal to 1/36th of the aggregate
principal amount of such consolidated Capital Expenditure Loan outstanding as of
such date.
With respect to any Capital Expenditure Loan made on or after the
second anniversary of the Closing Date, each installment of principal of such
Capital Expenditure Loan shall be in an amount equal to 1/36th of the original
principal amount of such Capital Expenditure Loan.
The outstanding principal balance and all accrued and unpaid
interest under each Capital Expenditure Loan shall be due and payable upon the
termination of this Agreement, whether by its terms, by prepayment, by
acceleration, or otherwise.
Each Capital Expenditure Loan shall be made by Foothill at such
times and in such amounts as Borrower may request in writing, shall be made
solely for the purposes permitted under Section 7.17(b) hereof, shall be
advanced directly to the applicable vendor or Borrower, as the case may be, and
once borrowed may be prepaid in whole or in part without penalty or premium at
any time during the term of this Agreement upon 15 days prior written notice by
Borrower to Foothill, all such prepaid amounts to be applied to the installments
due on all of the Capital Expenditure Loans in the inverse order of their
maturity. Amounts borrowed pursuant to this Section 2.4 may be repaid and,
subject to the terms and conditions of this Agreement, reborrowed pursuant to
this Section 2.4 at any time during the term of this Agreement. The foregoing to
the contrary notwithstanding, (a) each requested Capital Expenditure Loan shall
be in a principal amount of not less than (i) $250,000, or (ii) such lesser
amount as is the then unfunded balance of the Capital Expenditure Line
Commitment, (b) each Capital Expenditure Loan shall be in an amount, as
determined by Foothill, not to exceed 100% of Borrower's construction or invoice
cost (net of shipping, freight, installation, and other so-called `soft costs')
of (i) new PP&E that is to be purchased or constructed by Borrower with the
proceeds of such Capital Expenditure Loan, or (ii) new PP&E that has been
purchased or constructed by Borrower within 30 days prior to the date of the
making of such Capital Expenditure Loan, (c) the new PP&E that is to be acquired
or constructed or that has been purchased or constructed by Borrower must be
acceptable to Foothill in all respects, (d) the new PP&E that is to be acquired
or constructed or that has been purchased or constructed by Borrower must not be
a fixture, and not be intended to be affixed, to Real Property (other than Real
Property Collateral owned in fee by the applicable Obligor and subject to a
first priority Mortgage in favor of Foothill) or to become installed in or
affixed to goods (other than Equipment owned in fee by the applicable Obligor
and subject to a first priority Lien in favor of Foothill), (e) Foothill shall
have no obligation to make any Capital Expenditure Loan hereunder to the extent
that the making thereof would cause the then outstanding amount of Capital
Expenditure Loans to exceed the Capital Expenditure Line Commitment, and (f) the
aggregate amount of all Capital Expenditure Loans outstanding at any time
(including giving effect to any requested Capital Expenditure Loan) shall not
exceed the lesser of cost or fair market value, of all of the PP&E acquired,
constructed, or financed with the proceeds of such Capital Expenditure Loans.
All amounts outstanding under the Capital Expenditure Loans shall constitute
Obligations.
23.
<PAGE> 29
2.5 OVERADVANCES. If, at any time or for any reason, the amount of
Obligations owed by Borrower to Foothill pursuant to Sections 2.1, 2.2, and 2.4
is greater than the Dollar limitations set forth in Sections 2.1, 2.2, or 2.4
(an "Overadvance"), Borrower immediately shall pay to Foothill, in cash, the
amount of such excess to be used by Foothill first, to repay Advances
outstanding under Section 2.1 and, thereafter, to be held by Foothill as cash
collateral to secure Borrower's obligation to repay Foothill for all amounts
paid pursuant to Letters of Credit.
2.6 INTEREST AND LETTER OF CREDIT FEES: RATES, PAYMENTS, AND
CALCULATIONS.
(a) Interest Rate. Except as provided in clause (b) below, (i)
all Obligations (except for undrawn Letters of Credit) shall bear interest at a
per annum rate equal to the Reference Rate minus 7 basis points.
(b) Letter of Credit Fee. Borrower shall pay Foothill a fee
(in addition to the charges, commissions, fees, and costs set forth in Section
2.2(d)) equal to 1.25% per annum times the aggregate undrawn amount of all
outstanding Letters of Credit.
(c) Default Rate. Upon the occurrence and during the
continuation of an Event of Default, (i) all Obligations (except for undrawn
Letters of Credit) shall bear interest at a per annum rate equal to 2 percentage
points above the Reference Rate, and (ii) the Letter of Credit fee provided in
Section 2.6(b) shall be increased to 3.25% per annum times the amount of the
undrawn Letters of Credit that were outstanding during the immediately preceding
month.
(d) [intentionally omitted]
(e) Payments. Interest and Letter of Credit fees payable
hereunder shall be due and payable, in arrears, on the first day of each month
during the term hereof. Borrower hereby authorizes Foothill, at its option,
without prior notice to Borrower, to charge such interest and Letter of Credit
fees, all Foothill Expenses (as and when incurred), the charges, commissions,
fees, and costs provided for in Section 2.2(d) (as and when accrued or
incurred), the fees and charges provided for in Section 2.11 (as and when
accrued or incurred), and all installments or other payments due under the
Capital Expenditure Loans, or any Loan Document to Borrower's Loan Account,
which amounts thereafter shall accrue interest at the rate then applicable to
Advances hereunder. Any interest not paid when due shall be compounded and shall
thereafter accrue interest at the rate then applicable to Advances hereunder.
(f) Computation. The Reference Rate as of the date of this
Agreement is 8.5% per annum. In the event the Reference Rate is changed from
time to time hereafter, the applicable rate of interest hereunder automatically
and immediately shall be increased or decreased by an amount equal to such
change in the Reference Rate. All interest and fees chargeable under the Loan
Documents shall be computed on the basis of a 360 day year for the actual number
of days elapsed.
(g) Intent to Limit Charges to Maximum Lawful Rate. In no
event shall the interest rate or rates payable under this Agreement, plus any
other amounts paid in connection herewith, exceed the highest rate permissible
under any law that a court of competent
24.
<PAGE> 30
jurisdiction shall, in a final determination, deem applicable. Borrower and
Foothill, in executing and delivering this Agreement, intend legally to agree
upon the rate or rates of interest and manner of payment stated within it;
provided, however, that, anything contained herein to the contrary
notwithstanding, if said rate or rates of interest or manner of payment exceeds
the maximum allowable under applicable law, then, ipso facto as of the date of
this Agreement, Borrower is and shall be liable only for the payment of such
maximum as allowed by law, and payment received from Borrower in excess of such
legal maximum, whenever received, shall be applied to reduce the principal
balance of the Obligations to the extent of such excess.
2.7 [INTENTIONALLY OMITTED].
2.8 CREDITING PAYMENTS; APPLICATION OF COLLECTIONS. Subject to
Section 6.10(d) hereof, the receipt of any Collections by Foothill immediately
shall be applied provisionally to reduce the Obligations outstanding under
Section 2.1, but shall not be considered a payment on account unless such
Collection item is a wire transfer of immediately available federal funds and is
made to the Foothill Account or unless and until such Collection item is honored
when presented for payment. Should any Collection item not be honored when
presented for payment, then Borrower shall be deemed not to have made such
payment, and interest shall be recalculated accordingly. Anything to the
contrary contained herein notwithstanding, any Collection item shall be deemed
received by Foothill only if it is received into an account maintained by
Foothill with a depositary selected by Foothill (the "Foothill Account") on a
Business Day on or before 11:00 a.m. California time. If any Collection item is
received into the Foothill Account on a non-Business Day or after 11:00 a.m.
California time on a Business Day, it shall be deemed to have been received by
Foothill as of the opening of business on the immediately following Business
Day.
2.9 DESIGNATED ACCOUNT. Foothill is authorized to make the Advances,
the Letters of Credit, and the Capital Expenditure Loans under this Agreement
based upon telephonic or other instructions received from anyone purporting to
be an Authorized Person, or without instructions if pursuant to Section 2.6(e).
Borrower agrees to establish and maintain the Designated Account with the
Designated Account Bank for the purpose of receiving the proceeds of the
Advances and the Capital Expenditure Loans requested by Borrower and made by
Foothill hereunder. Unless otherwise agreed by Foothill and Borrower, any
Advance and the Capital Expenditure Loans requested by Borrower and made by
Foothill hereunder shall be made to the Designated Account.
2.10 MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF OBLIGATIONS.
Foothill shall maintain an account on its books in the name of Borrower (the
"Loan Account") on which Borrower will be charged with all Advances and the
Capital Expenditure Loans made by Foothill to Borrower or for Borrower's
account, including, accrued interest, Foothill Expenses, and any other payment
Obligations of Borrower. In accordance with Section 2.8, the Loan Account will
be credited with all payments received by Foothill from Borrower or for
Borrower's account, including all amounts received in the Foothill Account from
the Designated Account Bank. Foothill shall render statements regarding the Loan
Account to Borrower, including principal, interest, fees, and including an
itemization of all charges and expenses constituting Foothill Expenses owing,
and such statements shall be conclusively presumed to be correct and accurate
and constitute an account stated between Borrower and Foothill unless, within 30
days after
25/
<PAGE> 31
receipt thereof by Borrower, Borrower shall deliver to Foothill written
objection thereto describing the error or errors contained in any such
statements.
2.11 FEES. Borrower shall pay to Foothill the following fees:
(a) Closing Fee. On the Closing Date, a closing fee of
$150,000;
(b) Unused Line Fee. On the first day of each quarter during
the term of this Agreement, an unused line fee in an amount equal to 0.25% per
annum times the Average Unused Portion of the Applicable Amount, such fee to be
payable in arrears;
(c) Third Anniversary Fee. A one-time anniversary fee in an
amount equal to 0.25% of the Reduced Maximum Amount as of the third anniversary
of the Closing Date, such fee to be fully earned on the Closing Date, due and
payable on the third anniversary of the Closing Date, and non-refundable when
paid; and
(d) Financial Examination and Appraisal Fees. (i) Foothill's
customary fee of $650 per day per examiner, plus out-of-pocket expenses for each
financial analysis and examination (i.e., audits) of Borrower performed by
personnel employed by Foothill; provided, however, that, if during any one-year
period ending on each anniversary of the Closing Date there has not occurred an
Event of Default, the amount of such fee charged to Borrower for audits in that
one-year period will not exceed such fee for 5 examiner-days; and (ii) the
actual charges paid or incurred by Foothill if it elects to employ the services
of one or more third Persons to perform such financial analyses and examinations
(i.e., audits) of Borrower, appraise the Collateral, or perform real estate
surveys or environmental surveys; provided, however, that, if during any
one-year period ending on each anniversary of the Closing Date there has not
occurred an Event of Default, the amount of charges under this clause (ii)
charged to Borrower in that one-year period will not exceed $7,500; provided
further that, if during any two-year period ending on each anniversary of the
Closing Date there has not occurred an Event of Default, the amount of charges
under this clause (ii) charged to Borrower in that two-year period will not
exceed $12,000.
(e) [intentionally omitted]
3. CONDITIONS; TERM OF AGREEMENT.
3.1 CONDITIONS PRECEDENT TO THE INITIAL ADVANCE, LETTER OF CREDIT,
OR CAPITAL EXPENDITURE LOAN.
The obligation of Foothill to make the initial Advance, to issue the
initial Letter of Credit, or to make the initial Capital Expenditure Loan is
subject to the fulfillment, to the satisfaction of Foothill and its counsel, of
each of the following conditions on or before the Closing Date:
(a) the Closing Date shall occur on or before November 6,
1998;
(b) Foothill shall have received searches reflecting the
filing of its financing statements and fixture filings;
26.
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(c) Foothill shall have received each of the following
documents, duly executed, and each such document shall be in full force and
effect:
(1) [intentionally omitted];
(2) the Mortgages;
(3) the Environmental Indemnity;
(4) the Guarantor Security Agreement;
(5) the Guaranty;
(6) the Stock Pledge Agreement;
(7) the Guarantor Stock Pledge Agreement;
(8) the Trademark Security Agreement and the
Copyright Security Agreement;
(9) the Tunica Ship Mortgage;
(10) the Intercreditor Agreement;
(11) the Obligor Subordination Agreement;
(d) Except as otherwise provided with respect to the shares of
Stock of FLVI, FRI, and FSI under Section 3.3(b), (i) Foothill shall have
received possession of the shares of Stock of each of the Subsidiaries of
Borrower, as well as stock powers with respect thereto endorsed in blank; or
(ii) Foothill shall have received the written acknowledgment, in form and
substance satisfactory to Foothill, of a bailee reasonably acceptable to
Foothill that such bailee is in possession or control of the items described in
clause (i) above and holds, or is causing to be held, same for the benefit of
Foothill;
(e) Foothill shall have received a certificate from the
Secretary of each Obligor attesting to the resolutions of such Obligor's Board
of Directors authorizing its execution, delivery, and performance of the Loan
Documents to which such Obligor is a party and authorizing specific officers of
such Obligor to execute the same;
(f) Foothill shall have received copies of each Obligor's
Governing Documents, as amended, modified, or supplemented to the Closing Date,
certified by the Secretary of the applicable Obligor;
(g) Foothill shall have received a certificate of status with
respect to each Obligor, dated within 10 days of the Closing Date, such
certificate to be issued by the appropriate officer of the jurisdiction of
organization of such Obligor, which certificate shall indicate that such Obligor
is in good standing in such jurisdiction;
27.
<PAGE> 33
(h) Foothill shall have received certificates of status with
respect to each Obligor, each dated within 15 days of the Closing Date, such
certificates to be issued by the appropriate officer of the jurisdictions in
which its failure to be duly qualified or licensed would constitute a Material
Adverse Change, which certificates shall indicate that such Obligor is in good
standing in such jurisdictions;
(i) Foothill shall have received a certificate of insurance,
together with the endorsements thereto, as are required by Section 6.10, the
form and substance of which shall be satisfactory to Foothill and its counsel;
(j) Foothill shall have received duly executed certificates of
title with respect to that portion of the Collateral that is subject to
certificates of title;
(k) Foothill shall have received, in cash or other immediately
available funds, the closing fee set forth in Section 2.11(a);
(l) Foothill shall have received copies of each Key Lease,
together with a certificate of the Secretary of the relevant Obligor certifying
same to be a true, complete, and correct copy thereof;
(m) Foothill shall have received a copy of each of the
material Senior Note Documents, together with a certificate of the Secretary of
the relevant Obligor certifying same to be a true, complete, and correct copy
thereof;
(n) Foothill shall have received opinions of Borrower's
counsel in form and substance satisfactory to Foothill in its sole discretion.
Without limiting the generality of the foregoing, such opinions shall include an
opinion as to the due issuance and valid existence of the Obligors' Casino
Licenses;
(o) Foothill shall have received evidence, satisfactory to
Foothill and its counsel, that, except as contemplated by Section 3.3(b) hereof,
the Obligors have made all necessary registrations with, obtained all necessary
consents or approvals of, given all necessary notices to, and taken all other
necessary actions required by, each applicable Gaming Authority relative to the
execution, delivery, and performance of the Loan Documents by the Obligors;
(p) Foothill shall have received mortgagee title insurance
policies (or marked commitments to issue the same) for the Real Property
Collateral issued by a title insurance company satisfactory to Foothill (each a
"Mortgage Policy" and, collectively, the "Mortgage Policies") in amounts
satisfactory to Foothill assuring Foothill that the Mortgages on such Real
Property Collateral are valid and enforceable first priority mortgage Liens on
such Real Property Collateral free and clear of all defects and encumbrances
except Permitted Liens, and the Mortgage Policies shall otherwise be in form and
substance reasonably satisfactory to Foothill;
(q) Foothill shall have received copies of a company prepared
balance sheet, income statement, and statement of cash flow covering the
operations during September 30, 1998 of those Obligors that own a Significant
Casino, which financial statements shall be satisfactory to Foothill;
28.
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(r) Foothill shall have received satisfactory evidence that
all tax returns required to be filed by the Obligors have been timely filed and
all taxes upon each Obligor or its properties, assets, income, and franchises
(including real property taxes and payroll taxes) have been paid prior to
delinquency, except such taxes that are the subject of a Permitted Protest; and
(s) all other documents and legal matters in connection with
the transactions contemplated by this Agreement shall have been delivered,
executed, or recorded and shall be in form and substance satisfactory to
Foothill and its counsel.
3.2 CONDITIONS PRECEDENT TO ALL ADVANCES, ALL LETTERS OF CREDIT,
AND ALL CAPITAL EXPENDITURE LOANS.
The following shall be conditions precedent to all Advances, all
Letters of Credit, and all Capital Expenditure Loans hereunder:
(a) the representations and warranties contained in this
Agreement and the other Loan Documents shall be true and correct in all respects
on and as of the date of such extension of credit, as though made on and as of
such date (except to the extent that such representations and warranties relate
solely to an earlier date);
(b) no Default or Event of Default shall have occurred and be
continuing on the date of such extension of credit, nor shall either result from
the making thereof; and
(c) no injunction, writ, restraining order, or other order of
any nature prohibiting, directly or indirectly, the extending of such credit
shall have been issued and remain in force by any governmental authority against
Borrower, Foothill, or any of their Affiliates.
3.3 CONDITIONS SUBSEQUENT. As conditions subsequent to initial
closing hereunder, Borrower shall perform or cause to be performed the following
(the failure by Borrower to so perform or cause to be performed constituting an
Event of Default):
(a) within 30 days of the Closing Date, deliver to Foothill
the certified copies of the policies of insurance, together with the
endorsements thereto, as are required by Section 6.10, the form and substance of
which shall be satisfactory to Foothill and its counsel; and
(b) on or before February 28, 1999, (i) the Obligors shall
have obtained the consent of the Nevada Gaming Authorities to the grant of a
Lien in and to the Stock of FLVI, FRI, and FSI, the form and substance of which
shall be satisfactory to Foothill and its counsel, and (ii) (y) Foothill shall
have received possession of the shares of Stock of FLVI, FRI, and FSI, as well
as stock powers with respect thereto endorsed in blank, or (z) Foothill shall
have received the written acknowledgment, in form and substance satisfactory to
Foothill, of a bailee reasonably acceptable to Foothill that such bailee is in
possession or control of the items described in clause (z) above and holds, or
is causing to be held, same for the benefit of Foothill.
29.
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3.4 TERM; AUTOMATIC RENEWAL. This Agreement shall become effective
upon the execution and delivery hereof by Borrower and Foothill and shall
continue in full force and effect for a term ending on the date (the "Renewal
Date") that is 5 years from the Closing Date and automatically shall be renewed
for successive 1 year periods thereafter, unless sooner terminated pursuant to
the terms hereof. Either party may terminate this Agreement effective on the
Renewal Date or on any 1 year anniversary of the Renewal Date by giving the
other party at least 90 days prior written notice. The foregoing
notwithstanding, Foothill shall have the right to terminate its obligations
under this Agreement immediately and without notice upon the occurrence and
during the continuation of an Event of Default.
3.5 EFFECT OF TERMINATION. On the date of termination of this
Agreement, all Obligations (including contingent reimbursement obligations of
Borrower with respect to any outstanding Letters of Credit) immediately shall
become due and payable without notice or demand. No termination of this
Agreement, however, shall relieve or discharge Borrower of Borrower's duties,
Obligations, or covenants hereunder, and Foothill's continuing security
interests in the Borrower Collateral and the Guarantor Collateral shall remain
in effect until all Obligations have been fully and finally discharged and
Foothill's obligation to provide additional credit hereunder is terminated. If
Borrower has sent a notice of termination pursuant to the provisions of Section
3.4, but fails to pay the Obligations in full on the date set forth in said
notice, then Foothill may, but shall not be required to, renew this Agreement
for an additional term of 1 year.
3.6 EARLY TERMINATION BY BORROWER. The provisions of Section 3.4
that allow termination of this Agreement by Borrower only on the Renewal Date
and certain anniversaries thereof notwithstanding, Borrower has the option, at
any time upon 90 days prior written notice to Foothill, to terminate this
Agreement by paying to Foothill, in cash, the Obligations (including an amount
equal to 105% of the undrawn amount of the Letters of Credit), in full, together
with a premium (the "Early Termination Premium") equal to:
(a) $450,000, if such termination occurs during the period
from and after the Closing Date and up to and including first anniversary of the
Closing Date; provided, however, that, if such termination occurs during such
period proximately in connection with, and substantially contemporaneously with
the consummation of, an acquisition of all or substantially all of the capital
stock of Borrower or the acquisition of all or substantially all of the
Obligors' assets, then, the Early Termination Premium otherwise applicable under
this Section 3.6(a) shall equal $225,000;
(b) $300,000, if such termination occurs during the period
from and after the date immediately following the first anniversary of the
Closing Date and up to and including the second anniversary of the Closing Date;
provided, however, that, if such termination occurs during such period
proximately in connection with, and substantially contemporaneously with the
consummation of, an acquisition of all or substantially all of the capital stock
of Borrower or the acquisition of all or substantially all of the Obligors'
assets, then, the Early Termination Premium otherwise applicable under this
Section 3.6(b) shall equal $150,000;
30.
<PAGE> 36
(c) 1% of the Reduced Maximum Amount, if such termination
occurs during the period from and after the date immediately following the
second anniversary of the Closing Date and up to and including the third
anniversary of the Closing Date; provided, however, that, if such termination
occurs during such period proximately in connection with, and substantially
contemporaneously with the consummation of, an acquisition of all or
substantially all of the capital stock of Borrower or the acquisition of all or
substantially all of the Obligors' assets, then, the Early Termination Premium
otherwise applicable under this Section 3.6(c) shall equal 0.5% of the Reduced
Maximum Amount;
(d) 0.75% of the Reduced Maximum Amount, if such termination
occurs during the period from and after the date immediately following the third
anniversary of the Closing Date and up to and including the fourth anniversary
of the Closing Date; provided, however, that, if such termination occurs during
such period proximately in connection with, and substantially contemporaneously
with the consummation of, an acquisition of all or substantially all of the
capital stock of Borrower or the acquisition of all or substantially all of the
Obligors' assets, then, the Early Termination Premium otherwise applicable under
this Section 3.6(d) shall equal 0.375% of the Reduced Maximum Amount; and
(e) zero (-0-), if such termination occurs after the fourth
anniversary of the Closing Date.
3.7 TERMINATION UPON EVENT OF DEFAULT. If Foothill terminates this
Agreement upon the occurrence of an Event of Default, in view of the
impracticability and extreme difficulty of ascertaining actual damages and by
mutual agreement of the parties as to a reasonable calculation of Foothill's
lost profits as a result thereof, Borrower shall pay to Foothill upon the
effective date of such termination, a premium in an amount equal to the Early
Termination Premium. The Early Termination Premium shall be presumed to be the
amount of damages sustained by Foothill as the result of the early termination
and Borrower agrees that it is reasonable under the circumstances currently
existing. The Early Termination Premium provided for in this Section 3.7 shall
be deemed included in the Obligations.
4. CREATION OF SECURITY INTEREST.
4.1 GRANT OF SECURITY INTEREST. Borrower hereby grants to Foothill a
continuing security interest in all currently existing and hereafter acquired or
arising Personal Property Collateral in order to secure prompt repayment of any
and all Obligations and in order to secure prompt performance by Borrower of
each of its covenants and duties under the Loan Documents. Foothill's security
interests in the Borrower Personal Property Collateral shall attach to all
Borrower Personal Property Collateral without further act on the part of
Foothill or Borrower. Anything contained in this Agreement or any other Loan
Document to the contrary notwithstanding, except for Permitted Dispositions, no
Obligor has any authority, express or implied, to dispose of any item or portion
of the Collateral.
4.2 NEGOTIABLE COLLATERAL. In the event that any Collateral,
including proceeds, is evidenced by or consists of Negotiable Collateral, and if
and to the extent that perfection or priority is dependant or enhanced by
possession, Borrower, immediately upon the request of Foothill, shall (and shall
cause each of the other Obligors to, and, by its execution and
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delivery of the Guaranty or a joinder thereto, each of the Guarantors hereby
agrees to) endorse and deliver physical possession of such Negotiable Collateral
to Foothill.
4.3 COLLECTION OF ACCOUNTS, GENERAL INTANGIBLES, AND NEGOTIABLE
COLLATERAL. At any time from and after and during the continuation of an Event
of Default, Foothill or Foothill's designee may (a) notify customers or Account
Debtors of the Obligors that the Accounts, General Intangibles, or Negotiable
Collateral have been assigned to Foothill or that Foothill has a security
interest therein, and (b) collect the Accounts, General Intangibles, and
Negotiable Collateral directly and charge the collection costs and expenses to
the Loan Account. Borrower agrees that it will (and will cause each of the other
Obligors to, and, by its execution and delivery of the Guaranty or a joinder
thereto, each of the Guarantors hereby agrees to) hold in trust for Foothill, as
Foothill's trustee, any Collections that it receives and immediately will
deliver said Collections to Foothill in their original form as received by the
applicable Obligor.
4.4 DELIVERY OF ADDITIONAL DOCUMENTATION REQUIRED. At any time upon
the request of Foothill, Borrower shall (and shall cause each of the other
Obligors to, and, by its execution and delivery of the Guaranty or a joinder
thereto, each of the Guarantors hereby agrees to) execute and deliver to
Foothill all financing statements, continuation financing statements, fixture
filings, security agreements, pledges, assignments, collateral assignments,
mortgages, leasehold mortgages, deeds of trust, leasehold deeds of trust,
endorsements of certificates of title, applications for title, affidavits,
reports, notices, schedules of accounts, letters of authority, and all other
documents that Foothill reasonably may request, in form satisfactory to
Foothill, to perfect and continue perfected Foothill's security interests in the
Collateral (whether now owned or hereafter arising or acquired), and in order to
fully consummate all of the transactions contemplated hereby and under the other
Loan Documents. In this regard and without limiting the generality of the
foregoing, but subject to the applicable restrictions in Section 2.11(d),
Foothill shall have the right to require Borrower and the other Obligors to
obtain phase-I environmental reports and real estate surveys with respect to the
Real Property Collateral from environmental consultants and surveyors and
setting forth results, in each case, acceptable to Foothill in its sole
discretion.
4.5 POWER OF ATTORNEY. Borrower hereby irrevocably makes,
constitutes, and appoints (and hereby causes each of the other Obligors to make,
constitute, and appoint, and, by its execution and delivery of the Guaranty or a
joinder thereto, each of the Guarantors hereby makes, constitutes, and appoints)
Foothill (and any of Foothill's officers, employees, or agents designated by
Foothill) as the Obligors' true and lawful attorney, with power to (a) if any
Obligor refuses to, or fails timely to execute and deliver any of the documents
described in Section 4.4, sign the name of such Obligor on any of the documents
described in Section 4.4, (b) endorse any Obligor's name on any Collection item
that may come into Foothill's possession, and (c) at any time that an Event of
Default has occurred and is continuing or Foothill deems itself insecure, make,
settle, and adjust all claims under the Obligors' policies of insurance and make
all determinations and decisions with respect to such policies of insurance. The
appointment of Foothill as the Obligors' attorney, and each and every one of
Foothill's rights and powers, being coupled with an interest, is irrevocable
until all of the Obligations have been fully and finally repaid and performed
and Foothill's obligation to extend credit hereunder is terminated.
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4.6 RIGHT TO INSPECT. Foothill (through any of its officers,
employees, or agents) shall have the right, from time to time hereafter to
inspect the Books and to check, test, and appraise the Collateral in order to
verify any or all of the Obligors' financial condition or the amount, quality,
value, condition of, or any other matter relating to, the Collateral.
5. REPRESENTATIONS AND WARRANTIES.
In order to induce Foothill to enter into this Agreement, Borrower
makes the following representations and warranties which shall be true, correct,
and complete in all respects as of the date hereof, and shall be true, correct,
and complete in all respects as of the Closing Date, and at and as of the date
of the making of each Advance, Letter of Credit, or Capital Expenditure Loan
made thereafter, as though made on and as of the date of such Advance, Letter of
Credit, or Capital Expenditure Loan (except to the extent that such
representations and warranties relate solely to an earlier date) and such
representations and warranties shall survive the execution and delivery of this
Agreement:
5.1 NO ENCUMBRANCES. The Obligors have good and indefeasible title
to the Collateral, free and clear of Liens except for Permitted Liens.
5.2 [INTENTIONALLY OMITTED].
5.3 [INTENTIONALLY OMITTED].
5.4 PP&E. All of the PP&E (including the Equipment) is used or held
for use in the Obligors' business and is fit for such purposes, ordinary wear
and tear excepted.
5.5 LOCATION OF INVENTORY AND EQUIPMENT. The Inventory and Equipment
are not stored with a bailee, warehouseman, or similar party (without Foothill's
prior written consent) and are located only at the locations identified on
Schedule 6.12 or otherwise permitted by Section 6.12.
5.6 [INTENTIONALLY OMITTED].
5.7 LOCATION OF CHIEF EXECUTIVE OFFICE; FEIN. The chief executive
office of Borrower and each Guarantor is located at the address for Borrower
indicated in the preamble to this Agreement and the FEINs for each of the
Obligors are as set forth on Schedule 5.7.
5.8 DUE ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.
(a) Borrower is duly organized and existing and in good
standing under the laws of the jurisdiction of its incorporation and qualified
and licensed to do business in, and in good standing in, any state where the
failure to be so licensed or qualified reasonably could be expected to have a
Material Adverse Change.
(b) Each Guarantor is duly organized and existing and in good
standing under the laws of the jurisdiction of its incorporation and qualified
and licensed to do business in, and in good standing in, any state where the
failure to be so licensed or qualified reasonably could be expected to have a
Material Adverse Change.
33.
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(c) Set forth on Schedule 5.8 is a complete and accurate list
of Borrower's direct and indirect Subsidiaries, showing: (i) the jurisdiction of
their incorporation; (ii) the number of shares of each class of common and
preferred stock authorized for each of such Subsidiaries; and (iii) the number
and the percentage of the outstanding shares of each such class owned directly
or indirectly by Borrower; provided, however, that from time to time, Borrower
shall be entitled to update Schedule 5.8 to add the required information
concerning newly created or acquired Subsidiaries. All of the outstanding Stock
of each such Subsidiary has been validly issued and is fully paid and
non-assessable.
(d) Except as set forth on Schedule 5.8, no Stock (or any
securities, instruments, warrants, options, purchase rights, conversion or
exchange rights, calls, commitments or claims of any character convertible into
or exercisable for Stock) of any direct or indirect Subsidiary of Borrower is
subject to the issuance of any security, instrument, warrant, option, purchase
right, conversion or exchange right, call, commitment or claim of any right,
title, or interest therein or thereto.
(e) Each Unrestricted Subsidiary (i) does not, together with
all other Unrestricted Subsidiaries, own any property or assets with a book
value in excess of (y) on or before August 15, 1998, $8,000,000, and (z) from
and after August 16, 1998, (1) prior to the sale of all or substantially all of
the assets or capital stock of NCI, $5,000,000, or (2) thereafter, $2,500,000,
(ii) does not currently engage in any material business activity, and (iii) does
not intend in the future to engage in any material business activity.
5.9 DUE AUTHORIZATION; NO CONFLICT.
(a) (i) The execution, delivery, and performance by Borrower
of this Agreement and the Loan Documents to which it is a party have been duly
authorized by all necessary corporate action. (ii) The execution, delivery, and
performance by each of the other Obligors of the Loan Documents to which it is a
party have been duly authorized by all necessary corporate action.
(b) (i) The execution, delivery, and performance by Borrower
of this Agreement and the Loan Documents to which it is a party do not and will
not (w) violate any provision of federal, state, or local law or regulation
(including Regulations T, U, and X of the Federal Reserve Board) applicable to
Borrower, the Governing Documents of Borrower, or any order, judgment, or decree
of any court or other Governmental Authority binding on any Obligor, (x)
conflict with, result in a breach of, or constitute (with due notice or lapse of
time or both) a default under any material contractual obligation or material
lease of any Obligor, (y) result in or require the creation or imposition of any
Lien of any nature whatsoever upon any properties or assets of any Obligor,
other than Permitted Liens, or (z) require any approval of stockholders or any
approval or consent of any Person under any material contractual obligation of
any Obligor.
(ii) The execution, delivery, and performance by
each of the other Obligors of the Loan Documents to which it is a party do not
and will not (w) violate any provision of federal, state, or local law or
regulation (including Regulations T, U, and X of the Federal Reserve Board)
applicable to such Obligor, the Governing Documents of such Obligor,
34.
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or any order, judgment, or decree of any court or other Governmental Authority
binding on any Obligor, (x) conflict with, result in a breach of, or constitute
(with due notice or lapse of time or both) a default under any material
contractual obligation or material lease of any Obligor, (y) result in or
require the creation or imposition of any Lien of any nature whatsoever upon any
properties or assets of any Obligor, other than Permitted Liens, or (z) require
any approval of stockholders or any approval or consent of any Person under any
material contractual obligation of any Obligor.
(c) (i) Other than the filing of appropriate financing
statements, fixture filings, and Mortgages, the execution, delivery, and
performance by Borrower of this Agreement and the Loan Documents to which
Borrower is a party do not and will not require any registration with, consent,
or approval of, or notice to, or other action with or by, any federal, state,
foreign, or other Governmental Authority or other Person.
(ii) Other than the filing of appropriate financing
statements, fixture filings, and Mortgages, the execution, delivery, and
performance by each of the other Obligors of the Loan Documents to which such
Obligor is a party do not and will not require any registration with, consent,
or approval of, or notice to, or other action with or by, any federal, state,
foreign, or other Governmental Authority or other Person.
(d) (i) This Agreement and the Loan Documents to which
Borrower is a party, and all other documents contemplated hereby and thereby,
when executed and delivered by Borrower will be the legally valid and binding
obligations of Borrower, enforceable against Borrower in accordance with their
respective terms, except as enforcement may be limited by equitable principles
or by bankruptcy, insolvency, reorganization, moratorium, or similar laws
relating to or limiting creditors' rights generally.
(ii) The Loan Documents to which each of the other
Obligors is a party, and all other documents contemplated hereby and thereby,
when executed and delivered by such Obligor will be the legally valid and
binding obligations of such Obligor, enforceable against such Obligor in
accordance with their respective terms, except as enforcement may be limited by
equitable principles or by bankruptcy, insolvency, reorganization, moratorium,
or similar laws relating to or limiting creditors' rights generally.
(e) (i) The Liens granted by Borrower to Foothill in and to
its properties and assets pursuant to this Agreement and the other Loan
Documents are validly created, perfected, and first priority Liens, subject only
to Permitted Liens.
(ii) The Liens granted by each of the other Obligors
to Foothill in and to its properties and assets pursuant to the Loan Documents
are validly created, perfected, and first priority Liens, subject only to
Permitted Liens.
5.10 LITIGATION. There are no actions or proceedings pending by or
against any Obligor before any court or administrative agency and neither
Borrower nor any other Obligor has any knowledge or belief of any pending,
threatened, or imminent litigation, governmental investigations, or claims,
complaints, actions, or prosecutions involving any Obligor, except for: (a)
ongoing collection matters in which one or more of the Obligors is the
plaintiff; (b) matters
35.
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disclosed on Schedule 5.10; and (c) matters arising after the date hereof that,
if decided adversely to such Obligor, would not have a Material Adverse Change.
5.11 NO MATERIAL ADVERSE CHANGE. All financial statements relating
to Borrower or any guarantor of the Obligations that have been delivered by
Borrower to Foothill have been prepared in accordance with GAAP (except, in the
case of unaudited financial statements, for the lack of footnotes and being
subject to year-end audit adjustments) and fairly present Borrower's (or such
guarantor's, as applicable) financial condition as of the date thereof and
Borrower's results of operations for the period then ended. There has not been a
Material Adverse Change with respect to Borrower (or such guarantor, as
applicable) since the date of the latest financial statements submitted to
Foothill on or before the Closing Date.
5.12 [INTENTIONALLY OMITTED]
5.13 EMPLOYEE BENEFITS. None of Borrower, any of its Subsidiaries,
or any of their ERISA Affiliates maintains or contributes to any Benefit Plan,
other than those listed on Schedule 5.13. Borrower, each of its Subsidiaries and
each ERISA Affiliate have satisfied the minimum funding standards of ERISA and
the IRC with respect to each Benefit Plan to which it is obligated to
contribute. No ERISA Event has occurred and is continuing nor has any other
event occurred that may result in an ERISA Event that reasonably could be
expected to result in a Material Adverse Change. None of Borrower or its
Subsidiaries or any ERISA Affiliate is required to provide security to any Plan
under Section 401(a)(29) of the IRC.
5.14 ENVIRONMENTAL CONDITION. None of any Obligor's properties or
assets has ever been used by any Obligor or, to the best of Borrower's
knowledge, by previous owners or operators in the disposal of, or to produce,
store, handle, treat, release, or transport, any Hazardous Materials except as
disclosed on Schedule 5.14 (and, to the extent set forth on such schedule, any
such production, storage, handling, treatment, release, or transport of such
Hazardous Materials by any Obligor is in compliance with all applicable laws and
regulations in respect thereof). None of any Obligor's properties or assets has
ever been designated or identified in any manner pursuant to any environmental
protection statute as a Hazardous Materials disposal site, or a candidate for
closure pursuant to any environmental protection statute. No Lien arising under
any environmental protection statute has attached to any revenues or to any real
or personal property owned or operated by any Obligor. No Obligor has received a
summons, citation, notice, or directive from the Environmental Protection Agency
or any other federal or state governmental agency concerning any action or
omission by any Obligor resulting in the releasing or disposing of Hazardous
Materials into the environment.
5.15 BROKERAGE FEES. No brokerage commission or finders fees has or
shall be incurred or payable in connection with or as a result of Borrower's
obtaining financing from Foothill under this Agreement, and Borrower has not
utilized the services of any broker or finder in connection with Borrower's
obtaining financing from Foothill under this Agreement.
5.16 KEY LEASES. All Key Leases of the Obligors are identified on
Schedule 5.16 and each Obligor party to each of the Key Leases is in compliance
in all material respects with all of the terms of that Key Lease the failure to
comply with which reasonably could be
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expected to result in a termination or non-renewal thereof or a change therein
materially adverse to that Obligor.
5.17 GOVERNMENTAL AUTHORITY. Except as set forth on Schedule 5.17,
no consent, authorization, approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body or any other Person
is required (a) for the grant by any Obligor of the security interest in the
Collateral granted hereby or for the execution, delivery or performance of this
Agreement and the other Loan Documents by Borrower and the other Obligors, (b)
for the perfection of such security interest or the exercise by Foothill of the
rights and remedies provided for in this Agreement or the other Loan Documents,
or (c) except for the consents, authorizations, approvals, actions, notices and
filings with the Gaming Authorities, all of which have been duly obtained,
taken, given or made and are in full force and effect and are not subject to any
conditions (other than those conditions generally applicable to entities holding
licenses, permits, consents or authorizations granted or issued by the Gaming
Authorities).
5.18 YEAR 2000 COMPLIANCE.
(a) On the basis of a comprehensive inventory, review and
assessment currently being undertaken by Borrower of Borrower's computer
applications utilized by Borrower or contained in products produced or sold by
Borrower, and upon inquiry made of Borrower's material suppliers and vendors,
Borrower's management is of the considered view that Borrower, its products, and
all such suppliers and vendors will be Year 2000 Compliant before October 1,
1999.
(b) Borrower (i) has undertaken a detailed inventory, review
and assessment of all areas within its business and operations that could be
adversely affected by the failure of Borrower or its products to be Year 2000
Compliant on a timely basis, (ii) is developing a detailed plan and timeline for
becoming Year 2000 Compliant on a timely basis, and (iii) to date, is
implementing that plan in accordance with that timetable in all material
respects. Borrower reasonably anticipates that it will be Year 2000 Compliant on
a timely basis.
5.19 LICENSES AND PERMITS.
(a) (i) All material licenses, permits, and consents and
similar rights required from any federal, state, or local governmental body
(including the Gaming Authorities) for the ownership, use, or operation of the
businesses or properties now owned or operated by the Obligors, including all
necessary Casino Licenses, have been validly issued and are in full force and
effect; (ii) to the best of Borrower's knowledge and belief, each Obligor is in
compliance, in all material respects, with all of the provisions thereof
applicable to it; and (iii) none of such licenses, permits, or consents is the
subject of any pending or, to the best of Borrower's knowledge and belief,
threatened proceeding for the revocation, cancellation, suspension, or
non-renewal thereof. As of the Closing Date or of each subsequent date on which
Borrower delivers to Foothill an updated schedule pursuant to Section 6.18, set
forth on Schedule 5.19 is a complete and accurate list of all such licenses,
permits, and consents, and such schedule identifies the date by which an
application for the renewal of such license, permit, or consent must be filed
and describes the status of each such pending application.
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(b) Each Obligor has obtained (i) all material licenses,
permits, and consents necessary or appropriate to conduct the business and
operations located at each of the Facilities, and (ii) as of the Closing Date,
all required approvals from the Gaming Authorities of the transactions
contemplated hereby and by the other Loan Documents.
(c) Each Obligor owns or possesses all patents, trademarks,
trade names, copyrights, and other similar rights necessary for the conduct of
its business as now carried on or proposed to be conducted, without any known
conflict of the rights of others.
6. AFFIRMATIVE COVENANTS.
Borrower covenants and agrees that, so long as any credit hereunder
shall be available and until full and final payment of the Obligations, and
unless Foothill shall otherwise consent in writing, Borrower shall (and, where
applicable, cause each of the other Obligors to, and, by its execution and
delivery of the Guaranty or a joinder thereto, each of the Guarantors hereby
agrees to) do all of the following:
6.1 ACCOUNTING SYSTEM. Maintain a standard and modern system of
accounting that enables Borrower and each of the other Obligors to produce
financial statements in accordance with GAAP, and maintain records pertaining to
the Collateral that contain information as from time to time may be requested by
Foothill. The Obligors also shall keep a modern inventory reporting system that
shows all additions, sales, claims, returns, and allowances with respect to the
Inventory.
6.2 REPORTING. Provide Foothill with the following documents at the
following times in form satisfactory to Foothill: (a) copies of each report in
respect of any Obligor's business issued by a Gaming Authority or made by an
Obligor to a Gaming Authority within 15 days of their respective issuance or
filing date; and (b) copies of all operating and capital budgets, and all other
budgets, summaries of sources and uses of funds, projections, and financial
information prepared by or on behalf of any Obligor (including in respect of any
Casino or Facility) promptly upon the preparation and delivery to or by the
chief financial officer of any Obligor;
6.3 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES. Deliver to
Foothill: (a) as soon as available, but in any event within 45 days after the
end of each month during each of the Obligors' fiscal years, a company prepared
balance sheet, income statement, and statement of cash flow covering the
operations during such period of those Obligors that own a Significant Casino;
(b) as soon as available, but in any event within 45 days after the end of each
of the first 3 fiscal quarters during each of the Obligors' fiscal years, a
company prepared balance sheet, income statement, and statement of cash flow
covering the Obligors' the operations during such period; and (c) as soon as
available, but in any event within 90 days after the end of each of the
Obligors' fiscal years, financial statements of the Obligors for each such
fiscal year, audited by independent certified public accountants reasonably
acceptable to Foothill and certified, without any qualifications, by such
accountants to have been prepared in accordance with GAAP, together with a
certificate of such accountants addressed to Foothill stating that such
accountants do not have knowledge of the existence of any Default or Event of
Default. Such audited financial statements shall include a balance sheet, profit
and loss statement, and statement of
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cash flow and, if prepared, such accountants' letter to management. In addition
to the financial statements referred to above, Borrower agrees to deliver
financial statements prepared on a consolidating basis so as to present each
Obligor separately, and on a consolidated basis.
Together with the above, Borrower also shall deliver to Foothill
Borrower's Form 10-Q Quarterly Reports, Form 10-K Annual Reports, and Form 8-K
Current Reports, and any other filings made by any Obligor with the Securities
and Exchange Commission, if any, as soon as the same are filed, or any other
information that is provided by any Obligor to its shareholders, and any other
report reasonably requested by Foothill relating to the financial condition of
any one or more of the Obligors.
Each month, together with the applicable financial statements
provided pursuant to Section 6.3, Borrower shall deliver to Foothill a
certificate signed by its chief financial officer to the effect that: (i) all
financial statements delivered or caused to be delivered to Foothill hereunder,
(x) other than the financial statements provided pursuant to Section 6.3(a),
have been prepared in accordance with GAAP (except, in the case of unaudited
financial statements, for the lack of footnotes and being subject to year-end
audit adjustments), (y) are correct in all material respects, and (z) fairly
present the financial condition of the Obligors, (ii) the representations and
warranties of the Obligors contained in this Agreement and the other Loan
Documents are true and correct in all material respects on and as of the date of
such certificate, as though made on and as of such date (except to the extent
that such representations and warranties relate solely to an earlier date),
(iii) for each month that also is the date on which a financial covenant in
Section 7.20 is to be tested, a Compliance Certificate demonstrating in
reasonable detail compliance at the end of such period with the applicable
financial covenants contained in Section 7.20 and, in the event that Borrower
proposes to incur Indebtedness pursuant to Section 7.1(l), calculating the
Obligors' Interest Coverage Ratio (as such term is defined in the Indenture) for
the Obligors' most recently ended four full fiscal quarters, and (iv) on the
date of delivery of such certificate to Foothill there does not exist any
condition or event that constitutes a Default or Event of Default (or, in the
case of clauses (i), (ii), or (iii), to the extent of any non-compliance,
describing such non-compliance as to which he or she may have knowledge and what
action the relevant Obligor has taken, is taking, or proposes to take with
respect thereto).
Borrower (and, if required, each of the other Obligors) shall have
issued written instructions to its independent certified public accountants
authorizing them to communicate with Foothill and to release to Foothill
whatever financial information concerning the Obligors that Foothill may
request. Borrower hereby irrevocably authorizes and directs (and hereby agrees
to cause promptly each of the other Obligors to irrevocably authorize and
direct, and, by its execution and delivery of the Guaranty or a joinder thereto,
each of the Guarantors hereby irrevocably authorizes and directs) all auditors,
accountants, or other third parties that Foothill reasonably could expect to
have access to such information to deliver to Foothill, at Borrower's expense,
copies of the Obligors' financial statements, papers related thereto, and other
accounting records of any nature in their possession, and to disclose to
Foothill any information they may have regarding the Obligors' business affairs
and financial conditions.
From time to time, Borrower may, by written notice to Foothill,
request that any one or more of Schedule 5.13 (Employee Benefits), Schedule 5.14
(Environmental Condition), or Schedule 5.16 (Key Leases), as applicable, be
amended to reflect the information set forth in
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such notice. If and to the extent that the requested amendment to any such
schedule is accepted by Foothill in writing, such schedule will be deemed so
amended.
6.4 TAX RETURNS. Deliver to Foothill copies of each of the Obligors'
future federal income tax returns, and any amendments thereto, within 30 days of
the filing thereof with the Internal Revenue Service.
6.5 GUARANTOR REPORTS. To the extent the same are not covered by
Section 6.3 hereof, cause any guarantor of any of the Obligations to deliver
(and by its execution and delivery of the Guaranty or a joinder thereto, each of
the Guarantors hereby agrees to deliver) its annual financial statements at the
time when Borrower provides its audited financial statements to Foothill and
copies of all federal income tax returns as soon as the same are available and
in any event no later than 30 days after the same are required to be filed by
law.
6.6 [INTENTIONALLY OMITTED].
6.7 [INTENTIONALLY OMITTED].
6.8 MAINTENANCE OF EQUIPMENT. Maintain the Equipment (other than
Equipment that has been disposed of pursuant to a Permitted Disposition) in good
operating condition and repair (ordinary wear and tear excepted), and make all
necessary replacements thereto so that the value and operating efficiency
thereof shall at all times be maintained and preserved. Other than those items
of Equipment that constitute fixtures on the Closing Date, no Obligor shall
permit any item of Equipment (other than items of Equipment that customarily
become building fixtures as a result of renovation or remodeling of a building)
to become a fixture to real estate or an accession to other property, and such
Equipment shall at all times remain personal property.
6.9 TAXES. (a) Cause all assessments and taxes, whether real,
personal, or otherwise, due or payable by, or imposed, levied, or assessed
against any Obligor or any of its property to be paid in full, before
delinquency or before the expiration of any extension period, except to the
extent that the validity of such assessment or tax shall be the subject of a
Permitted Protest.
(b) Make due and timely payment or deposit of all such
federal, state, and local taxes, assessments, or contributions required of it by
law, and execute and deliver to Foothill, on demand, appropriate certificates
attesting to the payment thereof or deposit with respect thereto.
(c) Make timely payment or deposit of all tax payments and
withholding taxes required of it by applicable laws, including those laws
concerning F.I.C.A., F.U.T.A., state disability, and local, state, and federal
income taxes, and, upon request, furnish Foothill with proof satisfactory to
Foothill indicating that the applicable Obligor has made such payments or
deposits.
6.10 INSURANCE.
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(a) At its expense, (i) keep the Personal Property Collateral
insured against loss or damage by fire, theft, explosion, sprinklers, and all
other hazards and risks, and in such amounts, as are ordinarily insured against
by other owners in similar businesses, and (ii) maintain business interruption,
public liability, product liability, and property damage insurance relating to
the Obligors' ownership and use of the Personal Property Collateral, as well as
insurance against larceny, embezzlement, and criminal misappropriation.
(b) At its expense, obtain and maintain (i) insurance of the
type necessary to insure the Real Property Collateral, for the full replacement
cost thereof, against any loss by fire, lightning, windstorm, hail, explosion,
aircraft, smoke damage, vehicle damage, earthquakes, elevator collision, and
other risks from time to time included under "extended coverage" policies, in
such amounts as Foothill may require, but in any event in amounts sufficient to
prevent the Obligors from becoming a co-insurer under such policies, (ii)
combined single limit bodily injury and property damages insurance against any
loss, liability, or damages on, about, or relating to the Real Property
Collateral, in an amount of not less than $200,000,000 in the aggregate; and
(iii) insurance for such other risks as Foothill may require. Replacement costs,
at Foothill's option, may be redetermined by an insurance appraiser,
satisfactory to Foothill, not more frequently than once every 12 months at
Borrower's cost.
(c) All such policies of insurance shall be in such form, with
such companies, and in such amounts as may be reasonably satisfactory to
Foothill. All insurance required herein shall be written by companies which are
authorized to do insurance business in the States of Nevada, Colorado, and
Mississippi, in each case, as to the respective businesses or property of the
Obligors in such state. All hazard insurance and such other insurance as
Foothill shall specify, shall contain a Form 438BFU (NS) mortgagee endorsement,
or an equivalent endorsement satisfactory to Foothill, showing Foothill as a
loss payee thereof as its interests may appear, and shall contain a waiver of
warranties. Every policy of insurance referred to in this Section 6.10 shall
contain an agreement by the insurer that it will not cancel such policy except
after 30 days prior written notice to Foothill and that any loss payable
thereunder shall be payable notwithstanding any act or negligence of any Obligor
or Foothill which might, absent such agreement, result in a forfeiture of all or
a part of such insurance payment and notwithstanding (i) occupancy or use of the
Real Property Collateral for purposes more hazardous than permitted by the terms
of such policy, (ii) any foreclosure or other action or proceeding taken by
Foothill pursuant to the Loan Documents upon the happening of an Event of
Default, or (iii) any change in title or ownership of the Real Property
Collateral. Borrower shall deliver to Foothill certified copies of such policies
of insurance and evidence of the payment of all premiums therefor.
(d) Original policies or certificates thereof satisfactory to
Foothill evidencing such insurance shall be delivered to Foothill at least 30
days prior to the expiration of the existing or preceding policies. Borrower
shall give Foothill prompt notice of any loss covered by such insurance, and
Foothill shall have the right to adjust any loss. Foothill shall have the
exclusive right to adjust all losses payable under any such insurance policies
without any liability to any Obligor whatsoever in respect of such adjustments.
Any monies received as payment for any loss under any insurance policy including
the insurance policies mentioned above or as payment of any award or
compensation for condemnation or taking by eminent domain, shall be paid over to
Foothill to be applied at the option of Foothill either to the
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prepayment of the Obligations without premium, in such order or manner as
Foothill may elect, or shall be disbursed to the applicable Obligor under staged
payment terms satisfactory to Foothill for application to the cost of repairs,
replacements, or restorations. The foregoing notwithstanding, Borrower may
request that Foothill disburse to Borrower any monies received by Foothill
pursuant to the immediately preceding sentence and Foothill agrees to disburse
such money for the repair, replacement, or restoration of the Equipment or real
Property that has been damaged, if all of the following conditions are
satisfied: (i) no Default or Event of Default has occurred and is continuing or
would result from the disbursement or application of such monies (other than a
Default or Event of Default, if any, that exists hereunder solely due to the
subject loss, destruction, taking, or condemnation, but not excluding any other
Default or Event of Default that is caused by such loss, destruction, taking, or
condemnation); and (ii) Borrower has demonstrated to Foothill's satisfaction
that the sum of (A) EBITDA produced during the 12 months prior to the date of
any such loss, destruction, taking, or condemnation, by the properties and
assets of the Obligors that are not affected by the loss, destruction, taking,
or condemnation (or by any other loss, destruction, taking, or condemnation that
has not been restored under this section), plus (B) the projected proceeds from
business interruption insurance policies to be received by the Obligors during
the 12 months immediately following the date of, and in compensation for, any
such loss, destruction, taking, or condemnation, is not less than $15,000,000.
All monies paid by the insurer or other applicable payor relative to such loss,
destruction, taking, or condemnation (y) not in excess of $1,000,000 shall be
paid directly to the applicable Obligor regardless of Borrower's compliance with
the conditions described in the immediately preceding sentence, and (z) in
excess of $1,000,000 shall be paid to Foothill and held by Foothill as it shall
determine pending compliance with the conditions described in the immediately
preceding sentence, and, within 3 Business Days of Foothill's receipt of a
certificate of an Authorized Person certifying to compliance with the conditions
set forth in the preceding sentence and, pending disbursement thereof hereunder,
deposited by Foothill in a money market account selected by Foothill through
which such monies will be invested until disbursed in funds described in clause
(c) of the definition of Cash Equivalents.
(e) Borrower shall not, and shall not cause, suffer, or permit
any of the other Obligors to (and by its execution and delivery of the Guaranty
or a joinder thereto, each of the Guarantors hereby agrees not to), take out
separate insurance concurrent in form or contributing in the event of loss with
that required to be maintained under this Section 6.10, unless Foothill is
included thereon as named insured with the loss payable to Foothill under a
standard 438BFU (NS) Mortgagee endorsement, or its local equivalent. Borrower
immediately shall notify (and cause the applicable Obligor immediately to
notify, and, by its execution and delivery of the Guaranty or a joinder thereto,
each of the Guarantors hereby agrees immediately to notify) Foothill whenever
such separate insurance is taken out, specifying the insurer thereunder and full
particulars as to the policies evidencing the same, and originals of such
policies immediately shall be provided to Foothill.
6.11 NO SETOFFS OR COUNTERCLAIMS. Make payments hereunder and under
the other Loan Documents by or on behalf of Borrower and the other Obligors
without setoff or counterclaim and free and clear of, and without deduction or
withholding for or on account of, any federal, state, or local taxes.
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6.12 LOCATION OF INVENTORY AND EQUIPMENT. Keep the Inventory and
Equipment only at the locations identified on Schedule 6.12; provided, however,
that Borrower may amend Schedule 6.12 so long as such amendment occurs by
written notice to Foothill not less than 30 days prior to the date on which the
Inventory or Equipment is moved to such new location, so long as such new
location is within the continental United States, and so long as, at the time of
such written notification, the applicable Obligor provides any financing
statements or fixture filings necessary to perfect and continue perfected
Foothill's security interests in such assets and also provides to Foothill a
Collateral Access Agreement.
6.13 COMPLIANCE WITH LAWS. Comply with the requirements of all
applicable laws, rules, regulations, and orders of any governmental authority,
including the Fair Labor Standards Act and the Americans With Disabilities Act,
other than laws, rules, regulations, and orders the non-compliance with which,
individually or in the aggregate, would not result in and reasonably could not
be expected to result in a Material Adverse Change.
6.14 EMPLOYEE BENEFITS.
(a) Cause to be delivered to Foothill, each of the following:
(i) promptly, and in any event within 10 Business Days after Borrower or any of
its Subsidiaries knows or has reason to know that an ERISA Event has occurred
that reasonably could be expected to result in a Material Adverse Change, a
written statement of the chief financial officer of Borrower describing such
ERISA Event and any action that is being taking with respect thereto by
Borrower, any such Subsidiary or ERISA Affiliate, and any action taken or
threatened by the IRS, Department of Labor, or PBGC, (ii) promptly, and in any
event within 3 Business Days after the filing thereof with the IRS, a copy of
each funding waiver request filed with respect to any Benefit Plan and all
communications received by Borrower, any of its Subsidiaries or, to the
knowledge of Borrower, any ERISA Affiliate with respect to such request, and
(iii) promptly, and in any event within 3 Business Days after receipt by
Borrower, any of its Subsidiaries or, to the knowledge of Borrower, any ERISA
Affiliate, of the PBGC's intention to terminate a Benefit Plan or to have a
trustee appointed to administer a Benefit Plan, copies of each such notice.
(b) Cause to be delivered to Foothill, upon Foothill's
request, each of the following: (i) a copy of each Plan (or, where any such plan
is not in writing, complete description thereof) (and if applicable, related
trust agreements or other funding instruments) and all amendments thereto, all
written interpretations thereof and written descriptions thereof that have been
distributed to employees or former employees of Borrower or its Subsidiaries;
(ii) the most recent determination letter issued by the IRS with respect to each
Benefit Plan; (iii) for the three most recent plan years, annual reports on Form
5500 Series required to be filed with any governmental agency for each Benefit
Plan; (iv) all actuarial reports prepared for the last three plan years for each
Benefit Plan; (v) a listing of all Multiemployer Plans, with the aggregate
amount of the most recent annual contributions required to be made by Borrower
or any ERISA Affiliate to each such plan and copies of the collective bargaining
agreements requiring such contributions; (vi) any information that has been
provided to Borrower or any ERISA Affiliate regarding withdrawal liability under
any Multiemployer Plan; and (vii) the aggregate amount of the most recent annual
payments made to former employees of Borrower or its Subsidiaries under any
Retiree Health Plan.
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6.15 LEASES. Pay when due all rents and other amounts payable under
any leases to which an Obligor is a party or by which an Obligor's properties
and assets are bound (including the Key Leases), unless such payments are the
subject of a Permitted Protest. To the extent that any Obligor fails timely to
make payment of such rents and other amounts payable when due under its leases,
Foothill shall be entitled, in its discretion, to reserve an amount equal to
such unpaid amounts against the Maximum Revolving Amount.
6.16 BROKERAGE COMMISSIONS. Pay any and all brokerage commission or
finders fees incurred by in connection with or as a result of Borrower's
obtaining financing from Foothill under this Agreement.
6.17 GOVERNMENT AUTHORIZATION. Borrower shall deliver to Foothill,
as soon as practicable, and in any event within ten (10) days after the receipt
by any Obligor from any Gaming Authority or other governmental authority having
jurisdiction over the operations of any Obligor or filing or receipt thereof by
any Obligor, (i) copies of any order or notice of such Gaming Authority or such
other governmental authority or court of competent jurisdiction which designates
any material Casino License or other material franchise, permit, or other
governmental operating authorization of any Obligor, or any application
therefor, for a hearing or which refuses renewal or extension of, or revokes or
suspends the authority of any Obligor to construct, own, manage, or operate a
Casino (or portion thereof), and (ii) a copy of any competing application filed
with respect to any such Casino License or other authorization, or application
therefor, of any Obligor, or any citation, notice of violation, or order to show
cause issued by any Gaming Authority or other governmental authority or any
complaint filed by any Gaming Authority or other governmental authority which is
available to any Obligor.
6.18 LICENSE RENEWALS. Commencing on the date six months following
the Closing Date and continuing every six months thereafter, Borrower shall
deliver to Foothill an updated Schedule 5.19 reflecting thereon, as of the date
of such delivery, the information described in Section 5.19.
6.19 YEAR 2000 COMPLIANCE. Borrower will be Year 2000 Compliant
by October 1, 1999.
6.20 LICENSES AND PERMITS. (a) Ensure that all material licenses,
permits, and consents and similar rights required from any federal, state, or
local governmental body (including the Gaming Authorities) for the ownership,
use, or operation of the businesses or properties now owned or operated by the
Obligors, including all necessary Casino Licenses, have been validly issued and
are in full force and effect, and (b) comply, in all material respects, with all
of the provisions thereof applicable to it.
7. NEGATIVE COVENANTS.
Borrower covenants and agrees that, so long as any credit hereunder
shall be available and until full and final payment of the Obligations, Borrower
will not do, and will not cause, suffer, or permit any of the other Obligors to
do (and by its execution and delivery of the Guaranty or a joinder thereto, each
Guarantor hereby agrees that it will not do), any of the following without
Foothill's prior written consent:
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7.1 INDEBTEDNESS. Create, incur, assume, permit, guarantee, or
otherwise become or remain, directly or indirectly, liable with respect to any
Indebtedness, except:
(a) Indebtedness evidenced by this Agreement, together with
Indebtedness to issuers of letters of credit that are the subject of L/C
Guarantees;
(b) Indebtedness set forth in Schedule 7.1;
(c) Indebtedness outstanding under the Notes (as such term is
defined in the Indenture) in an aggregate principal amount not to exceed
$255,000,000 at any one time outstanding;
(d) Indebtedness owed by any Obligor to any other Obligor, so
long as such Indebtedness is the subject of the Obligor Subordination Agreement;
(e) Non-Recourse Indebtedness of a Restricted Subsidiary owing
to any Person (other than Foothill, any Obligor, or any Affiliate of an Obligor)
incurred to finance the acquisition or lease after the Closing Date of (i)
furniture, fixtures, or equipment to be used in connection with the operations
of any Significant Casino owned by such Restricted Subsidiary or (ii) a parking
structure at Fitzgeralds Reno Facility; provided, that (x) the aggregate amount
of such Indebtedness outstanding with respect to any such Significant Casino
(including such parking structure with respect to Fitzgeralds Reno Facility)
shall not exceed $7,000,000 at any time, and (y) the aggregate amount of such
Indebtedness outstanding with respect to such parking structure shall not exceed
$3,000,000 at any time;
(f) performance bonds, appeal bonds, surety bonds, insurance
obligations or bonds and other similar bonds incurred in the ordinary course of
business;
(g) Hedging Obligations incurred to fix the interest rate on
any variable rate Indebtedness otherwise permitted by this Agreement;
(h) Indebtedness owed by one Obligor to another Obligor if and
so long as the Obligor Subordination Agreement is in effect;
(i) Permitted Tunica Debt; provided that the Weighted Average
Life to Maturity and final stated maturity of such Indebtedness is equal to or
greater than the Weighted Average Life to Maturity and final stated maturity of
the Indebtedness under the Indenture;
(j) the Settlement Debt;
(k) refinancings, renewals, or extensions of Indebtedness
permitted under this Section 7.1 (and continuance or renewal of any Permitted
Liens associated therewith) so long as: (i) the terms and conditions of such
refinancings, renewals, or extensions do not materially impair the prospects of
repayment of the Obligations by Borrower or of the Guarantied Obligations by any
Guarantor, (ii) the net cash proceeds of such refinancings, renewals, or
extensions do not result in an increase in the aggregate principal amount of the
Indebtedness so refinanced, renewed, or extended, (iii) such refinancings,
renewals, refundings,
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or extensions do not result in a shortening of the Weighted Average Life to
Maturity of the Indebtedness so refinanced, renewed, or extended, and (iv) to
the extent that Indebtedness that is refinanced was subordinated in right of
payment to the Obligations or the Guarantied Obligations, then the subordination
terms and conditions of the refinancing Indebtedness must be at least as
favorable to Foothill as those applicable to the refinanced Indebtedness; and
(l) up to $5,000,000 in the aggregate of additional (1)
Non-Recourse Indebtedness of a Restricted Subsidiary owing to any Person (other
than Foothill, any Obligor, or any Affiliate of an Obligor) that is either
Purchase Money Obligations or obligations under capital leases to the extent
permitted under Section 7.21, or (2) unsecured Indebtedness, in each case, if
and to the extent: (y) no Default or Event of Default shall have occurred and be
continuing at the time of, or would occur after giving effect on a pro forma
basis to, the incurrence or issuance of such Indebtedness, and (z) the Interest
Coverage Ratio (as such term is defined in the Indenture) for the Obligors' most
recently ended four full fiscal quarters for which internal financial statements
are available immediately preceding the date on which such additional
Indebtedness is incurred would have been at least equal to 2.25 : 1.00,
determined on a pro forma basis (including a pro forma application of the net
proceeds therefrom), as if such additional Indebtedness had been incurred at the
beginning of such four-quarter period; provided, however, that the Weighted
Average Life to Maturity and final stated maturity of such additional
Indebtedness exceeds the Weighted Average Life to Maturity and final stated
maturity of the Indebtedness outstanding under the Notes (as such term is
defined in the Indenture).
7.2 LIENS. Create, incur, assume, or permit to exist, directly or
indirectly, any Lien on or with respect to any of its property or assets, of any
kind, whether now owned or hereafter acquired, or any income or profits
therefrom, except for Permitted Liens (including Liens that are replacements of
Permitted Liens to the extent that the original Indebtedness is refinanced under
Section 7.1(k) and so long as the replacement Liens only encumber those assets
or property that secured the original Indebtedness).
7.3 RESTRICTIONS ON FUNDAMENTAL CHANGES. Enter into any merger,
consolidation, reorganization, or recapitalization, or reclassify its Stock, or
liquidate, wind up, or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, assign, lease, transfer, or otherwise dispose of,
in one transaction or a series of transactions, all or any substantial part of
its property or assets.
7.4 DISPOSAL OF ASSETS. Except for Permitted Dispositions, sell,
lease, assign, transfer, or otherwise dispose of any of the Obligors' properties
or assets other than sales of Inventory to buyers in the ordinary course of the
Obligors' business as currently conducted.
7.5 CHANGE NAME. Change any Obligor's name, FEIN, corporate
structure (within the meaning of Section 9402(7) of the Code), or identity, or
add any new fictitious name.
7.6 GUARANTEE. Guarantee or otherwise become in any way liable with
respect to the obligations of any third Person except by endorsement of
instruments or items of payment for deposit to the account of Borrower or which
are transmitted or turned over to Foothill.
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7.7 NATURE OF BUSINESS. (a) make any change in the principal nature
of any Obligor's business; or (b) cause, suffer, or permit any Unrestricted
Subsidiary to engage in any business activity or own any property or assets with
a book value in excess of (i) on or before August 15, 1998, $8,000,000, and (ii)
from and after August 16, 1998, (y) prior to the sale of all or substantially
all of the assets or capital stock of NCI, $5,000,000, or (z) thereafter,
$2,500,000, in the aggregate for all Unrestricted Subsidiaries.
7.8 PREPAYMENTS AND AMENDMENTS.
(a) Except in connection with a refinancing permitted by
Section 7.1(k), prepay, redeem, retire, defease, purchase, or otherwise acquire
any Indebtedness owing to any third Person, other than (i) the Settlement Debt;
(ii) Non-Recourse Indebtedness of a Restricted Subsidiary that constitutes
Purchase Money Obligations permitted under Section 7.1(e) hereof; and (iii) the
Obligations in accordance with this Agreement; and
(b) Directly or indirectly, amend, modify, alter, increase, or
change any of the terms or conditions of any agreement, instrument, document,
indenture, or other writing evidencing or concerning Indebtedness permitted
under Sections 7.1(b), (c), (d), (e), (f), (g), (h), (i), (j), or (k).
7.9 CHANGE OF CONTROL. Cause, permit, or suffer, directly or
indirectly, any Change of Control.
7.10 CONSIGNMENTS. Consign any Inventory or sell any Inventory on
bill and hold, sale or return, sale on approval, or other conditional terms of
sale.
7.11 DISTRIBUTIONS. Make any distribution or declare or pay any
dividends (in cash or other property, other than Stock) on, or purchase,
acquire, redeem, or retire any Stock of any Obligor, of any class, whether now
or hereafter outstanding; provided, however, that (i) Borrower may repurchase or
redeem Preferred Stock outstanding on the Closing Date to the extent permitted
under clause (j) of the definition of "Permitted Investments" set forth in
Section 1.1 hereof; and (ii) any wholly-owned Subsidiary of Borrower may pay
dividends or other distributions to an Obligor.
7.12 ACCOUNTING METHODS. Modify or change its method of accounting
or enter into, modify, or terminate any agreement currently existing, or at any
time hereafter entered into with any third party accounting firm or service
bureau for the preparation or storage of any Obligor's accounting records
without said accounting firm or service bureau agreeing to provide Foothill
information regarding the Collateral or such Obligor's financial condition.
Borrower hereby waives, and hereby agrees to cause the other Obligors to waive
(and by its execution and delivery of the Guaranty or a joinder thereto, each
Guarantor hereby waives), the right to assert a confidential relationship, if
any, it may have with any accounting firm or service bureau in connection with
any information requested by Foothill pursuant to or in accordance with this
Agreement or any other Loan Document, and agrees that Foothill may contact
directly any such accounting firm or service bureau in order to obtain such
information.
7.13 INVESTMENTS. Other than Permitted Investments, directly or
indirectly make, acquire, or incur any liabilities (including contingent
obligations) for or in connection with
47.
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any Investment (including (a) the acquisition of the securities (whether debt or
equity) of, or other interests in, a Person, (b) loans, advances, capital
contributions, or transfers of property to a Person, or (c) the acquisition of
all or substantially all of the properties or assets of a Person).
7.14 TRANSACTIONS WITH AFFILIATES. Directly or indirectly enter into
or permit to exist any material transaction with any Affiliate of the Obligors
(other than an Obligor) except for transactions that are in the ordinary course
of the Obligors' business, upon fair and reasonable terms, that are fully
disclosed to Foothill, and that are no less favorable to the Obligors, or any of
them, than would be obtained in an arm's length transaction with a
non-Affiliate.
7.15 SUSPENSION. Suspend or go out of a substantial portion of its
business.
7.16 COMPENSATION. Increase the annual fee or per-meeting fees paid
to directors during any year by more than 15% over the prior year; except as
provided for under Borrower's executive bonus plan described in page 41 of
Borrower's 1997 Annual Report on Form 10K issued on April, 1998, pay or accrue
total cash compensation, during any year, to officers and senior management
employees (excluding, however, executives of specific Casinos who, in good
faith, are not corporate officers or other corporate level executives of
Borrower) in an aggregate amount in excess of 115% of that paid or accrued in
the prior year.
7.17 USE OF PROCEEDS. Use (a) the proceeds of the Advances made
hereunder for any purpose other than (i) to pay transactional fees, costs, and
expenses incurred in connection with this Agreement, and (ii) consistent with
the terms and conditions hereof, for its lawful and permitted corporate
purposes, and (b) the proceeds of the Capital Expenditure Loans made hereunder
for any purpose other than to finance Black Hawk Project Phase I and Black Hawk
Project Phase II in accordance with Section 2.4 hereof.
7.18 CHANGE IN LOCATION OF CHIEF EXECUTIVE OFFICE; INVENTORY AND
EQUIPMENT WITH BAILEES. Relocate its chief executive office to a new location
without providing 30 days prior written notification thereof to Foothill,
unless, at the time of such written notification, the applicable Obligor
provides any financing statements or fixture filings necessary to perfect and
continue perfected Foothill's security interests and also provides to Foothill a
Collateral Access Agreement with respect to such new location. The Inventory and
Equipment shall not at any time now or hereafter be stored with a bailee,
warehouseman, or similar party without Foothill's prior written consent.
7.19 NO PROHIBITED TRANSACTIONS UNDER ERISA. Directly or indirectly:
(a) engage, or permit any Subsidiary of Borrower to engage, in
any prohibited transaction which is reasonably likely to result in a civil
penalty or excise tax described in Sections 406 of ERISA or 4975 of the IRC for
which a statutory or class exemption is not available or a private exemption has
not been previously obtained from the Department of Labor;
(b) permit to exist with respect to any Benefit Plan any
accumulated funding deficiency (as defined in Sections 302 of ERISA and 412 of
the IRC), whether or not waived;
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(c) fail, or permit any Subsidiary of Borrower to fail, to pay
timely required contributions or annual installments due with respect to any
waived funding deficiency to any Benefit Plan;
(d) terminate, or permit any Subsidiary of Borrower to
terminate, any Benefit Plan where such event would result in any liability of
Borrower, any of its Subsidiaries or any ERISA Affiliate under Title IV of
ERISA;
(e) fail, or permit any Subsidiary of Borrower to fail, to
make any required contribution or payment to any Multiemployer Plan;
(f) fail, or permit any Subsidiary of Borrower to fail, to pay
any required installment or any other payment required under Section 412 of the
IRC on or before the due date for such installment or other payment;
(g) amend, or permit any Subsidiary of Borrower to amend, a
Plan resulting in an increase in current liability for the plan year such that
either of Borrower, any Subsidiary of Borrower or any ERISA Affiliate is
required to provide security to such Plan under Section 401(a)(29) of the IRC;
or
(h) withdraw, or permit any Subsidiary of Borrower to
withdraw, from any Multiemployer Plan where such withdrawal is reasonably likely
to result in any liability of any such entity under Title IV of ERISA;
which, individually or in the aggregate, results in or reasonably would be
expected to result in a claim against or liability of Borrower, any of its
Subsidiaries or any ERISA Affiliate in excess of $100,000.
7.20 FINANCIAL COVENANT. Fail to achieve EBITDA of not less than
$15,000,000 on a trailing 4 fiscal quarter period basis, measured on a fiscal
quarter-end basis. For purposes of this Section 7.20, the calculation of EBITDA
shall be made (if and to the extent the Obligors' EBITDA exceeds zero) without
reference to constituent items within the definition of "EBITDA" set forth in
Section 1.1 hereof that relate to any Facility or portion thereof affected by
any loss, destruction, taking, or condemnation (other than loss, destruction,
taking, or condemnation restored under Section 6.10(d)) occurring during such 4
fiscal quarter period.
7.21 CAPITAL EXPENDITURES. Make capital expenditures (other than
capital expenditures financed solely from the proceeds of Capital Expenditure
Loans in accordance with Sections 2.4 and 7.17(b) hereof and other than capital
expenditures financed solely from the proceeds of Indebtedness permitted under
Section 7.1(e) hereof) in the aggregate during each period set forth below in
excess of the amount set forth below for the period corresponding thereto:
49.
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<TABLE>
<CAPTION>
-------------------------------------------------------------
Maximum Capital
Period Expenditures
-------------------------------------------------------------
<S> <C>
Closing Date through December 31, 1998 $750,000
-------------------------------------------------------------
January 1, 1999 through December 31, 1999 $3,000,000
-------------------------------------------------------------
January 1, 2000 through December 31, 2000 $3,000,000
-------------------------------------------------------------
January 1, 2001 through December 31,
2001 and each calendar year thereafter $4,000,000
-------------------------------------------------------------
</TABLE>
8. EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an event of
default (each, an "Event of Default") under this Agreement:
8.1 If any Obligor fails to pay when due and payable or when
declared due and payable, any portion of the Obligations (whether in respect of
principal, interest (including any interest which, but for the provisions of the
Bankruptcy Code, would have accrued on such amounts), fees and charges due
Foothill, reimbursement of Foothill Expenses, or other amounts constituting
Obligations); unless in any case under this Section 8.1 (except as set forth in
the following proviso) such payment is made within 3 Business Days after the
date such payment was first due; provided, however, that such 3 Business Day
grace period shall not apply to (a) Overadvances that are not caused by the
charging of interest or Foothill Expenses to the Loan Account, or (b) any
payment obligation that arises in connection with or as a result of any
fraudulent act, deceit, or intentional or grossly negligent misrepresentation on
the party of any Obligor.
8.2 (a) If any Obligor fails or neglects to perform, keep, or
observe any term, provision, condition, covenant, or agreement applicable to
such Obligor contained in Sections 6.2 (Collateral Reporting), 6.3 (Financial
Statements, Reports, Certificates), 6.4 (Tax Returns), 6.12 (Location of
Equipment), 6.13 (Compliance with Laws), 6.14 (Employee Benefits), or 6.15
(Leases) of this Agreement and such failure continues for a period of 5 Business
Days; (b) If any Obligor fails or neglects to perform, keep, or observe any
term, provision, condition, covenant, or agreement contained in Sections 6.1
(Accounting System) or 6.8 (Maintenance of Equipment) of this Agreement and such
failure continues for a period of 15 Business Days; or (c) If any Obligor fails
or neglects to perform, keep, or observe any other term, provision, condition,
covenant, or agreement applicable to such Obligor contained in this Agreement,
or in any of the other Loan Documents (giving effect to any grace periods, cure
periods, or required notices, if any, expressly provided for in such Loan
Documents); in each case, other than any such term, provision, condition,
covenant, or agreement that is the subject of another provision of this Section
8, in which event such other provision of this Section 8 shall govern); provided
that, during any period of time that any such failure or neglect of any Obligor
referred to in this paragraph exists, even if such failure or neglect is not yet
an Event of Default by virtue of the existence of a grace or cure period or the
pre-condition of the giving of a notice, Foothill shall be relieved of its
obligation to extend credit hereunder;
50.
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8.3 If there is a Material Adverse Change;
8.4 If any material portion of any Obligor's properties or assets is
attached, seized, subjected to a writ or distress warrant, or is levied upon, or
comes into the possession of any third Person;
8.5 If an Insolvency Proceeding is commenced by any Obligor;
8.6 If an Insolvency Proceeding is commenced against any Obligor and
any of the following events occur: (a) such Obligor consents to the institution
of the Insolvency Proceeding against it; (b) the petition commencing the
Insolvency Proceeding is not timely controverted; (c) the petition commencing
the Insolvency Proceeding is not dismissed within 60 calendar days of the date
of the filing thereof; provided, however, that, during the pendency of such
period, Foothill shall be relieved of its obligation to extend credit hereunder;
(d) an interim trustee is appointed to take possession of all or a substantial
portion of the properties or assets of, or to operate all or any substantial
portion of the business of, any Obligor; or (e) an order for relief shall have
been issued or entered therein;
8.7 If any Obligor is enjoined, restrained, or in any way prevented
by court order from continuing to conduct all or any material part of its
business affairs;
8.8 (a) If a notice of Lien, levy, or assessment is filed of record
with respect to any of the Obligors' properties or assets by the United States,
or if any taxes or debts owing at any time hereafter to the United States
becomes a Lien, whether choate or otherwise, upon any of the Obligors'
properties or assets;
(b) If one or more notice of Lien, levy, or assessment with
respect to taxes or debts owing is filed of record with respect to any of the
Obligors' properties or assets by any state, county, municipal, or other
non-federal governmental agency, or if any taxes or debts owing at any time
hereafter to any one or more of such entities becomes a lien, whether choate or
otherwise, upon any of the Obligors' properties or assets and the Lien, levy, or
assessment is not (i) released, discharged, or bonded against before the earlier
of 30 days of the date it first arises or 5 days of the date when such property
or asset is subject to being forfeited, or (ii) the subject of a Permitted
Protest; or
8.9 If one or more judgments or other claims (including the
litigation relative to the Harolds Club described in Schedule 5.10) involving an
aggregate amount of $5,000,000, or more, and not fully covered by insurance, or
one or more judgments or other claims (exclusive of the litigation relative to
the Harolds Club described in Schedule 5.10) involving an aggregate amount of
$3,000,000, or more, and not fully covered by insurance, becomes a Lien or
encumbrance upon any material portion of any Obligor's properties or assets and
the Lien or encumbrance is not released, discharged, or bonded against before
the earlier of 30 days of the date it first arises or 5 days of the date when
such property or asset is subject to being forfeited; provided, however, that
during such period Foothill shall be entitled to create and maintain a reserve
against the Maximum Revolving Amount in an amount sufficient to discharge such
Lien or encumbrance and any and all penalties or interest payable in connection
therewith;
51.
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8.10 (a) If there is a default in any material Senior Note Document
and such default (i) occurs at the final maturity of the obligations thereunder,
or (ii) results in a right by the Indenture Trustee or any holder of
Indebtedness under the Senior Note Documents, irrespective of whether exercised,
to accelerate the maturity of an Obligor's obligations thereunder;
(b) If there is a default in any other agreement involving an
amount of $3,000,000, or more, to which an Obligor is a party with one or more
third Persons and such default (i) occurs at the final maturity of the
obligations thereunder, or (ii) results in a right by such third Person(s),
irrespective of whether exercised, to terminate such agreement or to accelerate
the maturity of an Obligor's obligations thereunder; provided, however, that
until such time as Foothill is satisfied that any such default has been
satisfied, remedied, cured or waived, Foothill shall be entitled to create and
maintain a reserve against the Maximum Revolving Amount in an amount sufficient
to reinstate the agreement which is the subject of the default or otherwise cure
the default;
8.11 If an Obligor makes any payment on account of Indebtedness that
has been contractually subordinated in right of payment to the payment of the
Obligations, except to the extent such payment is permitted by the terms of the
subordination provisions applicable to such Indebtedness;
8.12 If any material misstatement or misrepresentation exists now or
hereafter in any warranty, representation, statement, or report made to Foothill
by any Obligor or any officer, employee, agent, or director of any Obligor, or
if any such warranty or representation is withdrawn;
8.13 If the obligation of any Guarantor or the Indenture Trustee
under any Loan Document to which it is a party is limited or terminated by
operation of law or by such Guarantor or the Indenture Trustee thereunder; or
8.14 If any Obligor fails to keep in full force and effect, suffers
the termination, revocation, or suspension of, terminates, forfeits, or suffers
a materially adverse amendment to, any Casino License at any time held by any
Obligor that is necessary to the operation of any Casino owned by any Obligor.
9. FOOTHILL'S RIGHTS AND REMEDIES.
9.1 RIGHTS AND REMEDIES. Upon the occurrence, and during the
continuation, of an Event of Default Foothill may, at its election, without
notice of its election and without demand, do any one or more of the following,
all of which are authorized by Borrower (and hereby caused by Borrower to be
authorized by each of the other Obligors (and, by its execution and delivery of
the Guaranty or a joinder thereto, each of the Guarantors hereby authorizes
same)):
(a) Declare all Obligations, whether evidenced by this
Agreement, by any of the other Loan Documents, or otherwise, immediately due and
payable;
52.
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(b) Cease advancing money or extending credit to or for the
benefit of Borrower under this Agreement, under any of the Loan Documents, or
under any other agreement between Borrower and Foothill;
(c) Terminate this Agreement and any of the other Loan
Documents as to any future liability or obligation of Foothill, but without
affecting Foothill's rights and security interests in the Personal Property
Collateral or the Real Property Collateral and without affecting the
Obligations;
(d) Settle or adjust disputes and claims directly with Account
Debtors for amounts and upon terms which Foothill considers advisable, and in
such cases, Foothill will credit Borrower's Loan Account with only the net
amounts received by Foothill in payment of such disputed Accounts after
deducting all Foothill Expenses incurred or expended in connection therewith;
(e) Borrower agrees that, upon the occurrence of and during
the continuance of an Event of Default and at Foothill's request, Borrower will,
and will cause each other Obligor to (and, by its execution and delivery of the
Guaranty or a joinder thereto, each of the Guarantors hereby agrees to),
immediately file such applications for approval and shall take all other and
further actions required by Foothill to obtain such approvals or consents of
regulatory authorities as are necessary to transfer ownership and control to
Foothill, of the Casino Licenses held by it, or its interest in any Person
holding any such Casino License. To enforce the provisions of this Section
9.1(e), Foothill is empowered to request the appointment of a receiver from any
court of competent jurisdiction. Such receiver shall be instructed to seek from
the applicable Gaming Authority an involuntary transfer of control of any Casino
License for the purpose of seeking a bona fide purchaser to whom control will
ultimately be transferred. Borrower hereby agrees to authorize, and shall cause
each other Obligor to authorize (and, by its execution and delivery of the
Guaranty or a joinder thereto, each of the Guarantors hereby agrees to
authorize), such an involuntary transfer of control upon the request of the
receiver so appointed and, if Borrower or such other Obligor shall refuse to
authorize the transfer, its approval may be required by the court. Upon the
occurrence and continuance of an Event of Default, Borrower shall, and shall
cause each of the other Obligors to (and, by its execution and delivery of the
Guaranty or a joinder thereto, each of the Guarantors hereby agrees to), further
use its reasonable best efforts to assist in obtaining approval of the
applicable Gaming Authority, if required, for any action or transactions
contemplated by this Agreement or the Loan Documents, including, preparation,
execution, and filing with the applicable Gaming Authority of the assignor's or
transferor's portion of any application or applications for consent to the
assignment of any Casino License or transfer of control necessary or appropriate
under the applicable Gaming Authority's rules and regulations for approval of
the transfer or assignment of any portion of the Collateral, together with any
Casino License or other authorization. Borrower acknowledges, and shall cause
each of the other Obligors to acknowledge (and, by its execution and delivery of
the Guaranty or a joinder thereto, each of the Guarantors hereby acknowledges),
that the assignment or transfer of Casino Licenses is integral to Foothill's
realization of the value of the Collateral, that there is no adequate remedy at
law for failure by Borrower or any other Obligor to comply with the provisions
of this Section 9.1(e) and that such failure would not be adequately compensable
in damages, and therefore agrees that the agreements contained in this Section
9.1(e) may be specifically enforced.
53.
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(f) Subject to any rights of lessors or holders of purchase
money security interests, cause Borrower or any other Obligor to hold all
Personal Property Collateral in trust for Foothill, segregate all Personal
Property Collateral from all other property of the Obligors or in the Obligors'
possession and conspicuously label said Personal Property Collateral as the
property of Foothill;
(g) Without notice to or demand upon any Obligor or any other
guarantor, make such payments and do such acts as Foothill considers necessary
or reasonable to protect its security interests in the Collateral. Borrower
agrees to assemble, and cause each of the other Obligors to (and, by its
execution and delivery of the Guaranty or a joinder thereto, each of the
Guarantors hereby agrees to) assemble, the Personal Property Collateral if
Foothill so requires, and to make the Personal Property Collateral available to
Foothill as Foothill may designate. Borrower authorizes, and hereby agrees to
cause each of the other Obligors promptly to authorize (and, by its execution
and delivery of the Guaranty or a joinder thereto, each of the Guarantors hereby
authorizes), Foothill to enter the premises where the Personal Property
Collateral is located, to take and maintain possession of the Personal Property
Collateral, or any part of it, and to pay, purchase, contest, or compromise any
encumbrance, charge, or Lien that in Foothill's determination appears to
conflict with its security interests and to pay all expenses incurred in
connection therewith. With respect to any owned or leased premises of any of the
Obligors, Borrower hereby grants, and hereby causes each of the other Obligors
immediately to grant (and, by its execution and delivery of the Guaranty or a
joinder thereto, each of the Guarantors hereby grants), Foothill a license to
enter into possession of such premises and to occupy the same, without charge,
for up to 120 days in order to exercise any of Foothill's rights or remedies
provided herein, at law, in equity, or otherwise;
(h) Without notice to any Obligor (such notice hereby being
expressly waived by Borrower and caused by Borrower to be waived by each of the
other Obligors, and, by its execution and delivery of the Guaranty or a joinder
thereto, each of the Guarantors hereby waives same), and without constituting a
retention of any collateral in satisfaction of an obligation (within the meaning
of Section 9505 of the Code), set off and apply to the Obligations any and all
(i) balances and deposits of Borrower or any of the other Obligors held by
Foothill, or (ii) indebtedness at any time owing to or for the credit or the
account of Borrower or any of the other Obligors held by Foothill;
(i) Hold, as cash collateral, any and all balances and
deposits of Borrower or any of the other Obligors held by Foothill to secure the
full and final repayment of all of the Obligations;
(j) Ship, reclaim, recover, store, finish, maintain, repair,
prepare for sale, advertise for sale, and sell (in the manner provided for
herein) the Personal Property Collateral. Borrower hereby grants, and agrees to
cause each of the other Obligors to grant (and, by its execution and delivery of
the Guaranty or a joinder thereto, each of the Guarantors hereby grants), to
Foothill a license or other right to use, without charge, the Obligors' labels,
patents, copyrights, rights of use of any name, trade secrets, trade names,
trademarks, service marks, and advertising matter, or any property of a similar
nature, as it pertains to the Personal Property
54.
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Collateral, in completing production of, advertising for sale, and selling any
Personal Property Collateral and the Obligors' rights under all licenses and all
franchise agreements shall inure to Foothill's benefit;
(k) Sell the Personal Property Collateral at either a public
or private sale, or both, by way of one or more contracts or transactions, for
cash or on terms, in such manner and at such places (including any of the
Obligors' premises) as Foothill determines is commercially reasonable. It is not
necessary that the Personal Property Collateral be present at any such sale;
(l) Foothill shall give notice of the disposition of the
Personal Property Collateral as follows:
(1) Foothill shall give the applicable Obligor and
each holder of a security interest in the Personal Property Collateral who has
filed with Foothill a written request for notice, a notice in writing of the
time and place of public sale, or, if the sale is a private sale or some other
disposition other than a public sale is to be made of the Personal Property
Collateral, then the time on or after which the private sale or other
disposition is to be made;
(2) The notice shall be personally delivered or
mailed, postage prepaid, to such Obligor as provided in Section 12, at least 5
days before the date fixed for the sale, or at least 5 days before the date on
or after which the private sale or other disposition is to be made; no notice
needs to be given prior to the disposition of any portion of the Personal
Property Collateral that is perishable or threatens to decline speedily in value
or that is of a type customarily sold on a recognized market. Notice to Persons
(other than the Obligors) claiming an interest in the Personal Property
Collateral shall be sent to such addresses as they have furnished to Foothill;
(3) If the sale is to be a public sale, Foothill
also shall give notice of the time and place by publishing a notice one time at
least 5 days before the date of the sale in a newspaper of general circulation
in the county in which the sale is to be held;
(m) Foothill may credit bid and purchase at any public sale;
(n) Any deficiency that exists after disposition of the
Personal Property Collateral as provided above will be paid immediately by
Borrower. Any excess will be returned, without interest and subject to the
rights of third Persons, by Foothill to Borrower; and
(o) Foothill also shall have all other rights and remedies
available to it at law or in equity or pursuant to any other Loan Documents
(including the Mortgages).
All right, remedies, and powers provided in this Agreement relative to the
Collateral may be exercised only to the extent that the exercise thereof does
not violate any applicable mandatory provision of the applicable gaming laws,
rules, and regulations enacted by the applicable Gaming Authority (the
"Applicable Gaming Laws") and all provisions of this Agreement relative to the
Collateral are intended to be subject to all applicable mandatory provisions of
the Applicable Gaming Laws and to be limited solely to the extent necessary to
not render the provisions of this Agreement invalid or unenforceable, in whole
or in part. Foothill will timely apply for and
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<PAGE> 61
receive all required approvals of the applicable Gaming Authority for the sale
or other disposition of gaming Equipment regulated by Applicable Gaming Laws
(including any such sale or disposition of gaming Equipment consisting of slot
machines, gaming tables, cards, dice, gaming chips, player tracking systems, and
all other "gaming devices" (as such term or words of like import referring
thereto are defined in the Applicable Gaming Laws), and "associated equipment"
(as such term or words of like import referring thereto are defined in the
Applicable Gaming Laws).
9.2 REMEDIES CUMULATIVE. Foothill's rights and remedies under this
Agreement, the Loan Documents, and all other agreements shall be cumulative.
Foothill shall have all other rights and remedies not inconsistent herewith as
provided under the Code, by law, or in equity. No exercise by Foothill of one
right or remedy shall be deemed an election, and no waiver by Foothill of any
Event of Default shall be deemed a continuing waiver. No delay by Foothill shall
constitute a waiver, election, or acquiescence by it.
10. TAXES AND EXPENSES.
If any Obligor fails to pay any monies (whether taxes, assessments,
insurance premiums, or, in the case of leased properties or assets, rents or
other amounts payable under such leases) due to third Persons, or fails to make
any deposits or furnish any required proof of payment or deposit, all as
required under the terms of this Agreement or any other Loan Document, then
Foothill may, in its reasonable (from the perspective of a secured lender)
credit judgment and without prior notice to any Obligor, do any or all of the
following: (a) make payment of the same or any part thereof; (b) set up such
reserves in Borrower's Loan Account as Foothill reasonably deems necessary to
protect Foothill from the exposure created by such failure; or (c) obtain and
maintain insurance policies of the type described in Section 6.10, and take any
action with respect to such policies as Foothill deems prudent. Any such amounts
paid by Foothill shall constitute Foothill Expenses. Any such payments made by
Foothill shall not constitute an agreement by Foothill to make similar payments
in the future or a waiver by Foothill of any Event of Default under this
Agreement. Foothill need not inquire as to, or contest the validity of, any such
expense, tax, or Lien and the receipt of the usual official notice for the
payment thereof shall be conclusive evidence that the same was validly due and
owing.
11. WAIVERS; INDEMNIFICATION.
11.1 DEMAND; PROTEST; ETC. Borrower waives demand, protest, notice
of protest, notice of default or dishonor, notice of payment and nonpayment,
nonpayment at maturity, release, compromise, settlement, extension, or renewal
of accounts, documents, instruments, chattel paper, and guarantees at any time
held by Foothill on which Borrower or any other Obligor may in any way be
liable.
11.2 FOOTHILL'S LIABILITY FOR COLLATERAL. Borrower hereby agrees
that, and agrees to cause each of the other Obligors to agree that (and, by its
execution and delivery of the Guaranty or a joinder thereto, each of the
Guarantors hereby agrees that), so long as Foothill complies with its
obligations, if any, under Section 9207 of the Code, Foothill shall not in any
way or manner be liable or responsible for: (a) the safekeeping of the
Collateral; (b) any loss or damage thereto occurring or arising in any manner or
fashion from any cause; (c) any diminution
56.
<PAGE> 62
in the value thereof; or (d) any act or default of any carrier, warehouseman,
bailee, forwarding agency, or other Person. All risk of loss, damage, or
destruction of the Collateral shall be borne by Borrower and the other Obligors.
11.3 INDEMNIFICATION. Borrower shall pay, indemnify, defend, and
hold Foothill, each Participant, and each of their respective officers,
directors, employees, counsel, agents, and attorneys-in-fact (each, an
"Indemnified Person") harmless (to the fullest extent permitted by law) from and
against any and all claims, demands, suits, actions, investigations,
proceedings, and damages, and all reasonable attorneys fees and disbursements
and other costs and expenses actually incurred in connection therewith (as and
when they are incurred and irrespective of whether suit is brought), at any time
asserted against, imposed upon, or incurred by any of them in connection with or
as a result of or related to the execution, delivery, enforcement, performance,
and administration of this Agreement and any other Loan Documents or the
transactions contemplated herein, and with respect to any investigation,
litigation, or proceeding related to this Agreement, any other Loan Document, or
the use of the proceeds of the credit provided hereunder (irrespective of
whether any Indemnified Person is a party thereto), or any act, omission, event
or circumstance in any manner related thereto (all the foregoing, collectively,
the "Indemnified Liabilities"). Borrower shall have no obligation to any
Indemnified Person under this Section 11.3 with respect to any Indemnified
Liability that a court of competent jurisdiction finally determines to have
resulted proximately from the gross negligence or willful misconduct of such
Indemnified Person. This provision shall survive the termination of this
Agreement and the repayment of the Obligations.
12. NOTICES.
Unless otherwise provided in this Agreement, all notices or demands
by any party relating to this Agreement or any other Loan Document shall be in
writing and (except for financial statements and other informational documents
which may be sent by first-class mail, postage prepaid) shall be personally
delivered or sent by registered or certified mail (postage prepaid, return
receipt requested), overnight courier, or telefacsimile to any Obligor or to
Foothill, as the case may be, at its address set forth below:
IF TO ANY OBLIGOR: C/O FITZGERALDS GAMING CORPORATION
301 Fremont Street
Las Vegas, Nevada 89101
Attn: Chief Financial Officer
Fax No. 702.382.5562
WITH COPIES TO: HUGHES HUBBARD & REED LLP
350 South Grand Avenue, Suite 3600
Los Angeles, California 90071-3442
Attn: Theodore H. Latty, Esq.
Fax No. 213.613.2950
IF TO FOOTHILL: FOOTHILL CAPITAL CORPORATION
11111 Santa Monica Boulevard
57.
<PAGE> 63
Suite 1500
Los Angeles, California 90025-3333
Attn: Business Finance Division Manager
Fax No. 310.478.9788
WITH COPIES TO: BROBECK, PHLEGER & HARRISON LLP
550 South Hope Street
Los Angeles, California 90071
Attn: John Francis Hilson, Esq.
Fax No. 213.745.3345
The parties hereto may change the address at which they are to
receive notices hereunder, by notice in writing in the foregoing manner given to
the other. All notices or demands sent in accordance with this Section 12, other
than notices by Foothill in connection with Sections 9504 or 9505 of the Code,
shall be deemed received on the earlier of the date of actual receipt or 3
Business Days after the deposit thereof in the mail. Borrower, for itself and
each of the other Obligors, acknowledges and agrees that notices sent by
Foothill in connection with Sections 9504 or 9505 of the Code shall be deemed
sent when deposited in the mail or personally delivered, or, where permitted by
law, transmitted telefacsimile or other similar method set forth above.
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS
EXPRESSLY PROVIDED TO THE CONTRARY IN AN ANOTHER LOAN DOCUMENT), THE
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS
OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER
OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA. THE
PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE
STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF LOS ANGELES, STATE OF
CALIFORNIA OR, AT THE SOLE OPTION OF FOOTHILL, IN ANY OTHER JURISDICTION IN
WHICH THE COLLATERAL IS LOCATED IN CONNECTION WITH THE EXERCISE OF FOOTHILL'S
RIGHTS AND REMEDIES AS A SECURED CREDITOR WITH RESPECT TO SUCH COLLATERAL. EACH
OF BORROWER (FOR ITSELF AND ON BEHALF OF EACH OF THE OTHER OBLIGORS) AND
FOOTHILL WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH
MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENT OR TO OBJECT TO VENUE TO
THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 13.
BORROWER (FOR ITSELF AND ON BEHALF OF EACH OF THE OTHER OBLIGORS) AND FOOTHILL
HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A
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<PAGE> 64
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF
THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. EACH OF BORROWER (FOR ITSELF AND ON BEHALF OF EACH OF THE
OTHER OBLIGORS) AND FOOTHILL REPRESENTS THAT IT HAS REVIEWED THIS WAIVER AND
EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
14. DESTRUCTION OF BORROWER'S DOCUMENTS.
All documents, schedules, invoices, agings, or other papers
delivered to Foothill may be destroyed or otherwise disposed of by Foothill 4
months after they are delivered to or received by Foothill, unless Borrower
requests, in writing, the return of said documents, schedules, or other papers
and makes arrangements, at Borrower's expense, for their return.
15. GENERAL PROVISIONS.
15.1 EFFECTIVENESS. This Agreement shall be binding and deemed
effective when executed by Borrower and Foothill.
15.2 SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to
the benefit of the respective successors and assigns of each of the parties;
provided, however, that Borrower may not assign this Agreement or any rights or
duties hereunder without Foothill's prior written consent and any prohibited
assignment shall be absolutely void. No consent to an assignment by Foothill
shall release Borrower from its Obligations. Foothill may assign this Agreement
and the other Loan Documents and its rights and duties hereunder and thereunder
and no consent or approval by Borrower or any other Obligor is required in
connection with any such assignment. Foothill reserves the right to sell,
assign, transfer, negotiate, or grant participations in all or any part of, or
any interest in Foothill's rights and benefits hereunder and under the other
Loan Documents. In connection with any such assignment or participation,
Foothill may disclose all documents and information which Foothill now or
hereafter may have relating to any Obligor or any Obligor's business. To the
extent that Foothill assigns its rights and obligations hereunder or under any
other Loan Document to a third Person, Foothill thereafter shall be released
from such assigned obligations to the relevant Obligor and such assignment shall
effect a novation between the relevant Obligor and such third Person.
15.3 SECTION HEADINGS. Headings and numbers have been set forth
herein for convenience only. Unless the contrary is compelled by the context,
everything contained in each section applies equally to this entire Agreement.
15.4 INTERPRETATION. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against Foothill or Borrower or
any other Obligor, whether under any rule of construction or otherwise. On the
contrary, this Agreement has been reviewed by all parties (including Borrower
for itself and on behalf of each of the other Obligors) and shall
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<PAGE> 65
be construed and interpreted according to the ordinary meaning of the words used
so as to fairly accomplish the purposes and intentions of all parties hereto.
15.5 SEVERABILITY OF PROVISIONS. Each provision of this Agreement
shall be severable from every other provision of this Agreement for the purpose
of determining the legal enforceability of any specific provision.
15.6 AMENDMENTS IN WRITING. This Agreement can only be amended by a
writing signed by both Foothill and Borrower.
15.7 COUNTERPARTS; TELEFACSIMILE EXECUTION. This Agreement may be
executed in any number of counterparts and by different parties on separate
counterparts, each of which, when executed and delivered, shall be deemed to be
an original, and all of which, when taken together, shall constitute but one and
the same Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile shall be equally as effective as delivery of an original executed
counterpart of this Agreement. Any party delivering an executed counterpart of
this Agreement by telefacsimile also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement.
15.8 REVIVAL AND REINSTATEMENT OF OBLIGATIONS. If the incurrence or
payment of the Obligations by Borrower or any guarantor of the Obligations or
the transfer by either or both of such parties to Foothill of any property of
either or both of such parties should for any reason subsequently be declared to
be void or voidable under any state or federal law relating to creditors'
rights, including provisions of the Bankruptcy Code relating to fraudulent
conveyances, preferences, and other voidable or recoverable payments of money or
transfers of property (collectively, a "Voidable Transfer"), and if Foothill is
required to repay or restore, in whole or in part, any such Voidable Transfer,
or elects to do so upon the reasonable advice of its counsel, then, as to any
such Voidable Transfer, or the amount thereof that Foothill is required or
elects to repay or restore, and as to all reasonable costs, expenses, and
attorneys fees of Foothill related thereto, the liability of Borrower or such
guarantor automatically shall be revived, reinstated, and restored and shall
exist as though such Voidable Transfer had never been made.
15.9 INTEGRATION. This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.
[remainder of page intentionally left blank]
60.
<PAGE> 66
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered in Los Angeles, California.
FITZGERALDS GAMING CORPORATION,
a Nevada corporation
By /s/ MICHAEL E. McPHERSON
--------------------------------------
FOOTHILL CAPITAL CORPORATION,
a California corporation
By /s/ BRIAN DUFFY
--------------------------------------
61.
<PAGE> 67
Schedule R-1
<TABLE>
<CAPTION>
CITY, FOOTHILL
STREET STATE AND LIEN
FACILITY OBLIGOR ADDRESS COUNTY ZIP CODE POSITION
-------- ------- ------- ------ -------- --------
<S> <C> <C> <C> <C>
Fitzgeralds FLVI 301 Fremont Street Las Vegas, first
Las Vegas NV 89101
Facility
Fitzgeralds Reno FRI 255 North Reno, NV first
Reno Facility Virginia Street 89501
Fitzgeralds 101 Main 101 Main Street Black Hawk, first
Black Hawk CO 80422
Facility
Fitzgeralds FMI 711 Lucky Lane Robinsonville, first
Tunica Facility MS 38664
</TABLE>
62.
<PAGE> 1
EXHIBIT 10.2
Exhibit I-1
(Form of Intercreditor Agreement)
- --------------------------------------------------------------------------------
INTERCREDITOR AGREEMENT
between
FOOTHILL CAPITAL CORPORATION
and
THE BANK OF NEW YORK
as Trustee
Dated as of October 29, 1998
- --------------------------------------------------------------------------------
<PAGE> 2
INTERCREDITOR AGREEMENT
THIS INTERCREDITOR AGREEMENT dated as of October 29, 1998 (this
"Agreement") is made by and among THE BANK OF NEW YORK, solely in its capacity
as trustee under the Indenture (as hereinafter defined) and collateral agent
under the Security Documents (as herein defined) (the "Trustee") and FOOTHILL
CAPITAL CORPORATION, a California corporation (the "Eligible Credit Facility
Lender"), as lender under the Eligible Credit Facility (as hereinafter defined).
RECITALS
A. Fitzgeralds Gaming Corporation, a Nevada corporation ("Borrower"),
certain subsidiaries of Borrower (the "Guarantors"), and the Trustee entered
into an Indenture, dated as of December 30, 1997 (the "Indenture"), pursuant to
which indebtedness was incurred by Borrower, the repayment of which is
guaranteed by the Guarantors and secured by security interests in and liens on
certain now owned and hereafter acquired assets and properties described in the
Security Documents (the "Indenture Collateral").
B. As of October 29, 1998, Borrower and the Eligible Credit Facility
Lender entered into a Loan and Security Agreement (as such may be amended from
time to time after the date hereof, the "Eligible Credit Facility Loan
Agreement"), pursuant to which the Eligible Credit Facility Lender agreed, upon
the terms and conditions stated therein, to make loans and advances to, or to
issue letters of credit (or guaranties in respect thereof) for the account of,
Borrower in an aggregate principal and undrawn amount not to exceed $15,000,000
(such aggregate principal and undrawn amount, together with all interest, fees,
and expenses payable thereon or with respect thereto, the "Maximum Amount"), the
repayment of which is secured by security interests in and liens on the
Indenture Collateral pursuant to the Eligible Credit Facility Loan Agreement and
the collateral security documents, deeds of trust, mortgages, vessel mortgages,
instruments, and guaranties executed and delivered in connection therewith by
one or more of Borrower, the Guarantors, and other subsidiaries of Borrower,
together with such other agreements, instruments, and certificates as defined in
the Eligible Credit Facility Loan Agreement (as such may be amended from time to
time after the date hereof, together with the Eligible Credit Facility Loan
Agreement, the "Eligible Credit Facility Loan Documents").
C. One of the conditions of the Eligible Credit Facility Loan Agreement
is that the priority of the security interests and liens on the Collateral under
the Eligible Credit Facility Loan Documents be senior to the security interests
in and liens on the Collateral under the Indenture and the Security Documents
(as hereinafter defined), in the manner and to the extent provided for in this
Agreement.
D. The Trustee and the Eligible Credit Facility Lender desire to enter
into this Agreement concerning their respective rights with respect to the
priority of their respective security interests in and liens on the Collateral.
1
<PAGE> 3
E. The terms of the Indenture permit Borrower to enter into the Eligible
Credit Facility Loan Agreement, subject to compliance with certain conditions,
and in connection therewith authorize and direct the Trustee to enter into an
intercreditor agreement substantially in the form of this Agreement.
NOW THEREFORE, the Parties hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 Terms Defined Above and in the Recitals. As used in
this Agreement, the following terms shall have the respective meanings indicated
in the initial paragraph of this Agreement and in the above Recitals:
"Agreement"
"Borrower"
"Eligible Credit Facility Lender"
"Eligible Credit Facility Loan Agreement"
"Eligible Credit Facility Loan Documents"
"Guarantors"
"Indenture"
"Indenture Collateral"
"Maximum Amount"
"Trustee"
Section 1.2 Other Definitions. As used in this Agreement, the
following terms shall have the meanings set forth below:
"Collateral" shall mean all of the Indenture Collateral that
secures the Eligible Credit Facility Indebtedness.
"Eligible Credit Facility Indebtedness" shall mean the
"Obligations" (as that term is defined in the Eligible Credit Facility Loan
Agreement), contingent or otherwise, of Borrower and the Guarantors to the
Eligible Credit Facility Lender as defined in the Eligible Credit Facility Loan
Agreement and the obligations, contingent or otherwise, of the subsidiaries of
Borrower and the Guarantors arising under or pursuant to the Eligible Credit
Facility Loan Documents, including, in each case, interest, fees, and expenses
accruing after the initiation of any Insolvency Proceeding (irrespective of
whether allowed as a claim in such proceeding), and including the secured claims
of the Eligible Credit Facility Lender in respect of the Collateral in any
Insolvency Proceeding.
"Enforcement Action" shall have the meaning ascribed thereto in
Section 3.1.
2
<PAGE> 4
"Enforcement Event" shall mean the occurrence and continuance of
an "Event of Default" as defined under Section 6.1 of the Indenture.
"Entitled Party" shall have the meaning ascribed thereto in
Section 4.1(a).
"Event of Default" shall have the meaning ascribed thereto in
the Eligible Credit Facility Loan Agreement.
"Financing Documents" shall mean the Indenture Documents and the
Eligible Credit Facility Loan Documents.
"Foreclosure Actions" shall mean any action to foreclose upon or
enforce a Lien against any of the Collateral, including (i) commencing judicial
or non-judicial foreclosure proceedings, (ii) exercising any rights afforded to
secured creditors in a case under the Bankruptcy Code, or (iii) taking any
action under the Bankruptcy Code that directly relates to or directly affects
any such Collateral, other than any such action that relates to or affects all
or substantially all of the property of the bankruptcy estate.
"Fully Paid" shall mean the payment in cash or cash equivalents
in full of all obligations under the Eligible Credit Facility Loan Documents at
such time when there shall no longer be any obligation to make loans or advances
or issue letters of credit (or guaranties in respect thereof) thereunder and
there shall no longer be any letter of credit (or guaranty in respect thereof)
outstanding thereunder or such lender of credit (or guaranty in respect thereof)
shall have been fully cash collateralized in an amount not less that 105% of the
undrawn amount thereof.
"Indenture Documents" shall mean the Indenture, the Security
Documents, the Notes, and such other agreements, instruments, and certificates
executed and delivered (or issued) by Borrower or the Guarantors pursuant to the
Indenture, as any or all of the same may be amended or supplemented from time to
time.
"Insolvency Proceeding" shall mean any proceeding for the
purposes of dissolution, winding up, liquidation, arrangement, or reorganization
of Borrower, any Guarantor, any other subsidiary of Borrower, or their
respective successors or assigns, whether in bankruptcy, insolvency,
arrangement, reorganization, or receivership proceedings, or upon an assignment
for the benefit of creditors or any other marshaling of the assets and
liabilities of Borrower, any Guarantor, any other subsidiary of Borrower, or
their respective successors or assigns.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest, or encumbrance of any kind in respect of such
asset (including any conditional sale or other title retention agreement, any
lease in the nature thereof, any option or other agreement to sell or give a
security interest, and any filing of or agreement
3
<PAGE> 5
to give any financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction, excluding true lease and consignment filings).
"Lien Priority" shall mean, with respect to any Lien in and to
the Collateral, the order of priority of such Lien as specified in Sections 2.1
and 2.2.
"Notes" shall mean the notes issued to the holders thereof
pursuant to the Indenture.
"Party" shall mean any signatory to this Agreement.
"Secured Liabilities" shall mean the Subordinated Lien
Indebtedness and the Eligible Credit Facility Indebtedness.
"Security Agreement" shall mean that certain Security and Pledge
Agreement, dated as of December 30, 1997, between Borrower and the Guarantors on
the one hand, and the Trustee on the other hand, as such may be amended from
time to time thereafter.
"Security Documents" shall mean collectively, the Security
Agreement, any deeds of trust or mortgages, including any vessel mortgages, and
any other document, instrument, or agreement executed or delivered by Borrower,
any Guarantor, or any other subsidiary of Borrower from time to time pursuant to
which Borrower, any Guarantor, or any other subsidiary of Borrower shall grant a
Lien on any of their respective properties, assets, or revenues to secure
payment of the Subordinated Lien Indebtedness.
"Subordinated Lien Indebtedness" shall mean all obligations and
liabilities, contingent or otherwise, of Borrower and the Guarantors to the
holders of the Notes arising under or pursuant to the Indenture Documents,
including, in each case, interest, fees, and expenses accruing after the
initiation of any Insolvency Proceeding (irrespective of whether allowed as a
claim in such proceeding), and including the secured claims of the Trustee or
the holders of the Notes in respect of the Collateral in any Insolvency
Proceeding.
"Trigger Event" shall mean any of (a) the occurrence of an Event
of Default, (b) the acceleration of or demand for payment at maturity with
respect to the Eligible Credit Facility Indebtedness by the Eligible Credit
Facility Lender pursuant to the Eligible Credit Facility Loan Agreement, or (c)
the commencement of any action or proceeding by the Eligible Credit Facility
Lender, whether judicial or otherwise (but excluding demands for payment or
notices of default), for the enforcement of the Eligible Credit Facility
Lender's rights and remedies under any of the Eligible Credit Facility Loan
Documents, including (i) commencement of any receivership or Foreclosure Action
against or any other sale of, collection on, or disposition of any Collateral,
including any notification to third parties to make payment directly to the
Eligible Credit Facility Lender, (ii) exercise of any right of set-off, (iii)
commencement of any Insolvency Proceeding, and (iv) commencement
4
<PAGE> 6
of any action or proceeding against any Guarantor to recover all or any part of
the Eligible Credit Facility Indebtedness.
Section 1.3 Miscellaneous. All definitions herein (whether set forth
herein directly or by reference to definitions in other documents) shall be
equally applicable to both the singular and the plural forms of the terms
defined. The words "hereof," "herein," or "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. Article and section
references are to articles and sections of this Agreement unless otherwise
specified. The term "including" shall mean "including without limitation."
ARTICLE 2
LIEN PRIORITY
Section 2.1 Agreement to Subordinate Liens. The Trustee hereby agrees
that the Liens of the Trustee for the benefit of itself and the holders of the
Notes in the Collateral are and shall be subordinate in priority to the Liens of
the Eligible Credit Facility Lender in and to the Collateral securing the
Eligible Credit Facility Indebtedness up to and not exceeding the Maximum
Amount; provided, that the rights of the Eligible Credit Facility Lender under
this Agreement shall be void and of no further force and effect if, and only to
the extent, that the Liens of the Eligible Credit Facility Lender in and to the
Collateral are avoided, disallowed, set aside, or otherwise invalidated in any
action or proceeding by a court, tribunal, or administrative agency of competent
jurisdiction. The subordination of the Liens of the Trustee for the benefit of
itself and the holders of the Notes in and to the Collateral in favor of the
Eligible Credit Facility Lender provided for herein shall not be deemed to (a)
subordinate the Liens of the Trustee to the Liens of any other Person, or (b)
subordinate the Subordinated Lien Indebtedness to any other indebtedness of
Borrower or any of the Guarantors, including the Eligible Credit Facility
Indebtedness. Without limiting the generality of the foregoing, Trustee in its
capacity as Trustee-Mortgagee under that certain First Preferred Vessel
Mortgage, dated as of December 30, 1997, by Fitzgeralds Mississippi, Inc.
("FMI") as Owner-Mortgagor, recorded in the National Vessel Documentation Center
at Book 98-23, Page 467 (the "Indenture Vessel Mortgage"), hereby agrees that
the lien of the Indenture Vessel Mortgage is and shall be subordinate to the
lien of the First Preferred Vessel Mortgage, dated as of October 29, 1998, by
FMI, as Owner and Mortgagor, in favor of Foothill Capital Corporation, a
California corporation, as Mortgagee, with respect to the vessel "Fitzgeralds
Tunica", U.S.G.C. Official #262757 and securing a Maximum Principal Amount of
$15,000,000.
Section 2.2 Non-Contest; Excluded Assets. Each Party agrees that it will
not attack or contest the validity, perfection, priority, or enforceability of
the Liens of the other Party or finance or urge any other Person to do so,
provided that either Party may enforce its rights and privileges hereunder
without being deemed to have violated this
5
<PAGE> 7
provision. Any provision contained in this Agreement to the contrary
notwithstanding, the terms and conditions of this Agreement shall not apply to
any property or assets (including property or assets that do not constitute
Collateral) as to which one Party has a Lien and as to which the other Party
does not have a Lien.
Section 2.3 Exercise of Rights.
(a) The Trustee may exercise, and nothing herein shall constitute a
waiver of, any right it may have at law or equity to receive notice of, or to
commence or join with any creditor in commencing any Insolvency Proceeding or to
join or participate in any Enforcement Action (as hereinafter defined);
provided, that the exercise of any such right by the Trustee shall be (i)
subject to the Lien Priority and application of proceeds of Collateral as
provided in Section 3.4, and (ii) subject to the provisions of Sections 3.1 and
3.2.
(b) Notwithstanding any other provision hereof, the Trustee may make
such demands or file such claims as may be necessary to prevent the waiver or
bar of such claims under applicable statutes of limitations or other statutes,
court orders or rules of procedure.
Section 2.4 Priority of Liens. Irrespective of the order of recording of
mortgages, financing statements, security agreements, or other instruments, and
irrespective of the descriptions of Collateral contained in the Financing
Documents, including any financing statements, the Parties agree among
themselves that their respective Liens in the Collateral shall be governed by
the Lien Priority, which shall be controlling in the event of any conflict
between this Agreement and any of the Financing Documents.
ARTICLE 3
ACTIONS OF THE PARTIES
Section 3.1 Limitation on Certain Actions. Subject to Section 3.2:
(a) so long as any of the Eligible Credit Facility Indebtedness up to
the Maximum Amount is not Fully Paid, the Trustee will not, without the prior
written consent of the Eligible Credit Facility Lender, take any of the
following actions (each an "Enforcement Action");
(i) commencement of any action, whether judicial or otherwise,
for the enforcement of the Trustee's rights and remedies as a secured creditor
with respect to the Collateral including commencement of any receivership or
foreclosure proceedings against or any other sale of, collection on, or
disposition of any Collateral; or
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<PAGE> 8
(ii) notifying any third party account debtors of Borrower or
any of its Subsidiaries to make payment directly to it or to any of its agents
or other Persons acting on its behalf; and
(b) so long as any Eligible Credit Facility Indebtedness is outstanding,
the Trustee will not, without the prior written consent of the holders of a
majority in aggregate principal amount of the Subordinated Lien Indebtedness
then outstanding, take any Enforcement Action.
Section 3.2 Standstill Period. If an Enforcement Event has occurred and
is continuing, the Trustee, on behalf of the holders of the Notes, may give the
Eligible Credit Facility Lender written notice thereof, specifying the nature of
the Enforcement Event in reasonable detail. If such Enforcement Event is
continuing for more than 180 consecutive days after the delivery of such notice,
and if the Eligible Credit Facility Lender has not on or before the expiration
of such 180-day period notified the Trustee that the Eligible Credit Facility
Lender has commenced one or more types of enforcement actions described in
Section 3.1 or that Borrower or one or more of the Guarantors is the subject of
an Insolvency Proceeding, then the Trustee may, subject to the Lien Priority and
the application of all proceeds of the Collateral in accordance with the Section
3.4, take one or more types of enforcement actions described in Section 3.1 or
otherwise available to the Trustee under the Indenture Documents. If the
Eligible Credit Facility Lender has commenced any such enforcement action within
such 180-day period and thereafter discontinues such enforcement action or
actions, and no Insolvency Proceeding is pending against Borrower or one or more
of the Guarantor and no other action described in Section 3.1 is then being
taken by the Eligible Credit Facility Lender, and if, following the expiration
of such 180-day period, such Enforcement Event is then continuing, then the
Trustee may, subject to the Lien Priority and the application of all proceeds of
the Collateral in accordance with Section 3.4, take one or more types of
enforcement actions described in Section 3.1 or otherwise available to the
Trustee under the Indenture Documents. Nothing in this Agreement shall prevent
the Parties hereto from exercising any other remedy, or taking any other action,
under any of the Financing Documents.
Section 3.3 Foreclosure. In the event of any Foreclosure Action by any
Party to this Agreement, the Party taking such Foreclosure Action may enforce
its Financing Documents independently as to Borrower and each Guarantor and
independently of any other remedy or security such Party at any time may have or
hold in connection with its Secured Liabilities, and it shall not be necessary
for the Party taking such Foreclosure Action to marshal assets in favor of any
other Party hereto or any other Person or to proceed upon or against or exhaust
any other security or remedy before proceeding to enforce the Financing
Documents. Each of the Trustee (for so long as the Eligible Credit Facility
Lender is owed any Eligible Credit Facility Indebtedness) and the Eligible
Credit Facility Lender (for so long as the Trustee and the holders of the Notes
are owed any Subordinated Lien Indebtedness as defined hereunder) expressly
waives any right to require the other Party hereto to marshal assets in favor of
any Party hereto or to proceed against
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<PAGE> 9
any Collateral provided by Borrower or any Guarantor, or any other property,
assets, or collateral provided by Borrower, any Guarantor, or any other Person,
and agrees that the Party taking such Foreclosure Action may proceed against
Borrower, any Guarantor, any Collateral or other property, assets, or other
collateral provided by any of them or by any other Person, in such order as it
shall determine in its sole and absolute discretion. The foregoing
notwithstanding: (a) with respect to the sale or other disposition by the
Eligible Credit Facility Lender of any Collateral governed by Article 9 of the
Uniform Commercial Code, the Eligible Credit Facility Lender agrees in favor of
the Trustee that every aspect of such sale or other disposition, including the
method, manner, time, place, and terms, must be commercially reasonable, (b)
with respect to the sale or other disposition by the Eligible Credit Facility
Lender of any other Collateral, the Eligible Credit Facility Lender agrees in
favor of the Trustee that such sale or other disposition shall be conducted in a
commercially reasonable manner (such phrase being used in this clause (b) not in
the Uniform Commercial Code sense, but according to the normal meaning of such
phrase, with the intent that such standard would be established by reference to
the practices of commercial real property secured lenders generally), (c) with
respect to the sale or other disposition of any Collateral by either Party, such
Party agrees to provide the other Party with such written notice as it is
required by applicable law (including, if applicable, the Uniform Commercial
Code) to provide to Borrower or the Guarantors (without regard to whether
Borrower or the Guarantors have waived their entitlement to receive such
notice), and (d) the Eligible Credit Facility Lender agrees that, at such time
as all Eligible Credit Facility Indebtedness is Fully Paid, the Eligible Credit
Facility Lender thereupon promptly shall cease all further Foreclosure Actions.
Section 3.4 Distribution. Each Party agrees that, upon any distribution
as a result of a Foreclosure Action, or the receipt of any other payment or
distribution with respect to the Collateral, the proceeds thereof shall be
distributed in the order of, and in accordance with, the following priorities:
(a) FIRST, if the Foreclosure Action is taken by the Eligible Credit
Facility Lender, to the payment of all costs and expenses, commissions, and
taxes of the Eligible Credit Facility Lender incurred in connection with taking
any such Foreclosure Action or other realization, including all expenses
(including attorneys fees and expenses), liabilities, and advances made or
incurred by the Eligible Credit Facility Lender in connection therewith;
(b) SECOND, if the Foreclosure Action is taken and entitled to be taken
hereunder by the Trustee, to the payment of all costs and expenses, commissions,
and taxes of the Trustee incurred in connection with taking any such Foreclosure
Action or other realization, including all expenses (including attorneys fees
and expenses), liabilities, and advances made or incurred by the Trustee in
connection therewith;
(c) THIRD, to the Eligible Credit Facility Lender, until all Eligible
Credit Facility Indebtedness in an amount up to the to the Maximum Amount is
Fully Paid;
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(d) FOURTH, to the Trustee, until all Subordinated Lien Indebtedness
Fully Paid;
(e) FIFTH, to the Eligible Credit Facility Lender, until all Eligible
Credit Facility Indebtedness, if any, in excess of the Maximum Amount is Fully
Paid; and
(f) SIXTH, in accordance with the terms of the Indenture Documents.
Section 3.5 Notice of Certain Events. Each Party agrees that it will
notify the other, in writing, if it receives actual notice of the occurrence of
a Trigger Event or Enforcement Event, respectively, not later than 30 days after
the date of any such occurrence. The foregoing to the contrary notwithstanding,
the no Party shall incur any liability to the other under this Section as a
result of the failure of such Party to provide any such notice so long as the
failure to so provide such notice was not the result of wilful misconduct,
malfeasance, or gross negligence.
ARTICLE 4
ENFORCEMENT OF PRIORITIES
Section 4.1 In Furtherance of Lien Priorities. Each Party agrees as
follows:
(a) all payments or distributions of or with respect to the Collateral
that are received by any Party contrary to the provisions of this Agreement
shall be segregated from other funds and property held by such Party and shall
be held in trust for the Party entitled thereto in accordance with the
provisions of Section 3.4 (the "Entitled Party") and such Party shall forthwith
pay over such remaining proceeds to the Entitled Party in the same form as so
received (with any necessary endorsement) to be applied (in the case of cash) or
held as Collateral (in the case of non-cash property or securities) in
accordance with the provisions hereof and the provisions of the applicable
Financing Documents;
(b) after the Eligible Credit Facility Indebtedness is Fully Paid (to
the maximum amount set forth herein), the Eligible Credit Facility Lender will
promptly execute and deliver all further instruments and documents, and take all
further acts that may be necessary or that the Trustee reasonably may request,
to permit such Trustee to evidence or in furtherance of the termination of the
Lien Priority hereunder; provided, that (i) the Eligible Credit Facility Lender
shall not be required to pay over any payment or distribution, execute any
instruments or documents, or take any other action referred to in this clause
(b) to the extent that such action would contravene any law, order, or other
legal requirement and in the event of a controversy or dispute, the Eligible
Credit Facility Lender may interplead any payment or distribution in any court
of competent jurisdiction, and (ii) the Eligible Credit Facility Lender shall
not incur any liability to the Trustee for the failure to provide any such
further instruments and documents or take any such further acts, so long as the
failure to provide any such further instruments and documents or take
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any such further acts was not the result of malfeasance, wilful misconduct, or
gross negligence;
(c) Each Party is hereby authorized to demand specific performance of
this Agreement, whether or not Borrower or any Guarantor shall have complied
with any of the provisions hereof applicable to them, at any time when any other
Party shall have failed to comply with all of the provisions of this Agreement
applicable to it, provided that the remedy of specific performance shall not be
available, and the asserting Party shall be free to assert any and all legal
defenses it may possess, if such remedy would result in, or otherwise
constitute, a violation of the Employee Retirement Income Security Act of 1974,
as amended. Each Party hereto hereby irrevocably waives any defense based on the
adequacy of a remedy at law, which might be asserted as a bar to such remedy of
specific performance; and
(d) This Agreement shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of any of the Secured Liabilities
is, other than as a result of any malfeasance, intentional fraud, or gross
negligence of the applicable Party, rescinded or must otherwise be returned by
the applicable Party upon the insolvency, bankruptcy, or reorganization of
Borrower or any Guarantor or otherwise, all as though such payment had not been
made.
Section 4.2 Perfection of Possessory Security Interests. For the limited
purpose of perfecting the security interests of the Parties in those types or
items of Collateral in which a security interest only may be perfected by
possession or control, each Party hereby appoints the other as its
representative for the limited purpose of possessing on its behalf any such
Collateral that may come into the possession or control of such other Party from
time to time, and each Party agrees to act as the other's representative for
such limited purpose of perfecting the other's security interest by possession
or control through a representative, provided that neither Party shall incur any
liability to the other by virtue of acting as the other's representative
hereunder. In this regard, any Party that is in possession or control of any
such item of Collateral agrees that if it elects to relinquish possession or
control of such item of Collateral it shall deliver possession or control
thereof to the other Party.
Section 4.3 Control of Dispositions of Collateral and Effect thereof on
Junior Liens.
Except to the extent, if any, expressly prohibited by the terms and
conditions of Sections 4.10 or 5.1 or of the Indenture:
(a) each Party hereby agrees that if the Party with the senior Lien in
an item of Collateral shall have agreed with Borrower (or its
subsidiary, as applicable) that Borrower (or its subsidiary, as
applicable) may sell or otherwise dispose of such item of Collateral,
then the Lien of the other Party in such item of Collateral shall
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be released by such other Party concurrently with such sale or other
disposition and the net cash proceeds therefrom may, at the sole
election of the Party with the senior Lien therein, be applied to the
claims of the Parties in the manner provided for herein, or be used by
Borrower (or its subsidiary, as applicable) for its lawful general
corporate purposes;
(b) each Party hereby further agrees that any UCC collection, sale, or
other disposition of Collateral by the Eligible Credit Facility Lender
shall be free and clear of any Lien of the Trustee in such Collateral,
provided that the Trustee shall retain a Lien (having the same priority
as the Lien it previously had on the item of Collateral that was sold or
otherwise disposed of) on the proceeds of such collection, sale, or
other disposition (except to the extent such proceeds are applied to the
Eligible Credit Facility Indebtedness, as provided herein, or are used
by Borrower (or its subsidiary, as applicable) for general corporate
purposes as set forth in subsection (a) of this Section 4.3; and
(c) To the extent reasonably requested by either Party, the other Party
will cooperate in providing any necessary or appropriate releases to
permit a collection, sale, or other disposition of Collateral, as
provided in subsections (a) or (b) of this Section 4.3, by the Party
holding the senior Lien therein free and clear of the other Party's
junior Lien.
ARTICLE 5
MISCELLANEOUS
Section 5.1 Rights of Subrogation. Each Trustee agrees that no payment
or distribution to the Eligible Credit Facility Lender pursuant to the
provisions of this Agreement shall entitle such Trustee to exercise any rights
of subrogation in respect thereof until the Eligible Credit Facility
Indebtedness in an amount up to the to the Maximum Amount shall have been Fully
Paid.
Section 5.2 Further Assurances. The Parties will, at their own expense
and at any time and from time to time, promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
that any Party reasonably may request, in order to protect any right or interest
granted or purported to be granted hereby or to enable any Party to exercise and
enforce its rights and remedies hereunder; provided, that no Party shall be
required to pay over any payment or distribution, execute any instruments or
documents, or take any other action referred to in this Section 5.2 to the
extent that such action would contravene any law, order, or other legal
requirement binding upon such Party, and in the event of a controntion, such
Party shall interplead any payment or distribution in any court of competent
jurisdiction, without further responsibility in respect of such payment or
distribution under this Section 5.2.
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Section 5.3 Defenses Similar to Suretyship Defenses. All rights,
interests, agreements, and obligations of each of the Parties under this
Agreement, shall remain in full force and effect irrespective of:
(a) any change in the time, manner, or place of payment of, or
in any other term of, all or any of the Secured Liabilities, or any other
amendment or waiver of or any consent to departure from the Financing Documents,
provided that this clause (a) shall not apply to, and none of the Trustee's
Liens in the Collateral shall be subordinated in priority by virtue of this
Agreement to, the Eligible Credit Facility Lender's Liens therein to the extent
that the Eligible Credit Facility Indebtedness is increased, without the express
written consent of the Trustee, to an amount in excess of the Maximum Amount;
(b) any exchange, release, non-enforcement, or non-perfection of
any Party's Liens with respect to any Collateral, or any release, amendment, or
waiver of or consent to departure from any guaranty, for all or any of the
Secured Liabilities; and
(c) any failure by any Party to marshal assets in favor of any
other Party or any other Person or to proceed upon or against or exhaust any
security or remedy before proceeding to enforce the Financing Documents.
Section 5.4 Amendments, Etc. No amendment or waiver of any provision of
this Agreement nor consent to any departure by any Party shall in any event be
effective unless the same shall be in writing and signed by each Party, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
Section 5.5 Addresses for Notices. All demands, notices, and other
communications provided for hereunder shall be in writing and, if to the
Trustee, mailed or sent by telecopy or delivered to it, addressed to it as
follows:
The Bank of New York
101 Barclay Street, 21-W
New York, NY 10286
Attention: Corporate Trust Department
Telephone: (212) 815-3806
Facsimile: (212) 815-5915
and if to the Eligible Credit Facility Lender, mailed or sent by telecopy or
delivered to it, addressed to it as follows:
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Foothill Capital Corporation
11111 Santa Monica Boulevard, Suite 1500
Los Angeles, California 90025
Attention: Business Finance Division Manager
Telephone: (310) 996-7000
Facsimile: (310) 575-9623
, or as to any Party at such other address as shall be designated by such Party
in a written notice to the other parties complying as to delivery with the terms
of this Section. All such demands, notices, and other communications shall be
effective: when mailed, 2 business days after deposit in the mails, postage
prepaid; when sent by telecopy, when receipt is acknowledged by the receiving
telecopy equipment (or at the opening of the next business day if receipt is
after normal business hours); or when delivered, as the case may be, addressed
as aforesaid.
Section 5.6 No Waiver Remedies. No failure on the part of any Party to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
Section 5.7 Continuing Agreement. This Agreement is a continuing
agreement and shall (a) be binding upon the Parties and their successors and
assigns, and (b) inure to the benefit of and be enforceable by the Parties and
their respective successors, transferees, and assigns.
Section 5.8 Governing Law: Entire Agreement. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of New York
except as otherwise preempted by applicable federal law. This Agreement
constitutes the entire agreement and understanding among the Parties with
respect to the subject matter hereof and supersedes any prior agreements,
written or oral, with respect thereto.
Section 5.9 Counterparts. This Agreement may be executed in any number
of counterparts, and it is not necessary that the signatures of all Parties be
contained on any one counterpart hereof, each counterpart will be deemed to be
an original, and all together shall constitute one and the same document.
Section 5.10 No Third Party Beneficiary. This Agreement is solely for
the benefit of the Parties (and their successors and assigns) and the holders of
the Secured Liabilities (including the holders of the Notes). No other Person
(including Borrower, any Guarantor, or any subsidiary or affiliate of Borrower)
shall be deemed to be a third party beneficiary of this Agreement.
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Section 5.11 Headings. The headings of the articles and elections of
this Agreement are inserted for purposes of convenience only and shall not be
construed to affect the meaning or construction of any of the provisions hereof.
Section 5.12 Severability. If any of the provisions in this Agreement
shall, for any reason, be held invalid, illegal, or unenforceable in any
respect, such invalidity, illegality, or unenforceability shall not affect any
other provision of this Agreement and shall not invalidate the Lien Priority or
any other priority set forth in this Agreement.
Section 5.13 Trustee Status. Notwithstanding any term herein to the
contrary, it is hereby expressly agreed and acknowledged that the subordination
and related agreements set forth herein by the Trustee are made solely in its
capacity as trustee and collateral agent under the Indenture Documents and with
respect to the Notes issued under the Indenture (and not in its individual
commercial capacity, except to the extent that it is or becomes the holder of
any such Note). The Trustee shall not have any duties, obligations, or
responsibilities to the Eligible Credit Facility Lender under this Agreement
except as expressly set forth herein. Nothing in this Agreement shall be
construed to operate as a waiver by the Trustee, with respect to Borrower or any
holder of any Subordinated Lien Indebtedness, of the benefit of any exculpatory
provisions, presumptions, indemnities, protections, benefits, immunities or
reliance rights contained in the Indenture, and, by its acknowledgement hereof,
Borrower expressly agrees that as between itself and the Trustee, the Trustee
shall have such benefit with respect to all actions or omissions by the Trustee
pursuant to this Agreement. For all purposes of this Agreement, Trustee may (a)
conclusively rely in good faith, as to matters of fact, on any representation of
fact believed by Trustee to be true (without any duty of investigation) and that
is contained in a written certificate of any authorized representative of
Borrower or of the Eligible Credit Facility Lender, (b) conclusively rely in
good faith, as to matters of law, on any advice received from its legal counsel,
and shall have no liability for any action or omission taken in reliance
thereon, and (c) conclusively assume in good faith (without any duty of
investigation), and rely upon, the genuineness, due authority, validity, and
accuracy of any certificate, instrument, notice, or other document believed by
it in good faith to be genuine and presented by the proper person.
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IN WITNESS WHEREOF, each Party has caused this Agreement to be duty
executed and delivered as of the date first above written.
FOOTHILL CAPITAL CORPORATION
By: /s/ BRIAN DUFFY
-------------------------
Name: Brian Duffy
Title: Vice President
THE BANK OF NEW YORK, solely in its
capacity as trustee and collateral agent
(and not individually)
By: /s/ MARY BETH LEWICKI
-------------------------
Name: Mary Beth Lewicki
Title: Assistant Vice President
S-1
<PAGE> 17
ACKNOWLEDGMENT
The undersigned hereby acknowledges that (a) it has received a copy of
the foregoing Intercreditor Agreement and consents thereto, and agrees to
recognize all rights granted hereby to the parties thereto, and will not do any
act or perform any obligation which is not in accordance with the agreements set
forth in such Intercreditor Agreement and (b) it is not an intended beneficiary
or third party beneficiary under the Intercreditor Agreement.
Dated as of October 29, 1998
FITZGERALDS GAMING CORPORATION
a Nevada corporation
FITZGERALDS SOUTH, INC.
a Nevada corporation
FITZGERALDS RENO, INC.
a Nevada corporation
FITZGERALDS INCORPORATED
a Nevada corporation
FITZGERALDS MISSISSIPPI, INC.
a Mississippi corporation
FITZGERALDS LAS VEGAS, INC.
a Nevada corporation
FITZGERALDS BLACK HAWK, INC.
a Nevada corporation
FITZGERALDS BLACK HAWK II, INC.
a Colorado corporation
FITZGERALDS FREMONT EXPERIENCE
CORPORATION
a Nevada corporation
101 MAIN STREET LIMITED LIABILITY COMPANY
a Colorado limited liability company
By: /s/ MICHAEL E. MCPHERSON
------------------------------------------------
Name: Michael E. McPherson
Title: Senior Vice President, Chief Financial
Officer, Treasurer, and Secretary of each of
the above-listed companies
S-2
<PAGE> 18
STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
On October 29, 1998, before me, Kiersten Polk, Notary Public, personally
appeared Brian Duffy, 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.
[SEAL] KIERSTEN POLK
Commission #1100940
Notary Public--California /s/ KIERSTEN POLK
Los Angeles County -------------------------
My Comm. Expires Jun 14, 2000 Signature
STATE OF ___________ )
) ss
COUNTY OF ____________ )
On _____________, 1998, before me, _____________________, Notary Public,
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
[SEAL]
<PAGE> 1
EXHIBIT 10.3
STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT (this "Agreement"), dated as of
October 29, 1998, is entered into between FITZGERALDS GAMING CORPORATION, a
Nevada corporation ("Pledgor"), and FOOTHILL CAPITAL CORPORATION, a California
corporation ("Secured Party"), with reference to the following:
WHEREAS, Pledgor beneficially owns the specified number of shares
identified as Pledged Shares in the Persons identified as Issuers on Schedule A
attached hereto (or any addendum thereto);
WHEREAS, Pledgor and Secured Party are parties to that certain
Loan and Security Agreement (the "Loan Agreement"), of even date herewith,
pursuant to which Secured Party has agreed to make certain financial
accommodations to Pledgor;
WHEREAS, to induce Secured Party to make the financial
accommodations provided to Pledgor pursuant to the Loan Agreement, Pledgor
desires to pledge, grant, transfer, and assign to Secured Party a security
interest in the Collateral (as hereinafter defined) to secure the Secured
Obligations (as hereinafter defined), as provided herein.
NOW, THEREFORE, in consideration of the mutual promises,
covenants, representations, and warranties set forth herein and for other good
and valuable consideration, the parties hereto agree as follows:
1. Definitions and Construction.
(a) Definitions. All initially capitalized terms used
herein and not otherwise defined herein shall have the meaning ascribed thereto
in the Loan Agreement. As used in this Agreement:
"Agreement" shall mean this Stock Pledge Agreement.
"Chief Executive Office" shall mean where
Pledgor is deemed located pursuant to Section 9-103(3)(d) of the Code.
"Collateral" shall mean the Pledged Shares, the
Future Rights, and the Proceeds, collectively, but excluding any Excluded
Assets.
"FRI" shall mean Fitzgeralds Reno, Inc., a Nevada
corporation
"FSI" shall mean Fitzgeralds South, Inc., a Nevada
corporation.
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"Future Rights" shall mean: (a) all shares of stock
(other than Pledged Shares) of the Issuers, and all securities convertible or
exchangeable into, and all warrants, options, or other rights to purchase,
shares of stock of the Issuers; (b) to the extent of Pledgor's interest therein,
all shares of, all securities convertible or exchangeable into, and all
warrants, options, or other rights to purchase shares of stock of any Person in
which Pledgor, after the date of this Agreement, acquires a direct equity
interest, irrespective of whether such Person is or becomes a Subsidiary of
Pledgor; and (c) the certificates or instruments representing such additional
shares, convertible or exchangeable securities, warrants, and other rights and
all dividends, cash, options, warrants, rights, instruments, and other property
or proceeds from time to time received, receivable, or otherwise distributed in
respect of or in exchange for any or all of such shares.
"Gaming Laws" shall mean all gaming laws, rules,
and regulations enacted by any Gaming Authority or other governmental authority.
"Holder" and "Holders" shall have the meanings
ascribed thereto in Section 3 of this Agreement.
"Issuers" shall mean each of the Persons identified
as an Issuer on Schedule A attached hereto (or any addendum thereto), and any
successors thereto, whether by merger or otherwise.
"Lien" shall mean any lien, mortgage, pledge,
assignment (including any assignment of rights to receive payments of money),
security interest, charge, or encumbrance of any kind (including any conditional
sale or other title retention agreement, any lease in the nature thereof, or any
agreement to give any security interest).
"Loan Agreement" shall have the meaning ascribed
thereto in the recitals to this Agreement.
"Pledged Shares" shall mean all of the shares
identified as Pledged Shares on Schedule A attached hereto (or any addendum
thereto).
"Pledgor" shall have the meaning ascribed thereto
in the preamble to this Agreement.
"Proceeds" shall mean all proceeds (including
proceeds of proceeds) of the Pledged Shares and Future Rights including all: (a)
rights, benefits, distributions, premiums, profits, dividends, interest, cash,
instruments, documents of title, accounts, contract rights, inventory,
equipment, general intangibles, deposit accounts, chattel paper, and other
property from time to time received, receivable, or otherwise distributed in
respect of or in exchange for, or as a replacement of or a substitution for, any
of the Pledged Shares, Future Rights, or proceeds thereof (including any cash,
stock, or other securities or instruments issued after any recapitalization,
readjustment,
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reclassification, merger or consolidation with respect to the Issuers and any
claims against financial intermediaries under Section 8-313(2) of the Code or
otherwise); (b) "proceeds," as such term is used in Section 9-306 of the Code;
(c) proceeds of any insurance, indemnity, warranty, or guaranty (including
guaranties of delivery) payable from time to time with respect to any of the
Pledged Shares, Future Rights, or proceeds thereof; (d) payments (in any form
whatsoever) made or due and payable to Pledgor from time to time in connection
with any requisition, confiscation, condemnation, seizure or forfeiture of all
or any part of the Pledged Shares, Future Rights, or proceeds thereof; and (e)
other amounts from time to time paid or payable under or in connection with any
of the Pledged Shares, Future Rights, or proceeds thereof.
"Secured Obligations" shall mean all liabilities,
obligations, or undertakings owing by Pledgor to Secured Party of any kind or
description arising out of or outstanding under, advanced or issued pursuant to,
or evidenced by the Loan Agreement, the other Loan Documents, or this Agreement,
irrespective of whether for the payment of money, whether direct or indirect,
absolute or contingent, due or to become due, voluntary or involuntary, whether
now existing or hereafter arising, and including all interest (including
interest that accrues after the filing of a case under the Bankruptcy Code) and
any and all costs, fees (including attorneys fees), and expenses which Pledgor
is required to pay pursuant to any of the foregoing, by law, or otherwise.
"Secured Party" shall have the meaning ascribed
thereto in the preamble to this Agreement, together with its successors or
assigns.
"Securities Act" shall have the meaning ascribed
thereto in Section 9(c) of this Agreement.
(b) Construction.
(i) Unless the context of this Agreement clearly
requires otherwise, references to the plural include the singular and to the
singular include the plural, the part includes the whole, the term "including"
is not limiting, and the term "or" has, except where otherwise indicated, the
inclusive meaning represented by the phrase "and/or." The words "hereof,"
"herein," "hereby," "hereunder," and other similar terms in this Agreement refer
to this Agreement as a whole and not exclusively to any particular provision of
this Agreement. Article, section, subsection, exhibit, and schedule references
are to this Agreement unless otherwise specified. All of the exhibits or
schedules attached to this Agreement shall be deemed incorporated herein by
reference. Any reference to any of the following documents includes any and all
alterations, amendments, restatements, extensions, modifications, renewals, or
supplements thereto or thereof, as applicable: this Agreement, the Loan
Agreement, or any of the other Loan Documents.
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(ii) Neither this Agreement nor any uncertainty
or ambiguity herein shall be construed or resolved against Secured Party or
Pledgor, whether under any rule of construction or otherwise. On the contrary,
this Agreement has been reviewed by both of the parties and their respective
counsel and shall be construed and interpreted according to the ordinary meaning
of the words used so as to fairly accomplish the purposes and intentions of the
parties hereto.
(iii) In the event of any direct conflict
between the express terms and provisions of this Agreement and of the Loan
Agreement, the terms and provisions of the Loan Agreement shall control.
2. Pledge.
(a) As security for the prompt payment and performance
of the Secured Obligations in full by Pledgor when due, whether at stated
maturity, by acceleration or otherwise (including amounts that would become due
but for the operation of the provisions of the Bankruptcy Code), Pledgor hereby
pledges, grants, transfers, and assigns to Secured Party a security interest in
all of Pledgor's right, title, and interest in and to the Collateral.
(b) Notwithstanding anything to the contrary contained
herein, Secured Party expressly acknowledges and agrees that the pledge of the
Pledged Shares of FRI and FSI pursuant hereto, and any restrictions on the
transfer of and agreements not to encumber such Pledged Shares set forth herein,
will require the approval of the Nevada Gaming Commission upon the
recommendation of the Nevada State Gaming Control Board in order to become
effective, and that the exercise by Secured Party of its rights and remedies
hereunder is subject to the mandatory provisions of the Gaming Laws. Upon
obtaining such approval, the foregoing pledge of such Pledged Securities of FRI
and FSI automatically shall become effective without any further action by any
Person.
3. Delivery and Registration of Collateral.
(a) All certificates or instruments representing or
evidencing the Collateral shall be promptly delivered by Pledgor to Secured
Party or Secured Party's designee pursuant hereto at a location designated by
Secured Party and shall be held by or on behalf of Secured Party pursuant
hereto, and shall be in suitable form for transfer by delivery, or shall be
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance satisfactory to Secured Party. Secured Party hereby
acknowledges that the applicable Gaming Laws of the State of Nevada require that
the stock certificates or other instruments evidencing the Pledged Shares issued
by FRI and FSI be held and maintained at all times at a location within the
State of Nevada designated to the Nevada State Gaming Control Board and be
available for inspection by agents or employees of the Nevada State Gaming
Control Board as promptly as possible upon request during normal business hours.
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(b) After the occurrence and during the continuance of
an Event of Default, Secured Party shall have the right, at any time in its
discretion and without notice to Pledgor, to transfer to or to register on the
books of the Issuers (or of any other Person maintaining records with respect to
the Collateral) in the name of Secured Party or any of its nominees any or all
of the Collateral. In addition, Secured Party shall have the right at any time
to exchange certificates or instruments representing or evidencing Collateral
for certificates or instruments of smaller or larger denominations.
(c) If, at any time and from time to time, any
Collateral (including any certificate or instrument representing or evidencing
any Collateral) is in the possession of a Person other than Secured Party or
Pledgor (a "Holder"), then Pledgor shall immediately, at Secured Party's option,
either cause such Collateral to be delivered into Secured Party's possession, or
execute and deliver to such Holder a written notification/instruction, and take
all other steps necessary to perfect the security interest of Secured Party in
such Collateral, including obtaining from such Holder a written acknowledgement
that such Holder holds such Collateral for Secured Party, all pursuant to
Section 9-115 of the Code or other applicable law governing the perfection of
Secured Party's security interest in the Collateral in the possession of such
Holder. Each such notification/instruction and acknowledgement shall be in form
and substance satisfactory to Secured Party.
(d) Any and all Collateral (including dividends,
interest, and other cash distributions) at any time received or held by Pledgor
shall be so received or held in trust for Secured Party, shall be segregated
from other funds and property of Pledgor and shall be forthwith delivered to
Secured Party in the same form as so received or held, with any necessary
endorsements; provided that cash dividends or distributions received by Pledgor,
if and to the extent they are not prohibited by the Loan Agreement, may be
retained by Pledgor in accordance with Section 4 and used in the ordinary course
of Pledgor's business.
(e) If at any time and from time to time any Collateral
consists of an uncertificated security or a security in book entry form, then
Pledgor shall immediately cause such Collateral to be registered or entered, as
the case may be, in the name of Secured Party, or otherwise cause Secured
Party's security interest thereon to be perfected in accordance with applicable
law.
4. Voting Rights and Dividends.
(a) So long as no Event of Default shall have occurred
and be continuing, Pledgor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Collateral or any part thereof for any
purpose not inconsistent with the terms of the Loan Documents and shall be
entitled to receive and retain any cash dividends or distributions paid in
respect of the Collateral.
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(b) Upon the occurrence and during the continuance of an
Event of Default, all rights of Pledgor to exercise the voting and other
consensual rights or receive and retain cash dividends or distributions that it
would otherwise be entitled to exercise or receive and retain, as applicable
pursuant to Section 4(a), shall cease, and all such rights shall thereupon
become vested in Secured Party, who shall thereupon have the sole right to
exercise such voting or other consensual rights and to receive and retain such
cash dividends and distributions. Pledgor shall execute and deliver (or cause to
be executed and delivered) to Secured Party all such proxies and other
instruments as Secured Party may reasonably request for the purpose of enabling
Secured Party to exercise the voting and other rights which it is entitled to
exercise and to receive the dividends and distributions that it is entitled to
receive and retain pursuant to the preceding sentence.
5. Representations and Warranties. Pledgor represents, warrants,
and covenants as follows:
(a) Pledgor has taken all steps it deems necessary or
appropriate to be informed on a continuing basis of changes or potential changes
affecting the Collateral (including rights of conversion and exchange, rights to
subscribe, payment of dividends, reorganizations or recapitalization, tender
offers and voting rights), and Pledgor agrees that Secured Party shall have no
responsibility or liability for informing Pledgor of any such changes or
potential changes or for taking any action or omitting to take any action with
respect thereto;
(b) All information herein or hereafter supplied to
Secured Party by or on behalf of Pledgor in writing with respect to the
Collateral is, or in the case of information hereafter supplied will be,
accurate and complete in all material respects;
(c) Pledgor is and will be the sole legal and beneficial
owner of the Collateral (including the Pledged Shares and all other Collateral
acquired by Pledgor after the date hereof) free and clear of any adverse claim,
Lien, or other right, title, or interest of any party other than Liens in favor
of the Indenture Trustee relative to the Senior Note Documents and Liens in
favor of Secured Party, so long as and to the extent such Liens remain the
subject of the Intercreditor Agreement;
(d) This Agreement, and the delivery to Secured Party,
or its designee, of the Pledged Shares representing Collateral (or the delivery
to all Holders of the Pledged Shares representing Collateral of the
notification/instruction referred to in Section 3 of this Agreement), creates a
valid, perfected, and first priority security interest in one hundred percent
(100%) of the Pledged Shares in favor of Secured Party securing payment of the
Secured Obligations, and all actions necessary to achieve such perfection have
been duly taken;
(e) Schedule A to this Agreement is true and correct and
complete in all material respects; without limiting the generality of the
foregoing: (i) all the Pledged
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Shares are in certificated form, and, except to the extent registered in the
name of Secured Party or its nominee pursuant to the provisions of this
Agreement, are registered in the name of Pledgor; and (ii) the Pledged Shares as
to each of the Issuers constitute at least the percentage of all the fully
diluted issued and outstanding shares of stock of such Issuer as set forth in
Schedule A to this Agreement;
(f) There are no presently existing Future Rights or
Proceeds owned by Pledgor, except as set forth in Schedule C hereto;
(g) The Pledged Shares have been duly authorized and
validly issued and are fully paid and nonassessable; and
(h) Neither the pledge of the Collateral pursuant to
this Agreement nor the extensions of credit represented by the Secured
Obligations violates Regulation T, U or X of the Board of Governors of the
Federal Reserve System.
6. Further Assurances.
(a) Pledgor agrees that from time to time, at the
expense of Pledgor, Pledgor will promptly execute and deliver all further
instruments and documents, and take all further action that may be necessary or
reasonably desirable, or that Secured Party may request, in order to perfect and
protect any security interest granted or purported to be granted hereby or to
enable Secured Party to exercise and enforce its rights and remedies hereunder
with respect to any Collateral. Without limiting the generality of the
foregoing, Pledgor will: (i) at the request of Secured Party, mark conspicuously
each of its records pertaining to the Collateral with a legend, in form and
substance reasonably satisfactory to Secured Party, indicating that such
Collateral is subject to the security interest granted hereby; (ii) execute and
file such financing or continuation statements, or amendments thereto, and such
other instruments or notices, as may be necessary or reasonably desirable, or as
Secured Party may request, in order to perfect and preserve the security
interests granted or purported to be granted hereby; (iii) allow inspection of
the Collateral by Secured Party or Persons designated by Secured Party; and (iv)
appear in and defend any action or proceeding that may affect Pledgor's title to
or Secured Party's security interest in the Collateral.
(b) Pledgor hereby authorizes Secured Party to file one
or more financing or continuation statements, and amendments thereto, relative
to all or any part of the Collateral without the signature of Pledgor where
permitted by law. A carbon, photographic, or other reproduction of this
Agreement or any financing statement covering the Collateral or any part thereof
shall be sufficient as a financing statement where permitted by law.
(c) Pledgor will furnish to Secured Party, upon the
request of Secured Party: (i) a certificate executed by an authorized officer of
Pledgor, and dated as
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of the date of delivery to Secured Party, itemizing in such detail as Secured
Party may request, the Collateral which, as of the date of such certificate, has
been delivered to Secured Party by Pledgor pursuant to the provisions of this
Agreement; and (ii) such statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as Secured Party may request.
7. Covenants of Pledgor. Pledgor shall:
(a) Perform each and every covenant in the Loan
Documents applicable to Pledgor;
(b) At all times keep at least one complete set of its
records concerning substantially all of the Collateral at its Chief Executive
Office as set forth in Schedule B hereto, and not change the location of its
Chief Executive Office or such records without giving Secured Party at least
thirty (30) days prior written notice thereof;
(c) To the extent it may lawfully do so, use its best
efforts to prevent the Issuers from issuing Future Rights or Proceeds, except
for cash dividends and other distributions, if any, that are not prohibited by
the terms of the Loan Agreement to be paid by any Issuer to Pledgor;
(d) Upon receipt by Pledgor of any material notice,
report, or other communication from any of the Issuers or any Holder relating to
all or any part of the Collateral, deliver such notice, report or other
communication to Secured Party as soon as possible, but in no event later than
five (5) days following the receipt thereof by Pledgor; and
(e) Use its best efforts to obtain all recommendations
of the Nevada State Gaming Control Board and approvals of the Nevada Gaming
Commission that are required for the pledge of or any negative pledge on the
stock of FSI and FRI; provided, however, that such best efforts need not include
the obligation to expend money, other than in connection with customary
procedures for obtaining such recommendations or approvals.
8. Secured Party as Pledgor's Attorney-in-Fact.
(a) Pledgor hereby irrevocably appoints Secured Party as
Pledgor's attorney-in-fact, with full authority in the place and stead of
Pledgor and in the name of Pledgor, Secured Party or otherwise, from time to
time at Secured Party's discretion, to take any action and to execute any
instrument that Secured Party may reasonably deem necessary or advisable to
accomplish the purposes of this Agreement, including: (i) after the occurrence
and during the continuance of an Event of Default, to receive, endorse, and
collect all instruments made payable to Pledgor representing any dividend,
interest payment or other distribution in respect of the Collateral or any part
thereof to the extent permitted hereunder and to give full discharge for the
same and to execute and file governmental
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notifications and reporting forms; (ii) to issue any notifications/instructions
Secured Party deems necessary pursuant to Section 3 of this Agreement; or (iii)
to arrange for the transfer of the Collateral on the books of any of the Issuers
or any other Person to the name of Secured Party or to the name of Secured
Party's nominee.
(b) In addition to the designation of Secured Party as
Pledgor's attorney-in-fact in subsection (a), Pledgor hereby irrevocably
appoints Secured Party as Pledgor's agent and attorney-in-fact to make, execute
and deliver any and all documents and writings which may be necessary or
appropriate for approval of, or be required by, any regulatory authority located
in any city, county, state or country where Pledgor or any of the Issuers engage
in business, in order to transfer or to more effectively transfer any of the
Pledged Shares or otherwise enforce Secured Party's rights hereunder.
9. Remedies upon Default. Upon the occurrence and during the
continuance of an Event of Default:
(a) Secured Party may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party on
default under the Code (irrespective of whether the Code applies to the affected
items of Collateral), and Secured Party may also without notice (except as
specified below) sell the Collateral or any part thereof in one or more parcels
at public or private sale, at any exchange, broker's board or at any of Secured
Party's offices or elsewhere, for cash, on credit or for future delivery, at
such time or times and at such price or prices and upon such other terms as
Secured Party may deem commercially reasonable, irrespective of the impact of
any such sales on the market price of the Collateral. To the maximum extent
permitted by applicable law, Secured Party may be the purchaser of any or all of
the Collateral at any such sale and shall be entitled, for the purpose of
bidding and making settlement or payment of the purchase price for all or any
portion of the Collateral sold at any such public sale, to use and apply all or
any part of the Secured Obligations as a credit on account of the purchase price
of any Collateral payable at such sale. Each purchaser at any such sale shall
hold the property sold absolutely free from any claim or right on the part of
Pledgor, and Pledgor hereby waives (to the extent permitted by law) all rights
of redemption, stay, or appraisal that it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter enacted.
Pledgor agrees that, to the extent notice of sale shall be required by law, at
least ten (10) calendar days notice to Pledgor of the time and place of any
public sale or the time after which a private sale is to be made shall
constitute reasonable notification. Secured Party shall not be obligated to make
any sale of Collateral regardless of notice of sale having been given. Secured
Party may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned. To the maximum
extent permitted by law, Pledgor hereby waives any claims against Secured Party
arising because the price at which any Collateral may have been sold at such a
private sale was less than the price that might have been obtained at a public
sale, even
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if Secured Party accepts the first offer received and does not offer such
Collateral to more than one offeree.
(b) Pledgor hereby agrees that any sale or other
disposition of the Collateral conducted in conformity with reasonable commercial
practices of banks, insurance companies, or other financial institutions in the
City of Los Angeles, California in disposing of property similar to the
Collateral shall be deemed to be commercially reasonable.
(c) Pledgor hereby acknowledges that the sale by Secured
Party of any Collateral pursuant to the terms hereof in compliance with the
Securities Act of 1933 as now in effect or as hereafter amended, or any similar
statute hereafter adopted with similar purpose or effect (the "Securities Act"),
as well as applicable "Blue Sky" or other state securities laws may require
strict limitations as to the manner in which Secured Party or any subsequent
transferee of the Collateral may dispose thereof. Pledgor acknowledges and
agrees that in order to protect Secured Party's interest it may be necessary to
sell the Collateral at a price less than the maximum price attainable if a sale
were delayed or were made in another manner, such as a public offering under the
Securities Act. Pledgor has no objection to sale in such a manner and agrees
that Secured Party shall have no obligation to obtain the maximum possible price
for the Collateral. Without limiting the generality of the foregoing, Pledgor
agrees that, upon the occurrence and during the continuation of an Event of
Default, Secured Party may, subject to applicable law, from time to time attempt
to sell all or any part of the Collateral by a private placement, restricting
the bidders and prospective purchasers to those who will represent and agree
that they are purchasing for investment only and not for distribution. In so
doing, Secured Party may solicit offers to buy the Collateral or any part
thereof for cash, from a limited number of investors deemed by Secured Party, in
its reasonable judgment, to be institutional investors or other responsible
parties who might be interested in purchasing the Collateral. If Secured Party
shall solicit such offers, then the acceptance by Secured Party of one of the
offers shall be deemed to be a commercially reasonable method of disposition of
the Collateral.
(d) If Secured Party shall determine to exercise its
right to sell all or any portion of the Collateral pursuant to this Section,
Pledgor agrees that, upon request of Secured Party, Pledgor will, at its own
expense:
(i) use its best efforts to execute and
deliver, and cause the Issuers and the directors and officers thereof to execute
and deliver, all such instruments and documents, and to do or cause to be done
all such other acts and things, as may be necessary or, in the opinion of
Secured Party, advisable to register such Collateral under the provisions of the
Securities Act, and to cause the registration statement relating thereto to
become effective and to remain effective for such period as prospectuses are
required by law to be furnished, and to make all amendments and supplements
thereto and to the related prospectuses which, in the opinion of Secured Party,
are necessary or
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advisable, all in conformity with the requirements of the Securities Act and the
rules and regulations of the Securities and Exchange Commission applicable
thereto;
(ii) use its best efforts to qualify the
Collateral under the state securities laws or "Blue Sky" laws and to obtain all
necessary governmental approvals for the sale of the Collateral, as requested by
Secured Party;
(iii) cause the Issuers to make available to
their respective security holders, as soon as practicable, an earnings statement
which will satisfy the provisions of Section 11(a) of the Securities Act;
(iv) execute and deliver, or cause the officers
and directors of the Issuers to execute and deliver, to any person, entity or
governmental authority as Secured Party may choose, any and all documents and
writings which, in Secured Party's reasonable judgment, may be necessary or
appropriate for approval, or be required by, any regulatory authority located in
any city, county, state or country where Pledgor or the Issuers engage in
business, in order to transfer or to more effectively transfer the Pledged
Shares or otherwise enforce Secured Party's rights hereunder; and
(v) do or cause to be done all such other acts
and things as may be necessary to make such sale of the Collateral or any part
thereof valid and binding and in compliance with applicable law.
Pledgor acknowledges that there is no adequate remedy at law for failure by it
to comply with the provisions of this Section and that such failure would not be
adequately compensable in damages, and therefore agrees that its agreements
contained in this Section may be specifically enforced.
(e) PLEDGOR EXPRESSLY WAIVES TO THE MAXIMUM
EXTENT PERMITTED BY LAW: (i) ANY CONSTITUTIONAL OR OTHER RIGHT TO A JUDICIAL
HEARING PRIOR TO THE TIME SECURED PARTY DISPOSES OF ALL OR ANY PART OF THE
COLLATERAL AS PROVIDED IN THIS SECTION; (ii) ALL RIGHTS OF REDEMPTION, STAY, OR
APPRAISAL THAT IT NOW HAS OR MAY AT ANY TIME IN THE FUTURE HAVE UNDER ANY RULE
OF LAW OR STATUTE NOW EXISTING OR HEREAFTER ENACTED; AND (iii) EXCEPT AS SET
FORTH IN SUBSECTION (a) OF THIS SECTION, ANY REQUIREMENT OF NOTICE, DEMAND, OR
ADVERTISEMENT FOR SALE.
10. Application of Proceeds. After the occurrence and during the
continuance of an Event of Default, any cash held by Secured Party as Collateral
and all cash proceeds received by Secured Party in respect of any sale of,
collection from, or other realization upon all or any part of the Collateral
pursuant to the exercise by Secured Party of its remedies as a secured creditor
as provided in Section 9 shall be applied from time to time by Secured Party as
provided in the Loan Agreement.
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11. Duties of Secured Party. The powers conferred on Secured
Party hereunder are solely to protect its interests in the Collateral and shall
not impose on it any duty to exercise such powers. Except as provided in Section
9-207 of the Code, Secured Party shall have no duty with respect to the
Collateral or any responsibility for taking any necessary steps to preserve
rights against any Persons with respect to any Collateral.
12. CHOICE OF LAW AND VENUE. THE VALIDITY OF THIS AGREEMENT, ITS
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT, AND THE RIGHTS OF THE PARTIES
HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF CALIFORNIA. THE PARTIES AGREE THAT ALL ACTIONS OR
PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND
LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF LOS
ANGELES, STATE OF CALIFORNIA OR, AT THE SOLE OPTION OF SECURED PARTY, IN ANY
OTHER JURISDICTION IN WHICH THE COLLATERAL IS LOCATED IN CONNECTION WITH THE
EXERCISE OF SECURED PARTY'S RIGHTS AND REMEDIES AS A SECURED CREDITOR WITH
RESPECT TO SUCH COLLATERAL. EACH OF PLEDGOR AND SECURED PARTY WAIVES, TO THE
EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE
DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 12.
13. Amendments; Etc. No amendment or waiver of any provision of
this Agreement nor consent to any departure by Pledgor herefrom shall in any
event be effective unless the same shall be in writing and signed by Secured
Party, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. No failure on the part of
Secured Party to exercise, and no delay in exercising any right under this
Agreement, any other Loan Document, or otherwise with respect to any of the
Secured Obligations, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right under this Agreement, any other Loan Document, or
otherwise with respect to any of the Secured Obligations preclude any other or
further exercise thereof or the exercise of any other right. The remedies
provided for in this Agreement or otherwise with respect to any of the Secured
Obligations are cumulative and not exclusive of any remedies provided by law.
14. Notices. Unless otherwise specifically provided herein, any
notice or other communication herein required or permitted to be given shall be
in writing and shall be delivered in the manner set forth in the Loan Agreement.
15. Continuing Security Interest. This Agreement shall create a
continuing security interest in the Collateral and shall: (i) remain in full
force and effect until the indefeasible payment in full of the Secured
Obligations, including the cash collateralization,
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expiration, or cancellation of all Secured Obligations, if any, consisting of
letters of credit, and the full and final termination of any commitment to
extend any financial accommodations under the Loan Agreement; (ii) be binding
upon Pledgor and its successors and assigns; and (iii) inure to the benefit of
Secured Party and its successors, transferees, and assigns. Upon the
indefeasible payment in full of the Secured Obligations, including the cash
collateralization, expiration, or cancellation of all Secured Obligations, if
any, consisting of letters of credit, and the full and final termination of any
commitment to extend any financial accommodations under the Loan Agreement, the
security interests granted herein shall automatically terminate and all rights
to the Collateral shall revert to Pledgor. Upon any such termination, Secured
Party will, at Pledgor's expense, execute and deliver to Pledgor such documents
as Pledgor shall reasonably request to evidence such termination. Such documents
shall be prepared by Pledgor and shall be in form and substance reasonably
satisfactory to Secured Party.
16. Security Interest Absolute. To the maximum extent permitted
by law, all rights of Secured Party, all security interests hereunder, and all
obligations of Pledgor hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of any of the
Secured Obligations or any other agreement or instrument relating thereto,
including any of the Loan Documents;
(b) any change in the time, manner, or place of payment
of, or in any other term of, all or any of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from any of the Loan
Documents, or any other agreement or instrument relating thereto;
(c) any exchange, release, or non-perfection of any
other collateral, or any release or amendment or waiver of or consent to
departure from any guaranty for all or any of the Secured Obligations; or
(d) any other circumstances that might otherwise
constitute a defense available to, or a discharge of, Pledgor.
To the maximum extent permitted by law, Pledgor hereby waives any right to
require Secured Party to: (A) proceed against or exhaust any security held from
Pledgor; or (B) pursue any other remedy in Secured Party's power whatsoever.
17. 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 or be given any substantive effect.
18. Severability. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity,
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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.
19. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same Agreement.
20. Waiver of Marshaling. Each of Pledgor and Secured Party
acknowledges and agrees that in exercising any rights under or with respect to
the Collateral: (i) Secured Party is under no obligation to marshal any
Collateral; (ii) may, in its absolute discretion, realize upon the Collateral in
any order and in any manner it so elects; and (iii) may, in its absolute
discretion, apply the proceeds of any or all of the Collateral to the Secured
Obligations in any order and in any manner it so elects. Pledgor and Secured
Party waive any right to require the marshaling of any of the Collateral.
21. WAIVER OF JURY TRIAL. PLEDGOR AND SECURED PARTY HEREBY WAIVE
THEIR 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 TRANSACTIONS CONTEMPLATED
HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS. PLEDGOR AND SECURED PARTY REPRESENT THAT
EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
[signature page to follow]
14
<PAGE> 15
IN WITNESS WHEREOF, Pledgor and Secured Party have caused this
Agreement to be duly executed and delivered by their officers thereunto duly
authorized as of the date first written above.
FOOTHILL CAPITAL CORPORATION,
a California corporation
By /s/ BRIAN DUFFY
--------------------------------------
Title:
--------------------------------
FITZGERALDS GAMING CORPORATION,
a Nevada corporation
By /s/ MICHAEL E. MCPHERSON
------------------------------------
Name: Michael E. McPherson
Title: Senior Vice President,
Chief Financial Officer,
Treasurer, and Secretary
15
<PAGE> 16
SCHEDULE A
TO
STOCK PLEDGE AGREEMENT
Pledgor: Fitzgeralds Gaming Corporation
Pledged Shares
<TABLE>
<CAPTION>
Former Name, if Pledgor's
Number of Certificate any, in which Percentage Jurisdiction of
Issuer Shares Class Number(s) Certificate Issued Ownership Incorporation
- ------ --------- ----- ----------- ------------------ --------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Fitzgeralds 1,000,000 Common 2, 3 100% Nevada
South, Inc.
Fitzgeralds 14,004.75 Common 10 100% Nevada
Reno, Inc.
Fitzgeralds 4,550,000 Common 1, 2 100% Nevada
Incorporated
</TABLE>
<PAGE> 17
SCHEDULE B
TO
STOCK PLEDGE AGREEMENT
Pledgor: FITZGERALDS GAMING CORPORATION, a Nevada corporation
Address of Chief Executive Office:
301 Fremont Street
Las Vegas, Nevada 89101
<PAGE> 18
SCHEDULE C
TO
STOCK PLEDGE AGREEMENT
Existing Future Rights and Proceeds: None.
<PAGE> 1
EXHIBIT 10.4
GENERAL CONTINUING GUARANTY
THIS GENERAL CONTINUING GUARANTY ("Guaranty"), dated as of October 29,
1998, is executed and delivered by each of the undersigned Subsidiaries of
Fitzgeralds Gaming Corporation, a Nevada corporation (individually and
collectively, and jointly and severally, "Guarantor"), in favor of Foothill
Capital Corporation, a California corporation ("Guarantied Party"), in light of
the following:
WHEREAS, Debtor and Guarantied Party are, contemporaneously herewith,
entering into the Loan Agreement; and
WHEREAS, in order to induce Guarantied Party to extend financial
accommodations to Debtor pursuant to the Loan Agreement, and in consideration
thereof, and in consideration of any loans or other financial accommodations
heretofore or hereafter extended by Guarantied Party to Debtor, whether pursuant
to the Loan Agreement or otherwise, Guarantor has agreed to guaranty the
Guarantied Obligations.
NOW, THEREFORE, in consideration of the foregoing, Guarantor hereby
agrees, in favor of Guarantied Party, as follows:
1. Definitions and Construction.
(a) Definitions. Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to them in the Loan Agreement.
The following terms, as used in this Guaranty, shall have the following
meanings:
"Debtor" shall mean Fitzgeralds Gaming Corporation, a Nevada
corporation.
"Guarantied Obligations" shall mean: (a) the due and punctual
payment of the principal of, and interest (including, any and all interest
which, but for the application of the provisions of the Bankruptcy Code, would
have accrued on such amounts) on, and premium, if any, on the Indebtedness owed
by Debtor to Guarantied Party pursuant to the terms of the Loan Documents; and
(b) the due and punctual payment of all other present or future Indebtedness
owing by Debtor to Guarantied Party.
"Guarantied Party" shall have the meaning set forth in the
preamble to this Guaranty.
-1-
<PAGE> 2
"Guarantor" shall have the meaning set forth in the preamble to
this Guaranty.
"Guaranty" shall have the meaning set forth in the preamble to
this Guaranty.
"Indebtedness" shall mean any and all obligations, indebtedness,
or liabilities of any kind or character owed by Debtor to Guarantied Party and
arising directly or indirectly out of or in connection with the Loan Agreement
or the other Loan Documents, including all such obligations, indebtedness, or
liabilities, whether for principal, interest (including any and all interest
which, but for the application of the provisions of the Bankruptcy Code, would
have accrued on such amounts), premium, reimbursement obligations, fees, costs,
expenses (including attorneys fees), or indemnity obligations, whether
heretofore, now, or hereafter made, incurred, or created, whether voluntarily or
involuntarily made, incurred, or created, whether secured or unsecured (and if
secured, regardless of the nature or extent of the security), whether absolute
or contingent, liquidated or unliquidated, or determined or indeterminate,
whether Debtor is liable individually or jointly with others, and whether
recovery is or hereafter becomes barred by any statute of limitations or
otherwise becomes unenforceable for any reason whatsoever, including any act or
failure to act by Guarantied Party.
"Loan Agreement" shall mean that certain Loan and Security
Agreement, dated as of the date hereof, entered into between Debtor and
Guarantied Party.
(b) Construction. Unless the context of this Guaranty clearly
requires otherwise, references to the plural include the singular, references to
the singular include the plural, the part includes the whole, the terms
"include" and "including" are not limiting, and the term "or" has the inclusive
meaning represented by the phrase "and/or." The words "hereof," "herein,"
"hereby," "hereunder," and other similar terms refer to this Guaranty as a whole
and not to any particular provision of this Guaranty. Any reference in this
Guaranty to any of the following documents includes any and all alterations,
amendments, restatements, extensions, modifications, renewals, joinders, or
supplements thereto or thereof, as applicable: the Loan Agreement; this
Guaranty; and the other Loan Documents. Neither this Guaranty nor any
uncertainty or ambiguity herein shall be construed or resolved against
Guarantied Party or Guarantor, whether under any rule of construction or
otherwise. On the contrary, this Guaranty has been reviewed by Guarantor,
Guarantied Party, and their respective counsel, and shall be construed and
interpreted according to the ordinary meaning of the words used so as to fairly
accomplish the purposes and intentions of Guarantied Party and Guarantor.
-2-
<PAGE> 3
2. Guarantied Obligations. Guarantor hereby irrevocably and
unconditionally guaranties to Guarantied Party, as and for its own debt, until
final and indefeasible payment thereof has been made, (a) the payment of the
Guarantied Obligations, in each case when and as the same shall become due and
payable, whether at maturity, pursuant to a mandatory prepayment requirement, by
acceleration, or otherwise; it being the intent of Guarantor that the guaranty
set forth herein shall be a guaranty of payment and not a guaranty of
collection; and (b) the punctual and faithful performance, keeping, observance,
and fulfillment by Debtor of all of the agreements, conditions, covenants, and
obligations of Debtor contained in the Loan Agreement, and under each of the
other Loan Documents.
3. Continuing Guaranty. This Guaranty includes Guarantied Obligations
arising under successive transactions continuing, compromising, extending,
increasing, modifying, releasing, or renewing the Guarantied Obligations,
changing the interest rate, payment terms, or other terms and conditions
thereof, or creating new or additional Guarantied Obligations after prior
Guarantied Obligations have been satisfied in whole or in part. To the maximum
extent permitted by law, Guarantor hereby waives any right to revoke this
Guaranty as to future Indebtedness. If such a revocation is effective
notwithstanding the foregoing waiver, Guarantor acknowledges and agrees that (a)
no such revocation shall be effective until written notice thereof has been
received by Guarantied Party, (b) no such revocation shall apply to any
Guarantied Obligations in existence on such date (including any subsequent
continuation, extension, or renewal thereof, or change in the interest rate,
payment terms, or other terms and conditions thereof), (c) no such revocation
shall apply to any Guarantied Obligations made or created after such date to the
extent made or created pursuant to a legally binding commitment of Guarantied
Party in existence on the date of such revocation, (d) no payment by Guarantor,
Debtor, or from any other source, prior to the date of such revocation shall
reduce the maximum obligation of Guarantor hereunder, and (e) any payment by
Debtor or from any source other than Guarantor subsequent to the date of such
revocation shall first be applied to that portion of the Guarantied Obligations
as to which the revocation is effective and which are not, therefore, guarantied
hereunder, and to the extent so applied shall not reduce the maximum obligation
of Guarantor hereunder.
4. Performance Under this Guaranty. In the event that Debtor fails to
make any payment of any Guarantied Obligations, on or before the due date
thereof, or if Debtor shall fail to perform, keep, observe, or fulfill any other
obligation referred to in clause (b) of Section 2 hereof in the manner provided
in the Loan Agreement or the other Loan Documents, as applicable, Guarantor
immediately shall cause such payment to be made or each of such obligations to
be performed, kept, observed, or fulfilled.
-3-
<PAGE> 4
5. Primary Obligations. This Guaranty is a primary and original
obligation of Guarantor, is not merely the creation of a surety relationship,
and is an absolute, unconditional, and continuing guaranty of payment and
performance which shall remain in full force and effect without respect to
future changes in conditions. Guarantor agrees that it is directly, jointly and
severally with any other guarantor of the Guarantied Obligations, liable to
Guarantied Party, that the obligations of Guarantor hereunder are independent of
the obligations of Debtor or any other guarantor, and that a separate action may
be brought against Guarantor, whether such action is brought against Debtor or
any other guarantor or whether Debtor or any other guarantor is joined in such
action. Guarantor agrees that its liability hereunder shall be immediate and
shall not be contingent upon the exercise or enforcement by Guarantied Party of
whatever remedies it may have against Debtor or any other guarantor, or the
enforcement of any lien or realization upon any security Guarantied Party may at
any time possess. Guarantor agrees that any release which may be given by
Guarantied Party to Debtor or any other guarantor shall not release Guarantor.
Guarantor consents and agrees that Guarantied Party shall be under no obligation
to marshal any property or assets of Debtor or any other guarantor in favor of
Guarantor, or against or in payment of any or all of the Guarantied Obligations.
6. Waivers.
(a) To the fullest extent permitted by applicable law, Guarantor
hereby waives: (i) notice of acceptance hereof; (ii) notice of any loans or
other financial accommodations made or extended under the Loan Agreement, or the
creation or existence of any Guarantied Obligations; (iii) notice of the amount
of the Guarantied Obligations, subject, however, to Guarantor's right to make
inquiry of Guarantied Party to ascertain the amount of the Guarantied
Obligations at any reasonable time; (iv) notice of any adverse change in the
financial condition of Debtor or of any other fact that might increase
Guarantor's risk hereunder; (v) notice of presentment for payment, demand,
protest, and notice thereof as to any instrument among the Loan Documents; (vi)
notice of any unmatured Event of Default or Event of Default under the Loan
Agreement; and (vii) all other notices (except if such notice is specifically
required to be given to Guarantor under this Guaranty or any other Loan
Documents to which Guarantor is a party) and demands to which Guarantor might
otherwise be entitled.
(b) To the fullest extent permitted by applicable law, Guarantor
waives the right by statute or otherwise to require Guarantied Party to
institute suit against Debtor or to exhaust any rights and remedies which
Guarantied Party has or may have against Debtor. In this regard, Guarantor
agrees that it is bound to the payment of each and all Guarantied Obligations,
whether now existing or hereafter arising, as fully as if such Guarantied
Obligations were directly owing to Guarantied Party by Guarantor. Guarantor
further waives any defense arising by reason of any disability or other defense
-4-
<PAGE> 5
(other than the defense that the Guarantied Obligations shall have been fully
and finally performed and indefeasibly paid) of Debtor or by reason of the
cessation from any cause whatsoever of the liability of Debtor in respect
thereof.
(c) To the fullest extent permitted by applicable law, Guarantor
hereby waives: (i) any rights to assert against Guarantied Party any defense
(legal or equitable), set-off, counterclaim, or claim which Guarantor may now or
at any time hereafter have against Debtor or any other party liable to
Guarantied Party; (ii) any defense, set-off, counterclaim, or claim, of any kind
or nature, arising directly or indirectly from the present or future lack of
perfection, sufficiency, validity, or enforceability of the Guarantied
Obligations or any security therefor; (iii) any defense arising by reason of any
claim or defense based upon an election of remedies by Guarantied Party
including any defense based upon an election of remedies by Guarantied Party
under the provisions of Sections 580d and 726 of the California Code of Civil
Procedure, or any similar law of California or any other jurisdiction; (iv) the
benefit of any statute of limitations affecting Guarantor's liability hereunder
or the enforcement thereof, and any act which shall defer or delay the operation
of any statute of limitations applicable to the Guarantied Obligations shall
similarly operate to defer or delay the operation of such statute of limitations
applicable to Guarantor's liability hereunder.
(d) Until such time as all of the Guarantied Obligations have been
fully, finally, and indefeasibly paid in full in cash: (i) Guarantor hereby
waives and postpones any right of subrogation Guarantor has or may have as
against Debtor with respect to the Guarantied Obligations; (ii) in addition,
Guarantor hereby waives and postpones any right to proceed against Debtor or any
other Person, now or hereafter, for contribution, indemnity, reimbursement, or
any other suretyship rights and claims (irrespective of whether direct or
indirect, liquidated or contingent), with respect to the Guarantied Obligations;
and (iii) in addition, Guarantor also hereby waives and postpones any right to
proceed or to seek recourse against or with respect to any property or asset of
Debtor.
(e) If any of the Guarantied Obligations at any time are secured by a
mortgage or deed of trust upon real property, Guarantied Party may elect, in its
sole discretion, upon a default with respect to the Guarantied Obligations, to
foreclose such mortgage or deed of trust judicially or nonjudicially in any
manner permitted by law, before or after enforcing this Guaranty, without
diminishing or affecting the liability of Guarantor hereunder. Guarantor
understands that (a) by virtue of the operation of California's antideficiency
law applicable to nonjudicial foreclosures, an election by Guarantied Party
nonjudicially to foreclose such a mortgage or deed of trust probably would have
the effect of impairing or destroying rights of subrogation, reimbursement,
contribution, or indemnity of Guarantor against Debtor or other guarantors or
sureties, and
-5-
<PAGE> 6
(b) absent the waiver given by Guarantor herein, such an election would estop
Guarantied Party from enforcing this Guaranty against Guarantor. Understanding
the foregoing, and understanding that Guarantor is hereby relinquishing a
defense to the enforceability of this Guaranty, Guarantor hereby waives any
right to assert against Guarantied Party any defense to the enforcement of this
Guaranty, whether denominated "estoppel" or otherwise, based on or arising from
an election by Guarantied Party nonjudicially to foreclose any such mortgage or
deed of trust. Guarantor understands that the effect of the foregoing waiver may
be that Guarantor may have liability hereunder for amounts with respect to which
Guarantor may be left without rights of subrogation, reimbursement,
contribution, or indemnity against Debtor or other guarantors or sureties.
Guarantor also agrees that the "fair market value" provisions of Section 580a of
the California Code of Civil Procedure shall have no applicability with respect
to the determination of Guarantor's liability under this Guaranty.
(f) WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER OR OTHER
PROVISION SET FORTH IN THIS GUARANTY, GUARANTOR HEREBY WAIVES, TO THE MAXIMUM
EXTENT SUCH WAIVER IS PERMITTED BY LAW, ANY AND ALL BENEFITS OR DEFENSES ARISING
DIRECTLY OR INDIRECTLY UNDER ANY ONE OR MORE OF CALIFORNIA CIVIL CODE SECTIONS
2799, 2808, 2809, 2810, 2815, 2819, 2820, 2821, 2822, 2838, 2839, 2845, 2847,
2848, 2849, AND 2850, CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 580a,
580b, 580c, 580d, AND 726, AND CHAPTER 2 OF TITLE 14 OF THE CALIFORNIA CIVIL
CODE.
(g) WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER OR OTHER
PROVISION SET FORTH IN THIS GUARANTY, GUARANTOR WAIVES ALL RIGHTS AND DEFENSES
ARISING OUT OF AN ELECTION OF REMEDIES BY THE GUARANTEED PARTY, EVEN THOUGH THAT
ELECTION OF REMEDIES, SUCH AS A NONJUDICIAL FORECLOSURE WITH RESPECT TO SECURITY
FOR A GUARANTIED OBLIGATION, HAS DESTROYED THE GUARANTOR'S RIGHTS OF SUBROGATION
AND REIMBURSEMENT AGAINST THE DEBTOR BY THE OPERATION OF SECTION 580d OF THE
CALIFORNIA CODE OF CIVIL PROCEDURE OR OTHERWISE.
7. Releases. Guarantor consents and agrees that, without notice to or by
Guarantor and without affecting or impairing the obligations of Guarantor
hereunder, Guarantied Party may, by action or inaction, compromise or settle,
extend the period of duration or the time for the payment, or discharge the
performance of, or may refuse to, or otherwise not enforce, or may, by action or
inaction, release all or any one or more parties to, any one or more of the
terms and provisions of the Loan Agreement or any of the other Loan Documents or
may grant other indulgences to Debtor in respect thereof, or
-6-
<PAGE> 7
may amend or modify in any manner and at any time (or from time to time) any one
or more of the Loan Agreement or any of the other Loan Documents, or may, by
action or inaction, release or substitute any other guarantor, if any, of the
Guarantied Obligations, or may enforce, exchange, release, or waive, by action
or inaction, any security for the Guarantied Obligations or any other guaranty
of the Guarantied Obligations, or any portion thereof.
8. No Election. Guarantied Party shall have the right to seek recourse
against Guarantor to the fullest extent provided for herein and no election by
Guarantied Party to proceed in one form of action or proceeding, or against any
party, or on any obligation, shall constitute a waiver of Guarantied Party's
right to proceed in any other form of action or proceeding or against other
parties unless Guarantied Party has expressly waived such right in writing.
Specifically, but without limiting the generality of the foregoing, no action or
proceeding by Guarantied Party under any document or instrument evidencing the
Guarantied Obligations shall serve to diminish the liability of Guarantor under
this Guaranty except to the extent that Guarantied Party finally and
unconditionally shall have realized indefeasible payment by such action or
proceeding.
9. Indefeasible Payment. The Guarantied Obligations shall not be
considered indefeasibly paid for purposes of this Guaranty unless and until all
payments to Guarantied Party are no longer subject to any right on the part of
any person whomsoever, including Debtor, Debtor as a debtor in possession, or
any trustee (whether appointed under the Bankruptcy Code or otherwise) of
Debtor's assets to invalidate or set aside such payments or to seek to recoup
the amount of such payments or any portion thereof, or to declare same to be
fraudulent or preferential. In the event that, for any reason, all or any
portion of such payments to Guarantied Party is set aside or restored, whether
voluntarily or involuntarily, after the making thereof, the obligation or part
thereof intended to be satisfied thereby shall be revived and continued in full
force and effect as if said payment or payments had not been made and Guarantor
shall be liable for the full amount Guarantied Party is required to repay plus
any and all costs and expenses (including attorneys fees) paid by Guarantied
Party in connection therewith.
10. Financial Condition of Debtor. Guarantor represents and warrants to
Guarantied Party that it is currently informed of the financial condition of
Debtor and of all other circumstances which a diligent inquiry would reveal and
which bear upon the risk of nonpayment of the Guarantied Obligations. Guarantor
further represents and warrants to Guarantied Party that it has read and
understands the terms and conditions of the Loan Agreement and the other Loan
Documents. Guarantor hereby covenants that it will continue to keep itself
informed of Debtor's financial condition, the financial condition of other
guarantors, if any, and of all other circumstances which bear upon the risk of
nonpayment or nonperformance of the Guarantied Obligations.
-7-
<PAGE> 8
11. Subordination. Guarantor hereby agrees that any and all present and
future indebtedness of Debtor owing to Guarantor is postponed in favor of and
subordinated to payment, in full, in cash, of the Guarantied Obligations. In
this regard, no payment of any kind whatsoever shall be made with respect to
such indebtedness until the Guarantied Obligations have been indefeasibly paid
in full.
12. Payments; Application. All payments to be made hereunder by
Guarantor shall be made in lawful money of the United States of America at the
time of payment, shall be made in immediately available funds, and shall be made
without deduction (whether for taxes or otherwise) or offset. All payments made
by Guarantor hereunder shall be applied as follows: first, to all reasonable
costs and expenses (including attorneys fees) incurred by Guarantied Party in
enforcing this Guaranty or in collecting the Guarantied Obligations; second, to
all accrued and unpaid interest, premium, if any, and fees owing to Guarantied
Party constituting Guarantied Obligations; and third, to the balance of the
Guarantied Obligations.
13. Attorneys Fees and Costs. Guarantor agrees to pay, on demand, all
reasonable attorneys fees and all other reasonable costs and expenses which may
be incurred by Guarantied Party in the enforcement of this Guaranty or in any
way arising out of, or consequential to the protection, assertion, or
enforcement of the Guarantied Obligations (or any security therefor),
irrespective of whether suit is brought.
14. Notices. Any notice, consent, approval, or other communication
herein required or permitted to be given shall be in writing and shall be given
and be deemed given in the manner set forth in Section 12 of the Loan Agreement,
the provisions of which by this reference are incorporated herein mutatis
mutandis. For the purposes hereof, the address of each party hereto shall be as
set forth in the Loan Agreement or, as to any such party, such other address as
shall be designated by such party in a written notice to the other parties
hereto.
15. Cumulative Remedies. No remedy under this Guaranty, under the Loan
Agreement, or any other Loan Document is intended to be exclusive of any other
remedy, but each and every remedy shall be cumulative and in addition to any and
every other remedy given under this Guaranty, under the Loan Agreement, or any
other Loan Document, and those provided by law. No delay or omission by
Guarantied Party to exercise any right under this Guaranty shall impair any such
right nor be construed to be a waiver thereof. No failure on the part of
Guarantied Party to exercise, and no delay in exercising, any right under this
Guaranty shall operate as a waiver thereof; nor shall any single or partial
exercise of any right under this Guaranty preclude any other or further exercise
thereof or the exercise of any other right.
-8-
<PAGE> 9
16. Severability of Provisions. Any provision of this Guaranty which is
prohibited or unenforceable under applicable law shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof.
17. Entire Agreement; Amendments. This Guaranty constitutes the entire
agreement between Guarantor and Guarantied Party pertaining to the subject
matter contained herein. This Guaranty may not be altered, amended, or modified,
nor may any provision hereof be waived or noncompliance therewith consented to,
except by means of a writing executed by both Guarantor and Guarantied Party.
Any such alteration, amendment, modification, waiver, or consent shall be
effective only to the extent specified therein and for the specific purpose for
which given. No course of dealing and no delay or waiver of any right or default
under this Guaranty shall be deemed a waiver of any other, similar or
dissimilar, right or default or otherwise prejudice the rights and remedies
hereunder.
18. Successors and Assigns. This Guaranty shall be binding upon
Guarantor and its successors and assigns and shall inure to the benefit of the
successors and assigns of Guarantied Party; provided, however, Guarantor shall
not assign this Guaranty or delegate any of its duties hereunder without
Guarantied Party's prior written consent and any unconsented to assignment shall
be absolutely void. In the event of any assignment or other transfer of rights
by Guarantied Party, the rights and benefits herein conferred upon Guarantied
Party shall automatically extend to and be vested in such assignee or other
transferee.
19. No Third Party Beneficiary. This Guaranty is solely for the benefit
of Guarantied Party and its successors and assigns and may not be relied on by
any other Person.
20. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER
THE VALIDITY OF THIS GUARANTY, ITS CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT, AND THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL MATTERS
ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.
THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS GUARANTY SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND
FEDERAL COURTS LOCATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, OR
-9-
<PAGE> 10
AT THE SOLE OPTION OF GUARANTIED PARTY, IN ANY OTHER COURT IN WHICH GUARANTIED
PARTY SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER
JURISDICTION OVER THE MATTER IN CONTROVERSY. EACH OF GUARANTOR AND GUARANTIED
PARTY WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY
HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE
EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 20.
GUARANTOR AND GUARANTIED PARTY HEREBY WAIVE THEIR RESPECTIVE RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
THIS GUARANTY OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. GUARANTOR AND GUARANTIED PARTY REPRESENT THAT EACH HAS
REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A
COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
21. Counterparts; Effectiveness. This Guaranty may be executed in any
number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original for all purposes, but all such counterparts together shall
constitute but one and the same instrument. Delivery of an executed counterpart
of this Guaranty by telefacsimile shall be equally effective as delivery of an
executed original counterpart of this Guaranty. Any party delivering an executed
counterpart of this Guaranty by telefacsimile also shall deliver an original
executed counterpart but the failure to deliver an original executed counterpart
shall not affect the validity, enforceability, and binding effect of this
Guaranty. This Guaranty shall become effective as to each Guarantor upon the
execution and delivery of a counterpart hereof by such Guarantor (whether or not
a counterpart hereof shall have been executed and delivered by any other
Guarantor).
22. Agreement to be Bound by Loan Agreement. By its execution and
delivery of this Guaranty or any joinder hereto, any Guarantor that is not a
party to the Loan Agreement or any joinder thereto nevertheless shall be deemed
to have agreed to be bound by each provision in the Loan Agreement relating to
the Guarantors or Obligors or their assets with the same force and effect as
though such Guarantor were party to the Loan Agreement or any joinder thereto,
mutatis mutandis.
-10-
<PAGE> 11
IN WITNESS WHEREOF, each of the undersigned has executed and delivered
this Guaranty as of the date first written above.
GUARANTIED PARTY FOOTHILL CAPITAL CORPORATION, a
California corporation
By /s/ BRIAN DUFFY
--------------------------------------
Vice President
GUARANTORS FITZGERALDS SOUTH, INC., a Nevada
corporation
FITZGERALDS MISSISSIPPI, INC., a
Mississippi corporation
FITZGERALDS LAS VEGAS, INC., a Nevada
corporation
FITZGERALDS FREMONT EXPERIENCE
CORPORATION, a Nevada corporation
FITZGERALDS RENO, INC., a Nevada
corporation
FITZGERALDS INCORPORATED, a Nevada
corporation
FITZGERALDS BLACK HAWK, INC., a Nevada
corporation
FITZGERALDS BLACK HAWK II, INC., a
Colorado corporation
101 MAIN STREET LIMITED LIABILITY
COMPANY, a Colorado limited liability
company
By /s/ MICHAEL E. McPHERSON
-----------------------------------------
Name: Michael E. McPherson
Title: Senior Vice President,
Chief Financial Officer, Treasurer, and
Secretary of each of the above-listed
companies
S-1
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EXHIBIT 10.5
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Agreement"), dated as of October 29,
1998, is entered into between FITZGERALDS SOUTH, INC., a Nevada corporation,
FITZGERALDS MISSISSIPPI, INC., a Mississippi corporation, FITZGERALDS LAS VEGAS,
INC., a Nevada corporation, FITZGERALDS FREMONT EXPERIENCE CORPORATION, a Nevada
corporation, FITZGERALDS RENO, INC., a Nevada corporation, FITZGERALDS
INCORPORATED, a Nevada corporation, FITZGERALDS BLACK HAWK, INC., a Nevada
corporation, FITZGERALDS BLACK HAWK II, INC., a Colorado corporation, and 101
MAIN STREET LIMITED LIABILITY COMPANY, a Colorado limited liability company
(each a "Pledgor" and collectively, "Pledgors"), on the one hand and, on the
other hand, FOOTHILL CAPITAL CORPORATION, a California corporation ("Secured
Party"), with reference to the following:
WHEREAS, each Pledgor beneficially owns the specified number of
shares identified as Pledged Shares or the percentage interest identified as
Pledged Member Interest, in the Persons identified as Issuers on Schedule A
attached hereto (or any addendum thereto);
WHEREAS, Borrower and Secured Party are parties to that certain
Loan and Security Agreement (the "Loan Agreement"), of even date herewith,
pursuant to which Secured Party has agreed to make certain financial
accommodations to Borrower;
WHEREAS, to induce Secured Party to make the financial
accommodations provided to Borrower pursuant to the Loan Agreement, each Pledgor
desires to pledge, grant, transfer, and assign to Secured Party a security
interest in the Collateral (as hereinafter defined) to secure the Secured
Obligations (as hereinafter defined), as provided herein.
NOW, THEREFORE, in consideration of the mutual promises,
covenants, representations, and warranties set forth herein and for other good
and valuable consideration, the parties hereto agree as follows:
1. Definitions and Construction.
(a) Definitions. All initially capitalized terms used
herein and not otherwise defined herein shall have the meaning ascribed thereto
in the Loan Agreement. As used in this Agreement:
"Agreement" shall mean this Pledge Agreement.
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"Borrower" shall mean Fitzgeralds Gaming
Corporation, a Nevada corporation.
"Chief Executive Office" shall mean where a Pledgor
is deemed located pursuant to Section 9-103(3)(d) of the Code.
"Collateral" shall mean the Pledged Shares, the
Pledged Member Interests, the Future Rights, and the Proceeds, collectively, but
excluding any Excluded Assets.
"FLVI" shall mean Fitzgeralds Las Vegas, Inc., a
Nevada corporation.
"Future Rights" shall mean: (a) all shares of stock
or member interests (other than Pledged Shares or Pledged Member Interests) of
the Issuers, and all securities convertible or exchangeable into, and all
warrants, options, or other rights to purchase, shares of stock of, or member
interests in, the Issuers; (b) to the extent of any Pledgor's interest therein,
all shares of stock of or member interests in, all securities convertible or
exchangeable into, and all warrants, options, or other rights to purchase shares
of stock of or member interests in, any Person in which such Pledgor, after the
date of this Agreement, acquires a direct equity interest, irrespective of
whether such Person is or becomes a Subsidiary of such Pledgor; and (c) the
certificates or instruments representing such additional shares or member
interests, convertible or exchangeable securities, warrants, and other rights
and all dividends, cash, options, warrants, rights, instruments, and other
property or proceeds from time to time received, receivable, or otherwise
distributed in respect of or in exchange for any or all of such shares or member
interests.
"Gaming Laws" shall mean all gaming laws, rules,
and regulations enacted by any Gaming Authority or other governmental authority.
"Holder" and "Holders" shall have the meanings
ascribed thereto in Section 3 of this Agreement.
"Issuers" shall mean each of the Persons identified
as an Issuer on Schedule A attached hereto (or any addendum thereto), and any
successors thereto, whether by merger or otherwise.
"Lien" shall mean any lien, mortgage, pledge,
assignment (including any assignment of rights to receive payments of money),
security interest, charge, or encumbrance of any kind (including any conditional
sale or other title retention agreement, any lease in the nature thereof, or any
agreement to give any security interest).
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"Loan Agreement" shall have the meaning ascribed
thereto in the recitals to this Agreement.
"Pledged Member Interests" shall mean all of the
percentage interests identified as Pledged Member Interest on Schedule A
attached hereto (or any addendum thereto).
"Pledged Shares" shall mean all of the shares
identified as Pledged Shares on Schedule A attached hereto (or any addendum
thereto).
"Pledgor" shall have the meaning ascribed thereto
in the preamble to this Agreement.
"Proceeds" shall mean all proceeds (including
proceeds of proceeds) of the Pledged Shares, Pledged Member Interests, and
Future Rights including all: (a) rights, benefits, distributions, premiums,
profits, dividends, interest, cash, instruments, documents of title, accounts,
contract rights, inventory, equipment, general intangibles, deposit accounts,
chattel paper, and other property from time to time received, receivable, or
otherwise distributed in respect of or in exchange for, or as a replacement of
or a substitution for, any of the Pledged Shares, Pledged Member Interests,
Future Rights, or proceeds thereof (including any cash, stock, member interests,
or other securities or instruments issued after any recapitalization,
readjustment, reclassification, merger or consolidation with respect to the
Issuers and any claims against financial intermediaries under Section 8-313(2)
of the Code or otherwise); (b) "proceeds," as such term is used in Section 9-306
of the Code; (c) proceeds of any insurance, indemnity, warranty, or guaranty
(including guaranties of delivery) payable from time to time with respect to any
of the Pledged Shares, Pledged Member Interests, Future Rights, or proceeds
thereof; (d) payments (in any form whatsoever) made or due and payable to any
Pledgor from time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the Pledged Shares,
Pledged Member Interests, Future Rights, or proceeds thereof; and (e) other
amounts from time to time paid or payable under or in connection with any of the
Pledged Shares, Pledged Member Interests, Future Rights, or proceeds thereof.
"Secured Obligations" shall mean all liabilities,
obligations, or undertakings owing by Pledgor to Secured Party of any kind or
description arising out of or outstanding under, advanced or issued pursuant to,
or evidenced by the Loan Agreement, the other Loan Documents, or this Agreement,
irrespective of whether for the payment of money, whether direct or indirect,
absolute or contingent, due or to become due, voluntary or involuntary, whether
now existing or hereafter arising, and including all interest (including
interest that accrues after the filing of a case under the Bankruptcy Code) and
any and all costs, fees (including attorneys fees), and expenses which Pledgor
is required to pay pursuant to any of the foregoing, by law, or otherwise.
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"Secured Party" shall have the meaning ascribed
thereto in the preamble to this Agreement, together with its successors or
assigns.
"Securities Act" shall have the meaning ascribed
thereto in Section 9(c) of this Agreement.
(b) Construction.
(i) Unless the context of this Agreement
clearly requires otherwise, references to the plural include the singular and to
the singular include the plural, the part includes the whole, the term
"including" is not limiting, and the term "or" has, except where otherwise
indicated, the inclusive meaning represented by the phrase "and/or." The words
"hereof," "herein," "hereby," "hereunder," and other similar terms in this
Agreement refer to this Agreement as a whole and not exclusively to any
particular provision of this Agreement. Article, section, subsection, exhibit,
and schedule references are to this Agreement unless otherwise specified. All of
the exhibits or schedules attached to this Agreement shall be deemed
incorporated herein by reference. Any reference to any of the following
documents includes any and all alterations, amendments, restatements,
extensions, modifications, renewals, or supplements thereto or thereof, as
applicable: this Agreement, the Loan Agreement, or any of the other Loan
Documents.
(ii) Neither this Agreement nor any uncertainty
or ambiguity herein shall be construed or resolved against Secured Party or
Pledgors, whether under any rule of construction or otherwise. On the contrary,
this Agreement has been reviewed by all parties hereto and their respective
counsel and shall be construed and interpreted according to the ordinary meaning
of the words used so as to fairly accomplish the purposes and intentions of the
parties hereto.
(iii) In the event of any direct conflict
between the express terms and provisions of this Agreement and of the Loan
Agreement, the terms and provisions of the Loan Agreement shall control.
2. Pledge.
(a) As security for the prompt payment and
performance of the Secured Obligations in full by Pledgor when due, whether at
stated maturity, by acceleration or otherwise (including amounts that would
become due but for the operation of the provisions of the Bankruptcy Code), each
Pledgor hereby pledges, grants, transfers, and assigns to Secured Party a
security interest in all of such Pledgor's right, title, and interest in and to
the Collateral.
(b) Notwithstanding anything to the contrary
contained herein, Secured Party expressly acknowledges and agrees that the
pledge of the Pledged
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Shares of FLVI, and any restrictions on the transfer of and agreements not to
encumber such Pledged Shares set forth herein, will require the approval of the
Nevada Gaming Commission upon the recommendation of the Nevada State Gaming
Control Board in order to become effective, and that the exercise by Secured
Party of its rights and remedies hereunder is subject to the mandatory
provisions of the Gaming Laws. Upon obtaining such approval, the foregoing
pledge of such Pledged Securities of FLVI automatically shall become effective
without any further action by any Person.
3. Delivery and Registration of Collateral.
(a) All certificates or instruments representing or
evidencing the Collateral shall be promptly delivered by each Pledgor to Secured
Party or Secured Party's designee pursuant hereto at a location designated by
Secured Party and shall be held by or on behalf of Secured Party pursuant
hereto, and shall be in suitable form for transfer by delivery, or shall be
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance satisfactory to Secured Party. Secured Party hereby
acknowledges that the applicable Gaming Laws of the State of Nevada require that
the stock certificates or other instruments evidencing the Pledged Shares issued
by FLVI be held and maintained at all times at a location within the State of
Nevada designated to the Nevada State Gaming Control Board and be available for
inspection by agents or employees of the Nevada State Gaming Control Board as
promptly as possible upon request during normal business hours.
(b) After the occurrence and during the continuance
of an Event of Default, Secured Party shall have the right, at any time in its
discretion and without notice to the Pledgors, to transfer to or to register on
the books of the Issuers (or of any other Person maintaining records with
respect to the Collateral) in the name of Secured Party or any of its nominees
any or all of the Collateral. In addition, Secured Party shall have the right at
any time to exchange certificates or instruments representing or evidencing
Collateral for certificates or instruments of smaller or larger denominations.
(c) If, at any time and from time to time, any
Collateral (including any certificate or instrument representing or evidencing
any Collateral) is in the possession of a Person other than Secured Party or the
applicable Pledgor (a "Holder"), then such Pledgor shall immediately, at Secured
Party's option, either cause such Collateral to be delivered into Secured
Party's possession, or execute and deliver to such Holder a written
notification/instruction, and take all other steps necessary to perfect the
security interest of Secured Party in such Collateral, including obtaining from
such Holder a written acknowledgement that such Holder holds such Collateral for
Secured Party, all pursuant to Section 9-115 of the Code or other applicable law
governing the perfection of Secured Party's security interest in the Collateral
in the possession of such Holder. Each such notification/instruction and
acknowledgement shall be in form and substance satisfactory to Secured Party.
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(d) Any and all Collateral (including dividends,
interest, and other cash distributions) at any time received or held by any
Pledgor shall be so received or held in trust for Secured Party, shall be
segregated from other funds and property of such Pledgor and shall be forthwith
delivered to Secured Party in the same form as so received or held, with any
necessary endorsements; provided that cash dividends or distributions received
by such Pledgor, if and to the extent they are not prohibited by the Loan
Agreement, may be retained by such Pledgor in accordance with Section 4 and used
in the ordinary course of such Pledgor's business.
(e) If at any time and from time to time any
Collateral consists of an uncertificated security or a security in book entry
form, then the applicable Pledgor shall immediately cause such Collateral to be
registered or entered, as the case may be, in the name of Secured Party, or
otherwise cause Secured Party's security interest thereon to be perfected in
accordance with applicable law.
4. Voting Rights and Dividends.
(a) So long as no Event of Default shall have occurred and
be continuing, each Pledgor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Collateral or any part thereof for any
purpose not inconsistent with the terms of the Loan Documents and shall be
entitled to receive and retain any cash dividends or distributions paid in
respect of the Collateral.
(b) Upon the occurrence and during the continuance of an
Event of Default, all rights of each Pledgor to exercise the voting and other
consensual rights or receive and retain cash dividends or distributions that it
would otherwise be entitled to exercise or receive and retain, as applicable
pursuant to Section 4(a), shall cease, and all such rights shall thereupon
become vested in Secured Party, who shall thereupon have the sole right to
exercise such voting or other consensual rights and to receive and retain such
cash dividends and distributions. Each Pledgor shall execute and deliver (or
cause to be executed and delivered) to Secured Party all such proxies and other
instruments as Secured Party may reasonably request for the purpose of enabling
Secured Party to exercise the voting and other rights which it is entitled to
exercise and to receive the dividends and distributions that it is entitled to
receive and retain pursuant to the preceding sentence.
5. Representations and Warranties. Each Pledgor represents,
warrants, and covenants as follows:
(a) Such Pledgor has taken all steps it deems necessary or
appropriate to be informed on a continuing basis of changes or potential changes
affecting the Collateral (including rights of conversion and exchange, rights to
subscribe, payment of dividends, reorganizations or recapitalization, tender
offers and voting rights), and such Pledgor agrees that Secured Party shall have
no responsibility or liability for informing
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such Pledgor of any such changes or potential changes or for taking any action
or omitting to take any action with respect thereto;
(b) All information herein or hereafter supplied to
Secured Party by or on behalf of such Pledgor in writing with respect to the
Collateral is, or in the case of information hereafter supplied will be,
accurate and complete in all material respects;
(c) With regard to the Collateral owned by such Pledgor,
such Pledgor is and will be the sole legal and beneficial owner of the
Collateral (including the Pledged Shares, the Pledged Member Interests, and all
other Collateral acquired by such Pledgor after the date hereof) free and clear
of any adverse claim, Lien, or other right, title, or interest of any party
other than Liens in favor of the Indenture Trustee relative to the Senior Note
Documents and Liens in favor of Secured Party, so long as and to the extent such
Liens remain the subject of the Intercreditor Agreement;
(d) This Agreement, and the delivery to Secured Party, or
its designee, of the Pledged Shares or Pledged Member Interests representing
Collateral (or the delivery to all Holders of the Pledged Shares or Pledged
Member Interests representing Collateral of the notification/instruction
referred to in Section 3 of this Agreement), creates a valid, perfected, and
first priority security interest in one hundred percent (100%) of the Pledged
Shares and Pledged Member Interests in favor of Secured Party securing payment
of the Secured Obligations, and all actions necessary to achieve such perfection
have been duly taken;
(e) With respect to such Pledgor, Schedule A to this
Agreement is true and correct and complete in all material respects; without
limiting the generality of the foregoing: (i) all the Pledged Shares and Pledged
Member Interests are in certificated form, and, except to the extent registered
in the name of Secured Party or its nominee pursuant to the provisions of this
Agreement, are registered in the name of such Pledgor; (ii) the Pledged Shares
as to each of the Issuers of Pledged Shares constitute at least the percentage
of all the fully diluted issued and outstanding shares of stock of such Issuer
as set forth in Schedule A to this Agreement; and (iii) the Pledged Member
Interests as to each of the Issuers of Pledged Member Interests constitute at
least the percentage of all fully diluted issued and outstanding member
interests in such Issuer as set forth in Schedule A to this Agreement;
(f) There are no presently existing Future Rights or
Proceeds owned by such Pledgor, except as set forth in Schedule C hereto;
(g) The Pledged Shares and Pledged Member Interests have
been duly authorized and validly issued and are fully paid and nonassessable;
and
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(h) Neither the pledge of the Collateral pursuant to this
Agreement nor the extensions of credit represented by the Secured Obligations
violates Regulation T, U or X of the Board of Governors of the Federal Reserve
System.
6. Further Assurances.
(a) Each Pledgor agrees that from time to time, at the
expense of such Pledgor, such Pledgor will promptly execute and deliver all
further instruments and documents, and take all further action that may be
necessary or reasonably desirable, or that Secured Party may request, in order
to perfect and protect any security interest granted or purported to be granted
hereby or to enable Secured Party to exercise and enforce its rights and
remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, each Pledgor will: (i) at the request of Secured
Party, mark conspicuously each of its records pertaining to the Collateral with
a legend, in form and substance reasonably satisfactory to Secured Party,
indicating that such Collateral is subject to the security interest granted
hereby; (ii) execute and file such financing or continuation statements, or
amendments thereto, and such other instruments or notices, as may be necessary
or reasonably desirable, or as Secured Party may request, in order to perfect
and preserve the security interests granted or purported to be granted hereby;
(iii) allow inspection of the Collateral by Secured Party or Persons designated
by Secured Party; and (iv) appear in and defend any action or proceeding that
may affect such Pledgor's title to or Secured Party's security interest in the
Collateral.
(b) Each Pledgor hereby authorizes Secured Party to file
one or more financing or continuation statements, and amendments thereto,
relative to all or any part of the Collateral without the signature of such
Pledgor where permitted by law. A carbon, photographic, or other reproduction of
this Agreement or any financing statement covering the Collateral or any part
thereof shall be sufficient as a financing statement where permitted by law.
(c) Each Pledgor will furnish to Secured Party, upon the
request of Secured Party: (i) a certificate executed by an authorized officer of
such Pledgor, and dated as of the date of delivery to Secured Party, itemizing
in such detail as Secured Party may request, the Collateral which, as of the
date of such certificate, has been delivered to Secured Party by such Pledgor
pursuant to the provisions of this Agreement; and (ii) such statements and
schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as Secured Party may request.
7. Covenants of Pledgors. Each Pledgor shall:
(a) Perform each and every covenant in the Loan Documents
applicable to such Pledgor;
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(b) At all times keep at least one complete set of its
records concerning substantially all of the Collateral at its Chief Executive
Office as set forth in Schedule B hereto, and not change the location of its
Chief Executive Office or such records without giving Secured Party at least
thirty (30) days prior written notice thereof;
(c) To the extent it may lawfully do so, use its best
efforts to prevent the Issuers from issuing Future Rights or Proceeds, except
for cash dividends and other distributions, if any, that are not prohibited by
the terms of the Loan Agreement to be paid by any Issuer to such Pledgor;
(d) Upon receipt by such Pledgor of any material notice,
report, or other communication from any of the Issuers or any Holder relating to
all or any part of the Collateral, deliver such notice, report or other
communication to Secured Party as soon as possible, but in no event later than
five (5) days following the receipt thereof by such Pledgor; and
(e) Use its best efforts to obtain all recommendations of
the Nevada State Gaming Control Board and approvals of the Nevada Gaming
Commission that are required for the pledge of or any negative pledge on the
stock of FLVI; provided, however, that such best efforts need not include the
obligation to expend money, other than in connection with customary procedures
for obtaining such recommendations or approvals.
8. Secured Party as Pledgors' Attorney-in-Fact.
(a) Each Pledgor hereby irrevocably appoints Secured Party
as such Pledgor's attorney-in-fact, with full authority in the place and stead
of such Pledgor and in the name of such Pledgor, Secured Party or otherwise,
from time to time at Secured Party's discretion, to take any action and to
execute any instrument that Secured Party may reasonably deem necessary or
advisable to accomplish the purposes of this Agreement, including: (i) after the
occurrence and during the continuance of an Event of Default, to receive,
endorse, and collect all instruments made payable to such Pledgor representing
any dividend, interest payment or other distribution in respect of the
Collateral or any part thereof to the extent permitted hereunder and to give
full discharge for the same and to execute and file governmental notifications
and reporting forms; (ii) to issue any notifications/instructions Secured Party
deems necessary pursuant to Section 3 of this Agreement; or (iii) to arrange for
the transfer of the Collateral on the books of any of the Issuers or any other
Person to the name of Secured Party or to the name of Secured Party's nominee.
(b) In addition to the designation of Secured Party as
such Pledgor's attorney-in-fact in subsection (a), each Pledgor hereby
irrevocably appoints Secured Party as such Pledgor's agent and attorney-in-fact
to make, execute and deliver any and all documents and writings which may be
necessary or appropriate for approval of, or be required by, any regulatory
authority located in any city, county, state or country where
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such Pledgor or any of the Issuers engage in business, in order to transfer or
to more effectively transfer any of the Pledged Shares or Pledged Member
Interests, or otherwise enforce Secured Party's rights hereunder.
9. Remedies upon Default. Upon the occurrence and during the
continuance of an Event of Default:
(a) Secured Party may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party on
default under the Code (irrespective of whether the Code applies to the affected
items of Collateral), and Secured Party may also without notice (except as
specified below) sell the Collateral or any part thereof in one or more parcels
at public or private sale, at any exchange, broker's board or at any of Secured
Party's offices or elsewhere, for cash, on credit or for future delivery, at
such time or times and at such price or prices and upon such other terms as
Secured Party may deem commercially reasonable, irrespective of the impact of
any such sales on the market price of the Collateral. To the maximum extent
permitted by applicable law, Secured Party may be the purchaser of any or all of
the Collateral at any such sale and shall be entitled, for the purpose of
bidding and making settlement or payment of the purchase price for all or any
portion of the Collateral sold at any such public sale, to use and apply all or
any part of the Secured Obligations as a credit on account of the purchase price
of any Collateral payable at such sale. Each purchaser at any such sale shall
hold the property sold absolutely free from any claim or right on the part of
Pledgors, and each Pledgor hereby waives (to the extent permitted by law) all
rights of redemption, stay, or appraisal that it now has or may at any time in
the future have under any rule of law or statute now existing or hereafter
enacted. Each Pledgor agrees that, to the extent notice of sale shall be
required by law, at least ten (10) calendar days notice to such Pledgor of the
time and place of any public sale or the time after which a private sale is to
be made shall constitute reasonable notification. Secured Party shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. Secured Party may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned. To the maximum extent permitted by law, each Pledgor hereby waives
any claims against Secured Party arising because the price at which any
Collateral may have been sold at such a private sale was less than the price
that might have been obtained at a public sale, even if Secured Party accepts
the first offer received and does not offer such Collateral to more than one
offeree.
(b) Each Pledgor hereby agrees that any sale or other
disposition of the Collateral conducted in conformity with reasonable commercial
practices of banks, insurance companies, or other financial institutions in the
City of Los Angeles, California in disposing of property similar to the
Collateral shall be deemed to be commercially reasonable.
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(c) Each Pledgor hereby acknowledges that the sale by
Secured Party of any Collateral pursuant to the terms hereof in compliance with
the Securities Act of 1933 as now in effect or as hereafter amended, or any
similar statute hereafter adopted with similar purpose or effect (the
"Securities Act"), as well as applicable "Blue Sky" or other state securities
laws may require strict limitations as to the manner in which Secured Party or
any subsequent transferee of the Collateral may dispose thereof. Each Pledgor
acknowledges and agrees that in order to protect Secured Party's interest it may
be necessary to sell the Collateral at a price less than the maximum price
attainable if a sale were delayed or were made in another manner, such as a
public offering under the Securities Act. Each Pledgor has no objection to sale
in such a manner and agrees that Secured Party shall have no obligation to
obtain the maximum possible price for the Collateral. Without limiting the
generality of the foregoing, each Pledgor agrees that, upon the occurrence and
during the continuation of an Event of Default, Secured Party may, subject to
applicable law, from time to time attempt to sell all or any part of the
Collateral by a private placement, restricting the bidders and prospective
purchasers to those who will represent and agree that they are purchasing for
investment only and not for distribution. In so doing, Secured Party may solicit
offers to buy the Collateral or any part thereof for cash, from a limited number
of investors deemed by Secured Party, in its reasonable judgment, to be
institutional investors or other responsible parties who might be interested in
purchasing the Collateral. If Secured Party shall solicit such offers, then the
acceptance by Secured Party of one of the offers shall be deemed to be a
commercially reasonable method of disposition of the Collateral.
(d) If Secured Party shall determine to exercise its right
to sell all or any portion of the Collateral pursuant to this Section, each
Pledgor agrees that, upon request of Secured Party, such Pledgor will, at its
own expense:
(i) use its best efforts to execute and
deliver, and cause the Issuers and the directors and officers thereof to execute
and deliver, all such instruments and documents, and to do or cause to be done
all such other acts and things, as may be necessary or, in the opinion of
Secured Party, advisable to register such Collateral under the provisions of the
Securities Act, and to cause the registration statement relating thereto to
become effective and to remain effective for such period as prospectuses are
required by law to be furnished, and to make all amendments and supplements
thereto and to the related prospectuses which, in the opinion of Secured Party,
are necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto;
(ii) use its best efforts to qualify the
Collateral under the state securities laws or "Blue Sky" laws and to obtain all
necessary governmental approvals for the sale of the Collateral, as requested by
Secured Party;
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(iii) cause the Issuers to make available to
their respective security holders, as soon as practicable, an earnings statement
which will satisfy the provisions of Section 11(a) of the Securities Act;
(iv) execute and deliver, or cause the officers
and directors of the Issuers to execute and deliver, to any person, entity or
governmental authority as Secured Party may choose, any and all documents and
writings which, in Secured Party's reasonable judgment, may be necessary or
appropriate for approval, or be required by, any regulatory authority located in
any city, county, state or country where such Pledgor or the Issuers engage in
business, in order to transfer or to more effectively transfer the Pledged
Shares or Pledged Member Interests, or otherwise enforce Secured Party's rights
hereunder; and
(v) do or cause to be done all such other acts
and things as may be necessary to make such sale of the Collateral or any part
thereof valid and binding and in compliance with applicable law.
Each Pledgor acknowledges that there is no adequate remedy at law for failure by
it to comply with the provisions of this Section and that such failure would not
be adequately compensable in damages, and therefore agrees that its agreements
contained in this Section may be specifically enforced.
(e) EACH PLEDGOR EXPRESSLY WAIVES TO THE MAXIMUM EXTENT
PERMITTED BY LAW: (i) ANY CONSTITUTIONAL OR OTHER RIGHT TO A JUDICIAL HEARING
PRIOR TO THE TIME SECURED PARTY DISPOSES OF ALL OR ANY PART OF THE COLLATERAL AS
PROVIDED IN THIS SECTION; (ii) ALL RIGHTS OF REDEMPTION, STAY, OR APPRAISAL THAT
IT NOW HAS OR MAY AT ANY TIME IN THE FUTURE HAVE UNDER ANY RULE OF LAW OR
STATUTE NOW EXISTING OR HEREAFTER ENACTED; AND (iii) EXCEPT AS SET FORTH IN
SUBSECTION (a) OF THIS SECTION, ANY REQUIREMENT OF NOTICE, DEMAND, OR
ADVERTISEMENT FOR SALE.
10. Application of Proceeds. After the occurrence and during the
continuance of an Event of Default, any cash held by Secured Party as Collateral
and all cash proceeds received by Secured Party in respect of any sale of,
collection from, or other realization upon all or any part of the Collateral
pursuant to the exercise by Secured Party of its remedies as a secured creditor
as provided in Section 9 shall be applied from time to time by Secured Party as
provided in the Loan Agreement.
11. Duties of Secured Party. The powers conferred on Secured
Party hereunder are solely to protect its interests in the Collateral and shall
not impose on it any duty to exercise such powers. Except as provided in Section
9-207 of the Code, Secured
12
<PAGE> 13
Party shall have no duty with respect to the Collateral or any responsibility
for taking any necessary steps to preserve rights against any Persons with
respect to any Collateral.
12. CHOICE OF LAW AND VENUE. THE VALIDITY OF THIS AGREEMENT, ITS
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT, AND THE RIGHTS OF THE PARTIES
HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF CALIFORNIA. THE PARTIES AGREE THAT ALL ACTIONS OR
PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND
LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF LOS
ANGELES, STATE OF CALIFORNIA OR, AT THE SOLE OPTION OF SECURED PARTY, IN ANY
OTHER JURISDICTION IN WHICH THE COLLATERAL IS LOCATED IN CONNECTION WITH THE
EXERCISE OF SECURED PARTY'S RIGHTS AND REMEDIES AS A SECURED CREDITOR WITH
RESPECT TO SUCH COLLATERAL. EACH PLEDGOR AND SECURED PARTY WAIVES, TO THE EXTENT
PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE
OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS
BROUGHT IN ACCORDANCE WITH THIS SECTION 12.
13. Amendments; Etc. No amendment or waiver of any provision of
this Agreement nor consent to any departure by Pledgors herefrom shall in any
event be effective unless the same shall be in writing and signed by Secured
Party, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. No failure on the part of
Secured Party to exercise, and no delay in exercising any right under this
Agreement, any other Loan Document, or otherwise with respect to any of the
Secured Obligations, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right under this Agreement, any other Loan Document, or
otherwise with respect to any of the Secured Obligations preclude any other or
further exercise thereof or the exercise of any other right. The remedies
provided for in this Agreement or otherwise with respect to any of the Secured
Obligations are cumulative and not exclusive of any remedies provided by law.
14. Notices. Unless otherwise specifically provided herein, any
notice or other communication herein required or permitted to be given shall be
in writing and shall be delivered in the manner set forth in the Loan Agreement.
15. Continuing Security Interest. This Agreement shall create a
continuing security interest in the Collateral and shall: (i) remain in full
force and effect until the indefeasible payment in full of the Secured
Obligations, including the cash collateralization, expiration, or cancellation
of all Secured Obligations, if any, consisting of letters of credit, and the
full and final termination of any commitment to extend any financial
accommodations under the Loan Agreement; (ii) be binding upon each Pledgor and
its
13
<PAGE> 14
successors and assigns; and (iii) inure to the benefit of Secured Party and its
successors, transferees, and assigns. Upon the indefeasible payment in full of
the Secured Obligations, including the cash collateralization, expiration, or
cancellation of all Secured Obligations, if any, consisting of letters of
credit, and the full and final termination of any commitment to extend any
financial accommodations under the Loan Agreement, the security interests
granted herein shall automatically terminate and all rights to the Collateral
shall revert to the applicable Pledgor. Upon any such termination, Secured Party
will, at the applicable Pledgor's expense, execute and deliver to such Pledgor
such documents as such Pledgor shall reasonably request to evidence such
termination. Such documents shall be prepared by such Pledgor and shall be in
form and substance reasonably satisfactory to Secured Party.
16. Security Interest Absolute. To the maximum extent permitted
by law, all rights of Secured Party, all security interests hereunder, and all
obligations of Pledgors hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of any of the
Secured Obligations or any other agreement or instrument relating thereto,
including any of the Loan Documents;
(b) any change in the time, manner, or place of payment
of, or in any other term of, all or any of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from any of the Loan
Documents, or any other agreement or instrument relating thereto;
(c) any exchange, release, or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to departure
from any guaranty for all or any of the Secured Obligations; or
(d) any other circumstances that might otherwise
constitute a defense available to, or a discharge of, any Pledgor.
To the maximum extent permitted by law, each Pledgor hereby waives any right to
require Secured Party to: (A) proceed against or exhaust any security held from
such Pledgor; or (B) pursue any other remedy in Secured Party's power
whatsoever.
17. 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 or be given any substantive effect.
18. Severability. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
14
<PAGE> 15
19. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same Agreement. Delivery of an executed
counterpart of this Agreement by telefacsimile shall be equally effective as
delivery of an executed original counterpart of this Agreement. Any party
delivering an executed counterpart of this Agreement by telefacsimile also shall
deliver an original executed counterpart but the failure to deliver an original
executed counterpart shall not affect the validity, enforceability, and binding
effect of this Agreement. This Agreement shall become effective as to each
Obligor upon the execution and delivery of a counterpart hereof by such Obligor
(whether or not a counterpart hereof shall have been executed and delivered by
any other Obligor).
20. Waiver of Marshaling. Each Pledgor and Secured Party
acknowledges and agrees that in exercising any rights under or with respect to
the Collateral: (i) Secured Party is under no obligation to marshal any
Collateral; (ii) may, in its absolute discretion, realize upon the Collateral in
any order and in any manner it so elects; and (iii) may, in its absolute
discretion, apply the proceeds of any or all of the Collateral to the Secured
Obligations in any order and in any manner it so elects. Each Pledgor and
Secured Party waive any right to require the marshaling of any of the
Collateral.
21. WAIVER OF JURY TRIAL. EACH PLEDGOR AND SECURED PARTY HEREBY
WAIVE THEIR 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 TRANSACTIONS
CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PLEDGOR AND SECURED
PARTY REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.
22. Waivers.
(a) To the maximum extent permitted by law, each Pledgor hereby
waives: (i) notice of acceptance hereof; (ii) notice of any loans or other
financial accommodations made or extended under the Loan Agreement, or the
creation or existence of any Obligations; (iii) notice of the amount of the
Obligations, subject, however, to such Pledgor's right to make inquiry of
Secured Party to ascertain the amount of the Obligations at any reasonable time;
(iv) notice of any adverse change in the financial condition of Borrower or of
any other fact that might increase such Pledgor's risk hereunder; (v) notice of
presentment for payment, demand, protest, and notice thereof as to any
instrument among the Loan Documents; (vi) notice of any unmatured Event of
Default or Event of Default under the Loan Agreement; and (vii) all other
notices (except if such notice is
15
<PAGE> 16
specifically required to be given to such Pledgor under this Agreement) and
demands to which such Pledgor might otherwise be entitled.
(b) To the fullest extent permitted by applicable law, each
Pledgor waives the right by statute or otherwise to require Secured Party to
institute suit against Borrower or to exhaust any rights and remedies which
Secured Party has or may have against Borrower. Each Pledgor further waives any
defense arising by reason of any disability or other defense (other than the
defense that the Obligations shall have been fully and finally indefeasibly
paid) of Borrower or by reason of the cessation from any cause (other than that
the Obligations shall have been fully and finally indefeasibly paid) whatsoever
of the liability of Borrower in respect thereof.
(c) To the maximum extent permitted by law, each Pledgor hereby
waives: (i) any rights to assert against Secured Party any defense (legal or
equitable), set-off, counterclaim, or claim which such Pledgor may now or at any
time hereafter have against Borrower or any other party liable to Secured Party
on account of or with respect to the Obligations; (ii) any defense, set-off,
counterclaim, or claim, of any kind or nature, arising directly or indirectly
from the present or future sufficiency, validity, or enforceability of the
Obligations; (iii) any defense arising by reason of any claim or defense based
upon an election of remedies by Secured Party including, to the extent
applicable, the provisions of Sections 580d and 726 of the California Code of
Civil Procedure, or any similar law of California or any other jurisdiction;
(iv) the benefit of any statute of limitations affecting such Pledgor's
liability hereunder or the enforcement thereof.
(d) To the maximum extent permitted by law, each Pledgor hereby
waives any right of subrogation such Pledgor has or may have as against Borrower
with respect to the Obligations. In addition, each Pledgor hereby waives any
right to proceed against Borrower, now or hereafter, for contribution,
indemnity, reimbursement, or any other suretyship rights and claims
(irrespective of whether direct or indirect, liquidated or contingent), with
respect to the Obligations. Each Pledgor also hereby waives any right to proceed
or to seek recourse against or with respect to any property or asset of
Borrower. Each Pledgor hereby agrees that, in light of the waivers contained in
this Section, such Pledgor shall not be deemed to be a "creditor" (as that term
is defined in the Bankruptcy Code or otherwise) of Borrower, whether for
purposes of the application of Sections 547 or 550 of the United States
Bankruptcy Code or otherwise.
(e) If any of the Secured Obligations at any time are secured by
a mortgage or deed of trust upon real property, Secured Party may elect, in its
sole discretion, upon a default with respect to the Secured Obligations, to
foreclose such mortgage or deed of trust judicially or nonjudicially in any
manner permitted by law, before or after enforcing this Agreement, without
diminishing or affecting the liability of Pledgors hereunder. Each Pledgor
understands that (a) by virtue of the operation of California's antideficiency
law applicable to nonjudicial foreclosures, an election by Secured Party
nonjudicially to foreclose such a mortgage or deed of trust probably would
16
<PAGE> 17
have the effect of impairing or destroying rights of subrogation, reimbursement,
contribution, or indemnity of such Pledgor against Borrower or guarantors or
sureties, and (b) absent the waiver given by such Pledgor herein, such an
election might estop Secured Party from enforcing this Agreement against such
Pledgor. Understanding the foregoing, and understanding that such Pledgor is
hereby relinquishing a defense to the enforceability of this Agreement, each
Pledgor hereby waives any right to assert against Secured Party any defense to
the enforcement of this Agreement, whether denominated "estoppel" or otherwise,
based on or arising from an election by Secured Party nonjudicially to foreclose
any such mortgage or deed of trust. Each Pledgor understands that the effect of
the foregoing waiver may be that such Pledgor may have liability hereunder for
amounts with respect to which such Pledgor may be left without rights of
subrogation, reimbursement, contribution, or indemnity against Borrower or
guarantors or sureties. Each Pledgor also agrees that the "fair market value"
provisions of Section 580a of the California Code of Civil Procedure shall have
no applicability with respect to the determination of such Pledgor's liability
under this Agreement.
(f) WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER OR OTHER
PROVISION SET FORTH IN THIS AGREEMENT, EACH PLEDGOR HEREBY WAIVES, TO THE
MAXIMUM EXTENT SUCH WAIVER IS PERMITTED BY LAW, ANY AND ALL DEFENSES ARISING
DIRECTLY OR INDIRECTLY UNDER ANY ONE OR MORE OF CALIFORNIA CIVIL CODE SECTIONS
2808, 2809, 2810, 2815, 2819, 2820, 2821, 2838, 2839, 2845, 2848, 2849, AND
2850, TO THE EXTENT APPLICABLE, CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS
580a, 580b, 580c, 580d, AND 726, AND, TO THE EXTENT APPLICABLE, CHAPTER 2 OF
TITLE 14 OF THE CALIFORNIA CIVIL CODE.
(g) WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER OR OTHER
PROVISION SET FORTH IN THIS AGREEMENT, EACH PLEDGOR HEREBY WAIVES ALL RIGHTS AND
DEFENSES ARISING OUT OF AN ELECTION OF REMEDIES BY SECURED PARTY, EVEN THOUGH
THAT ELECTION OF REMEDIES, SUCH AS A NONJUDICIAL FORECLOSURE WITH RESPECT TO
SECURITY FOR A SECURED OBLIGATION, HAS DESTROYED SUCH PLEDGOR'S RIGHTS OF
SUBROGATION AND REIMBURSEMENT AGAINST THE PRINCIPAL BY THE OPERATION OF SECTION
580d OF THE CODE OF CIVIL PROCEDURE OR OTHERWISE.
[Signature page to follow.]
17
<PAGE> 18
IN WITNESS WHEREOF, each Pledgor and Secured Party have caused
this Agreement to be duly executed and delivered by their officers thereunto
duly authorized as of the date first written above.
FITZGERALDS SOUTH, INC., a Nevada corporation
FITZGERALDS MISSISSIPPI, INC., a Mississippi corporation
FITZGERALDS LAS VEGAS, INC., a Nevada corporation
FITZGERALDS FREMONT EXPERIENCE CORPORATION,
a Nevada corporation
FITZGERALDS RENO, INC., a Nevada corporation
FITZGERALDS INCORPORATED, a Nevada corporation
FITZGERALDS BLACK HAWK, INC., a Nevada corporation
FITZGERALDS BLACK HAWK II, INC., a Colorado corporation
101 MAIN STREET LIMITED LIABILITY COMPANY,
a Colorado limited liability company
By /s/ MICHAEL E. MCPHERSON
------------------------------------
Name: Michael E. McPherson
Title: Senior Vice President, Chief Financial Officer,
Treasurer, and Secretary of each of the above-
listed companies
FOOTHILL CAPITAL CORPORATION, a California corporation
By /s/ BRIAN DUFFY
-----------------------------------
Title: Vice President
-------------------------------
S-1
<PAGE> 19
SCHEDULE A
TO
PLEDGE AGREEMENT
Pledgor: Fitzgerald's South, Inc.
<TABLE>
<CAPTION>
Former Name, if Pledgor's
Pledged Certificate any, in which Percentage Jurisdiction of
Issuer Shares Class Number(s) Certificate Issued Ownership Incorporation
- ------ ------ ----- --------- ------------------ --------- -------------
<S> <C> <C> <C> <C> <C> <C>
Fitzgeralds Mississippi, Inc. 8,000,000 common 16 100% Mississippi
(formerly known as Polk
Landing Entertainment
Corporation)
Fitzgeralds Las Vegas, Inc. 10,000 common 6 100% Nevada
</TABLE>
A-1
<PAGE> 20
SCHEDULE A
TO
PLEDGE AGREEMENT
Pledgor: Fitzgeralds Mississippi, Inc.
<TABLE>
<CAPTION>
Former Name, if Pledgor's
Pledged Certificate any, in which Percentage Jurisdiction of
Issuer Shares Class Number(s) Certificate Issued Ownership Incorporation
- ------ ------ ----- --------- ------------------ --------- -------------
<S> <C> <C> <C> <C> <C> <C>
none
</TABLE>
A-2
<PAGE> 21
SCHEDULE A
TO
PLEDGE AGREEMENT
Pledgor: Fitzgeralds Las Vegas, Inc.
<TABLE>
<CAPTION>
Former Name, if Pledgor's
Pledged Certificate any, in which Percentage Jurisdiction of
Issuer Shares Class Number(s) Certificate Issued Ownership Incorporation
- ------ ------ ----- --------- ------------------ --------- -------------
<S> <C> <C> <C> <C> <C> <C>
Fitzgeralds Fremont 100 common 1 Fitzgeralds Las 100% Nevada
Experience Corporation Vegas Limited
Partnership
</TABLE>
A-3
<PAGE> 22
SCHEDULE A
TO
PLEDGE AGREEMENT
Pledgor: Fitzgeralds Fremont Experience Corporation
<TABLE>
<CAPTION>
Former Name, if Pledgor's
Pledged Certificate any, in which Percentage Jurisdiction of
Issuer Shares Class Number(s) Certificate Issued Ownership Incorporation
- ------ ------ ----- --------- ------------------ --------- -------------
<S> <C> <C> <C> <C> <C> <C>
none
</TABLE>
A-4
<PAGE> 23
SCHEDULE A
TO
PLEDGE AGREEMENT
Pledgor: Fitzgeralds Reno, Inc.
<TABLE>
<CAPTION>
Former Name, if Pledgor's
Pledged Certificate any, in which Percentage Jurisdiction of
Issuer Shares Class Number(s) Certificate Issued Ownership Incorporation
- ------ ------ ----- --------- ------------------ --------- -------------
<S> <C> <C> <C> <C> <C> <C>
none
</TABLE>
A-5
<PAGE> 24
SCHEDULE A
TO
PLEDGE AGREEMENT
Pledgor: Fitzgeralds Incorporated
<TABLE>
<CAPTION>
Former Name, if Pledgor's
Pledged Certificate any, in which Percentage Jurisdiction of
Issuer Shares Class Number(s) Certificate Issued Ownership Incorporation
- ------ ------ ----- --------- ------------------ --------- -------------
<S> <C> <C> <C> <C> <C> <C>
Fitzgeralds Black Hawk, 100 common 1 Griffith Gaming, 100% Nevada
Inc. Inc.
</TABLE>
A-6
<PAGE> 25
SCHEDULE A
TO
PLEDGE AGREEMENT
Pledgor: Fitzgeralds Black Hawk, Inc.
<TABLE>
<CAPTION>
Former Name, if Pledgor's
Pledged Certificate any, in which Percentage Jurisdiction of
Issuer Shares Class Number(s) Certificate Issued Ownership Incorporation
- ------ ------ ----- --------- ------------------ --------- -------------
<S> <C> <C> <C> <C> <C> <C>
Fitzgeralds Black Hawk II, 100 2 100% Colorado
Inc.
</TABLE>
A-7
<PAGE> 26
SCHEDULE A
TO
PLEDGE AGREEMENT
Pledgor: Fitzgeralds Black Hawk II, Inc.
<TABLE>
<CAPTION>
Pledged Former Name, if
Member Certificate any, in which Jurisdiction of
Issuer Interest Number(s) Certificate Issued Organization
- ------ -------- --------- ------------------ ------------
<S> <C> <C> <C> <C>
101 Main Street Limited 100% 1 Colorado
Liability Company
</TABLE>
A-8
<PAGE> 27
SCHEDULE A
TO
PLEDGE AGREEMENT
Pledgor: 101 Main Street Limited Liability Company
<TABLE>
<CAPTION>
Former Name, if Pledgor's
Pledged Certificate any, in which Percentage Jurisdiction of
Issuer Shares Class Number(s) Certificate Issued Ownership Incorporation
- ------ ------ ----- --------- ------------------ --------- -------------
<S> <C> <C> <C> <C> <C> <C>
none
</TABLE>
A-9
<PAGE> 28
SCHEDULE B
TO
PLEDGE AGREEMENT
<TABLE>
<CAPTION>
Pledgor Address of Chief Executive Office
- ----------------------------------- ---------------------------------
<S> <C>
Fitzgeralds South, Inc., 301 Fremont Street
a Nevada corporation Las Vegas, Nevada 89101
Fitzgeralds Mississippi, Inc., 301 Fremont Street
a Mississippi corporation Las Vegas, Nevada 89101
Fitzgeralds Las Vegas, Inc., 301 Fremont Street
a Nevada corporation Las Vegas, Nevada 89101
Fitzgeralds Fremont Street 301 Fremont Street
Experience Corporation, Las Vegas, Nevada 89101
a Nevada corporation
Fitzgeralds Reno, Inc., 301 Fremont Street
a Nevada corporation Las Vegas, Nevada 89101
Fitzgeralds Incorporated, 301 Fremont Street
a Nevada corporation Las Vegas, Nevada 89101
Fitzgeralds Las Vegas, Inc., 301 Fremont Street
a Nevada corporation Las Vegas, Nevada 89101
Fitzgeralds Black Hawk, Inc., 301 Fremont Street
a Nevada corporation Las Vegas, Nevada 89101
Fitzgeralds Black Hawk II, Inc., 301 Fremont Street
a Colorado corporation Las Vegas, Nevada 89101
101 Main Street Limited Liability 301 Fremont Street
Company, a Colorado limited Las Vegas, Nevada 89101
liability company
</TABLE>
B-1
<PAGE> 29
SCHEDULE C
TO
PLEDGE AGREEMENT
Existing Future Rights and Proceeds: None.
C-1
<PAGE> 1
EXHIBIT 10.6
SECURITY AGREEMENT
This SECURITY AGREEMENT (this "Agreement"), is entered into as of
October 29, 1998 between FOOTHILL CAPITAL CORPORATION, a California corporation
("Foothill"), and each of the undersigned Subsidiaries of Fitzgeralds Gaming
Corporation, a Nevada corporation (individually and collectively, and jointly
and severally, "Debtor").
WHEREAS, Borrower and Foothill are, contemporaneously herewith,
entering into the Loan Agreement; and
WHEREAS, Debtor has executed that certain General Continuing
Guaranty, dated as of the date hereof, in favor of Foothill (the "Guaranty"),
respecting certain obligations of Borrower owing to Foothill under the Loan
Agreement;
WHEREAS, Debtor desires to collateralize its obligations under
the Guaranty and the other Loan Documents to which it is a party by granting to
Foothill a security interest in certain of its assets; and
WHEREAS, Debtor will benefit by virtue of the credit extended by
Foothill to Borrower pursuant to the Loan Agreement.
NOW THEREFORE, in consideration of the premises set forth above,
the terms and conditions contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
each intending to be bound hereby, Foothill and Debtor agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. All capitalized terms used herein and
not otherwise defined herein shall have the meanings ascribed to them in the
Loan Agreement. As used in this Agreement, the following terms shall have the
following definitions:
"Accounts" means all currently existing and
hereafter arising accounts, contract rights, and all other forms of obligations
owing to Debtor arising out of the sale, license, or lease of goods or General
Intangibles or the rendition of services by
<PAGE> 2
Debtor, irrespective of whether earned by performance, and any and all credit
insurance, guaranties, or security therefor.
"Books" means all of Debtor's books and records,
including: ledgers; records indicating, summarizing, or evidencing the Debtors'
properties or assets (including the Collateral) or liabilities; all information
relating to the Debtors' business operations or financial condition; and all
computer programs, disk or tape files, printouts, runs, or other computer
prepared information.
"Borrower" means Fitzgeralds Gaming Corporation, a
Nevada corporation.
"Collateral" means all right, title, and interest
of Debtor with respect to each of the following:
(a) the Accounts,
(b) the Books,
(c) the Equipment,
(d) the General Intangibles,
(e) the Inventory,
(f) the Negotiable Collateral,
(g) any other assets of Debtor that now or
hereafter come into the possession, custody, or control of Foothill, and
(h) the proceeds and products, whether tangible
or intangible, of any of the foregoing, including proceeds of insurance
covering any or all of the Collateral, and any and all Accounts, Books,
Equipment, General Intangibles, Inventory, Negotiable Collateral, Real
Property, or other tangible or intangible property resulting from the
sale, exchange, collection, or other disposition of any of the
foregoing, or any portion thereof or interest therein, and the proceeds
thereof.
Anything in the Loan Documents to the contrary notwithstanding, the
Collateral shall not include the Excluded Assets.
-2-
<PAGE> 3
"Debtor" has the meaning ascribed thereto in the
preamble to this Agreement.
"Equipment" means all of Debtor's present and
hereafter acquired machinery, machine tools, motors, equipment, furniture,
furnishings, fixtures, vehicles (including motor vehicles and trailers), tools,
parts, goods (other than consumer goods, farm products, or Inventory), wherever
located, including, (a) any assets acquired by the Obligors with the proceeds of
credit extended by Foothill, (b) any interest of any of the Debtors in any of
the foregoing, and (c) all attachments, accessories, accessions, replacements,
substitutions, additions, and improvements to any of the foregoing.
"Excluded Assets" means: (a) Debtor's cash, deposit
accounts, and other cash equivalents; (b) furniture, fixtures, and equipment
securing Non-Recourse Indebtedness owing in favor of any Person (other than
Foothill, any Obligor, or any Affiliate of an Obligor) and permitted to be
incurred under both the Indenture and Section 7.1(e) of the Loan Agreement; (c)
assets securing Purchase Money Obligations and capital lease obligations, in
each case, owing in favor of any Person (other than Foothill, any Obligor, or
any Affiliate of an Obligor) and permitted to be incurred under both the
Indenture and Sections 7.1(l) and 7.21 of the Loan Agreement; and (d) any
General Intangible consisting of contract rights, permits, or licenses
(including Casino Licenses) that is now or hereafter held by Debtor as licensee
or otherwise, solely in the event and to the extent that: (i) such General
Intangible cannot be subjected to a consensual security interest in favor of
Foothill without the consent of the licensor or other party to such contract,
permit, or license; (ii) any such restriction shall be effective and enforceable
under all applicable law, including Section 9318(4) of the Code; and (iii) such
consent is not obtainable by Debtor; provided, however, that Excluded Assets
does not include (and, accordingly, the Collateral shall include) any and all
proceeds of the assets described in clauses (b), (c), and (d) above (unless and
to the extent such proceeds constitute Debtor's cash, deposit accounts, or cash
equivalents); provided further that any General Intangible qualifying as an
Excluded Asset under clause (d) above no longer shall constitute an Excluded
Asset (and instead shall constitute Collateral) from and after such licensor or
other applicable party's consent with respect to the grant of a consensual
security interest in such General Intangible; provided further that, anything to
the contrary notwithstanding, any property or asset acquired by an Obligor for
cash or cash equivalents of the Obligors, or otherwise received by an Obligor in
exchange for cash or cash equivalents of the Obligors, shall not constitute
Excluded Assets so long as such acquired or received property or asset is not an
asset described in clause (a), (b), (c), or (d) above.
"General Intangibles" means all of Debtor's present
and future general intangibles and other personal property (including contract
rights, rights arising under common law, statutes, or regulations, choses or
things in action, goodwill, patents,
-3-
<PAGE> 4
trade names, trademarks, servicemarks, copyrights, blueprints, drawings,
purchase orders, customer lists, monies due or recoverable from pension funds,
route lists, rights to payment and other rights under any royalty or licensing
agreements, infringement claims, computer programs, information contained on
computer disks or tapes, literature, reports, catalogs, deposit accounts,
insurance premium rebates, tax refunds, and tax refund claims), other than
goods, Accounts, and Negotiable Collateral.
"Guaranty" means the General Continuing Guaranty of
Debtor to Foothill dated as of the date hereof.
"Inventory" means all present and future inventory
in which Debtor has any interest, including goods held for sale or lease or to
be furnished under a contract of service and all of Debtor's present and future
raw materials, work in process, finished goods, and packing and shipping
materials, wherever located.
"Investment Property" means "investment property"
as that term is defined in Section 9115 of the Code.
"Loan Agreement" means that certain Loan and
Security Agreement, dated as of the date hereof, between Borrower and Foothill.
"Negotiable Collateral" means all of Debtor's
present and future letters of credit, notes, drafts, instruments, Investment
Property, documents, personal property leases (wherein Debtor is the lessor),
chattel paper, and Books relating to any of the foregoing.
1.2 CODE. Any terms used in this Agreement which are
defined in the Code shall be construed and defined as set forth in the Code
unless otherwise defined herein.
1.3 CONSTRUCTION. Unless the context of this Agreement
clearly requires otherwise, references to the plural include the singular,
references to the singular include the plural, the term "including" is not
limiting, and the term "or" has, except where otherwise indicated, the inclusive
meaning represented by the phrase "and/or." The words "hereof," "herein,"
"hereby," "hereunder," and similar terms in this Agreement refer to this
Agreement as a whole and not to any particular provision of this Agreement.
Section, subsection, clause, schedule, and exhibit references are to this
Agreement unless otherwise specified. Any reference in this Agreement or in any
of the other Loan Documents to this Agreement or any of the other Loan Documents
shall include all alterations, amendments, restatements, changes, extensions,
modifications, renewals, replacements, substitutions,
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<PAGE> 5
joinders, and supplements, thereto and thereof, as applicable. In the event of a
direct conflict between the terms and provisions of this Agreement and the Loan
Agreement, it is the intention of the parties hereto that both such documents
shall be read together and construed, to the fullest extent possible, to be in
concert with each other. In the event of any actual, irreconcilable conflict
that cannot be resolved as aforesaid, the terms and provisions of the Loan
Agreement shall control and govern; provided, however, that the inclusion herein
of additional obligations on the part of Debtor and supplemental rights and
remedies in favor of Foothill, in each case in respect of the Collateral, shall
not be deemed a conflict with the Loan Agreement.
1.4 SCHEDULES AND EXHIBITS. All of the schedules and
exhibits attached to this Agreement shall be deemed incorporated herein by
reference.
2. CREATION OF SECURITY INTEREST.
2.1 GRANT OF SECURITY INTEREST. Each Debtor hereby grants
to Foothill a continuing security interest in all currently existing and
hereafter acquired or arising Collateral (other than Real Property) in order to
secure prompt repayment of any and all of such Debtor's obligations, and in
order to secure prompt performance by such Debtor of each of its covenants and
duties under the Loan Documents (the "Secured Obligations"). Foothill's security
interests in the Collateral (other than the Real Property) shall attach to all
Collateral (other than Real Property) without further act on the part of
Foothill or Debtor. Anything contained in this Agreement or any other Loan
Document to the contrary notwithstanding, except for Permitted Dispositions, no
Debtor has any authority, express or implied, to dispose of any item or portion
of the Collateral.
2.2 NEGOTIABLE COLLATERAL. In the event that any
Collateral, including proceeds, is evidenced by or consists of Negotiable
Collateral, and if and to the extent that perfection or priority is dependent or
enhanced by possession, each Debtor, immediately upon the request of Foothill,
shall endorse and deliver physical possession of such Negotiable Collateral to
Foothill.
2.3 COLLECTION OF ACCOUNTS, GENERAL INTANGIBLES,
NEGOTIABLE COLLATERAL. At any time from and after and during the continuation of
an Event of Default, Foothill or Foothill's designee may: (a) notify customers
or Account Debtors of each Debtor that the Accounts, General Intangibles, or
Negotiable Collateral have been assigned to Foothill or that Foothill has a
security interest therein; and (b) collect the Accounts, General Intangibles,
and Negotiable Collateral directly and charge the collection costs and expenses
to the Loan Account. Each Debtor agrees that it will hold in trust for Foothill,
as Foothill's trustee, any Collections that it receives and immediately will
deliver said Collections to Foothill in their original form as received by the
applicable Debtor.
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2.4 DELIVERY OF ADDITIONAL DOCUMENTATION REQUIRED. At any
time upon the request of Foothill, Debtor shall execute, and deliver to Foothill
all financing statements, continuation financing statements, fixture filings,
security agreements, pledges, mortgages, deeds of trust, assignments, collateral
assignments, leasehold mortgages, leasehold deeds of trust, endorsements of
certificates of title, applications for title, affidavits, reports, notices,
schedules of accounts, letters of authority, and all other documents that
Foothill may reasonably request, in form satisfactory to Foothill, to perfect
and continue perfected Foothill's security interests in the Collateral (whether
now owned or hereafter arising or acquired), and in order to fully consummate
all of the transactions contemplated hereby and under the other Loan Documents.
2.5 ADDITIONAL PROVISIONS INCORPORATED BY REFERENCE.
Sections 4.5 and 4.6 of the Loan Agreement are incorporated herein by this
reference and shall apply to each Debtor and the Collateral, mutatis mutandis.
3. REPRESENTATIONS AND WARRANTIES.
Debtor represents and warrants as follows:
3.1 NO PRIOR ENCUMBRANCES. Debtor has good and
indefeasible title to the Collateral, free and clear of Liens, except for
Permitted Liens.
3.2 LOCATION OF INVENTORY AND EQUIPMENT. The Inventory and
Equipment are not stored with a bailee, warehouseman, or similar party (without
Foothill's prior written consent) except as set forth on Schedule 6.12 to the
Loan Agreement and are located only at the locations identified on Schedule 6.12
to the Loan Agreement or otherwise permitted by Section 6.12 of the Loan
Agreement.
3.3 RELIANCE BY FOOTHILL; CUMULATIVE. The warranties,
representations, and agreements set forth herein shall be conclusively presumed
to have been relied upon by Foothill and shall be cumulative and in addition to
any and all other warranties, representations, and agreements which Debtor shall
now or hereinafter give, or cause to be given, to Foothill.
4. AFFIRMATIVE COVENANTS.
Debtor covenants and agrees that, until payment in full of
the Secured Obligations, and unless Foothill shall otherwise consent in writing,
Debtor shall do all of the following:
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4.1 MAINTENANCE OF EQUIPMENT. Keep and maintain the
Equipment in good operating condition and repair (ordinary wear and tear
excepted), and make all necessary replacements thereto so that the value and
operating efficiency thereof shall at all times be maintained and preserved.
Other than those items of Equipment that constitute fixtures on the Closing
Date, Debtor shall not permit any item of Equipment to become a fixture to real
estate or an accession to other property, and the Equipment is now and shall at
all times remain personal property.
4.2 TAXES. Debtor shall: (a) cause all assessments and
taxes, whether real, personal, or otherwise, due or payable by, or imposed,
levied, or assessed against Debtor or any of its property to be paid in full,
before delinquency or before the expiration of any extension period, except to
the extent that the validity of such assessment or tax shall be the subject of a
Permitted Protest.
(b) Make due and timely payment or deposit of all such
federal, state, and local taxes, assessments, or contributions required of it by
law, and will execute and deliver to Foothill, on demand, appropriate
certificates attesting to the payment thereof or deposit with respect thereto.
(c) Make timely payment or deposit of all tax payments and
withholding taxes required of it by applicable laws, including those laws
concerning F.I.C.A., F.U.T.A., state disability, and local, state, and federal
income taxes, and will, upon request, furnish Foothill with proof satisfactory
to Foothill indicating that Debtor has made such payments or deposits.
4.3 EXISTENCE. Debtor shall do all things necessary to
preserve and keep in full force and effect its existence, except, in each case,
to the extent that the failure of such Debtor to do the same would not result
and could not reasonably be expected to result in a Material Adverse Change.
5. NEGATIVE COVENANTS.
Debtor covenants and agrees that until payment in full of
the Secured Obligations, it will not do any of the following without Foothill's
prior written consent:
5.1 CHANGE NAME. Change Debtor's name, FEIN, business
structure, or identity, or add any new fictitious name.
5.2 NATURE OF BUSINESS; FISCAL YEAR. (a) Make any change
in the principal nature of Debtor's business, or (b) without the prior written
consent of Foothill, which consent shall not unreasonably be withheld, change
the date of its fiscal year.
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<PAGE> 8
5.3 SUSPENSION. Suspend or go out of business.
5.4 CHANGE IN LOCATION OF CHIEF EXECUTIVE OFFICE;
INVENTORY AND EQUIPMENT WITH BAILEES. Without thirty (30) days prior written
notification to Foothill, relocate its chief executive office to a new location,
unless, at the time of such written notification, Debtor provides any financing
statements or fixture filings necessary to perfect and continue perfected
Foothill's security interests and also provides to Foothill a landlord's waiver
in form and substance satisfactory to Foothill. The Inventory and Equipment
shall not at any time now or hereafter be stored with a bailee, warehouseman, or
similar party without Foothill's prior written consent.
5.5 NO LOSS OF CASINO LICENSE. Through direct or indirect
action, or failure to take an action, cause any Casino License that is material
to Debtor, to be forfeited, revoked, rescinded, materially imposed or
not-renewed.
6. EVENTS OF DEFAULT.
Any one or more of the following events shall constitute
an event of default (each, an "Event of Default") under this Agreement:
6.1 The occurrence of an Event of Default (as defined in the
Loan Agreement);
6.2 If Debtor fails or neglects to perform, keep, or observe, in
any material respect, any term, provision, condition, covenant, or agreement
contained in this Agreement or in the Guaranty, or in any other present or
future agreement between Debtor and Foothill; or
6.3 If Debtor makes any payment on account of indebtedness that
has been contractually subordinated in right of payment to the payment of the
Secured Obligations, except to the extent such payment is permitted by the terms
hereof and by the subordination provisions applicable to such indebtedness.
7. FOOTHILL'S RIGHTS AND REMEDIES.
7.1 RIGHTS AND REMEDIES. Upon the occurrence of an Event
of Default, the security hereby constituted shall become enforceable and, in
addition to all other rights and remedies available to Foothill as provided
hereafter, Foothill may, at its election, without notice of its election and
without demand, do any one or more of the following with respect to each Debtor,
all of which are authorized by such Debtor:
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(a) Proceed directly and at once, without notice,
against Debtor to collect and recover the full amount or any portion of the
Secured Obligations, without first proceeding against Borrower or any other
Person, or against any security or collateral for the Secured Obligations;
(b) Without notice to the Debtor and regardless of
the acceptance of any security or collateral for the payment hereof, appropriate
and apply toward the payment of the Secured Obligations (i) any indebtedness due
or to become due from Foothill to the Debtor and (ii) any moneys, credits or
other property belonging to the Debtor at any time held by or coming into the
possession of Foothill;
(c) May exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein and the Guaranty or
otherwise available to it, all the rights and remedies available to it at law
(including those of a secured party under the Code) or in equity;
(d) Settle or adjust disputes and claims directly
with Account Debtors for amounts and upon terms which Foothill considers
advisable, and in such cases, Foothill will credit Borrower's loan account with
only the net amounts received by Foothill in payment of such disputed Accounts
after deducting all Foothill Expenses incurred or expended in connection
therewith;
(e) Cause Debtor to hold all returned Inventory in
trust for Foothill, segregate all returned Inventory from all other property of
Debtor or in Debtor's possession and conspicuously label said returned Inventory
as the property of Foothill;
(f) Without notice or demand, make such payments
and do such acts as Foothill considers necessary or reasonable to protect its
security interest in the Collateral. Debtor agrees to assemble the Collateral if
Foothill so requires, and to make the Collateral available to Foothill as
Foothill may designate. Debtor authorizes Foothill to enter the premises where
the Collateral is located, to take and maintain possession of the Collateral, or
any part of it, and to pay, purchase, contest, or compromise any encumbrance,
charge, or lien which in Foothill's determination appears to be prior or
superior to its security interest and to pay all expenses incurred in connection
therewith. With respect to any of Debtor's owned premises, Debtor hereby grants
Foothill a license to enter into possession of such premises and to occupy the
same, without charge, for up to one hundred twenty (120) days in order to
exercise any of Foothill's rights or remedies provided herein, at law, in
equity, or otherwise;
(g) Ship, reclaim, recover, store, finish,
maintain, repair, prepare for sale, advertise for sale, and sell (in the manner
provided for herein) the
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Collateral. Foothill is hereby granted a license or other right to use, without
charge, Debtor's labels, patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks, service marks, and advertising matter, or any
property of a similar nature, as it pertains to the Collateral, in completing
production of advertising for sale and selling any Collateral, and Debtor's
rights under all licenses and all franchise agreements shall inure to Foothill's
benefit;
(h) Sell all or any part of the Collateral at
either a public or private sale, or both, by way of one or more contracts or
transactions, for cash or on terms, in such manner and at such places (including
Debtor's premises) as Foothill determines is commercially reasonable. It is not
necessary that the Collateral be present at any such sale. Foothill shall have
the right upon any such public sale or sales, and, to the extent permitted by
law, upon any such private sale or sales, to purchase the whole or any part of
the Collateral so sold, free of any right or equity of redemption in Debtor,
which right or equity is hereby waived or released to the extent permitted by
law;
(i) By an instrument in writing, appoint a receiver
(which term shall include a receiver and manager) of all or any part of the
Collateral and may remove or replace such receiver from time to time or may
institute proceedings in any court of competent jurisdiction for the appointment
of such receiver;
(j) Require Debtor to establish a lockbox or other
restricted account satisfactory to Foothill for the collection of Accounts,
General Intangibles, or Negotiable Collateral;
(k) Notify customers or Account Debtors of Debtor
that the Accounts of Debtor, General Intangibles, or Negotiable Collateral have
been assigned to Foothill or that Foothill has a security interest therein;
(l) Collect the Accounts, General Intangibles, and
Negotiable Collateral directly, and charge the collection costs and expenses as
Foothill Expenses; but, unless and until Foothill does so or gives Debtor other
written instructions, Debtor shall collect all Accounts of Debtor, General
Intangibles, and Negotiable Collateral for Foothill, receive in trust all
payments thereon as Foothill's trustee, and immediately deliver said payments to
Foothill in their original form as received from such Account Debtor; or
(m) Any deficiency which exists after disposition
of the Collateral as provided above will be paid immediately by Debtor up to the
maximum amount, if any, of Debtor's liability under the Guaranty. Any excess
will be returned to Debtor, without interest and subject to the rights of third
parties, by Foothill.
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Except as required by law, Foothill may take any or all of the foregoing action
without demand, presentment, protest, advertisement or notice of any kind to or
upon Debtor or any other person.
All right, remedies, and powers provided in this Agreement relative to the
Collateral may be exercised only to the extent that the exercise thereof does
not violate any applicable mandatory provision of the applicable gaming laws,
rules, and regulations enacted by the applicable Gaming Authority (the
"Applicable Gaming Laws") and all provisions of this Agreement relative to the
Collateral are intended to be subject to all applicable mandatory provisions of
the Applicable Gaming Laws and to be limited solely to the extent necessary to
not render the provisions of this Agreement invalid or unenforceable, in whole
or in part. Foothill will timely apply for and receive all required approvals of
the applicable Gaming Authority for the sale or other disposition of gaming
Equipment regulated by Applicable Gaming Laws (including any such sale or
disposition of gaming Equipment consisting of slot machines, gaming tables,
cards, dice, gaming chips, player tracking systems, and all other "gaming
devices" (as such term or words of like import referring thereto are defined in
the Applicable Gaming Laws), "cashless wagering systems", (as such term or words
of like import referring thereto are defined in the Applicable Gaming Laws), and
"associated equipment" (as such term or words of like import referring thereto
are defined in the Applicable Gaming Laws).
7.2 REMEDIES CUMULATIVE. Foothill's rights and
remedies under this Agreement, the Loan Documents, and all other agreements
shall be cumulative. Foothill shall have all other rights and remedies not
inconsistent herewith as provided under the Code, by law, or in equity. No
exercise by Foothill of one right or remedy shall be deemed an election,and no
waiver by Foothill of any Event of Default shall be deemed a continuing waiver.
No delay by Foothill shall constitute a waiver, election, or acquiescence by it.
8. TAXES AND EXPENSES.
If Debtor fails to pay any monies (whether taxes, assessments,
insurance premiums, Permit fees, or, in the case of leased properties or assets,
rents or other amounts payable under such leases) due to third Persons, or fails
to make any deposits or furnish any required proof of payment or deposit, all as
required under the terms of this Agreement or any other Loan Document, then, to
the extent that Foothill determines that such failure by Debtor could result in
a Material Adverse Change, in its discretion and without prior notice to any
Obligor, Foothill may do any or all of the following: (a) make payment of the
same or any part thereof; or (b) set up such reserves in Borrower's loan account
as Foothill deems necessary to protect Foothill from the exposure created by
such failure. Any such amounts paid by Foothill shall constitute Foothill
Expenses. Any such payments
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made by Foothill shall not constitute an agreement by Foothill to make similar
payments in the future or a waiver by Foothill of any Event of Default under
this Agreement. Foothill need not inquire as to, or contest the validity of, any
such expense, tax, fee, or Lien and the receipt of the usual official notice for
the payment thereof shall be conclusive evidence that the same was validly due
and owing.
9. WAIVERS; INDEMNIFICATION.
9.1 DEMAND; PROTEST; ETC. To the extent permitted by law,
Debtor waives demand, protest, notice of protest, notice of default or dishonor,
notice of payment and nonpayment, notice of any default, nonpayment at maturity,
release, compromise, settlement, extension, or renewal of accounts, documents,
instruments, chattel paper, and guarantees at any time held by Foothill on which
Debtor may in any way be liable. Debtor hereby waives any defenses that Debtor
might have based upon suretyship or impairment of collateral, such waiver being
intended to be a waiver contemplated by Section 3605(i) of the Code.
9.2 FOOTHILL'S LIABILITY FOR COLLATERAL. So long as
Foothill complies with its obligations, if any, under Section 9207 of the Code,
Foothill shall not in any way or manner be liable or responsible for: (a) the
safekeeping of the Collateral; (b) any loss or damage thereto occurring or
arising in any manner or fashion from any cause; (c) any diminution in the value
thereof; or (d) any act or default of any carrier, warehouseman, bailee,
forwarding agency, or other Person. All risk of loss, damage, or destruction of
the Collateral shall be borne by Debtor.
9.3 INDEMNIFICATION. Debtor agrees to defend, indemnify,
save, and hold Foothill and its officers, employees, and agents harmless
against: (a) all obligations, demands, claims, and liabilities claimed or
asserted by any other Person, and (b) all losses (including attorneys fees and
disbursements) in any way suffered, incurred, or paid by Foothill as a result of
or in any way arising out of, following, or consequential to transactions with
Borrower or Debtor, whether under this Agreement, the other Loan Documents or
otherwise. This provision shall survive the termination of this Agreement and
the repayment of the Secured Obligations.
10. NOTICES.
All notices and other communications hereunder to Foothill
shall be in writing and shall be mailed, sent or delivered in accordance with
the Loan Agreement and all notices and other communications hereunder to Debtor
shall be in writing and shall be mailed, sent or delivered in care of Borrower
in accordance with the Loan Agreement.
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11. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
THE VALIDITY OF THIS AGREEMENT, ITS CONSTRUCTION,
INTERPRETATION, AND ENFORCEMENT, AND THE RIGHTS OF THE PARTIES HERETO SHALL BE
DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF CALIFORNIA. THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING
IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE
AND FEDERAL COURTS LOCATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA OR,
AT THE SOLE OPTION OF FOOTHILL, IN ANY OTHER COURT IN WHICH FOOTHILL SHALL
INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER
JURISDICTION OVER THE MATTER IN CONTROVERSY. EACH OF DEBTOR AND FOOTHILL WAIVES,
TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT
THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 11.
DEBTOR AND FOOTHILL HEREBY WAIVE THEIR 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 TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. DEBTOR AND FOOTHILL REPRESENT THAT EACH HAS REVIEWED THIS
WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
12. DESTRUCTION OF DEBTOR'S DOCUMENTS.
All documents, schedules, agings, or other papers
delivered to Foothill may be destroyed or otherwise disposed of by Foothill four
(4) months after they are delivered to or received by Foothill, unless Debtor
requests, in writing, the return of said documents, schedules or other papers
and makes arrangements, at Debtor's expense, for their return.
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13. GENERAL PROVISIONS.
13.1 EFFECTIVENESS. This Agreement shall be binding and
deemed effective when executed by Debtor and accepted and executed by Foothill.
13.2 SUCCESSORS AND ASSIGNS. This Agreement shall bind and
inure to the benefit of the respective successors and assigns of each of the
parties; provided, however, that Debtor may not assign this Agreement or any
rights or duties hereunder without Foothill's prior written consent and any
prohibited assignment shall be absolutely void. No consent to an assignment by
Foothill shall release Debtor from its Secured Obligations. Foothill may assign
this Agreement and its rights and duties hereunder and no consent or approval by
Debtor is required in connection with any such assignment. Foothill reserves the
right to sell, assign, transfer, negotiate, or grant participations in all or
any part of, or any interest in Foothill's rights and benefits hereunder. In
connection therewith, Foothill may disclose all documents and information which
Foothill now or hereafter may have relating to Debtor or Debtor's business. To
the extent that Foothill assigns its rights and obligations to a third Person,
Foothill thereafter shall be released from such assigned obligations to Debtor
and such assignment shall effect a novation between Debtor and such third
Person.
13.3 SECTION HEADINGS. Headings and numbers have been set
forth herein for convenience only. Unless the contrary is compelled by the
context, everything contained in each section applies equally to this entire
Agreement.
13.4 INTERPRETATION. Neither this Agreement nor any
uncertainty or ambiguity herein shall be construed or resolved against Foothill
or Debtor, whether under any rule of construction or otherwise. On the contrary,
this Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to fairly
accomplish the purposes and intentions of all parties hereto.
13.5 SEVERABILITY OF PROVISIONS. Each provision of this
Agreement shall be severable from every other provision of this Agreement for
the purpose of determining the legal enforceability of any specific provision.
13.6 AMENDMENTS IN WRITING. This Agreement can only be
amended by a writing signed by both Foothill and Debtor.
13.7 COUNTERPARTS; TELEFACSIMILE EXECUTION. This Agreement
may be executed in any number of counterparts and by different parties on
separate counterparts, each of which, when executed and delivered, shall be
deemed to be an original, and all of which, when taken together, shall
constitute but one and the same
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Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile shall be equally as effective as delivery of an original executed
counterpart of this Agreement. Any party delivering an executed counterpart of
this Agreement by telefacsimile also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement.
13.8 REVIVAL AND REINSTATEMENT OF OBLIGATIONS. If the
incurrence or payment of the Secured Obligations by Debtor or the transfer by
Debtor to Foothill of any property of Debtor should for any reason subsequently
be declared to be void or voidable under any state or federal law relating to
creditors' rights, including provisions of the Bankruptcy Code relating to
fraudulent conveyances, preferences, and other voidable or recoverable payments
of money or transfers of property (collectively, a "Voidable Transfer"), and if
Foothill is required to repay or restore, in whole or in part, any such Voidable
Transfer, or elects to do so upon the reasonable advice of its counsel, then, as
to any such Voidable Transfer, or the amount thereof that Foothill is required
or elects to repay or restore, and as to all reasonable costs, expenses, and
attorneys fees of Foothill related thereto, the liability of Debtor
automatically shall be revived, reinstated, and restored and shall exist as
though such Voidable Transfer had never been made.
13.9 AGREEMENT TO BE BOUND BY LOAN AGREEMENT. By its
execution and delivery of this Agreement any Debtor that is not a party to the
Loan Agreement nevertheless shall be deemed to have agreed to be bound by each
provision in the Loan Agreement relating to the Obligors or their assets with
the same force and effect as though such Debtor were party to the Loan
Agreement, mutatis mutandis.
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IN WITNESS WHEREOF, each of the undersigned has executed and delivered
this Agreement as of the date first written above.
FOOTHILL CAPITAL CORPORATION, a
California corporation
By /s/ BRIAN DUFFY
-----------------------------
Title: Vice President
--------------------------
FITZGERALDS SOUTH, INC., a Nevada
corporation
FITZGERALDS MISSISSIPPI, INC., a
Mississippi corporation
FITZGERALDS LAS VEGAS, INC., a
Nevada corporation
FITZGERALDS FREMONT EXPERIENCE
CORPORATION, a Nevada corporation
FITZGERALDS RENO, INC., a Nevada
corporation
FITZGERALDS INCORPORATED, a Nevada
corporation
FITZGERALDS BLACK HAWK, INC., a
Nevada corporation
FITZGERALDS BLACK HAWK II, INC., a
Colorado corporation
101 MAIN STREET LIMITED
LIABILITY COMPANY, a
Colorado limited liability company
By /s/ MICHAEL E. MCPHERSON
-----------------------------
Name: Michael E. McPherson
Title: Senior Vice President,
Chief Financial Officer, Treasurer,
and Secretary of each of the
above-listed companies
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EXHIBIT 10.7
TRADEMARK SECURITY AGREEMENT
THIS TRADEMARK SECURITY AGREEMENT (this "Agreement"), dated as of
October 29, 1998, is made by each of FITZGERALDS GAMING CORPORATION, a Nevada
corporation, FITZGERALDS SOUTH, INC., a Nevada corporation, FITZGERALDS
MISSISSIPPI, INC., a Mississippi corporation, FITZGERALDS LAS VEGAS, INC., a
Nevada corporation, FITZGERALDS FREMONT EXPERIENCE CORPORATION, a Nevada
corporation, FITZGERALDS RENO, INC., a Nevada corporation, FITZGERALDS
INCORPORATED, a Nevada corporation, FITZGERALDS BLACK HAWK, INC., a Nevada
corporation, FITZGERALDS BLACK HAWK II, INC., a Colorado corporation, and 101
MAIN STREET LIMITED LIABILITY COMPANY, a Colorado limited liability company
(individually, a "Debtor", and collectively and jointly and severally, the
"Debtors"), in favor of FOOTHILL CAPITAL CORPORATION, a California corporation
("Secured Party").
RECITALS
A. Borrower and Secured Party have entered into that certain Loan and
Security Agreement, dated as of even date herewith (as amended, restated,
supplemented, modified, renewed, extended, or refinanced from time to time, the
"Loan Agreement"), pursuant to which Secured Party has agreed to make certain
financial accommodations to Borrower, and Borrower has granted to Secured Party
a security interest in (among other things) all or substantially all of the
general intangibles of Borrower (but excluding the Excluded Assets).
B. Each of the Debtors other than Borrower and Secured Party have
entered into the Guarantor Security Agreement, pursuant to which each such
Debtor has granted to Secured Party a security interest in (among other things)
all or substantially all of the general intangibles of such Debtor (but
excluding the Excluded Assets).
C. Pursuant to the Loan Agreement and as one of the conditions precedent
to the obligations of Secured Party under the Loan Agreement, each Debtor has
agreed to execute and deliver this Agreement to Secured Party for filing with
the United States Patent and Trademark Office and with any other relevant
recording systems in any domestic or foreign jurisdiction, and as further
evidence of and to effectuate Secured Party's existing security interests in the
Trademark Collateral.
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<PAGE> 2
ASSIGNMENT
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which is hereby acknowledged, each Debtor hereby agrees in favor of Secured
Party as follows:
1. Definitions; Interpretation.
(a) Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"Borrower" means Fitzgeralds Gaming Corporation, a Nevada corporation.
"Proceeds" means whatever is receivable or received from or upon the
sale, lease, license, collection, use, exchange or other disposition, whether
voluntary or involuntary, of any Trademark Collateral, including "proceeds" as
defined at California UCC Section 9306, all insurance proceeds and all proceeds
of proceeds. Proceeds shall include (i) any and all accounts, chattel paper,
instruments, general intangibles, cash and other proceeds, payable to or for the
account of any Debtor, from time to time in respect of any of the Trademark
Collateral, (ii) any and all proceeds of any insurance, indemnity, warranty or
guaranty payable to or for the account of any Debtor from time to time with
respect to any of the Trademark Collateral, (iii) any and all claims and
payments (in any form whatsoever) made or due and payable to any Debtor from
time to time in connection with any requisition, confiscation, condemnation,
seizure or forfeiture of all or any part of the Trademark Collateral by any
Person acting under color of governmental authority, and (iv) any and all other
amounts from time to time paid or payable under or in connection with any of the
Trademark Collateral or for or on account of any damage or injury to or
conversion of any Trademark Collateral by any Person.
"PTO" means the United States Patent and Trademark Office and any
successor thereto.
"Secured Obligations" means all liabilities, obligations, or
undertakings owing by each Debtor to Secured Party of any kind or description
arising out of or outstanding under, advanced or issued pursuant to, or
evidenced by the Loan Agreement, the other Loan Documents, or this Agreement,
irrespective of whether for the payment of money, whether direct or indirect,
absolute or contingent, due or to become due, voluntary or involuntary, whether
now existing or hereafter arising, and including all interest (including
interest that accrues after the filing of a case under the Bankruptcy Code) and
any and all costs, fees (including attorneys fees), and expenses which any one
or more of the Debtors is required to pay pursuant to any of the foregoing, by
law, or otherwise.
"Trademark Collateral" has the meaning set forth in Section 2.
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<PAGE> 3
"Trademarks" has the meaning set forth in Section 2.
"UCC" means the Uniform Commercial Code as in effect from time to time
in the State of California.
"United States" and "U.S." each mean the United States of America.
(b) Terms Defined in UCC. Where applicable and except as otherwise
defined herein, terms used in this Agreement shall have the meanings ascribed to
them in the UCC.
(c) Interpretation. In this Agreement, except to the extent the
context otherwise requires:
(i) Any reference to a Section or a Schedule is a reference to
a section hereof, or a schedule hereto, respectively, and to a
subsection or a clause is, unless otherwise stated, a reference to a
subsection or a clause of the Section or subsection in which the
reference appears.
(ii) The words "hereof," "herein," "hereto," "hereunder" and
the like mean and refer to this Agreement as a whole and not merely to
the specific Section, subsection, paragraph or clause in which the
respective word appears.
(iii) The meaning of defined terms shall be equally applicable
to both the singular and plural forms of the terms defined.
(iv) The words "including," "includes" and "include" shall be
deemed to be followed by the words "without limitation."
(v) References to agreements and other contractual instruments
shall be deemed to include all subsequent amendments and other
modifications thereto.
(vi) References to statutes or regulations are to be construed
as including all statutory and regulatory provisions consolidating,
amending or replacing the statute or regulation referred to.
(vii) Any captions and headings are for convenience of
reference only and shall not affect the construction of this Agreement.
(viii) Capitalized words not otherwise defined herein shall
have the respective meanings ascribed to them in the Loan Agreement.
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<PAGE> 4
(ix) In the event of a direct conflict between the terms and
provisions of this Agreement and the Loan Agreement, it is the intention of the
parties hereto that both such documents shall be read together and construed, to
the fullest extent possible, to be in concert with each other. In the event of
any actual, irreconcilable conflict that cannot be resolved as aforesaid, the
terms and provisions of the Loan Agreement shall control and govern; provided,
however, that the inclusion herein of additional obligations on the part of any
Debtor or Secured Party and supplemental rights and remedies in favor of Secured
Party (whether under California law or applicable federal law), in each case in
respect of the Trademark Collateral, shall not be deemed a conflict in the Loan
Agreement.
2. Security Interest.
(a) Assignment and Grant of Security Interest. To secure the payment
and performance of the Secured Obligations, each Debtor hereby assigns,
transfers, conveys, and grants a security interest to Secured Party in, all of
such Debtor's right, title and interest in, to and under the following property,
whether now existing or hereafter acquired or arising, and whether registered or
unregistered (collectively, the "Trademark Collateral"):
(i) all state (including common law), federal and foreign
trademarks, service marks and trade names, corporate names, company names,
business names, fictitious business names, trade styles, trade dress, logos,
other source or business identifiers, designs and general intangibles of like
nature, now existing or hereafter adopted or acquired, together with and
including all licenses therefor held by that Debtor (unless otherwise prohibited
by any license or related licensing agreement under circumstances where the
granting of the security interest would have the effect under applicable law of
the termination or permitting termination of the license for breach and where
the licensor is not an affiliate of a Debtor), and all registrations and
recordings thereof, and all applications filed or to be filed in connection
therewith, including registrations and applications in the PTO, any State of the
United States or any other country or any political subdivision thereof, and all
extensions or renewals thereof, including without limitation any of the
foregoing identified on Schedule A hereto (as the same may be amended, modified
or supplemented from time to time), and the right (but not the obligation) to
register claims under any state or federal trademark law or regulation or any
trademark law or regulation of any foreign country and to apply for, renew and
extend any of the same, to sue or bring opposition or cancellation proceedings
in the name of that Debtor or in the name of Secured Party for past, present or
future infringement or unconsented use thereof, and all rights arising therefrom
throughout the world (collectively, the "Trademarks");
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<PAGE> 5
(ii) all claims, causes of action and rights to sue for past,
present or future infringement or unconsented use of any Trademarks and all
rights arising therefrom and pertaining thereto;
(iii) all general intangibles related to or arising out of any
of the Trademarks and all the goodwill of that Debtor's business symbolized by
the Trademarks or associated therewith; and
(iv) all products and Proceeds of any and all of the foregoing.
Anything in the Loan Documents to the contrary notwithstanding, the Trademark
Collateral shall not include the Excluded Assets.
(b) Continuing Security Interest. Each Debtor agrees that this
Agreement shall create a continuing security interest in the Trademark
Collateral which shall remain in effect until terminated in accordance with
Section 17.
3. Further Assurances; Appointment of Secured Party as Attorney-in-Fact.
Each Debtor at its expense shall execute and deliver, or cause to be executed
and delivered, to Secured Party any and all documents and instruments, in form
and substance satisfactory to Secured Party, and take any and all action, which
Secured Party may reasonably request from time to time, to perfect and continue
perfected, maintain the priority of or provide notice of Secured Party's
security interest in the Trademark Collateral and to accomplish the purposes of
this Agreement. Secured Party shall have the right, in the name of each Debtor,
or in the name of Secured Party or otherwise, without notice to or assent by
that Debtor, and each Debtor hereby irrevocably constitutes and appoints Secured
Party (and any of Secured Party's officers or employees or agents designated by
Secured Party) as that Debtor's true and lawful attorney-in-fact with full power
and authority, (i) to sign the name of Debtor on all or any of such documents or
instruments and perform all other acts that Secured Party deems necessary or
advisable in order to perfect or continue perfected, maintain the priority or
enforceability of or provide notice of Secured Party's security interest in, the
Trademark Collateral, and (ii) to execute any and all other documents and
instruments, and to perform any and all acts and things for and on behalf of
Debtor, which Secured Party reasonably may deem necessary or advisable to
maintain, preserve and protect the Trademark Collateral and to accomplish the
purposes of this Agreement, including (A) after the occurrence and during the
continuance of any Event of Default, to defend, settle, adjust or institute any
action, suit or proceeding with respect to the Trademark Collateral, (B) after
the occurrence and during the continuance of any Event of Default, to assert or
retain any rights under any license agreement for any of the Trademark
Collateral, and (C) after the occurrence and during the continuance of any Event
of Default, to execute any and all applications, documents, papers and
instruments for Secured Party to use the Trademark Collateral, to grant or issue
any exclusive or non-exclusive license with respect to any Trademark Collateral
(it being understood that so long as no Event of Default has occurred and is
continuing, that Debtor
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<PAGE> 6
may grant or issue licenses in the ordinary course of business with respect to
the Trademark Collateral), and to assign, convey or otherwise transfer title in
or dispose of the Trademark Collateral. The power of attorney set forth in this
Section 3, being coupled with an interest, is irrevocable so long as this
Agreement shall not have terminated in accordance with Section 17.
4. Representations and Warranties. Each Debtor represents and warrants
to Secured Party as follows:
(a) No Other Trademarks. Schedule A sets forth a true and correct
list of all of the existing Trademarks that currently are registered, or for
which any currently pending application for registration has been filed with the
PTO or any corresponding or similar trademark office of any other U.S. or
foreign jurisdiction, and that are owned or held (whether pursuant to a license
or otherwise) or used by that Debtor.
(b) Trademarks Subsisting. To the best of that Debtor's knowledge,
each of the Trademarks listed in Schedule A is subsisting and has not been
adjudged invalid or unenforceable, in whole or in part, and each of the
Trademarks is valid and enforceable.
(c) Ownership of Trademark Collateral; No Violation. (i) That Debtor
has rights in and good and defensible title to the existing Trademark
Collateral, (ii) with respect to the Trademark Collateral shown on Schedule A
hereto as owned by it, that Debtor is the sole and exclusive owner thereof, free
and clear of any Liens and rights of others (other than the security interest
created hereunder and, subject to the Intercreditor Agreement, Liens in favor of
the Indenture Trustee relative to the Senior Note Documents), including
licenses, registered user agreements and covenants by that Debtor not to sue
third persons, and (iii) with respect to any Trademarks for which that Debtor is
either a licensor or a licensee pursuant to a license or licensee agreement
regarding such Trademark, each such license or licensing agreement is in full
force and effect, that Debtor is not in default of any of its obligations
thereunder and, other than the parties to such licenses or licensing agreements,
no other Person has any rights in or to any of the Trademark Collateral. To the
best of that Debtor's knowledge, the past, present and contemplated future use
of the Trademark Collateral by that Debtor has not, does not and will not
infringe upon or violate any right, privilege or license agreement of or with
any other Person.
(d) No Infringement. To the best of that Debtor's knowledge, no
material infringement or unauthorized use presently is being made of any of the
Trademark Collateral by any Person.
(e) Powers. That Debtor has the unqualified right, power and
authority to pledge and to grant to Secured Party a security interest in all of
that Debtor's right, title, and interest in and to the Trademark Collateral
pursuant to this Agreement, and
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<PAGE> 7
to execute, deliver and perform its obligations in accordance with the terms of
this Agreement, without the consent or approval of any other Person except as
already obtained.
5. Covenants. So long as any of the Secured Obligations remain
unsatisfied, each Debtor agrees that it will comply with all of the covenants,
terms and provisions of this Agreement, the Loan Agreement and the other Loan
Documents to which it is a party, and each Debtor will promptly give Secured
Party written notice of the occurrence of any event that could have a material
adverse effect on any of the Trademarks or the Trademark Collateral, including
any petition under the Bankruptcy Code filed by or against any licensor of any
of the Trademarks as to which that Debtor is a licensee.
6. Future Rights. For so long as any of the Secured Obligations shall
remain outstanding, or, if earlier, until Secured Party shall have released or
terminated, in whole but not in part, its interest in the Trademark Collateral,
if and when any Debtor shall obtain rights to any new Trademarks, or any
reissue, renewal or extension of any Trademarks, the provisions of Section 2
shall automatically apply thereto and that Debtor shall give to Secured Party
prompt notice thereof. Each Debtor shall do all things reasonably deemed
necessary or advisable by Secured Party to ensure the validity, perfection,
priority and enforceability of the security interests of Secured Party in such
future acquired Trademark Collateral. Each Debtor hereby authorizes Secured
Party, if and to the extent such Debtor refuses to or fails timely to execute,
deliver, or do same, to modify, amend or supplement the Schedules hereto and to
re-execute this Agreement from time to time on that Debtor's behalf and as its
attorney-in-fact to include any future Trademarks which are or become Trademark
Collateral and to cause such re-executed Agreement or such modified, amended or
supplemented Schedules to be filed with the PTO.
7. Secured Party's Duties. Notwithstanding any provision contained in
this Agreement, Secured Party shall have no duty to exercise any of the rights,
privileges or powers afforded to it and shall not be responsible to any Debtor
or any other Person for any failure to do so or delay in doing so. Except for
the accounting for moneys actually received by Secured Party hereunder or in
connection herewith, Secured Party shall have no duty or liability to exercise
or preserve any rights, privileges or powers pertaining to the Trademark
Collateral.
8. Remedies. Secured Party shall have all rights and remedies available
to it under the Loan Agreement and applicable law (which rights and remedies are
cumulative) with respect to the security interests in any of the Trademark
Collateral or any other Collateral. Each Debtor agrees that such rights and
remedies include the right of Secured Party as a secured party to sell or
otherwise dispose of its Collateral after default, pursuant to UCC Section 9504.
Each Debtor agrees that Secured Party shall at all times have such royalty-free
licenses, to the extent permitted by law, for any Trademark Collateral that is
reasonably necessary to permit the exercise of any of Secured Party's rights or
remedies upon or after the occurrence of (and during the continuance of) an
Event of Default with
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respect to (among other things) any tangible asset of any Debtor in which
Secured Party has a security interest, including Secured Party's rights to sell
inventory, tooling or packaging which is acquired by any Debtor (or its
successors, permitted assignees, or trustees in bankruptcy). In addition to and
without limiting any of the foregoing, upon the occurrence and during the
continuance of an Event of Default, Secured Party shall have the right but shall
in no way be obligated to bring suit, or to take such other action as Secured
Party deems necessary or advisable, in the name of any Debtor or Secured Party,
to enforce or protect any of the Trademark Collateral, in which event each
Debtor shall, at the request of Secured Party, do any and all lawful acts and
execute any and all documents required by Secured Party in aid of such
enforcement. To the extent that Secured Party shall elect not to bring suit to
enforce a material item or portion of such Trademark Collateral (and unless
Secured Party otherwise agrees in writing), each Debtor agrees to use all
reasonable measures and its diligent efforts, whether by action, suit,
proceeding or otherwise, to prevent the material infringement, misappropriation
or violation thereof by others and for that purpose agrees diligently to
maintain any action, suit or proceeding against any Person necessary to prevent
such material infringement, misappropriation or violation.
9. Binding Effect. This Agreement shall be binding upon, inure to the
benefit of and be enforceable by each Debtor and Secured Party and their
respective successors and permitted assigns.
10. Notices. All notices and other communications hereunder to or from
Secured Party or any Debtor shall be in writing and shall be mailed, sent or
delivered in accordance with the Loan Agreement.
11. GOVERNING LAW AND VENUE; JURY TRIAL WAIVER. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE
ASSIGNMENT AND SECURITY INTERESTS HEREUNDER IN RESPECT OF ANY PROPERTY ARE
GOVERNED BY FEDERAL LAW, IN WHICH CASE SUCH CHOICE OF CALIFORNIA LAW SHALL NOT
BE DEEMED TO DEPRIVE SECURED PARTY OF SUCH RIGHTS AND REMEDIES AS MAY BE
AVAILABLE UNDER FEDERAL LAW. THE VALIDITY OF THIS AGREEMENT, ITS CONSTRUCTION,
INTERPRETATION, AND ENFORCEMENT, AND THE RIGHTS OF THE PARTIES HERETO SHALL BE
DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF CALIFORNIA. THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING
IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE
AND FEDERAL COURTS LOCATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA OR,
AT THE SOLE OPTION OF SECURED PARTY, IN ANY OTHER JURISDICTION IN WHICH THE
TRADEMARK COLLATERAL IS LOCATED IN CONNECTION WITH THE
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EXERCISE OF SECURED PARTY'S RIGHTS AND REMEDIES AS A SECURED CREDITOR WITH
RESPECT TO SUCH TRADEMARK COLLATERAL. EACH DEBTOR AND SECURED PARTY WAIVES, TO
THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE
DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 11.
EACH DEBTOR AND SECURED PARTY HEREBY WAIVE THEIR 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 TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. EACH DEBTOR AND SECURED PARTY REPRESENT THAT EACH HAS REVIEWED
THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
12. Entire Agreement; Amendment. This Agreement, together with the
Schedules hereto, contains the entire agreement of the parties with respect to
the subject matter hereof and supersedes all prior drafts and communications
relating to such subject matter. Neither this Agreement nor any provision hereof
may be modified, amended or waived except by the written agreement of the
parties as provided in the Loan Agreement. Notwithstanding the foregoing,
Secured Party may re-execute this Agreement or modify, amend or supplement the
Schedules hereto as provided in Section 6 hereof.
13. Severability. If one or more provisions contained in this Agreement
shall be invalid, illegal or unenforceable in any respect in any jurisdiction or
with respect to any party, such invalidity, illegality or unenforceability in
such jurisdiction or with respect to such party shall, to the fullest extent
permitted by applicable law, not invalidate or render illegal or unenforceable
any such provision in any other jurisdiction or with respect to any other party,
or any other provisions of this Agreement.
14. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute but one and the same agreement.
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15. Loan Agreement. Each Debtor acknowledges that the rights and
remedies of Secured Party with respect to the security interest in the Trademark
Collateral granted hereby are more fully set forth in the Loan Agreement, the
Guarantor Security Agreement, and the other Loan Documents and all such rights
and remedies are cumulative.
16. No Inconsistent Requirements. Each Debtor acknowledges that this
Agreement and the other Loan Documents may contain covenants and other terms and
provisions variously stated regarding the same or similar matters, and each
Debtor agrees that all such covenants, terms and provisions are cumulative and
all shall be performed and satisfied in accordance with their respective terms.
17. Termination. Upon the indefeasible payment in full of the Secured
Obligations, including the cash collateralization, expiration, or cancellation
of all Secured Obligations, if any, consisting of letters of credit, and the
full and final termination of any commitment to extend any financial
accommodations under the Loan Agreement, this Agreement shall terminate and
Secured Party shall execute and deliver such documents and instruments and take
such further action reasonably requested by the Debtors, at the Debtors'
expense, as shall be necessary to evidence termination of the security interest
granted by any Debtor to Secured Party hereunder.
18. Waivers.
(a) To the maximum extent permitted by law, each Debtor hereby
waives: (i) notice of acceptance hereof; (ii) notice of any loans or other
financial accommodations made or extended under the Loan Agreement, or the
creation or existence of any Obligations; (iii) notice of the amount of the
Obligations, subject, however, to Section 2.10 of the Loan Agreement and
Debtor's right to make inquiry of Secured Party to ascertain the amount of the
Obligations at any reasonable time; (iv) notice of any adverse change in the
financial condition of Borrower or of any other fact that might increase such
Debtor's risk hereunder; (v) notice of presentment for payment, demand, protest,
and notice thereof as to any instrument among the Loan Documents; (vi) notice of
any Default or Event of Default under the Loan Agreement; and (vii) all other
notices (except if such notice is specifically required to be given to such
Debtor under this Agreement) and demands to which such Debtor might otherwise be
entitled.
(b) To the fullest extent permitted by applicable law, each Debtor
waives the right by statute or otherwise to require Secured Party to institute
suit against Borrower or to exhaust any rights and remedies which Secured Party
has or may have against Borrower. Each Debtor further waives any defense arising
by reason of any disability or other defense (other than the defense that the
Obligations shall have been fully and finally indefeasibly paid) of Borrower or
by reason of the cessation from any cause (other than that the Obligations shall
have been fully and finally indefeasibly paid) whatsoever of the liability of
Borrower in respect thereof.
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(c) To the maximum extent permitted by law, each Debtor hereby
waives: (i) any rights to assert against Secured Party any defense (legal or
equitable), set-off, counterclaim, or claim which such Debtor may now or at any
time hereafter have against Borrower or any other party liable to Secured Party
on account of or with respect to the Obligations; (ii any defense, set-off,
counterclaim, or claim, of any kind or nature, arising directly or indirectly
from the present or future sufficiency, validity, or enforceability of the
Obligations; (iii) any defense arising by reason of any claim or defense based
upon an election of remedies by Secured Party including, to the extent
applicable, the provisions of Sections 580d and 726 of the California Code of
Civil Procedure, or any similar law of California or any other jurisdiction;
(iv) the benefit of any statute of limitations affecting any Debtor's liability
hereunder or the enforcement thereof.
(d) To the maximum extent permitted by law, each Debtor hereby
waives any right of subrogation that such Debtor has or may have as against any
other Debtor with respect to the Obligations. In addition, each Debtor hereby
waives any right to proceed against any other Debtor, now or hereafter, for
contribution, indemnity, reimbursement, or any other suretyship rights and
claims (irrespective of whether direct or indirect, liquidated or contingent),
with respect to the Obligations. Each Debtor also hereby waives any right to
proceed or to seek recourse against or with respect to any property or asset of
any other Debtor. As between any Debtor and Secured Party, each Debtor hereby
agrees that, in light of the waivers contained in this Section, such Debtor
shall not be deemed to be a "creditor" (as that term is defined in the
Bankruptcy Code or otherwise) of any other Debtor, whether for purposes of the
application of Sections 547 or 550 of the United States Bankruptcy Code or
otherwise.
(e) If any of the Secured Obligations at any time are secured by a
mortgage or deed of trust upon real property, Secured Party may elect, in its
sole discretion, upon a default with respect to the Secured Obligations, to
foreclose such mortgage or deed of trust judicially or nonjudicially in any
manner permitted by law, before or after enforcing this Agreement, without
diminishing or affecting the liability of any Debtor hereunder. Each Debtor
understands that (i) by virtue of the operation of California's antideficiency
law applicable to nonjudicial foreclosures, an election by Secured Party
nonjudicially to foreclose such a mortgage or deed of trust probably would have
the effect of impairing or destroying rights of subrogation, reimbursement,
contribution, or indemnity of such Debtor against Borrower or guarantors or
sureties, and (ii) absent the waiver given by such Debtor herein, such an
election might estop Secured Party from enforcing this Agreement against such
Debtor. Understanding the foregoing, and understanding that each Debtor is
hereby relinquishing a defense to the enforceability of this Agreement, each
Debtor hereby waives any right to assert against Secured Party any defense to
the enforcement of this Agreement, whether denominated "estoppel" or otherwise,
based on or arising from an election by Secured Party nonjudicially to foreclose
any such mortgage or deed of trust. Each Debtor understands that the effect of
the foregoing waiver may be that such Debtor may have liability hereunder for
amounts with respect to which such Debtor may be left without rights
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of subrogation, reimbursement, contribution, or indemnity against Borrower or
guarantors or sureties. Each Debtor also agrees that the "fair market value"
provisions of Section 580a of the California Code of Civil Procedure shall have
no applicability with respect to the determination of such Debtor's liability
under this Agreement.
(f) WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER OR OTHER
PROVISION SET FORTH IN THIS AGREEMENT, EACH DEBTOR HEREBY WAIVES, TO THE MAXIMUM
EXTENT SUCH WAIVER IS PERMITTED BY LAW, ANY AND ALL DEFENSES ARISING DIRECTLY OR
INDIRECTLY UNDER ANY ONE OR MORE OF CALIFORNIA CIVIL CODE Sections 2808, 2809,
2810, 2815, 2819, 2820, 2821, 2838, 2839, 2845, 2848, 2849, AND 2850, TO THE
EXTENT APPLICABLE, CALIFORNIA CODE OF CIVIL PROCEDURE Sections 580a, 580b, 580c,
580d, AND 726, AND, TO THE EXTENT APPLICABLE, CHAPTER 2 OF TITLE 14 OF THE
CALIFORNIA CIVIL CODE.
(g) WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER OR OTHER
PROVISION SET FORTH IN THIS AGREEMENT, EACH DEBTOR HEREBY WAIVES ALL RIGHTS AND
DEFENSES ARISING OUT OF AN ELECTION OF REMEDIES BY SECURED PARTY, EVEN THOUGH
THAT ELECTION OF REMEDIES, SUCH AS A NONJUDICIAL FORECLOSURE WITH RESPECT TO
SECURITY FOR A SECURED OBLIGATION, HAS DESTROYED SUCH DEBTOR'S RIGHTS OF
SUBROGATION AND REIMBURSEMENT AGAINST THE PRINCIPAL BY THE OPERATION OF SECTION
580d OF THE CODE OF CIVIL PROCEDURE OR OTHERWISE.
[remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, as of the date first above written.
FITZGERALDS GAMING CORPORATION, a
Nevada corporation
FITZGERALDS SOUTH, INC., a Nevada
corporation
FITZGERALDS MISSISSIPPI, INC., a
Mississippi corporation
FITZGERALDS LAS VEGAS, INC., a Nevada
corporation
FITZGERALDS FREMONT EXPERIENCE
CORPORATION, a Nevada corporation
FITZGERALDS RENO, INC., a Nevada
corporation
FITZGERALDS INCORPORATED, a Nevada
corporation
FITZGERALDS BLACK HAWK, INC., a
Nevada corporation
FITZGERALDS BLACK HAWK II, INC., a
Colorado corporation
101 MAIN STREET LIMITED LIABILITY
COMPANY, a Colorado limited liability
company
By /s/ MICHAEL E. McPHERSON
--------------------------------------
Name: Michael E. McPherson
Title: Senior Vice President,
Chief Financial Officer, Treasurer,
and Secretary of each of the
above-listed companies
FOOTHILL CAPITAL CORPORATION,
a California corporation
By /s/ BRIAN DUFFY
--------------------------------------
Title: President
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<PAGE> 14
STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
On October 29, 1998, before me, Kiersten Polk, Notary Public, personally
appeared Brian Duffy, 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.
/s/ KIERSTEN POLK
-----------------------
Signature
[SEAL] KIERSTEN POLK
Commission #1100940
Notary Public--California
Los Angeles County
My Comm. Expires Jun 14, 2000
STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
On October 29, 1998, before me, Kiersten Polk, Notary Public, personally
appeared Michael E. McPherson, 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 executed the
same in his authorized capacity(ies), and that by his 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.
/s/ KIERSTEN POLK
-----------------------
Signature
[SEAL] KIERSTEN POLK
Commission #1100940
Notary Public--California
Los Angeles County
My Comm. Expires Jun 14, 2000
-14-
<PAGE> 15
SCHEDULE 7(a)
SCHEDULE TO TRADEMARK SECURITY AGREEMENT
Fitzgeralds Gaming Corporation ("FGC")
Fitzgeralds Reno, Inc. ("FRI")
1. FGC Trademarks schedule (as at 10/28/98)
2. FGC State of Nevada Trademarks schedule (as at 11/28/97)
3. FRI State of Nevada Trademarks schedule (as at 11/28/97)
1
<PAGE> 1
EXHIBIT 10.8
COPYRIGHT SECURITY AGREEMENT
THIS COPYRIGHT SECURITY AGREEMENT (this "Agreement"), dated as of
October 29, 1998, is made by each of FITZGERALDS GAMING CORPORATION, a Nevada
corporation, FITZGERALDS SOUTH, INC., a Nevada corporation, FITZGERALDS
MISSISSIPPI, INC., a Mississippi corporation, FITZGERALDS LAS VEGAS, INC., a
Nevada corporation, FITZGERALDS FREMONT EXPERIENCE CORPORATION, a Nevada
corporation, FITZGERALDS RENO, INC., a Nevada corporation, FITZGERALDS
INCORPORATED, a Nevada corporation, FITZGERALDS BLACK HAWK, INC., a Nevada
corporation, FITZGERALDS BLACK HAWK II, INC., a Colorado corporation, and 101
MAIN STREET LIMITED LIABILITY COMPANY, a Colorado limited liability company
(individually, a "Debtor", and collectively and jointly and severally, the
"Debtors"), in favor of FOOTHILL CAPITAL CORPORATION, a California corporation
("Secured Party").
RECITALS
A. Borrower and Secured Party have entered into that certain Loan
and Security Agreement, dated as of even date herewith (as amended, restated,
supplemented, modified, renewed, extended, or refinanced from time to time, the
"Loan Agreement"), pursuant to which Secured Party has agreed to make certain
financial accommodations to Borrower, and Borrower has granted to Secured Party
a security interest in (among other things) all or substantially all of the
general intangibles of Borrower (but excluding the Excluded Assets).
B. Each of the Debtors other than Borrower and Secured Party have
entered into the Guarantor Security Agreement, pursuant to which each such
Debtor has granted to Secured Party a security interest in (among other things)
all or substantially all of the general intangibles of such Debtor (but
excluding the Excluded Assets).
C. Pursuant to the Loan Agreement and as one of the conditions
precedent to the obligations of Secured Party under the Loan Agreement, each
Debtor has agreed to execute and deliver this Agreement to Secured Party for
filing with the United States Copyright Office and with any other relevant
recording systems in any domestic or foreign jurisdiction, and as further
evidence of and to effectuate Secured Party's existing security interests in the
Copyright Collateral.
ASSIGNMENT
NOW, THEREFORE, for valuable consideration, the receipt and
adequacy of which is hereby acknowledged, each Debtor hereby agrees in favor of
Secured Party as follows:
1. Definitions; Interpretation.
(a) Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
1.
<PAGE> 2
"Borrower" means Fitzgeralds Gaming Corporation, a Nevada
corporation.
"Copyright Collateral" has the meaning set forth in Section 2.
"Copyrights" has the meaning set forth in Section 2.
"Secured Obligations" means all liabilities, obligations, or
undertakings owing by each Debtor to Secured Party of any kind or description
arising out of or outstanding under, advanced or issued pursuant to, or
evidenced by the Loan Agreement, the other Loan Documents, or this Agreement,
irrespective of whether for the payment of money, whether direct or indirect,
absolute or contingent, due or to become due, voluntary or involuntary, whether
now existing or hereafter arising, and including all interest (including
interest that accrues after the filing of a case under the Bankruptcy Code) and
any and all costs, fees (including attorneys fees), and expenses which any one
or more of the Debtors is required to pay pursuant to any of the foregoing, by
law, or otherwise.
"UCC" means the Uniform Commercial Code as in effect from time to
time in the State of California.
"United States" and "U.S." each mean the United States of
America.
(b) Terms Defined in UCC. Where applicable and except as
otherwise defined herein, terms used in this Agreement shall have the meanings
ascribed to them in the UCC.
(c) Interpretation. In this Agreement, except to the
extent the context otherwise requires:
(i) Any reference to a Section or a Schedule is
a reference to a section hereof, or a schedule hereto, respectively, and
to a subsection or a clause is, unless otherwise stated, a reference to
a subsection or a clause of the Section or subsection in which the
reference appears.
(ii) The words "hereof," "herein," "hereto,"
"hereunder" and the like mean and refer to this Agreement as a whole and
not merely to the specific Section, subsection, paragraph or clause in
which the respective word appears.
(iii) The meaning of defined terms shall be
equally applicable to both the singular and plural forms of the terms
defined.
(iv) The words "including," "includes" and
"include" shall be deemed to be followed by the words "without
limitation."
(v) References to agreements and other
contractual instruments shall be deemed to include all subsequent
amendments and other modifications thereto.
2.
<PAGE> 3
(vi) References to statutes or regulations are to
be construed as including all statutory and regulatory provisions
consolidating, amending or replacing the statute or regulation referred
to.
(vii) Any captions and headings are for
convenience of reference only and shall not affect the construction of
this Agreement.
(viii) Capitalized words not otherwise defined
herein shall have the respective meanings ascribed to them in the Loan
Agreement.
(ix) In the event of a direct conflict between
the terms and provisions of this Agreement and the Loan Agreement, it is
the intention of the parties hereto that both such documents shall be
read together and construed, to the fullest extent possible, to be in
concert with each other. In the event of any actual, irreconcilable
conflict that cannot be resolved as aforesaid, the terms and provisions
of the Loan Agreement shall control and govern; provided, however, that
the inclusion herein of additional obligations on the part of any Debtor
or Secured Party and supplemental rights and remedies in favor of
Secured Party (whether under California law or applicable federal law),
in each case in respect of the Copyright Collateral, shall not be deemed
a conflict with the Loan Agreement.
2. Assignment and Grant of Security. As security for the payment
and performance of the Secured Obligations, each Debtor hereby assigns,
transfers, conveys, and grants a security interest to Secured Party in, all of
such Debtor's right, title and interest in, to and under the following property,
whether now existing or hereafter acquired or arising or in which that Debtor
now has or hereafter acquires or develops an interest and wherever the same may
be located (the "Copyright Collateral"):
(a) all copyrights, rights, titles and interests in and
to published and unpublished works of authorship that that Debtor owns or uses
in its business or will in the future adopt and so use, and all copyrights in
any original or derivative works of authorship and all works protectable by
copyright that are presently, or in the future may be, owned, created, authored
(as a work for hire), acquired or used (whether pursuant to a license or
otherwise) by that Debtor, in whole or in part (collectively, the "Copyrights"),
all copyright registrations and applications for copyright registration that
have heretofore been or may hereafter be issued thereon or applied for in the
United States or throughout the world, including registrations, recordings,
supplemental registrations and pending applications for registration in the
United States Copyright Office (the "Registrations"), all common law and other
rights in and to the Copyrights throughout the world, including all copyright
licenses (unless otherwise prohibited by any license or related licensing
agreement under circumstances where the granting of the security interest would
have the effect under applicable law of the termination or permitting
termination of the license for breach and where the licensor is not an affiliate
of a Debtor) (collectively, the "Copyright Rights"), and all renewals and
extensions thereof, throughout the world, including all proceeds thereof (such
as, by way of example and not by limitation, license royalties and proceeds of
infringement suits), the right (but not the obligation) to renew and extend such
Copyrights, Registrations and Copyright Rights and to register works protectable
3.
<PAGE> 4
by copyright and the right (but not the obligation) to sue or bring opposition
or cancellation proceedings in the name of that Debtor or in the name of Secured
Party for past, present and future infringements or violations of the
Copyrights, Registrations and Copyright Rights, and recover damages for past,
present and future infringements or violations thereof, and all rights
corresponding thereto throughout the world, including:
(i) all of that Debtor's right, title and interest
in and to all copyrights or rights or interests in copyrights
registered or recorded in the United States Copyright Office,
including the Registrations listed on Schedule A attached hereto,
as the same may be amended or supplemented pursuant hereto from
time to time;
(ii) all of that Debtor's right, title and interest
in and to all renewals and extensions of any such copyrights,
including renewals or extensions of the Registrations listed on
Schedule A attached hereto, that may be secured under the law now
or hereafter in force and effect;
(iii) all of that Debtor's right, title and
interest to make and exploit all derivative works based on or
adopted from all works covered by any of the Copyright
Collateral; and
(iv) all of that Debtor's right, title and interest
pursuant to or under licensing or other contracts in favor of
that Debtor pertaining to copyrights and works protectable by
copyright presently or in the future owned or used by third
parties (unless otherwise prohibited by any license or related
licensing agreement under circumstances where the granting of the
security interest would have the effect under applicable law of
the termination or permitting termination of the license for
breach);
(b) all inventions, designs, registrations, trade secrets,
proprietary rights, corporate or other business records, computer programs,
source codes, object codes, data bases and all other intangible personal
property at any time used in connection with the businesses of the Debtors
(referred to herein as "Proprietary Rights");
(c) all general intangibles (as defined in the UCC) and
all intangible intellectual or other similar property of that Debtor of any kind
or nature, whether now owned or hereafter acquired or developed, associated with
or arising out of any of the Copyrights, Registrations, Copyright Rights or
Proprietary Rights and not otherwise described above; and
(d) all proceeds of any and all of the foregoing Copyright
Collateral (including license royalties, rights to payment, accounts receivable
and proceeds of infringement suits) and, to the extent not otherwise included,
all payments under insurance (whether or not Secured Party is the loss payee
thereof) or any indemnity, warranty or guaranty payable by reason of loss or
damage to or otherwise with respect to the foregoing Copyright Collateral. For
purposes of this Agreement, the term "proceeds" includes whatever is receivable
or received when Copyright Collateral or proceeds are sold, collected, exchanged
or otherwise disposed of,
4.
<PAGE> 5
whether such disposition is voluntary or involuntary, and includes, without
limitation, all rights to payment, including returned premiums, with respect to
any insurance relating thereto.
Anything in the Loan Documents to the contrary notwithstanding, the Copyright
Collateral shall not include the Excluded Assets.
Each Debtor agrees that this Agreement shall create a continuing security
interest in the Copyright Collateral which shall remain in effect until
terminated in accordance with Section 17.
3. Representations and Warranties. Each Debtor represents and
warrants to Secured Party and for the benefit of Secured Party the following:
(a) True and Complete List. Set forth in Schedule A is a
true and complete list of all Copyrights, Registrations in the United States
Copyright Office, and applications for Registrations in the United States
Copyright Office owned by that Debtor or held (whether pursuant to a license or
otherwise) or used in conducting its business, in whole or in part;
(b) Powers. That Debtor has full power, authority and
legal right to pledge and to grant to Secured Party a security interest in all
of the Copyright Collateral pursuant to this Agreement, and to execute, deliver
and perform its obligations in accordance with the terms of this Agreement,
without the consent or approval of any other Person except as already obtained;
(c) Validity. Each of the Copyrights referred to in
Schedule A is valid, subsisting and enforceable, and that Debtor has properly
complied with all applicable statutory and regulatory requirements, including
all notice requirements, in connection with each of such Copyrights, and, except
as set forth on Schedule 5.10 to the Loan Agreement, no claim has been made that
the use of any of such Copyrights does or may infringe or otherwise violate the
rights of any third Person;
(d) Title. That Debtor has rights in and good title to the
Copyright Collateral shown on the schedules hereto as being owned by it, is the
sole and exclusive owner of the entire and unencumbered right, title and
interest in and to such Copyright Collateral, free and clear of any Liens,
including pledges, agreements, licenses, registered user agreements and
covenants by that Debtor not to sue third Persons (other than Liens in favor of
Secured Party and, subject to the Intercreditor Agreement, Liens in favor of the
Indenture Trustee relative to the Senior Note Documents); for any Copyright
Collateral for which that Debtor is either a licensor or a licensee pursuant to
a license or licensing agreement regarding such Copyright Collateral, each such
license or licensing agreement is in full force and effect, that Debtor is not
in default of any of its obligations thereunder and other than the parties to
such licenses or licensing agreements, no other Person has any rights in or to
any of such Copyright Collateral;
(e) No Violation. The execution, delivery and performance
by Debtor of this Agreement do not violate any provision of law or the articles
of incorporation or by-laws of that Debtor or result in a breach of or
constitute a default under any contract, obligation,
5.
<PAGE> 6
indenture or other instrument to which that Debtor is a party or by which that
Debtor may be bound;
(f) Authorization. This Agreement has been duly
authorized, executed and delivered, and constitutes a legal, valid and binding
agreement of that Debtor enforceable in accordance with its terms; and
(g) Secrecy. That Debtor has taken and will continue to
take all reasonable steps to protect the secrecy of all material trade secrets
relating to any of its unpublished Copyright Collateral and its Proprietary
Rights.
4. Covenants. Each Debtor covenants that so long as this
Agreement shall be in effect, that Debtor shall:
(a) Further Acts. On a continuing basis, make, execute,
acknowledge and deliver, and file and record in the proper filing and recording
places, all such instruments and documents, including appropriate financing and
continuation statements and security agreements, and take all such action as may
be reasonably necessary or advisable or may be reasonably requested by Secured
Party to carry out the intent and purposes of this Agreement, or for assuring,
confirming or protecting the grant or perfection of the security interest
granted or purported to be granted hereby, to ensure that Debtor's compliance
with this Agreement or to enable Secured Party to exercise and enforce its
rights and remedies hereunder with respect to the Copyright Collateral. Without
limiting the generality of the foregoing sentence, each Debtor:
(i) authorizes Secured Party in its sole discretion
after ten (10) days prior notice to that Debtor, to modify this
Agreement without first obtaining that Debtor's approval of or
signature to such modification by amending Schedule A hereof to
include a reference to any right, title or interest in any
existing Copyright, Registration or Copyright Right or any
Copyright, Registration or Copyright Right acquired or developed
by that Debtor after the execution hereof, or to delete any
reference to any right, title or interest in any Copyright,
Registration or Copyright Right in which that Debtor no longer
has or claims any right, title or interest; and
(ii) hereby authorizes Secured Party, in its sole
discretion, to file one or more financing or continuation
statements, and after ten (10) days prior notice to that Debtor,
amendments thereto, relative to all or any portion of the
Copyright Collateral without the signature of that Debtor where
permitted by law;
(b) Compliance with Law. Comply, in all material respects,
with all applicable statutory and regulatory requirements in connection with any
and all of the Copyright Collateral that is the subject of the Registrations and
give such notice of copyright, prosecute such material claims, keep such
confidentiality and do all other acts and take all other measures which may be
necessary or desirable to preserve, protect and maintain such Copyright
Collateral
6.
<PAGE> 7
and all of that Debtor's rights therein, including diligently prosecute any
material copyright application pending as of the date of this Agreement or
thereafter;
(c) Compliance with Agreement. Comply with each of the
terms and provisions of this Agreement, and not enter into any agreement (for
example, a license agreement) which is inconsistent with the obligations of that
Debtor under this Agreement without Secured Party's prior written consent; and
(d) Lien Protection. Not permit the inclusion in any
contract to which that Debtor becomes a party of any provision that could or
might impair or prevent the creation of a security interest in favor of Secured
Party in that Debtor's rights and interest in any property included within the
definitions of the Copyrights, Registrations and Copyright Rights acquired under
such contracts.
5. New Copyrights, Registrations and Copyright Rights. If any
Debtor shall obtain rights to or develop any new works protectable by copyright,
or become entitled to the benefit of any Copyright Rights, Registration or
application for Registration not described on the schedules hereto, or any
renewals or extension of any Copyright, Copyright Rights or Registration, the
provisions of this Agreement shall automatically apply thereto. Each Debtor
shall give Secured Party written notice (a) of any such work or such rights of
material value to that Debtor or the operation of its businesses and (b) any
such Registration, applications for Registration or renewal or extension of any
Copyright. Concurrently with or promptly after the filing of an application for
any Registration for any Copyright, each Debtor shall execute and deliver a
Copyright Security Agreement substantially in the form of this Agreement and
otherwise in form and substance satisfactory to the Secured Party, pursuant to
which Debtor shall grant and reaffirm its grant of a security interest to the
extent of its interest in such Registration as provided herein to Secured Party,
and each Debtor shall cause such agreement to be recorded in the offices and
jurisdictions indicated by Secured Party.
6. Copyright Registration, Renewal and Litigation.
(a) Registration. Each Debtor shall have the duty
diligently to make any application for Registration on any existing or future
unregistered but copyrightable material works and to do any and all acts which
are reasonably necessary or desirable to preserve, renew and maintain all rights
in all Copyrights, Registrations and Copyright Rights; provided, however, that
no Debtor shall be obligated to renew any Copyrights, Registrations or Copyright
Rights covering any products that that Debtor has not sold, licensed or used in
its business for the previous five (5) years and which are of nominal commercial
value or covering any products that are immaterial to that Debtor's business
operations. Any expenses incurred in connection therewith shall be borne solely
by that Debtor. Except as otherwise permitted in this Section 6(a), Debtor shall
not do any act or omit to do any act whereby any of the Copyright Collateral may
become abandoned or fall into the public domain or fail to renew any Copyright,
Registration or Copyright Right owned by that Debtor without the prior written
consent of Secured Party.
7.
<PAGE> 8
(b) Protection. Except as provided in Section 8 and
notwithstanding Section 1, each Debtor shall have the right and obligation to
commence and diligently prosecute in its own name, as real party in interest,
for its own benefit and at its own expense, such suits, proceedings or other
actions for material infringement or other damage as are in its reasonable
business judgment necessary to protect the Copyright Collateral or any of that
Debtor's rights therein. Each Debtor shall provide to Secured Party any
information with respect thereto requested by Secured Party. Secured Party shall
provide at that Debtor's expense all necessary cooperation in connection with
any such suit, proceeding or action including joining as a nominal party if
Secured Party shall have been satisfied that it is not incurring any risk of
liability because of such joinder. Each Debtor shall provide at its expense
representation acceptable to Secured Party for the common interest of that
Debtor and Secured Party with respect to such proceedings.
(c) Notice. Each Debtor shall, promptly upon its becoming
aware thereof, notify Secured Party in writing of the institution of, or any
adverse determination in, any proceeding, application, suit or action of any
kind described in Section 6(a) or 6(b), or regarding any Debtor's claim of
ownership in any of the Copyrights, Registrations or Copyright Rights, its right
to register the same, or its right to keep and maintain such registration,
whether before the United States Copyright Office or any United States or
foreign court or governmental agency. Each Debtor shall provide promptly to
Secured Party any information with respect thereto requested from time to time
by Secured Party.
7. Events of Default. The occurrence of any "Event of Default"
under the Loan Agreement or any other Loan Document shall constitute an Event of
Default hereunder.
8. Remedies. Following the occurrence and during the continuation
of an Event of Default, Secured Party shall have all rights and remedies
available to it under the Loan Agreement and the other Loan Documents and
applicable law (which rights and remedies are cumulative) with respect to its
security interests in any of the Copyright Collateral or any other collateral.
Each Debtor agrees that such rights and remedies include the right of Secured
Party as a secured party to sell or otherwise dispose of its collateral after
default, pursuant to UCC Section 9504. Each Debtor agrees that Secured Party
shall at all times have such royalty free licenses, to the extent permitted by
law, for any Copyright, Copyright Rights, Proprietary Right and any other
Copyright Collateral that is reasonably necessary to permit the exercise of any
of Secured Party's rights or remedies upon or after the occurrence of (and
during the occurrence of) an Event of Default with respect to (among other
things) any tangible asset of the Debtors in which Secured Party has a security
interest, including Secured Party's rights to sell inventory, tooling or
packaging which is acquired by the Debtors (or their respective successors,
permitted assignees, or trustees in bankruptcy). In addition to and without
limiting any of the foregoing, upon the occurrence and during the continuance of
an Event of Default, Secured Party shall have the right but shall in no way be
obligated to bring suit, or to take such other action as Secured Party deems
necessary or advisable, in the name of any Debtor or Secured Party, to enforce
or protect any Copyright, Registration, Copyright Right or Proprietary Right,
and any license thereunder, in which event each Debtor shall, at the request of
Secured Party, do any and all lawful acts and execute any and all documents
required by Secured Party in aid of such enforcement. To the extent that Secured
Party shall elect not to bring suit to enforce a material
8.
<PAGE> 9
item or portion of any Copyright, Registration, Copyright Rights, Proprietary
Right, or any license thereunder (and unless Secured Party otherwise agrees in
writing), each Debtor agrees to use all reasonable measures and its diligent
efforts, whether by action, suit, proceeding or otherwise, to prevent the
material infringement, misappropriation or violation thereof by others and for
that purpose agrees diligently to maintain any action, suit or proceeding
against any Person necessary to prevent such material infringement,
misappropriation or violation.
9. Authorization. If any Debtor fails to comply with any of its
obligations hereunder, Secured Party may do so in that Debtor's name or in
Secured Party's name, but at that Debtor's expense, and each Debtor hereby
agrees to reimburse Secured Party in full upon demand for all expenses,
including attorneys fees, incurred by Secured Party in protecting, defending and
maintaining any of the Copyright Collateral or any right, title or interest of
any Debtor or Secured Party therein. Each Debtor hereby appoints Secured Party,
and authorizes, directs and empowers Secured Party to make, constitute and
appoint any officer or agent of Secured Party as Secured Party may select, in
its exclusive discretion, as the true and lawful attorney-in-fact of that
Debtor, with the power (a) to execute in the name of that Debtor any financing
statement or other instrument and any modification, supplement or amendment to
this Agreement or any supplemental Copyright Security Agreement described in
Sections 4(a) or 5 hereof, and do such other acts on that Debtor's behalf, that
Secured Party may deem necessary or advisable to accomplish the purposes hereof,
and (b) upon and after the occurrence and continuation of any Event of Default,
(i) to endorse that Debtor's name on all applications, documents, papers and
instruments necessary for Secured Party to use any of the Copyright Collateral,
and (ii) to grant or issue any exclusive or nonexclusive license under any of
the Copyright Collateral to anyone else, or as may be necessary for Secured
Party to assign, pledge, convey or otherwise transfer title in or dispose of any
of the Copyright Collateral or any other collateral to anyone else. Each Debtor
hereby ratifies all that such attorney shall lawfully do or cause to be done by
virtue hereof. This power of attorney is coupled with an interest and is
irrevocable until termination of this Agreement.
10. Notices. All notices and other communications hereunder to or
from Secured Party or any one or more of the Debtors shall be in writing and
shall be mailed, sent or delivered in accordance with the Loan Agreement.
11. GOVERNING LAW AND VENUE; JURY TRIAL WAIVER. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE
ASSIGNMENT AND SECURITY INTERESTS HEREUNDER IN RESPECT OF ANY PROPERTY ARE
GOVERNED BY FEDERAL LAW, IN WHICH CASE SUCH CHOICE OF CALIFORNIA LAW SHALL NOT
BE DEEMED TO DEPRIVE SECURED PARTY OF SUCH RIGHTS AND REMEDIES AS MAY BE
AVAILABLE UNDER FEDERAL LAW. THE VALIDITY OF THIS AGREEMENT, ITS CONSTRUCTION,
INTERPRETATION, AND ENFORCEMENT, AND THE RIGHTS OF THE PARTIES HERETO SHALL BE
DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF CALIFORNIA. THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING
IN CONNECTION WITH THIS AGREEMENT
9.
<PAGE> 10
SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE
COUNTY OF LOS ANGELES, STATE OF CALIFORNIA OR, AT THE SOLE OPTION OF SECURED
PARTY, IN ANY OTHER JURISDICTION IN WHICH THE COPYRIGHT COLLATERAL IS LOCATED IN
CONNECTION WITH THE EXERCISE OF SECURED PARTY'S RIGHTS AND REMEDIES AS A SECURED
CREDITOR WITH RESPECT TO SUCH COPYRIGHT COLLATERAL. EACH DEBTOR AND SECURED
PARTY WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY
HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE
EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 11.
EACH DEBTOR AND SECURED PARTY HEREBY WAIVE THEIR
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 TRANSACTIONS CONTEMPLATED HEREIN,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW OR STATUTORY CLAIMS. EACH DEBTOR AND SECURED PARTY REPRESENT THAT
EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
12. Entire Agreement; Amendment. This Agreement, together with
the Schedules hereto, contains the entire agreement of the parties with respect
to the subject matter hereof and supersedes all prior drafts and communications
relating to such subject matter. Neither this Agreement nor any provision hereof
may be modified, amended or waived except by the written agreement of the
parties, as provided in the Loan Agreement. Notwithstanding the foregoing,
Secured Party may re-execute this Agreement, modify, amend or supplement the
Schedules hereto or execute a supplemental Copyright Security Agreement, as
provided herein, and the terms of any such modification, amendment, supplement
or supplemental Copyright Security Agreement shall be deemed to be incorporated
herein by this reference.
13. Severability. If one or more provisions contained in this
Agreement shall be invalid, illegal or unenforceable in any respect in any
jurisdiction or with respect to any party, such invalidity, illegality or
unenforceability in such jurisdiction or with respect to such party shall, to
the fullest extent permitted by applicable law, not invalidate or render illegal
or unenforceable any such provision in any other jurisdiction or with respect to
any other party, or any other provisions of this Agreement.
14. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute but one and the same agreement.
10.
<PAGE> 11
15. Loan Agreement. Each Debtor acknowledges that the rights and
remedies of Secured Party with respect to the security interest in the Copyright
Collateral granted hereby are more fully set forth in the Loan Agreement, the
Guarantor Security Agreement, and the applicable other Loan Documents and all
such rights and remedies are cumulative.
16. No Inconsistent Requirements. Each Debtor acknowledges that
this Agreement and the other Loan Documents may contain covenants and other
terms and provisions variously stated regarding the same or similar matters, and
each Debtor agrees that all such covenants, terms and provisions are cumulative
and all shall be performed and satisfied in accordance with their respective
terms.
17. Termination. Upon the indefeasible payment in full of the
Secured Obligations, including the cash collateralization, expiration, or
cancellation of all Secured Obligations, if any, consisting of letters of
credit, and the full and final termination of any commitment to extend any
financial accommodations under the Loan Agreement, this Agreement shall
terminate and Secured Party shall execute and deliver such documents and
instruments and take such further action reasonably requested by any Debtor and
at that Debtor's expense as shall be necessary to evidence termination of the
security interest granted by that Debtor to Secured Party hereunder.
18. Waivers.
(a) To the maximum extent permitted by law, each Debtor
hereby waives: (i) notice of acceptance hereof; (ii) notice of any loans or
other financial accommodations made or extended under the Loan Agreement, or the
creation or existence of any Obligations; (iii) notice of the amount of the
Obligations, subject, however, to Section 2.10 of the Loan Agreement and
Debtor's right to make inquiry of Secured Party to ascertain the amount of the
Obligations at any reasonable time; (iv) notice of any adverse change in the
financial condition of Borrower or of any other fact that might increase such
Debtor's risk hereunder; (v) notice of presentment for payment, demand, protest,
and notice thereof as to any instrument among the Loan Documents; (vi) notice of
any Default or Event of Default under the Loan Agreement; and (vii) all other
notices (except if such notice is specifically required to be given to such
Debtor under this Agreement) and demands to which such Debtor might otherwise be
entitled.
(b) To the fullest extent permitted by applicable law,
each Debtor waives the right by statute or otherwise to require Secured Party to
institute suit against Borrower or to exhaust any rights and remedies which
Secured Party has or may have against Borrower. Each Debtor further waives any
defense arising by reason of any disability or other defense (other than the
defense that the Obligations shall have been fully and finally indefeasibly
paid) of Borrower or by reason of the cessation from any cause (other than that
the Obligations shall have been fully and finally indefeasibly paid) whatsoever
of the liability of Borrower in respect thereof.
(c) To the maximum extent permitted by law, each Debtor
hereby waives: (i) any rights to assert against Secured Party any defense (legal
or equitable), set-off,
11.
<PAGE> 12
counterclaim, or claim which such Debtor may now or at any time hereafter have
against Borrower or any other party liable to Secured Party on account of or
with respect to the Obligations; (ii) any defense, set-off, counterclaim, or
claim, of any kind or nature, arising directly or indirectly from the present or
future sufficiency, validity, or enforceability of the Obligations; (iii) any
defense arising by reason of any claim or defense based upon an election of
remedies by Secured Party including, to the extent applicable, the provisions of
Sections 580d and 726 of the California Code of Civil Procedure, or any
similar law of California or any other jurisdiction; (iv) the benefit of any
statute of limitations affecting any Debtor's liability hereunder or the
enforcement thereof.
(d) To the maximum extent permitted by law, each Debtor
hereby waives any right of subrogation that such Debtor has or may have as
against any other Debtor with respect to the Obligations. In addition, each
Debtor hereby waives any right to proceed against any other Debtor, now or
hereafter, for contribution, indemnity, reimbursement, or any other suretyship
rights and claims (irrespective of whether direct or indirect, liquidated or
contingent), with respect to the Obligations. Each Debtor also hereby waives any
right to proceed or to seek recourse against or with respect to any property or
asset of any other Debtor. As between any Debtor and Secured Party, each Debtor
hereby agrees that, in light of the waivers contained in this Section, such
Debtor shall not be deemed to be a "creditor" (as that term is defined in the
Bankruptcy Code or otherwise) of any other Debtor, whether for purposes of the
application of Sections 547 or 550 of the United States Bankruptcy Code or
otherwise.
(e) If any of the Secured Obligations at any time are
secured by a mortgage or deed of trust upon real property, Secured Party may
elect, in its sole discretion, upon a default with respect to the Secured
Obligations, to foreclose such mortgage or deed of trust judicially or
nonjudicially in any manner permitted by law, before or after enforcing this
Agreement, without diminishing or affecting the liability of any Debtor
hereunder. Each Debtor understands that (i) by virtue of the operation of
California's antideficiency law applicable to nonjudicial foreclosures, an
election by Secured Party nonjudicially to foreclose such a mortgage or deed of
trust probably would have the effect of impairing or destroying rights of
subrogation, reimbursement, contribution, or indemnity of such Debtor against
Borrower or guarantors or sureties, and (ii) absent the waiver given by such
Debtor herein, such an election might estop Secured Party from enforcing this
Agreement against such Debtor. Understanding the foregoing, and understanding
that each Debtor is hereby relinquishing a defense to the enforceability of this
Agreement, each Debtor hereby waives any right to assert against Secured Party
any defense to the enforcement of this Agreement, whether denominated "estoppel"
or otherwise, based on or arising from an election by Secured Party
nonjudicially to foreclose any such mortgage or deed of trust. Each Debtor
understands that the effect of the foregoing waiver may be that such Debtor may
have liability hereunder for amounts with respect to which such Debtor may be
left without rights of subrogation, reimbursement, contribution, or indemnity
against Borrower or guarantors or sureties. Each Debtor also agrees that the
"fair market value" provisions of Section 580a of the California Code of Civil
Procedure shall have no applicability with respect to the determination of such
Debtor's liability under this Agreement.
(f) WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER OR
OTHER PROVISION SET FORTH IN THIS AGREEMENT, EACH
12.
<PAGE> 13
DEBTOR HEREBY WAIVES, TO THE MAXIMUM EXTENT SUCH WAIVER IS PERMITTED BY LAW, ANY
AND ALL DEFENSES ARISING DIRECTLY OR INDIRECTLY UNDER ANY ONE OR MORE OF
CALIFORNIA CIVIL CODE SECTIONS 2808, 2809, 2810, 2815, 2819, 2820, 2821, 2838,
2839, 2845, 2848, 2849, AND 2850, TO THE EXTENT APPLICABLE, CALIFORNIA CODE OF
CIVIL PROCEDURE SECTIONS 580A, 580B, 580C, 580D, AND 726, AND, TO THE EXTENT
APPLICABLE, CHAPTER 2 OF TITLE 14 OF THE CALIFORNIA CIVIL CODE.
(g) WITHOUT LIMITING THE GENERALITY OF ANY OTHER
WAIVER OR OTHER PROVISION SET FORTH IN THIS AGREEMENT, EACH DEBTOR HEREBY WAIVES
ALL RIGHTS AND DEFENSES ARISING OUT OF AN ELECTION OF REMEDIES BY SECURED PARTY,
EVEN THOUGH THAT ELECTION OF REMEDIES, SUCH AS A NONJUDICIAL FORECLOSURE WITH
RESPECT TO SECURITY FOR A SECURED OBLIGATION, HAS DESTROYED SUCH DEBTOR'S RIGHTS
OF SUBROGATION AND REIMBURSEMENT AGAINST THE PRINCIPAL BY THE OPERATION OF
SECTION 580D OF THE CODE OF CIVIL PROCEDURE OR OTHERWISE.
[remainder of page intentionally left blank]
13.
<PAGE> 14
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, as of the date first above written.
FITZGERALDS GAMING
CORPORATION, a Nevada
corporation FITZGERALDS
SOUTH, INC., a Nevada
corporation FITZGERALDS
MISSISSIPPI, INC., a
Mississippi corporation
FITZGERALDS LAS VEGAS, INC.,
a Nevada corporation
FITZGERALDS FREMONT
EXPERIENCE CORPORATION, a
Nevada corporation
FITZGERALDS RENO, INC., a
Nevada corporation
FITZGERALDS INCORPORATED, a
Nevada corporation
FITZGERALDS BLACK HAWK, INC.,
a Nevada corporation
FITZGERALDS BLACK HAWK II,
INC., a Colorado corporation
101 MAIN STREET LIMITED
LIABILITY COMPANY, a Colorado
limited liability company
By /s/ MICHAEL E. MCPHERSON
-------------------------------
Name: Michael E. McPherson
Title: Senior Vice President, Chief Financial
Officer, Treasurer, and Secretary of each of
the above-listed companies
FOOTHILL CAPITAL CORPORATION,
a California corporation
By /s/ BRIAN DUFFY
------------------------------
Title: Vice President
--------------------------
14.
<PAGE> 15
STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
On Oct. 29, 1998, before me, Kiersten Polk , Notary Public, personally
appeared Brian Duffy, 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.
/s/ KIERSTEN POLK KIERSTEN POLK
----------------------- Commission #1100940
Signature Notary Public-California
Los Angeles County
[SEAL] My Comm, Expires Jun 14, 2000
STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
On Oct. 29, 1998, before me, Kiersten Polk, Notary Public, personally
appeared Michael E. McPherson, 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 executed the
same in his authorized capacity(ies), and that by his 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.
/s/ KIERSTEN POLK KIERSTEN POLK
------------------------- Commission #1100940
Signature Notary Public-California
Los Angeles County
[SEAL] My Comm, Expires Jun 14, 2000
<PAGE> 16
SCHEDULE 8 (a)
SCHEDULE TO COPYRIGHT SECURITY AGREEMENT
Fitzgeralds Gaming Corporation
Fitzgeralds Las Vegas, Inc.
1. FGC Copyright schedule
2. FLVI Copyright schedule
1
<PAGE> 17
SCHEDULE TO COPYRIGHT
<TABLE>
<CAPTION>
Title of Work Reg. No. Recorder Owner
- ------------- -------- --------------
<S> <C> <C>
People of Fitzgeralds TX3389710 Fitzgeralds Gaming Corp.
(also known as, "Fitzgeralds (by assignment from
Creed" and "We the People Fitzgeralds Las Vegas, L.P.
of Fitzgeralds") on 11/27/95 v. 3180 p.142)
Keno Ticket TXU661930 Fitzgeralds Las Vegas, Inc.
</TABLE>
<PAGE> 1
EXHIBIT 10.9
ENVIRONMENTAL INDEMNITY
TO: FOOTHILL CAPITAL CORPORATION, a California corporation
This ENVIRONMENTAL INDEMNITY ("Indemnity"), dated as of October
29, 1998, is made by FITZGERALDS GAMING CORPORATION, a Nevada corporation,
FITZGERALDS SOUTH, INC., a Nevada corporation, FITZGERALDS MISSISSIPPI, INC., a
Mississippi corporation, FITZGERALDS LAS VEGAS, INC., a Nevada corporation,
FITZGERALDS FREMONT EXPERIENCE CORPORATION, a Nevada corporation, FITZGERALDS
RENO, INC., a Nevada corporation, FITZGERALDS INCORPORATED, a Nevada
corporation, FITZGERALDS BLACK HAWK, INC., a Nevada corporation, FITZGERALDS
BLACK HAWK II, INC., a Colorado corporation, and 101 MAIN STREET LIMITED
LIABILITY COMPANY, a Colorado limited liability company (collectively and
individually, and jointly and severally, "Obligor"), in favor of FOOTHILL
CAPITAL CORPORATION, a California corporation ("Foothill"), and is executed in
connection with that certain Loan and Security Agreement, dated as of the date
hereof (as the same may be amended, restated, supplemented, modified, extended,
renewed, or refinanced from time to time, the "Loan Agreement"), by and between
Obligor and Foothill.
To induce Foothill to make loans and advances to Obligor, and for
other valuable consideration, Obligor represents, warrants and agrees as
follows:
1. DEFINITIONS. As used in this Indemnity, the following terms
shall have the following meanings:
"Environmental Activity" means any treatment,
manufacturing, refining, storage, existence, release, generation,
production, processing, abatement, removal, disposal, handling or
transportation of any Hazardous Materials from, under, into or on the
Real Property Collateral.
"Environmental Law" means all present and future laws,
regulations, statutes, common law, rules, ordinances, codes, licenses,
permits, orders, approvals, plans, authorizations, concessions,
franchises, and similar items of any federal, state or local government,
instrumentality or body, as the same may be amended, modified or
supplemented from time to time related to Hazardous Materials.
"Hazardous Materials" means:
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<PAGE> 2
(a) those substances as defined as "hazardous substances,"
"hazardous materials," "toxic substances," or "solid waste" in the
Comprehensive Environmental Response, Compensation and Liability Act,
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq.
("RCRA"), or the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801 et seq., and
in the regulations promulgated pursuant thereto;
(b) those substances designated as a "hazardous substance"
under or pursuant to the Federal Water Pollution Control Act, 33 U.S.C.
Section 1257 et seq., or defined as a "hazardous waste" under or
pursuant to RCRA and in the regulations promulgated pursuant thereto;
(c) those substances listed in the United States
Department of Transportation Table (40 CFR 172.101 and amendments
thereto) or by the Environmental Protection Agency (or any successor
agency) as hazardous substances (40 CFR Part 302 and amendments
thereto); and
(d) such other substances, materials and wastes which are
regulated under any Environmental Law, or which are classified as
hazardous or toxic under any Environmental Law.
"Indemnified Persons" means Foothill and its parents,
subsidiaries and affiliates, attorneys and each of their officers,
directors, agents, employees, trustees, receivers, executors and
administrators, and the heirs, successors and assigns of all of the
foregoing. Notwithstanding the foregoing, purchasers of all or any
portion of the Real Property Collateral at a foreclosure sale or through
a private sale following a foreclosure or transfer of all or a portion
of the Real Property Collateral to Foothill shall not be Indemnified
Persons; it being the intent of the parties that the term "Indemnified
Persons" shall include only those Persons (including their parents,
subsidiaries, affiliates, attorneys, officers, directors, agents,
employees, trustees, receivers, executors, administrators, successors,
and assigns in connection with such capacity) acting in the capacity of
Obligor's lender and not successor owners of the Real Property
Collateral other than Foothill (or an affiliate of Foothill) that
acquires the same after foreclosure or acceptance of a deed-in-lieu of
foreclosure.
"Losses" mean any and all losses, liabilities, contingent
liabilities, damages, obligations, claims, contingent claims, actions,
suits, proceedings, disbursements, penalties, costs and expenses
(including, without limitation, reasonable attorneys' fees and costs and
all other professional or consultant's fees
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<PAGE> 3
and expenses), whether or not an action or proceeding is commenced or
threatened.
"Use" means ownership, use, development, construction,
maintenance, management, operation or occupancy.
Capitalized terms used in this Indemnity and not otherwise defined are used with
the meanings set forth in the Loan Agreement.
2. REPRESENTATIONS OF OBLIGOR. Obligor represents and warrants to
Foothill that: (a) Obligor has not used Hazardous Materials at or affecting the
Real Property Collateral in any manner which violates any Environmental Law; (b)
except as otherwise disclosed on Exhibit "A" attached hereto and incorporated
herein by this reference, to the actual knowledge of Obligor, no prior or
current owner, occupant or operator of the Real Property Collateral has engaged
in any Environmental Activity which violates any Environmental Laws; (c) except
as otherwise disclosed on Exhibit "A", the Use of the Real Property Collateral
for its intended purpose will not result in any Environmental Activity in
violation of any Environmental Laws; (d) except as otherwise disclosed in
Exhibit "A", Obligor has not otherwise engaged and does not intend to engage in
any Environmental Activity in relation to the Real Property Collateral; and (e)
except as otherwise disclosed on Exhibit "A", to Obligor's actual knowledge, (i)
no other Environmental Activity has occurred at any time in relation to the Real
Property Collateral, (ii) no portion of the Real Property Collateral is located
within 2,000 feet of a significant disposal of "hazardous waste" within the
meaning of any Environmental Laws, (iii) no notice, order, directive, complaint
or other communication has been made or issued by any governmental authority or
any other person to Obligor alleging the occurrence of any Environmental
Activity in violation of any Environmental Laws or any loss as a result of any
Environmental Activity, and to Obligor's actual knowledge, no investigations,
inquiries, orders, hearings, actions or other proceedings by or before any
governmental authority are pending or threatened in connection with any
Environmental Activity or alleged Environmental Activity, and (iv) except as
disclosed on Exhibit "A", there are no judgments and no actions or proceedings
pending by or against Obligor before any court or administrative agency in
connection with any Environmental Activity.
3. COVENANTS OF OBLIGOR. Obligor covenants that at all times, at
its sole expense: (a) Obligor shall keep or cause the Real Property Collateral
to be kept free of Hazardous Materials and not cause or permit the Real Property
Collateral to be used to generate, manufacture, refine, transport, treat, store,
handle, dispose, produce or process Hazardous Materials except, in each case, in
compliance with all applicable Environmental Laws; (b) Obligor shall use
diligent efforts to ensure compliance by all
-3-
<PAGE> 4
owners, operators and occupants, if any, of the Real Property Collateral with
all applicable Environmental Laws and will use diligent efforts to ensure that
all such owners, operators and occupants obtain and comply with any and all
required approvals, registration or permits; (c) Obligor shall, upon the
reasonable request of Foothill, conduct and complete all such investigations,
studies, sampling and tests relating to Hazardous Materials at or affecting the
Real Property Collateral as are requested; (d) Obligor, promptly upon the
reasonable request of Foothill from time to time, shall provide Foothill,
without any liability on the part of Foothill, with an environmental site
assessment or environmental audit report, or an update of such assessment or
report, by an environmental engineering firm acceptable to Foothill, all in
scope, form and content reasonably satisfactory to Foothill, to assess with a
reasonable degree of certainty the presence or absence of Hazardous Materials
and the potential cost in connection with the Remediation (as hereinafter
defined) of any Hazardous Materials at or related to the Real Property
Collateral; and (e) notwithstanding the obligation of Obligor to indemnify
Foothill pursuant to this Indemnity, Obligor shall, upon demand of Foothill,
promptly take all actions to Remediate (as defined below) the Real Property
Collateral that are required by any federal, state or local governmental agency
or political subdivision or that are reasonably necessary to mitigate a spill or
a violation of any Environmental Law or to allow full use of the Real Property
Collateral for the purposes for which it is currently used.
"Remediate" and "Remediation" shall include, but not be limited
to, the investigation of the environmental condition of the Real Property
Collateral, the preparation of any feasibility studies, reports or remedial
plans, and the performance of any cleanup, abatement, removal, remediation,
containment, operation, maintenance, monitoring or restoration work relating to
the presence or suspected presence of Hazardous Materials on or under the Real
Property Collateral in violation of Environmental Laws, whether on or off the
Real Property Collateral. All such work shall be performed by one or more
contractors selected by Obligor and reasonably approved in advance and in
writing by Foothill. Obligor shall proceed continuously and diligently with such
investigatory and remedial actions, provided that in all cases such actions
shall be in accordance with all applicable requirements of all Environmental
Laws. Any such actions shall be performed in a good, safe and workmanlike manner
and shall minimize any impact on the business or occupation at or near the Real
Property Collateral. Obligor shall pay all costs in connection with such
investigatory and remedial activities, including but not limited to, all power
and utility costs, and any and all taxes or fees that may be applicable to such
activities. Obligor shall promptly provide to Foothill copies of testing results
and reports that are generated in connection with the above activities. Promptly
upon completion of such investigation and Remediation, Obligor shall permanently
seal or cap all monitoring wells and test holes to industrial standards in
compliance with all Environmental Laws, remove all
-4-
<PAGE> 5
associated equipment, and restore the Real Property Collateral to the condition
existing prior to the commencement of Remediation, which shall include, without
limitation, the repair of any surface damage, including paving, caused by such
investigation or remediation hereunder. If the estimated cost of any performance
under this section exceeds Two Hundred Fifty Thousand Dollars ($250,000) in the
aggregate, then within ten (10) days of demand therefor, Obligor shall provide
Foothill with a bond, letter of credit, or similar financial assurance
evidencing that the necessary funds are available for the obligations
established by this subparagraph or shall instruct Foothill to reserve (subject
to availability) such amounts against the amount of advances available under
Section 2.1 of the Loan Agreement.
4. INDEMNITY BY OBLIGOR. Obligor indemnifies, protects, defends
(with reputable counsel satisfactory to Foothill) and holds the Indemnified
Persons harmless from and against the full amount of any and all Losses (except
such Losses arising proximately from the gross negligence or willful misconduct
of the Indemnified Person asserting a claim under this Indemnity), suffered or
incurred by an Indemnified Person arising from, in respect of, as a consequence
of (whether foreseeable or unforeseeable) or in connection with any spill or
with the presence, use, storage, disposal, generation, transportation or
treatment of any Hazardous Material at, on, under or related to the Real
Property Collateral, or in the soil, groundwater or soil vapor on or under the
Real Property Collateral, including, without limitation, the following: (a) the
occurrence of any Environmental Activity or any failure of Obligor or any other
person to comply with all Environmental Laws relating to the Real Property
Collateral or the Use of the Real Property Collateral; (b) any failure of any
representation of Obligor set forth in Section 2 above to be true and correct as
of the date of this Indemnity; (c) any failure of Obligor to perform any
covenant set forth in Section 3 above; (d) any failure by Obligor to comply
with, or any violation or claimed violation by Obligor of, any Environmental
Law; (e) claims asserted by any person or entity (including, without limitation,
any governmental agency or quasi-governmental authority, board, bureau,
commission, department, instrumentality or public body, court, or administrative
tribunal), including, but not limited to, claims under common law causes of
action; and (f) the implementation by Obligor of the recommendations set forth
in any environmental audit of the Real Property Collateral or the Uses.
Obligor's agreement contained in this Indemnity shall not be limited in any
manner by Obligor's date of acquisition or time of ownership of the Real
Property Collateral, or by the value of the Real Property Collateral. Obligor
shall not settle any claim or matter which is the subject of the foregoing
agreement of Obligor without Foothill's prior written consent, which consent may
be not be unreasonably (from the perspective of a secured lender) withheld by
Foothill. The foregoing indemnity shall not apply, however, to any losses
suffered or incurred by any Person as the result of any act or omission with
respect to the Real Property Collateral that occurs or fails to occur,
respectively, on or
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<PAGE> 6
after the date on which any Indemnified Person has foreclosed thereon or taken
title thereto.
5. COSTS AND EXPENSES. Obligor shall pay to each Indemnified
Person all reasonable costs, expenses and charges (including reasonable
attorneys' fees) incurred by any Indemnified Person in connection with the
enforcement of the terms of this Indemnity.
6. DEFENSE OF INDEMNIFIED PERSONS. Upon demand by Foothill or any
assignee on behalf of any Indemnified Person, Obligor shall defend any
investigation, action or proceeding involving any Losses which is brought or
commenced against any Indemnified Person, whether alone or together with Obligor
or any other person, all at Obligor's own cost and by counsel to be approved by
the Indemnified Person in the exercise of its reasonable judgment. If, in the
Indemnified Person's reasonable judgment, such counsel is not diligently
pursuing such defense or is involved in a conflict of interest, such Indemnified
Person may elect to conduct its own defense at the reasonable expense of
Obligor.
7. SITE VISITS, OBSERVATIONS AND TESTING. Subject to the
limitations in this Section 7 and in Section 2.11(d) of the Loan Agreement,
Foothill and any assignee and their agents and representatives shall have the
right at any reasonable time to enter and visit the Real Property Collateral for
the purposes of observing the Real Property Collateral, taking and removing soil
or groundwater samples, and conducting tests on any part of the Real Property
Collateral. Said parties have no duty, however, to visit or observe the Real
Property Collateral or to conduct tests, and no site visit, observation or
testing by any such party shall impose any liability on any such party. In no
event shall any site visit, observation or testing by any such party be a
representation that Hazardous Materials are or are not present in, on or under
the Real Property Collateral, or that there has been or shall be compliance with
any Environmental Laws. Neither Obligor nor any other person is entitled to rely
on any site visit, observation or testing by any such party. Any such party
shall give Obligor reasonable notice before entering the Real Property
Collateral. Any such party shall make reasonable efforts to avoid any
unreasonable interference with Obligor's use or enjoyment of the Real Property
Collateral in exercising any rights provided in this Section.
8. SURVIVAL OF INDEMNITY. The obligations of Obligor and the
rights of Foothill under this Indemnity are in addition to and not in
substitution of the obligations of Obligor and rights of Foothill under all
applicable federal, state and local laws, regulations, land ordinances relating
to health and safety, and protection of the
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<PAGE> 7
environment. The obligations of Obligor and the rights of Foothill shall survive
(a) the repayment of the Obligations, and (b) the termination of the Loan
Agreement.
9. NOTICE. Any notice required hereunder shall comply with, and
be given in accordance with, the notice provision set forth in the Loan
Agreement.
10. JURY WAIVER. THE WAIVER OF JURY TRIAL PROVIDED FOR IN THE
LOAN AGREEMENT SHALL APPLY TO ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS INDEMNITY.
11. JOINT AND SEVERAL LIABILITY. The liability of each entity
signing this Indemnity as a Obligor entity is joint and several, and applies
with respect to all Real Property Collateral, regardless of which Obligor entity
holds title thereto or is the operator or possessor thereof.
12. CHOICE OF LAW. This Indemnity is governed by California law,
except that California real property, foreclosure, procedural, and
antideficiency laws shall not apply with respect to Real Property Collateral
located outside California.
13. WAIVERS.
(a) To the maximum extent permitted by law, each Obligor
hereby waives: (i) notice of acceptance hereof; (ii) notice of any loans or
other financial accommodations made or extended under the Loan Agreement, or the
creation or existence of any Obligations; (iii) notice of the amount of the
Obligations, subject, however, to Section 2.10 of the Loan Agreement and
Obligor's right to make inquiry of Foothill to ascertain the amount of the
Obligations at any reasonable time; (iv) notice of any adverse change in the
financial condition of Borrower or of any other fact that might increase such
Obligor's risk hereunder; (v) notice of presentment for payment, demand,
protest, and notice thereof as to any instrument among the Loan Documents; (vi)
notice of any Default or Event of Default under the Loan Agreement; and (vii)
all other notices (except if such notice is specifically required to be given to
such Obligor under this Agreement) and demands to which such Obligor might
otherwise be entitled.
(b) To the fullest extent permitted by applicable law,
each Obligor waives the right by statute or otherwise to require Foothill to
institute suit against Borrower or to exhaust any rights and remedies which
Foothill has or may have against Borrower. Each Obligor further waives any
defense arising by reason of any disability or other defense (other than the
defense that the Obligations shall have been fully and finally indefeasibly
paid) of Borrower or by reason of the cessation from any
-7-
<PAGE> 8
cause (other than that the Obligations shall have been fully and finally
indefeasibly paid) whatsoever of the liability of Borrower in respect thereof.
(c) To the maximum extent permitted by law, each Obligor
hereby waives: (i) any rights to assert against Foothill any defense (legal or
equitable), set-off, counterclaim, or claim which such Obligor may now or at any
time hereafter have against Borrower or any other party liable to Foothill on
account of or with respect to the Obligations; (ii) any defense, set-off,
counterclaim, or claim, of any kind or nature, arising directly or indirectly
from the present or future sufficiency, validity, or enforceability of the
Obligations; (iii) any defense arising by reason of any claim or defense based
upon an election of remedies by Foothill including, to the extent applicable,
the provisions of Sections 580d and 726 of the California Code of Civil
Procedure, or any similar law of California or any other jurisdiction; (iv) the
benefit of any statute of limitations affecting any Obligor's liability
hereunder or the enforcement thereof.
(d) To the maximum extent permitted by law, each Obligor
hereby waives any right of subrogation that such Obligor has or may have as
against any other Obligor with respect to the Obligations. In addition, each
Obligor hereby waives any right to proceed against any other Obligor, now or
hereafter, for contribution, indemnity, reimbursement, or any other suretyship
rights and claims (irrespective of whether direct or indirect, liquidated or
contingent), with respect to the Obligations. Each Obligor also hereby waives
any right to proceed or to seek recourse against or with respect to any property
or asset of any other Obligor. As between any Obligor and Foothill, each Obligor
hereby agrees that, in light of the waivers contained in this Section, such
Obligor shall not be deemed to be a "creditor" (as that term is defined in the
Bankruptcy Code or otherwise) of any other Obligor, whether for purposes of the
application of Sections 547 or 550 of the United States Bankruptcy Code or
otherwise.
(e) If any of the Secured Obligations at any time are
secured by a mortgage or deed of trust upon real property, Foothill may elect,
in its sole discretion, upon a default with respect to the Secured Obligations,
to foreclose such mortgage or deed of trust judicially or nonjudicially in any
manner permitted by law, before or after enforcing this Agreement, without
diminishing or affecting the liability of any Obligor hereunder. Each Obligor
understands that (i) by virtue of the operation of California's antideficiency
law applicable to nonjudicial foreclosures, an election by Foothill
nonjudicially to foreclose such a mortgage or deed of trust probably would have
the effect of impairing or destroying rights of subrogation, reimbursement,
contribution, or indemnity of such Obligor against Borrower or guarantors or
sureties, and (ii) absent the waiver given by such Obligor herein, such an
election might estop Foothill from
-8-
<PAGE> 9
enforcing this Agreement against such Obligor. Understanding the foregoing, and
understanding that each Obligor is hereby relinquishing a defense to the
enforceability of this Agreement, each Obligor hereby waives any right to assert
against Foothill any defense to the enforcement of this Agreement, whether
denominated "estoppel" or otherwise, based on or arising from an election by
Foothill nonjudicially to foreclose any such mortgage or deed of trust. Each
Obligor understands that the effect of the foregoing waiver may be that such
Obligor may have liability hereunder for amounts with respect to which such
Obligor may be left without rights of subrogation, reimbursement, contribution,
or indemnity against Borrower or guarantors or sureties. Each Obligor also
agrees that the "fair market value" provisions of Section 580a of the California
Code of Civil Procedure shall have no applicability with respect to the
determination of such Obligor's liability under this Agreement.
(f) WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER OR
OTHER PROVISION SET FORTH IN THIS AGREEMENT, EACH OBLIGOR HEREBY WAIVES, TO THE
MAXIMUM EXTENT SUCH WAIVER IS PERMITTED BY LAW, ANY AND ALL DEFENSES ARISING
DIRECTLY OR INDIRECTLY UNDER ANY ONE OR MORE OF CALIFORNIA CIVIL CODE SECTIONS
2808, 2809, 2810, 2815, 2819, 2820, 2821, 2838, 2839, 2845, 2848, 2849, AND
2850, TO THE EXTENT APPLICABLE, CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS
580A, 580B, 580C, 580D, AND 726, AND, TO THE EXTENT APPLICABLE, CHAPTER 2 OF
TITLE 14 OF THE CALIFORNIA CIVIL CODE.
(g) WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER OR
OTHER PROVISION SET FORTH IN THIS AGREEMENT, EACH OBLIGOR HEREBY WAIVES ALL
RIGHTS AND DEFENSES ARISING OUT OF AN ELECTION OF REMEDIES BY FOOTHILL PARTY,
EVEN THOUGH THAT ELECTION OF REMEDIES, SUCH AS A NONJUDICIAL FORECLOSURE WITH
RESPECT TO SECURITY FOR A SECURED OBLIGATION, HAS DESTROYED SUCH OBLIGOR'S
RIGHTS OF SUBROGATION AND REIMBURSEMENT AGAINST THE PRINCIPAL BY THE OPERATION
OF SECTION 580D OF THE CODE OF CIVIL PROCEDURE OR OTHERWISE.
[remainder of page intentionally left blank]
-9-
<PAGE> 10
IN WITNESS WHEREOF, Obligor has executed this Indemnity as of
the date first set forth above.
"OBLIGOR":
FITZGERALDS GAMING CORPORATION, a
Nevada corporation FITZGERALDS
SOUTH, INC., a Nevada corporation
FITZGERALDS MISSISSIPPI, INC., a
Mississippi corporation FITZGERALDS
LAS VEGAS, INC., a Nevada
corporation FITZGERALDS FREMONT
EXPERIENCE CORPORATION, a Nevada
corporation FITZGERALDS RENO, INC.,
a Nevada corporation FITZGERALDS
INCORPORATED, a Nevada corporation
FITZGERALDS BLACK HAWK, INC., a
Nevada corporation FITZGERALDS BLACK
HAWK II, INC., a Colorado
corporation 101 MAIN STREET LIMITED
LIABILITY COMPANY, a Colorado
limited liability company
By Michael E. McPherson
-----------------------------
Name: Michael E. McPherson
Title: Senior Vice President,
Chief Financial Officer,
Treasurer, and Secretary of
each of the above-listed companies
-10-
<PAGE> 11
EXHIBIT "A"
(ENVIRONMENTAL DISCLOSURES)
1. Customary amounts of such materials customarily used by operators of the
type of business conducted on the applicable Real Property Collateral in
the ordinary course of business, for use in the manner for which such
materials were designed and only in accordance with the Environmental
Laws, and then only in such amounts as may be normal for the operations
conducted by the operators of such Real Property Collateral.
2. Such matters as disclosed in the environmental reports submitted by
Obligor to Foothill in accordance with the requirements of the Loan
Documents, including, without limitation, any asbestos remediation
projects, asbestos remediation operations and maintenance plans
undertaken by Obligor.
-11-
<PAGE> 1
EXHIBIT 10.10
AFTER RECORDING, MAIL TO:
Brobeck, Phleger & Harrison LLP
550 South Hope Street
Los Angeles, California 90071
Attention: James D. Prendergast, Esq.
DEED OF TRUST, SECURITY AGREEMENT AND
FIXTURE FILING WITH ASSIGNMENT OF RENTS
(CLARK COUNTY)
FITZGERALDS LAS VEGAS, INC,
a Nevada corporation,
as Trustor
LAWYERS TITLE INSURANCE CORPORATION,
a Virginia corporation,
as Trustee
FOOTHILL CAPITAL CORPORATION,
a California corporation,
as Beneficiary
Dated as of October 29, 1998
* * * * *
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
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<S> <C>
GRANTING CLAUSE ONE
[Land]...............................................................................2
GRANTING CLAUSE TWO
[Improvements].......................................................................2
GRANTING CLAUSE THREE
[Rents, etc.]........................................................................3
GRANTING CLAUSE FOUR
[Leases, Including Deposits and Advance Rentals].....................................3
GRANTING CLAUSE FIVE [Options to Purchase, etc.].............................................4
GRANTING CLAUSE SIX
[Personalty].........................................................................4
GRANTING CLAUSE SEVEN
[Condemnation Awards, etc.]..........................................................4
GRANTING CLAUSE EIGHT
[Insurance Proceeds].................................................................4
GRANTING CLAUSE NINE [Claims for Damages, etc.]..............................................4
GRANTING CLAUSE TEN
[Deposits, Advance Payments and Refunds of Insurance, Utilities, etc.]...............5
GRANTING CLAUSE ELEVEN [Water Rights, etc.]..................................................5
GRANTING CLAUSE TWELVE
[Minerals, etc.].....................................................................5
GRANTING CLAUSE THIRTEEN
[Accessions, etc.]...................................................................5
i
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
PAGE
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<S> <C>
ARTICLE 1.
DEFINITIONS AND RELATED MATTERS......................................................6
Section 1.1 Certain Defined Terms........................................6
Section 1.2 Related Matters.............................................13
1.2.1 Terms Used in the UCC..........................13
1.2.2 Construction...................................13
1.2.3 Determinations.................................13
1.2.4 Governing Law..................................13
1.2.5 Headings.......................................14
1.2.6 Severability...................................14
1.2.7 Exhibits and Schedules.........................14
ARTICLE 2.
[RESERVED]..........................................................................14
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES......................................................14
Section 3.1 Corporate Existence.........................................14
Section 3.2 Authorization; Approvals....................................15
Section 3.3 Enforceability..............................................15
Section 3.4 Validity and Perfection of Security Interests...............15
Section 3.5 Title to and Right to Use Assets............................15
Section 3.6 Non-Contravention...........................................16
Section 3.7 Contracts...................................................16
Section 3.8 Leases......................................................16
Section 3.9 No Other Property...........................................16
Section 3.10 Compliance with Laws........................................17
Section 3.11 Property Use; Mechanics Liens...............................17
Section 3.12 Condemnation................................................17
Section 3.13 Litigation..................................................17
Section 3.14 Construction of Improvements................................17
ARTICLE 4.
AFFIRMATIVE COVENANTS...............................................................18
Section 4.1 Secured Obligations of Trustor..............................18
Section 4.2 Compliance with Law: Maintenance of Approvals...............18
Section 4.3 Other Reports...............................................18
Section 4.4 Insurance...................................................18
Section 4.5 Waste and Repair............................................18
Section 4.6 Impositions; Impounds; Taxes, Capital Costs.................19
4.6.1 Impositions Affecting the Property.............19
4.6.2 Impounds; Impound Account......................19
Section 4.7 Further Assurances..........................................19
Section 4.8 Reimbursement: Waiver of Offsets............................19
ii
</TABLE>
<PAGE> 4
<TABLE>
PAGE
----
<S> <C>
Section 4.9 Litigation..................................................20
Section 4.10 Certain Reports.............................................20
Section 4.11 Tax Receipts................................................21
Section 4.12 FIRPTA Affidavit............................................21
Section 4.13 Preservation of Contractual Rights..........................21
Section 4.14 Tax Service Contract........................................21
Section 4.15 Liens.......................................................22
Section 4.16 Inspection..................................................22
ARTICLE 5.
LEASEHOLD PROVISIONS................................................................22
Section 5.1 Deed of Trust Subject to Ground Leases......................22
Section 5.2 Certain Covenants...........................................22
ARTICLE 6.
NEGATIVE COVENANTS..................................................................26
Section 6.1 Restrictive Uses............................................26
Section 6.2 No Cooperative or Condominium...............................26
ARTICLE 7.
CASUALTIES AND CONDEMNATION.........................................................27
Section 7.1 Casualties..................................................27
Section 7.2 Condemnation................................................27
ARTICLE 8.
REMEDIES OF BENEFICIARY.............................................................27
Section 8.1 Event of Default............................................27
Section 8.2 Remedies....................................................28
Section 8.3 Power of Sale...............................................30
Section 8.4 Proof of Default............................................31
Section 8.5 Protection of Security......................................31
Section 8.6 Receiver....................................................32
Section 8.7 Curing of Defaults..........................................32
Section 8.8 Remedies Cumulative.........................................33
Section 8.9 Marshaling..................................................33
Section 8.10 Adoption of Covenants.......................................33
ARTICLE 9.
SECURITY AGREEMENT AND FIXTURE FILING...............................................33
Section 9.1 Grant of Security Interest..................................33
Section 9.2 Remedies, etc...............................................37
Section 9.3 Expenses....................................................38
Section 9.4 Fixture Filing..............................................38
</TABLE>
iii
<PAGE> 5
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE 10.
ASSIGNMENT OF RENTS.................................................................39
Section 10.1 Assignment of Rents.........................................39
Section 10.2 Collection of Rents.........................................39
ARTICLE 11.
ENVIRONMENTAL MATTERS...............................................................40
Section 11.1 Representations and Warranties..............................40
Section 11.2 Environmental Covenants.....................................41
ARTICLE 12.
MISCELLANEOUS.......................................................................43
Section 12.1 Beneficiary's Expenses, including Attorney's Fees...........43
Section 12.2 Indemnity...................................................44
Section 12.3 Waivers; Modifications in Writing...........................44
Section 12.4 Cumulative Remedies; Failure or Delay.......................44
12.4.1 Successors and Assigns.........................45
Section 12.5 Independence of Covenants...................................45
Section 12.6 Change of Law...............................................45
Section 12.7 No Waiver...................................................45
Section 12.8 Notices.....................................................46
Section 12.9 References to Foreclosure...................................46
Section 12.10 Joinder of Foreclosure......................................46
Section 12.11 Rights and Secured Obligations of Beneficiary and
Trustee.....................................................46
Section 12.12 Copies......................................................47
Section 12.13 Subordination...............................................47
Section 12.14 Personally Security Instruments.............................47
Section 12.15 Suits to Protect Property...................................47
Section 12.16 Trustor Waiver of Rights....................................48
Section 12.17 Charges for Statements......................................48
Section 12.18 Complete Agreement..........................................48
Section 12.19 Payments Set Aside..........................................48
Section 12.20 Substitution................................................49
Section 12.21 Choice of Forum.............................................49
Section 12.22 Regulatory Matters..........................................50
Section 12.23 Guarantor Waivers...........................................50
Section 12.24 Waiver of Trial by Jury.....................................52
iv
</TABLE>
<PAGE> 6
DEED OF TRUST, SECURITY AGREEMENT AND
FIXTURE FILING WITH ASSIGNMENT OF RENTS
(CLARK COUNTY)
THIS DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING WITH
ASSIGNMENT OF RENTS (this "Deed of Trust") is made as of the 29th day of
October, 1998, by Fitzgerald's Las Vegas, Inc., a Nevada
corporation,("Trustor"), whose principal place of business is located at 301
Fremont Street, Las Vegas, Nevada, 89101 in favor of Lawyers Title Insurance
Corporation, a Virginia corporation, as the trustee ("Trustee"), for the benefit
of Foothill Capital Corporation, a California corporation, as beneficiary
("Beneficiary"), whose principal place of business is located at 11111 Santa
Monica Boulevard, Suite 1500, Los Angeles, California 90025.
THIS INSTRUMENT SECURES FUTURE ADVANCES, AS DEFINED IN NRS 106.320, AND
IS TO BE GOVERNED BY NRS 106.300 TO 106.400, INCLUSIVE. THE MAXIMUM AMOUNT OF
PRINCIPAL TO BE SECURED HEREBY IS $15,000,000.00.
R E C I T A L S:
A. Pursuant to that certain Loan and Security Agreement dated as of
October 29, 1998 (as supplemented and otherwise amended from time to time, the
"Loan Agreement"), by and among Fitzgeralds Gaming Corporation ("Fitzgeralds"),
as the borrower, and Beneficiary, as the lender, pursuant to which Beneficiary
has agreed to make a loan to Fitzgeralds on the terms and conditions set forth
therein. Unless the context other requires, all capitalized terms used and not
otherwise defined herein shall have the meanings ascribed thereto in the Loan
Agreement.
B. Pursuant to the Guaranty, the Guarantors (including Trustor) have
guaranteed the Guarantied Obligations.
C. Pursuant to the Loan Agreement, the Guarantied Obligations are
required to be secured by, among other things, this Deed of Trust.
D. The parties acknowledge that certain provisions of this Deed of Trust
may be subject to the laws, rules and regulations ("Applicable Gaming Laws") of
the gaming authorities (collectively, "Gaming Authority") of the State of Nevada
and of other governmental jurisdictions, including, but not limited to, the
Nevada State Gaming Control Board, the Nevada Gaming Commission and the Clark
County Liquor and Gaming Licensing Board.
WITNESSETH:
In consideration of the foregoing premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Trustor does hereby irrevocably grant, bargain, sell, transfer,
convey and assign to Trustee, its successors and assigns, in trust,
1
<PAGE> 7
with power of sale, for the benefit and security of Beneficiary, the following
(but excluding in each and every case all Excluded Assets as defined below),
whether now owned or hereafter acquired:
GRANTING CLAUSE ONE
[LAND]
All of Trustor's right, title and interest in the real property located
in the County of Clark, State of Nevada, described in EXHIBIT "A" attached
hereto and by this reference incorporated herein (the "Owned Land"), together
with all and singular the tenements, hereditament, rights, reversions,
remainders, development rights, privileges, benefits, easements (in gross or
appurtenant), rights-of-way, gores or strips of land, streets, ways, alleys,
passages, sewer rights, water courses, water rights and powers, and all
appurtenances whatsoever and claims or demands of Trustor at law or in equity,
in any way belonging, benefiting, relating or appertaining to the Owned Land,
the airspace over the Owned Land, the "Improvements" (as hereinafter defined) to
the Owned Land, or relating or appertaining to any number of them, or which
hereinafter shall in any way belong, relate or be appurtenant thereto.
To the fullest extent allowed by Applicable Law and the applicable
Ground Leases (as defined below), all of Trustor's right, title and interest in
the leasehold estate created by those certain lease agreement described in
EXHIBIT "B-1" attached hereto and by this reference incorporated herein
(collectively, "Ground Leases"), wherein Trustor is the owner of the lessee's
interest thereunder, and that certain party referenced on said Exhibit is the
lessor ("Lessor"), as the same may be amended, restated, renewed or extended
from time to time, in that certain real property located in the County of Clark,
State of Nevada, described in EXHIBIT "B-2" (the "Leased Land"), together with
all and singular the tenements, hereditaments, rights, reversions, remainders,
development rights, privileges, benefits, easements (in gross or appurtenant),
rights-of-way, gores or strips of land, streets, ways, alleys, passages, sewer
rights, water courses, water rights and powers, and all appurtenances whatsoever
and claims or demands of Trustor at law or in equity, in any way belonging,
benefiting, relating or appertaining to the Leased Land, the air space over the
Leased Land, the "Improvements" (as hereinafter defined) to the Leased Land, or
relating or appertaining to any number of them, or which hereinafter shall in
any way belong, relate or be appurtenant thereto). The Owned Land and the Leased
Land are herein collectively referred to as the "Land".
GRANTING CLAUSE TWO
[IMPROVEMENTS]
TOGETHER WITH, any and all structures, buildings, facilities and
improvements of every nature whatsoever now or hereafter erected on the Land,
including, but not limited to, the "Fixtures" (as hereinafter defined)
(collectively, the "Improvements") (the Land and Improvements are referred to
collectively as the "Property").
For purposes of this Deed of Trust, Fixtures shall be deemed to include,
to the full extent allowed by law, fixtures and all other equipment and
machinery now or at any time hereafter
2
<PAGE> 8
owned by Trustor and located or included in or on or appurtenant to the Property
and used in connection therewith and which are or become so related to the real
property encumbered hereby that an interest arises in them under real estate law
which may include, but is not limited to: all docks, piers, barges, vessels,
machinery, equipment (including, without limitation, pipes, furnaces, conveyors,
drums, fire sprinklers and alarm systems, and air conditioning, heating,
refrigerating, electronic monitoring, stoves, ovens, ranges, dishwashers,
disposals, food storage, food processing (including restaurant fixtures), trash
and garbage removal and maintenance equipment), office equipment, all built-in
tables, chairs, mantels, screens, plumbing, bathtubs, sinks, basins, faucets,
laundry equipment, planters, desks, sofas, shelves, lockers and cabinets,
laundry equipment, all safes, furnishings, appliances (including, without
limitation, food warming and holding equipment, iceboxes, refrigerators, fans,
heaters, water heaters and incinerators), rugs, carpets and other floor
coverings, draperies and drapery rods and brackets, awnings, window shades,
venetian or other blinds, curtains, lamps, chandeliers and other lighting
fixtures.
GRANTING CLAUSE THREE
[RENTS, ETC.]
TOGETHER WITH all rents, income, security or similar deposits, including
without limitation, receipts, issues, royalties, earnings, products or proceeds,
profits, maintenance, license and concession fees and other revenues to which
Trustor may now or hereafter be entitled, including, without limitation, all
rights to payment for hotel room occupancy by hotel guests, which includes any
payment or monies received or to be received in whole or in part, whether actual
or deemed to be, for the sale of services or products in connection therewith
and/or in connection with such occupancy, advance registration fees by hotel
guests, tour or junket proceeds and deposits for conventions and/or party
reservations (collectively, the "Rents"), subject to the revocable license
hereinafter given to Trustor to collect and apply such Rents.
GRANTING CLAUSE FOUR
[LEASES, INCLUDING DEPOSITS AND ADVANCE RENTALS]
TOGETHER WITH (a) all estate, right, title and interest of Trustor in,
to and under any and all leases, subleases, lettings, licenses, concessions,
operating agreements, management agreement franchise agreements and all other
agreements affecting or covering the Property or any portion thereof now or
hereafter existing or entered into, together with all amendments, extensions and
renewals of any of the foregoing, (b) all right, title, claim, estate and
interest of Trustor thereunder, including, without limitation, all claims of the
lessor thereunder, letters of credit, guarantees or security deposits, advance
rentals, and any and all deposits or payments of similar nature and (c) the
right to enforce against any tenants thereunder and otherwise any and all
remedies under any of the foregoing, including Trustor's right to evict from
possession any tenant thereunder or to retain, apply, use, draw upon, pursue,
enforce or realize upon any guaranty thereof, to terminate, modify, or amend any
such agreement; to obtain possession of, use, or occupy, any of the real or
personal property subject to any such agreement; and to enforce or exercise,
whether at law or in equity or by any other means, all provisions of any such
agreement and all obligations of the tenants thereunder based upon (i) any
breach by such tenant
3
<PAGE> 9
thereunder (including any claim that Trustor may have by reason of a
termination, rejection, or disaffirmance of such agreement pursuant to any
Bankruptcy Law), and (ii) the use and occupancy of the premises demised, whether
or not pursuant to the applicable agreement (including any claim for use and
occupancy arising under landlord-tenant law of the State of Nevada or any
Bankruptcy Law).
GRANTING CLAUSE FIVE
[OPTIONS TO PURCHASE, ETC.]
TOGETHER WITH all right, title and interest of Trustor in and to all
options and other rights to purchase or lease the Property or any portion
thereof or interest therein, if any, and any greater estate in the Property
owned or hereafter acquired by Trustor.
GRANTING CLAUSE SIX
[PERSONALTY]
TOGETHER WITH all right, title and interest of Trustor in and to all
Tangible Property and Intangible Property (except, with respect to Casino
Licenses, as prohibited by Applicable Gaming Laws) now or at any time hereafter
located on or appurtenant to the Property and used or useful in connection with
the ownership, management or operation of the Property, including, without
limitation, the Personalty.
GRANTING CLAUSE SEVEN
[CONDEMNATION AWARDS, ETC.]
TOGETHER WITH all the estate, interest right title, other claim or
demand, which Trustor now has or may hereafter acquire in any and all awards,
payments or other consideration made for the taking by eminent domain, or by any
proceeding or purchase in lieu thereof, of the whole or any part of the
Property, including, without limitation, any awards, payments or other
consideration resulting from a change of grade of streets and for severance
damages.
GRANTING CLAUSE EIGHT
[INSURANCE PROCEEDS]
TOGETHER WITH, all the estate, interest, right, title and other claim or
demand which Trustor now has or may hereafter acquire with respect to the
proceeds of insurance in effect with respect to all or any part of the Property,
together with all interest thereon and the right to collect and receive the
same.
GRANTING CLAUSE NINE
[CLAIMS FOR DAMAGES, ETC.]
TOGETHER WITH all the estate, interest, right, title and other claim or
demand which Trustor now has or may hereafter acquire against anyone with
respect to any damage to all or any part of the Property, including, without
limitation, damage arising from any defect in or with
4
<PAGE> 10
respect to the design or construction of all or any part of the Improvements and
damage resulting therefrom.
GRANTING CLAUSE TEN
[DEPOSITS, ADVANCE PAYMENTS AND REFUNDS OF INSURANCE, UTILITIES, ETC.]
TOGETHER WITH all deposits or other security or advance payments
including rental payments made by or on behalf of Trustor to others, and all
refunds made by others to Trustor, with respect to (i) insurance policies
relating to all or any part of the Property, (ii) utility service for all or any
part of the Property, (iii) cleaning, maintenance, repair, or similar services
for all or any part of the Property, (iv) refuse removal or sewer service for
all or any part of the Property, (v) rental of equipment, if any, used in the
operation, maintenance or repair by or on behalf of Trustor of all or any part
of the Property and (vi) parking or similar services or rights afforded to all
or any part of the Property.
GRANTING CLAUSE ELEVEN
[WATER RIGHTS, ETC.]
TOGETHER WITH all water rights, water stock, water permits and other
rights to the use of water that are now or that may be hereinafter used in
connection with the said Property, or any part thereof, or any improvements or
appurtenances thereto.
GRANTING CLAUSE TWELVE
[MINERALS, ETC.]
TOGETHER WITH all oil and gas and other mineral rights, if any, in or
pertaining to the Land and all royalty, leasehold and other rights of Trustor
pertaining thereto.
GRANTING CLAUSE THIRTEEN
[ACCESSIONS, ETC.]
TOGETHER WITH all extensions, improvements, betterments, renewals,
substitutes for and replacements of, and all additions, accessions, and
appurtenances to, any of the foregoing that Trustor may subsequently acquire,
and all conversions of any of the foregoing; Trustor agrees that all property
hereafter acquired by Trustor and required by the Loan Agreement, this Deed of
Trust or any other Loan Document to be subject to the lien and security
interests created by this Deed of Trust shall forthwith upon the acquisition
thereof by Trustor be subject to the lien and security interests of this Deed of
Trust as if such property were now owned by Trustor and were specifically
described in this Deed of Trust and granted hereby or pursuant hereto, and the
Beneficiary is hereby authorized to receive any and all such property as and for
additional security for the Guarantied Obligations.
The entire estate, property and interest hereby conveyed to Trustee may
hereafter be referred to as the "Trust Estate."
5
<PAGE> 11
FOR THE PURPOSE OF SECURING:
A. the Guarantied Obligations (as defined in the Guaranty);
B. the due and punctual payment and performance of any and all present
and future obligations and liabilities of Trustor of every type or description
to Beneficiary, arising under or in connection with this Deed of Trust or any
other Loan Document including for reimbursement of amounts permitted to be
advanced or expended by Beneficiary (i) to satisfy amounts required to be paid
by Trustor under this Deed of Trust or any other Loan Document together with
interest thereon to the extent provided, or (ii) to protect the Trust Estate,
together with interest thereon to the extent provided; and
C. all future advances pursuant to the Indenture or any other of the
Loan Documents, as future advances is defined by Nevada Revised Statutes ("NRS")
106.320;
in each case whether due or not due, direct or indirect, joint and/or several,
absolute or contingent, voluntary or involuntary, liquidated or unliquidated,
determined or undetermined, now or hereafter existing, renewed or restructured,
whether or not from time to time decreased or extinguished and later increased,
created or incurred, whether or not arising after the commencement of a
proceeding under the Bankruptcy Code (including post-petition interest) and
whether or not allowed or allowable as a claim in any such proceeding (all
obligations and liabilities described herein, including, without limitation, the
Guarantied Obligations, are collectively referred to herein as the "Secured
Obligations").
To protect the security of its Deed of Trust, Trustor hereby covenants
and agrees as follows:
ARTICLE 1.
DEFINITIONS AND RELATED MATTERS
Section 1.1 Certain Defined Terms As used herein, the following terms
shall have the following meanings:
"Accounts" shall have the meaning set forth in Section 9.1.2 hereof.
"Applicable Gaming Laws" has the meaning set forth in Recital D above.
"Applicable Laws" has the meaning set forth in Section 3.7 hereof.
"Beneficiary" has the meaning set forth in the Preamble.
"Casino" means a gaming establishment owned, directly or indirectly, by
Trustor and any hotel, building, restaurant, theater, amusement park, other
entertainment facility, parking facilities, retail shops, land, equipment and
other property asset directly ancillary thereto and used or to be used in
connection therewith.
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"Casino License" means any material license, franchise or other approval
or authorization required to own, lease or operate a Casino, or otherwise
conduct gaming in any jurisdiction in which Trustor conducts, or proposes in
good faith to conduct, gaming business, including any applicable liquor license.
"Chattel Paper" has the meaning set forth in Section 9. 1. 1.
"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations thereunder.
"Documents" has the meaning set forth in Section 9.1.9.
"Environmental Damages" means all claims, judgments, damages, losses,
penalties, fines, liabilities (including strict liability), encumbrances, liens,
costs and expenses of investigation and defense of any claim, whether or not
such is ultimately defeated, and of any settlement or judgment, of whatever kind
or nature, contingent or otherwise, matured or unmatured, foreseeable or
unforeseeable, including, without limitation, reasonable attorneys fees, charges
and disbursements (including, without limitation, costs of appeal), and
consultants fees, any of which are actually incurred at any time as a result of
the existence or alleged existence of Hazardous Materials upon, about or beneath
the Property or migrating or threatening to migrate to or from the Property, or
the existence or alleged existence of a violation of Environmental Requirements
pertaining to the Property regardless of whether the existence of such Hazardous
Materials or the violation of Environmental Requirements arose prior to the
present ownership or operation of the Property, and including, without
limitation:
(i) damages for personal injury, or injury to property or natural
resources occurring upon or off of the Property, foreseeable or unforeseeable,
including, without limitation, lost profits, consequential damages, the cost of
demolition and rebuilding of any improvements on real property, interest and
penalties including, but not limited to, claims brought by or on behalf of
employees of Trustor, with respect to which Trustor waives, for the benefit of
Beneficiary only, any immunity to which it may be entitled under any industrial
or workers compensation laws;
(ii) reasonable fees actually incurred for the services of
attorneys, consultants, contractors, experts, laboratories and all other costs
incurred in connection with the investigation or remediation of such Hazardous
Materials or violation of Environmental Requirements including, but not limited
to, the preparation of any feasibility studies or reports or the performance of
any cleanup, remedial, removal, abatement containment, closure, restoration or
monitoring work required by any federal, state or local governmental agency or
political subdivision, or reasonably necessary to make full economic use of the
Property or any other property or otherwise expended in connection with such
conditions, and including, without limitation, any reasonable attorneys fees,
charges and disbursements (including, without limitation, costs of appeal)
actually incurred in enforcing this Deed of Trust or collecting any sums due
hereunder; and
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(iii) liability to any Person to indemnify such Person for actual
costs incurred in good faith in connection with the items referenced in
subparagraphs (i) and (ii) hereof
"Environmental Requirements" means the common law and all applicable
present and future statutes, regulations, rules, ordinances, codes, licenses,
permits, orders, approvals, plans, authorizations, concessions, franchises and
similar items, of all a governmental agencies, departments, commissions, boards,
bureaus or instrumentalities of the United States, states and political
subdivisions thereof and all applicable judicial and administrative and
regulatory decrees, injunctions, judgments and orders relating to the
environment, including, without limitation:
(i) all requirements, including, but not limited to, those
relating or pertaining to (A) reporting, licensing, permitting, investigation
and remediation of emissions, discharges, releases or threatened releases of
Hazardous Materials or other chemical substances, pollutants, contaminants or
hazardous or toxic substances, materials or wastes whether solid, liquid or
gaseous in nature, into the environment (including, without limitation, ambient
air, surface water, groundwater or land surface or subsurface strata), (B) the
manufacture, processing, distribution, use, generation, treatment, storage,
disposal, transport or handling of chemical substances, materials or wastes,
whether solid, liquid or gaseous in nature, including without limitation,
Hazardous Materials or (C) underground storage tanks and related piping, and
emissions, discharges, releases or threatened releases of Hazardous Materials or
other chemical substances, pollutants, contaminants or hazardous or toxic
substances, materials or wastes whether solid, liquid or gaseous in nature
therefrom; and
(ii) all other requirements pertaining to the protection of the
health and safety of employees or the public with respect to Hazardous
Materials.
"Equipment" has the meaning set forth in Section 9.1.7.
"Excluded Assets" has the meaning set forth in the Loan Agreement.
"Fixtures" has the meaning set forth in Section 9.1.7.
"Gaming Authority" has the meaning set forth in Recital D above.
"Gaming Equipment" means all equipment and supplies used in the
operation of a casino, including, without limitation, slot machines, gaming
tables, cards, dice, gaming chips, player tracking systems, and all other gaming
devices (as defined in NRS 463.0155), cashless wagering systems (as defined in
NRS 463.014) and associated equipment (as defined in NRS 463.0136).
"General Intangibles" has the meaning set forth in Section 9.1.10.
"Ground Leases" shall have the meaning set forth in Granting Clause One
above.
"Guarantied Obligations" has the meaning ascribed to such term in the
Guaranty.
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"Guaranty" means that certain Guaranty, dated as of even date herewith,
made by each of the Guarantors in favor of Beneficiary.
"Hazardous Materials" means any chemical, material or substance:
(i) the presence of which requires investigation or remediation
under any federal, state or local law, statute, code, regulation, ordinance,
order, action or policy; or
(ii) which is or becomes defined as or included in the definition
of "hazardous substances," "hazardous wastes," "hazardous materials," extremely
hazardous waste," "restricted hazardous waste" or "toxic substances" or words of
similar import under any applicable local, state or federal law or under
regulations adopted or publications promulgated pursuant thereto, including, but
not limited to, any such laws or regulations promulgated by governmental
authorities of the State of Nevada; the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et
seq.; the Hazardous Materials Transportation Act as amended, 49 U.S.C. Section
1801, et seq., the Resource Conservation and Recovery Act as amended, 42 U.S.C.
Section 6901, et seq.; the Federal Water Pollution Control Act, as amended, 33
U.S.C. Section 1251, et seq.; or any substance defined as a "hazardous
substance," "hazardous waste," "hazardous substance," "highly hazardous
substance," "hazardous material" or words of similar meaning as referred to in
Nevada Revised Statutes ("NRS") Chapters 459, 444, 445A, 445B, 590, NRS Sections
618.750-618.850, inclusive, NRS Section 477.045, and the Uniform Fire Code (1988
edition), as now existing and as hereafter amended, and any administrative
regulations adopted pursuant thereto;
(iii) which is toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic, or otherwise hazardous and is
or a becomes regulated by any governmental authority, agency, department,
commission, board, agency or instrumentality of the United States, any state of
the United States, or any political subdivision thereof ("governmental
authority"); or
(iv) the presence of which on the Property causes or threatens to
pose a hazard to the Property or to the health or safety of Persons on or about
the Property; or
(v) without limitation, which contains gasoline, crude oil,
diesel fuel or other petroleum hydrocarbons in violation of applicable
Environmental Requirements; or
(vi) without limitation, which contains "PCBs" (as hereinafter
defined) or asbestos or urea formaldehyde foam insulation or radon gas.
"Impositions" means any and all (i) real estate and personal property
taxes and other taxes and assessments, water and sewer rates and charges levied
or assessed upon or with respect to the Property, and any and all other
governmental charges (including any penalties and other charges imposed by any
Gaming Authority) and any interest or costs or penalties with respect thereto,
in each case whether general, special, ordinary or extraordinary, foreseen or
unforeseen, of any kind and nature whatsoever that at any time prior to or after
the execution hereof may be
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assessed, levied, imposed, or become a lien upon the Property or the Rents, but
excluding taxes on Trustor's income or operating revenues; (ii) charges for any
easement or agreement maintained for the benefit of the Property and (iii) other
charges, expenses, payments or assessments of any nature, if any, which are or
may be assessed, levied, imposed or become a lien upon the Property or the
Rents, including mechanics and other Permitted Liens.
"Impound Account" means the account that Trustor may be required to
maintain pursuant to Section 4.6.2 of this Deed of Trust for the deposit of
amounts required to pay Impositions and insurance premiums.
"Improvements" has the meaning set forth in Granting Clause Two.
"Indemnitees" has the meaning set forth in Section 11.2.7.
"Intangible Property" means any and all intangible personal property,
including, without limitation, (a) the rights to use all names and all
derivations thereof now or hereafter used by Trustor in connection with the
Land, or the Improvements, including, without limitation, the name "Fitzgerald's
Las Vegas, Inc." and any variations thereof, together with the goodwill
associated therewith, and all names, logos, and designs used by Trustor, or in
connection with the Land or the Improvements or in which Trustor has rights,
with the exclusive right to use such names, logos and designs wherever they are
now or hereafter used in connection with the Land or the Improvements, and any
and all other trade names, trademarks or service marks, whether or not
registered, now or hereafter used in the operation of the Land or the
Improvements, including, without limitation, any interest as a licensee or
franchisee, and, in each case, together with the goodwill associated therewith;
(b) maps, plans, specifications, surveys, studies, tests, reports, data and
drawings relating to the development of the Land or the Improvements and the
construction of the Improvements, including, without limitation, all marketing
plans, feasibility studies, soils tests, design contracts and all contracts and
agreements of Trustor relating thereto and all architectural, structural,
mechanical and engineering plans and specifications, studies, data and drawings
prepared for or relating to the development of the Land or the Property or the
construction, renovation or restoration of any of the Improvements or the
extraction of minerals, sand, gravel or other valuable substances from the Land;
(c) any and all books, records, customer lists (including lists or information
derived from or related to the Player Tracking System described within the
definition of "Tangible Property"), concession agreements, supply or service
contracts, licenses, permits, governmental approvals (to the extent such
licenses, permits and approvals may be pledged under applicable law), signs,
goodwill, casino and hotel credit and charge records, supplier lists, checking
accounts, safe deposit boxes (excluding the contents of such deposit boxes owned
by Persons other than Trustor), cash, instruments, Chattel Papers, documents,
unearned premiums, deposits, refunds, including but not limited to income tax
refunds, prepaid expenses, rebates, tax and insurance escrow and impound
accounts, if any, actions and rights in action, and all other claims, and all
other contract rights and general intangibles resulting from or used in
connection with the operation of the Trust Estate and in which Trustor now or
hereafter has rights; (d) all of Trustor's documents, instruments, contract
rights, and general intangibles including, without limitation, all insurance
policies, permits, licenses, franchises and agreements required for the use,
occupancy or operation of the Land, or
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any of the Improvements (to the extent such licenses, permits and approvals are
not prohibited from being pledged under applicable law); (e) general
intangibles, vacation license resort agreements or other time share license or
right to use agreements with respect to the Land, the Improvements and/or the
business being conducted thereon, including, without limitation, all rents,
issues, profits, income and maintenance fees resulting therefrom; whether any of
the foregoing is now owned or hereafter acquired and (f) any and all 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) now or hereafter obtained by Trustor from any
governmental authority having or claiming jurisdiction over the Land, the
Tangible Property, the Property or any other element of the Trust Estate or
providing access thereto, or the operation of any business on, at, or from the
Land, including, without limitation, any Casino Licenses.
"Intellectual Property Collateral" shall have the meaning set forth in
Section 9.1.15.
"Inventory" has the meaning set forth in Section 9.1.6.
"Negotiable Collateral" means all of the Trustor's present and future
letters of credit, notes, drafts, instruments, Investment Property, documents,
personal property leases (wherein Trustor is the lessor), chattel paper, and
books and records relating to any of the foregoing.
"Land" has the meaning set forth in Granting Clause One.
"Leases" means any and all leases, subleases, lettings, licenses,
concessions, operating agreements, management agreements and all other
agreements affecting or covering the Property or any portion thereof now or
hereafter existing or entered into, together with all amendments, extensions and
renewals of any of the foregoing.
"Loan Documents" has the meaning set forth in the Loan Agreement.
"NRS" means the Nevada Revised Statutes.
"PCBs" means polychlorinated biphenyls.
"Personalty" means the Intangible Property and the Tangible Property.
"Proceeds" has the meaning set forth in Section 9.1.22.
"Property" has the meaning set forth in Granting Clause Two.
"Public Waters" means any river, lake, stream, sea, ocean, gulf, bay or
other public body of water.
"Receiver" means any trustee, receiver, custodian, fiscal agent,
liquidator or similar officer.
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"Rents" has the meaning set forth in Granting Clause Three.
"Tangible Property" means any and all tangible personal property,
including, without limitation, all goods, equipment, supplies, building and
other materials of every nature whatsoever and all other tangible personal
property constituting a part or portion of the Property and/or used in the
operation of any hotel, casino, restaurant store, parking facility, special
events arena, theme park, and any other commercial operations on the Property,
including but not limited to Inventory, communication systems, visual and
electronic surveillance systems and transportation systems and not constituting
a part of the real property subject to the real property lien of this Deed of
Trust and including all property and materials stored on all or any portion of
the Property in which Trustor has an interest and all tools, utensils, food and
beverage, liquor, uniforms, linens, housekeeping and maintenance supplies,
vehicles, fuel, advertising and promotional material, blueprints, surveys, plans
and other documents relating to the Land or the Improvements, and all
construction materials and all Fixtures, including, but not limited to, all
gaming equipment and devices which are used in connection with the operation of
the Property and those items of Fixtures which are purchased or leased by
Trustor, machinery and any other item of personal property in which Trustor now
or hereafter owns or acquires an interest or right, and which are used or useful
in the construction, operation, use and occupancy of the Property; to the extent
permitted by the applicable contract or applicable law, all financial equipment
computer equipment, player tracking systems (including all computer hardware,
operating software programs and all right, title and interest in and to any
applicable license therefor and all equipment included within the definition of
"associated equipment" under NRS 463.0136), calculators, adding machines, video
game and slot machines, and any other electronic equipment of every nature used
or located on any part of the Property, and all present and future right, title
and interest of Trustor in and to any casino operator's agreement, license
agreement or sublease agreement used in connection with the Property.
"Title Policy" means the title insurance policy or policies in favor of
Beneficiary insuring the lien of this Deed of Trust.
"Trademarks" means trademarks, servicemarks and trade names (including
without limitation, the trademarks listed on Schedule A to the Trademark
Security Agreement, all registrations and applications to register such
trademarks, servicemarks and trade names and all renewals thereof, and the
goodwill of the business associated with or relating to such trademarks,
servicemarks and trade names, including without limitation any and all licenses
and rights granted to use any trademark, serviceman or trade name owned by any
other Person.
"Trust Estate" has the meaning set forth hereinabove.
"UCC" means the Uniform Commercial Code (as amended from time to time)
as adopted by the State of California.
Section 1.2 Related Matters.
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1.2.1 Terms Used in the UCC. Unless the context clearly
otherwise requires, all lower case terms used in Section 9 of this Deed of Trust
and not otherwise defined herein that are used or defined in Article 9 (or any
equivalent subpart) of the UCC have the same meanings herein.
1.2.2 Construction . Unless the context of this Deed of Trust
clearly requires otherwise, references to the plural include the singular, the
singular includes the plural, the part includes the whole, and "including" is
not limiting. The words "hereof," "herein," "hereby," "hereunder" and similar
terms in this Deed of Trust refer to this Deed of Trust as a whole (including
the Preamble, the Recitals and all Schedules and Exhibits, but subject to
Section 1.2.5) and not to any particular provision of this Deed of Trust.
Article, section, subsection, exhibit, recital, preamble and schedule references
in this Deed of Trust are to this Deed of Trust unless otherwise specified.
References in this Deed of Trust to any agreement, other document or law "as
amended" or "as may be amended from time to time," or to amendments of any
document or law, shall include any amendments, supplements, replacements,
renewals or other modifications.
1.2.3 Determinations. Any determination or calculation
contemplated by this Deed of Trust that is made by Beneficiary shall be final
and conclusive and binding upon the Trustor and Fitzgeralds in the absence of
manifest error. References in this Deed of Trust to "determination" by
Beneficiary include good faith estimates (in the case of quantitative
determinations) and good faith beliefs (in the case of qualitative
determinations). All references herein to "discretion" of Beneficiary (or terms
of similar import) shall mean "absolute and sole discretion." All consents and
other actions of Beneficiary contemplated by this Deed of Trust may be given,
taken, withheld or not taken in Beneficiary's discretion (whether or not so
expressed), except as otherwise expressly provided herein. No approval or
consent of Beneficiary shall be effective unless the express written approval or
consent of Beneficiary is received by Trustor.
1.2.4 Governing Law. This Deed of Trust shall be governed by,
and construed in accordance with, the laws (other than the rules regarding
conflicts of laws) of the State of California, except the provisions hereof
relating to the creation, perfection and enforcement of the lien and security
interest in that portion of the Trust Estate which is real property or fixtures
which shall be governed by the laws of the State of Nevada. Notwithstanding
anything to the contrary set forth in this Section 1.24, this Deed of Trust is
subject to the Applicable Gaming Laws of the State of Nevada. Beneficiary and
Trustee each agrees to cooperate with the Gaming Authorities of the State of
Nevada in connection with the administration of their regulatory jurisdiction
over Trustor, including the provision of such documents or other information as
may be requested by the Gaming Authorities of the State of Nevada relating to
Trustor or to the Loan Documents.
1.2.5 Headings. The Article and Section headings used in this
Deed of Trust are for convenience of reference only and shall not affect the
construction hereof.
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1.2.6 Severability. If any provision of this Deed of Trust or
any lien or other right hereunder shall be held to be invalid, illegal or
unenforceable under Applicable Law in any jurisdiction, such provision, lien or
other right shall be ineffective only to the extent of such invalidity,
illegality or unenforceability, which shall not affect any other provisions
herein or any other lien or right granted hereby or the validity, legality or
enforceability of such provision, lien or right in any other jurisdiction.
1.2.7 Exhibits and Schedules. All of the appendices, exhibits
and schedules attached to this Deed of Trust shall be deemed incorporated herein
by reference.
ARTICLE 2.
[RESERVED]
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES.
Trustor hereby represents and warrants to Beneficiary and Trustee that:
Section 3.1 Corporate Existence. Trustor (a) is a corporation duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated, and (b) has the corporate power and
authority to own its property and assets and to transact the business in which
it is engaged or presently proposes to engage, (c) is duly qualified and is
authorized to do business and is in good standing as a foreign corporation in
every jurisdiction in which it owns or leases real property or in which the
nature of its business requires it to be so qualified; and (d) the principal
place of business (as defined in the UCC) of Trustor is in Nevada.
Section 3.2 Authorization; Approvals. The execution, delivery and
performance by Trustor of this Deed of Trust are within Trustor's corporate
powers and authority, have been duly authorized by all necessary corporate
action, and do not contravene (a) Trustor's charter or by-laws or (b) any law or
any contractual restriction binding on or affecting Trustor or the Property. All
authorizations or approvals or other actions by, or notice to or filing with,
any governmental authority required for the due execution, delivery and
performance by Trustor of this Deed of Trust have been duly obtained and are in
full force and effect.
Section 3.3 Enforceability. This Deed of Trust has been duly executed
and delivered by Trustor and is the legal, valid and binding obligation of
Trustor, enforceable against Trustor in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium, reorganization or other similar
laws affecting creditors rights generally and general principles of equity.
Section 3.4 Validity and Perfection of Security Interests. The liens and
security interests in the Trust Estate created in accordance with the terms
hereof constitute valid security interests, and, (a) upon recordation of this
Deed of Trust in the appropriate office in Clark
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County, Nevada, (b) upon the filing of financing statements naming Trustor as
"Debtor" and Beneficiary as "Secured Party" and describing the Trust Estate in
the filing offices of the Secretary of State of Nevada and in the real estate
records of Clark County, Nevada, (c) upon the delivery of any instruments and
Chattel Paper which are included in the Trust Estate to Beneficiary, (d) to the
extent subject to U.S. federal law and not Article 9 of the UCC, upon
recordation of the security interests granted in patents, if any, Trademarks (as
defined in the Trademark Security Agreement) and Copyrights (as defined in the
Copyright Security Agreement) in the U.S. Patent and Trademark Office and the
U.S. Copyright Office, as applicable, along with the registration of all U.S.
Copyrights in the U.S. Copyright Office and, to the extent governed by foreign
law, the taking of all steps necessary under applicable foreign law to perfect
or record the security interest in all foreign Intellectual Property Collateral
applications and registrations and (e) to the extent ownership of Collateral is
represented by a certificate, a notation on the certificate of the lien granted
hereby, the security interests granted to Beneficiary hereunder will constitute
perfected security interests therein superior and prior to all liens, rights or
claims of all other Persons other than Permitted Liens.
Section 3.5 Title to and Right to Use Assets. Trustor has good and
marketable fee simple title in the Land and is the legal and beneficial owner of
the remainder of the Trust Estate (and as to the Trust Estate whether now
existing or hereafter acquired, Trustor will continue to own each item thereof),
free and clear of all liens except Permitted Liens. Trustor has the right to
hold, occupy and enjoy its interest in the Trust Estate subject to the terms of
the Casino Licenses and subject to the Permitted Liens, and has valid right,
full power and legal authority, subject to Applicable Gaming Laws, to mortgage
and pledge the same as provided herein, and Trustor shall defend the Trust
Estate against all claims and demands of all Persons at any time claiming the
same or any interest therein adverse to Beneficiary (except for Permitted Liens)
and Beneficiary may, subject to Applicable Gaming Laws, at all times peaceably
and quietly enter upon, hold, occupy and enjoy the entire Trust Estate in
accordance with the terms hereof.
Section 3.6 Non-Contravention. Neither the execution, delivery or
performance of this Deed of Trust by the Trustor nor the consummation of the
transactions herein contemplated nor the fulfillment of the terms hereof (i)
violate the terms of or constitute a default under any agreement, indenture,
mortgage, deed of trust, equipment lease, instrument or other document to which
the Trustor is a party or by which it or any of its property or assets is bound
or to which it may be subject, (ii) conflict with any law, order, rule or
regulation applicable to the Trustor of any court or any government, regulatory
body or administrative agency or other governmental body having jurisdiction
over the Trustor or the Trust Estate, or (iii) result in or require the creation
or imposition of (or the obligation to create or impose) any lien (other than
the lien contemplated hereby or by any other Loan Document), upon or with
respect to any of the property or assets now owned or hereafter acquired by
Trustor.
Section 3.7 Contracts. Each material contract which is part of the Trust
Estate (each, a "Contract"), (i) is the genuine, legal, valid, and binding
obligation of Trustor, (ii) is enforceable against Trustor in accordance with
its terms, (iii) is in full force and effect and is, to Trustor's knowledge, not
subject to any setoffs, defenses, overdue taxes, counterclaims or other claims,
nor have any of the foregoing been asserted or alleged as to any Contract, and
(iv) is, in
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all material respects, in compliance with all applicable laws, whether federal,
state, local or foreign ("Applicable Laws"). Neither Trustor nor, to the best
knowledge of Trustor, any other party to any Contract is in default in the
performance or observance of any of the terms thereof. No party to any Contract
is the United States government or an instrumentality thereof.
Section 3.8 Leases. Trustor has delivered to Beneficiary true, correct
and complete copies of all Leases and the Ground Leases, including all
amendments thereof and modifications thereto. Each Lease and each Ground Leases
(i) is the genuine, legal, valid and binding obligation of Trustor, (ii) is
enforceable against Trustor and, to the best of Trustor's knowledge, the other
party thereto, in accordance with its terms, (iii) is in full force and effect
and is not subject to any setoffs, defenses, taxes, counterclaims or other
claims, nor have any of the foregoing been asserted or alleged as to any Lease,
and (iv) is in compliance with all applicable laws, whether federal, state,
local or foreign.
Section 3.9 No Other Property. The Trust Estate constitutes all of the
property (whether owned, leased or otherwise) currently used by Trustor in
connection with the operation of the Fitzgeralds Las Vegas Casino, other than
Excluded Assets.
Section 3.10 Compliance with Laws. To the best knowledge of Trustor,
except as otherwise disclosed in writing to Beneficiary, the Trust Estate and
the proposed and actual use thereof comply in all material respects with all
Applicable Laws, and there is no proceeding pending or, to the best knowledge of
Trustor, threatened before any court, quasi-judicial body, governmental
authority or administrative agency relating to the validity of the Loan
Documents or the proposed or actual use of the Trust Estate.
Section 3.11 Property Use; Mechanics Liens. The Property is not used
principally or primarily for agricultural or grazing purposes. All costs for
labor and material for the removal, construction and renovation of the
Improvements (including, without limitation, any additions and alterations
thereto) have been paid in full or will be paid in accordance with Section 4.15
hereof.
Section 3.12 Condemnation. There are no pending or, to the best
knowledge of Trustor, threatened condemnation or eminent domain proceedings
against the Trust Estate or any part thereof.
Section 3.13 Litigation. Except as disclosed in writing to Beneficiary
on the date hereof, there are no pending or, to the best knowledge of Trustor,
threatened, actions, claims, proceedings, investigations, suits or proceedings
before any court, governmental agency or arbitrator.
Section 3.14 Construction of Improvements. All Improvements have been
and will be constructed in all material respects in accordance with Applicable
Laws and all requirements of governmental authorities and governmental
approvals. To the best knowledge of Trustor, the Improvements are free from
latent and patent defects, and do not require any material repairs,
reconstruction or replacement on the date hereof (except for any material
repairs, reconstruction
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or replacement that do not have a material adverse effect on the value of the
Improvements and do not materially and adversely affect Trustor's use and
operation of the Improvements).
ARTICLE 4.
AFFIRMATIVE COVENANTS
Trustor hereby covenants to and agrees with Beneficiary as follows:
Section 4.1 Secured Obligations of Trustor. Trustor will perform,
observe and comply with its Secured Obligations arising under this Deed of Trust
and shall continue to be liable for the performance of its Secured Obligations
arising under this Deed of Trust until discharged in full, notwithstanding any
actions of partial foreclosure that may be brought hereunder to recover any
amount or amounts expended by Beneficiary on behalf of Trustor in order to cure
any of Trustor's defaults or to satisfy any of Trustor's obligations or
covenants under any agreement relating to the Trust Estate and to which Trustor
is a party or by which the Trust Estate is bound.
Section 4.2 Compliance with Law: Maintenance of Approvals. Except as
expressly permitted by the Loan Agreement, Trustor shall (i) comply with all
requirements of law applicable to the ownership, operation, use and occupancy of
all or any portion of the Trust Estate, whether or not such compliance requires
work or remedial measures that are ordinary or extraordinary, foreseen or
unforeseen, or structural or nonstructural, and (ii) maintain in full force and
effect all authorizations, approvals or other actions, including, without
limitation, Casino Licenses and liquor licenses and permits, which are necessary
or desirable for the performance of Trustor's obligations pursuant to this Deed
of Trust or for the business conducted by Trustor on the Property.
Section 4.3 Other Reports. Trustor shall provide from time to time such
additional information regarding Trustor or the Trust Estate as are required
under the Loan Agreement or as Beneficiary may reasonably request.
Section 4.4 Insurance. Trustor, at its sole cost and expense, will
provide, maintain and keep in force the insurance required by Section 6.10 of
the Loan Agreement ("Insurance Policies").
Section 4.5 Waste and Repair. Except as may be expressly permitted by
the Loan Agreement, Trustor shall at all times cause the Trust Estate to be
maintained in normal working order and condition (reasonable wear and tear
excepted). Trustor shall not suffer any waste of the Property or do or permit to
be done thereon anything not otherwise permitted in the Loan Agreement that may
in any way impair the security of this Deed of Trust. Trustor shall not abandon
the Property nor leave the Property unprotected or deserted.
Section 4.6 Impositions; Impounds; Taxes, Capital Costs.
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4.6.1 Impositions Affecting the Property. Trustor shall pay when
due all Impositions (or currently payable installments thereof) that are or that
may become a lien on the Property or are assessed against the Property or the
Rents; provided, however, that Trustor may, at its expense, contest the amount
or validity or application of any such Impositions by appropriate legal
proceedings promptly initiated and conducted in good faith and with due
diligence; provided, that (i) neither the Property nor any substantial part
thereof will be in danger of being sold, forfeited, terminated, canceled, or
lost as a result of such contest, and (ii) except in the case of a lien junior
to the lien of this Deed of Trust, Trustor shall have posted such bond or
furnished such other security as may be required by law to release such lien.
4.6.2 Impounds; Impound Account. Upon the occurrence and during
the continuance of an Event of Default and at the request of Beneficiary,
Trustor will pay to Beneficiary monthly an amount equal to one-twelfth (1/12th)
of the annual cost (or such greater amount as may be reasonably necessary for
Beneficiary to have on hand sufficient funds to pay the next installment prior
to delinquency) of Impositions on the Property (but only those Impositions
defined in clause (i) of the definition of "Impositions"), together with an
amount equal to the estimated next hazard and other required insurance premiums
in order to accumulate with Beneficiary sufficient funds to pay such Impositions
and premiums at least 30 days prior to their respective due dates. Such funds
shall be held by Beneficiary on a commingled basis and shall not bear interest.
Said accumulated funds shall be paid and applied by Beneficiary with respect to
such Impositions and insurance premiums as and when due.
Section 4.7 Further Assurances. Trustor shall, at its own expense,
perform such acts as may be necessary, or that Beneficiary may request at any
time, to execute, acknowledge and deliver all such additional papers and
instruments (including, without limitation, a declaration of no setoff) and all
such further assurances of title and will do or cause to be done all further
acts and things as may be proper or reasonably necessary to carry out the
purpose hereof and to subject to the liens hereof any property intended by the
terms hereof to be covered thereby and any renewals, additions, substitutions,
replacements or betterments thereto.
Section 4.8 Reimbursement: Waiver of Offsets.
4.8.1 In the event any tax, stamp tax, assessment water rate,
sewer rate, insurance premium, repair, rent charge, debt, claim, inspection,
Imposition or lien having priority over the lien of this Deed of Trust or in the
event any other amount required to be paid by Trustor hereunder shall remain
unpaid and Trustor is not contesting such amount pursuant to the terms hereof or
the Loan Agreement, Beneficiary shall have the right to pay such amount and
shall have the right to declare immediately due and payable any such amount so
paid. Any amount so paid by Beneficiary shall bear interest at the default
interest rate specified in Section 2.6(c) of the Loan Agreement ("Default Rate")
from the date of payment by Beneficiary, shall constitute an additional Secured
Obligation secured hereby, prior to any right, title or interest in or claim
upon the Trust Estate attaching or accruing subsequent to the lien of this Deed
of Trust, shall be secured by this Deed of Trust and shall be payable by Trustor
to Beneficiary within thirty (30) days after receipt by Trustor of written
demand.
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4.8.2 Except as otherwise provided herein, in the Loan Agreement
or in the other Loan Documents, all sums payable by Trustor hereunder or under
the other Loan Documents shall be paid without notice, demand, counterclaim,
setoff, deduction or defense and without abatement, suspension, deferment,
diminution or reduction, and the obligations and liabilities of Trustor
hereunder shall in no way be released, discharged or otherwise affected by
reason of: (i) any damage to or destruction of or any condemnation or similar
taking of the Trust Estate or any part thereof, (ii) any restriction or
prevention of or interference with any use of the Trust Estate or any part
thereof, (iii) any title defect or encumbrance or any eviction from the Property
or the Improvements or any part thereof by title paramount or otherwise; (iv)
any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceeding relating to Beneficiary, or
any action taken with respect to this Deed of Trust by any trustee or receiver
of Beneficiary, or by any court, in any such proceeding; (v) any claim which
Trustor has or might have against Beneficiary; (vi) any default or failure on
the part of Beneficiary to perform or comply with any of the terms hereof or of
any other agreement with Trustor or (vii) any other occurrence whatsoever,
whether similar or dissimilar to the foregoing; whether or not Trustor shall
have notice or knowledge of any of the foregoing. Trustor waives all rights now
or hereafter conferred by statute or otherwise to any abatement, suspension,
deferment, diminution or reduction of any sum secured hereby and payable by
Trustor.
Section 4.9 Litigation. Trustor will, promptly upon obtaining actual
knowledge thereof, give notice in writing to Beneficiary of any litigation
commenced that is likely to have a material adverse effect on the Property or
the liens created hereby other than unlawful detainer proceedings brought by
Trustor.
Section 4.10 Certain Reports. Trustor will, promptly and in any event
within fifteen days after actual receipt by Trustor thereof, deliver to
Beneficiary a copy of any written notice or citation concerning any actual,
alleged or suspected violation of Environmental Requirements or liability of
Trustor for Environmental Damages in connection with the Property or past or
present activities of any Person thereon.
Section 4.11 Tax Receipts. Subject to the provisions of Section 4.6.1
hereof, Trustor shall provide to Beneficiary, within 30 days after demand made
therefor, bills (which shall be receipted from and after the date receipted
bills are obtainable) showing the payment to the extent then due of all taxes,
assessments (including those payable in periodic installments), water rates,
sewer rates, and/or any other Imposition that have become a lien (other than an
inchoate lien) upon the Trust Estate.
Section 4.12 FIRPTA Affidavit. Trustor hereby represents and warrants to
Beneficiary under penalty of perjury:
(i) Trustor's U.S. Taxpayer Identification Number is 88-0266868;
(ii) Trustor's business address is set forth in the preamble
hereto; and
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(iii) Trustor is not a "foreign person" within the meaning of
Sections 1445 and 7701 of the Code (i.e., Trustor is not a nonresident
alien, foreign corporation, foreign partnership, foreign trust or
foreign estate as those terms are defined in the Code and regulations
promulgated thereunder).
Trustor agrees to indemnify, defend, protect and hold Beneficiary and
Beneficiary's agents harmless of, from and against any and all loss,
liability, costs, damages, claims or causes of action including
reasonable attorneys fees, costs and expenses which may be actually
incurred by Beneficiary or Beneficiary's agents by reason of any failure
of any representation or warranty made by Trustor in this Section 4.12
to be true and correct in all respects, including, but not limited to,
any liability for failure to withhold any amount required under Code
Section 1445 in the event of foreclosure or other transfer of the
Property.
Section 4.13 Preservation of Contractual Rights. Except as otherwise
expressly permitted by the Loan Agreement, Trustor shall, prior to delinquency,
default or forfeiture, perform all obligations and satisfy all material
conditions required on its part to be satisfied to preserve its rights and
privileges under any contract, lease, license, permit or other authorization (a)
under which it holds any Tangible Property, or (b) which constitutes part of the
Intangible Property.
Section 4.14 Tax Service Contract. At any time after the occurrence of
an Event of Default (whether or not such Event of Default is cured), at the
request of Beneficiary and at Trustor's and/or its permitted successor's sole
expense, Beneficiary shall be furnished a tax service contract in form
satisfactory to Beneficiary issued by a tax reporting agency satisfactory to
Beneficiary, which contract shall remain in force until indefeasible discharge
in full of the Secured Obligations.
Section 4.15 Liens. Trustor shall pay and promptly discharge, at
Trustor's cost and expense, all liens upon the Trust Estate, or any part thereof
or interest therein other than the Permitted Liens. Trustor shall have the right
to contest in good faith the validity of any such lien, provided Trustor shall
first post such bond or furnish such other security as may be required by law to
release such lien, and provided however that Trustor shall thereafter diligently
proceed to cause such lien to be removed and discharged. If Trustor shall fail
to discharge any such lien, 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 by depositing in court a bond for the amount claimed or otherwise
giving security for such lien, or in such manner as is or may be prescribed by
law. Any amount so paid by Beneficiary shall bear interest at the Default Rate
from the date of payment by Beneficiary, shall constitute an additional Secured
Obligation secured hereby, prior to any right, title or interest in or claim
upon the Trust Estate attaching or accruing subsequent to the lien of this Deed
of Trust shall be secured by this Deed of Trust and shall be payable by Trustor
to Beneficiary upon demand.
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Section 4.16 Inspection. Trustor shall permit Beneficiary, upon 24 hours
prior notice, to enter upon and inspect during normal business hours, the
Property and the construction and operation thereof, for such purposes
reasonably deemed necessary by Beneficiary, it being agreed by Trustor that
Beneficiary's good faith belief of the existence of a past or present release or
threatened release of any Hazardous Material into, onto, beneath or from the
Property shall be conclusively deemed reasonable; provided, however, that no
such prior notice shall be necessary and such inspection may occur at any time
if (i) Beneficiary reasonably believes that an emergency exists or is imminent
or (ii) the giving or delivery of such notice is prohibited or stayed by
Applicable Laws.
ARTICLE 5.
LEASEHOLD PROVISIONS
Section 5.1 Deed of Trust Subject to Ground Leases. This Deed of Trust
is made subject to whatever rights and interest the Lessor(s) may have under
each lease defined herein as one of the Ground Leases and the covenants,
conditions and restrictions set forth therein. This Deed of Trust shall not be
construed so as to constitute a default under any Ground Leases pursuant to
Applicable Law or the terms of such Ground Leases, and this Deed of Trust and
the lien created hereby shall be of no further force and effect if deemed by a
court of competent jurisdiction to violate the terms of such Ground Leases or
Applicable Law.
Section 5.2 Certain Covenants. Trustor covenants and agrees as follows:
5.2.1 Trustor shall keep and perform, in all material respects,
the covenants, agreements and obligations of the lessee set forth in the Ground
Leases, and not to commit, suffer or permit any material breach thereof. If
Trustor shall default under any of the Ground Leases, Beneficiary shall have the
right, but not the obligation, to take any action necessary or desirable to cure
any default by Trustor in the performance of any of the terms, covenants and
conditions of the Ground Leases, Beneficiary being authorized to enter upon the
leased premises for such purposes. Any default by the Trustor as lessee under
any of the leases defined herein as the "Ground Leases" or breach of an
obligation thereunder shall be a default hereunder, provided that such shall not
constitute a default hereunder until the expiration of any applicable lessee
notice and grace period under the Ground Leases and the failure of Trustor to
cure such default or breach under the Ground Leases within such grace period.
5.2.2 Trustor shall give prompt notice to Beneficiary of the
actual receipt by it of written notice of default served on Trustor from the
holder of the lessor's interest under the Ground Leases ("Lessor"), and to
furnish to Beneficiary all information that it may reasonably request concerning
the performance by Trustor of the covenants of the Ground Leases, including,
without limitation, evidence of payment of ground rent, taxes, insurance
premiums and operating expenses.
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5.2.3 So long as this Deed of Trust is in effect, there shall be
no merger of the Ground Leases or any interest therein nor of the leasehold
estate created thereby with the fee estate in the land leased thereunder
("Leased Land") or any portion thereof by reason of the fact that the Ground
Leases or such interest therein or such leasehold estate may be held directly or
indirectly by or for the account of any person who shall hold the fee estate in
the Leased Land or any portion thereof or any interest of the Lessor. In case
Trustor acquires the fee title or any other estate, title or interest in the
Leased Land covered by the Ground Leases, this Deed of Trust shall attach to and
cover and be a lien upon the fee title or any other estate, title or interest in
the Leased Land covered by the Ground Leases, this Deed of Trust shall attach to
and cover and be a lien upon the fee title or such other estate so acquired, and
such fee title or other estate shall, without further assignment, mortgage or
conveyance, become and be subject to the lien of and covered by this Deed of
Trust. Trustor shall notify Beneficiary of any such acquisition by Trustor and,
on written request by Beneficiary, shall at its own expense cause to be executed
and recorded all such other and further assurances or other instruments in
writing as may in the opinion of Beneficiary be required to carry out the intent
and meaning hereof.
5.2.4 Trustor shall not surrender any Ground Leases (except a
surrender upon the expiration of the term of the applicable Ground Leases or
upon the termination by the Lessor thereunder pursuant to the provisions
thereof) to the Lessor thereunder, or any portion thereof or of any interest
therein, and no termination of any Ground Leases, by Trustor as lessee
thereunder, shall be valid or effective, and the Ground Leases shall not be
surrendered or canceled, amended, other than in immaterial respects, or
subordinated to any fee mortgage, to any lease, or to any other interest, either
orally or in writing, without the prior written consent of Beneficiary so long
as this Deed of Trust is in effect. Any attempted surrender, amendment (except
in immaterial respects), cancellation or termination of any Ground Leases by
Trustor without obtaining the prior written consent of Beneficiary shall be null
and void and without force and effect on the Ground Leases, and such attempt
shall constitute a default hereunder.
5.2.5 If and to the extent required by the terms of the Ground
Leases, Trustor shall, promptly after the execution and delivery of this Deed of
Trust or of any instrument or agreement supplemental thereto, notify such Lessor
in writing of the execution and delivery thereof and deliver to each such Lessor
a copy of such Deed of Trust, instrument or agreement, as the case may be.
5.2.6 If any Ground Leases is terminated prior to natural
expiration of its term by reason of default of Trustor, and if, pursuant to any
provision of the Ground Leases, or otherwise, Beneficiary or its designee shall
acquire from the Lessor thereunder a new lease of the Leased Land, or of any
part of the Leased Land, Trustor shall have no right, title or interest in or to
such new lease or the leasehold estate created thereby.
5.2.7 Trustor hereby warrants the quiet and peaceful possession
of the Property by Trustee for the benefit of Beneficiary after the occurrence
of an Event of Default for so long as the Deed of Trust is in effect and further
warrants and agrees to defend the leasehold estate created under each Ground
Leases for the remainder of the term set forth therein against each and every
person claiming the same or any part thereof.
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5.2.8 In the event of the termination, rejection or
disaffirmance by the Lessor (or by any receiver, trustee, custodian, or other
party that succeeds to the rights of any Lessor, pursuant to any section or
chapter of the Bankruptcy Code, or any similar law, whether state, federal or
otherwise, relating to insolvency, reorganization or liquidation, or for the
relief of debtors (each such law referred to herein as a "Bankruptcy Law" and
all such laws collectively referred to herein as "Bankruptcy Laws"), Trustor
hereby presently, absolutely, and irrevocably grants and assigns to Beneficiary
the sole and exclusive right to make or refrain from making any election
available to lessees under any Bankruptcy Law (including, without limitation,
the election available pursuant to Section 365(h) of the Bankruptcy Code, 11
U.S.C. Section 365(h), and any successor provision), and Trustor agrees that
any such election, if made by Trustor without the prior written consent of
Beneficiary (which Beneficiary would not anticipate granting due to the
importance of the Ground Leases as security), shall be void and of no force or
effect.
5.2.9 In the event there is a termination, rejection or
disaffirmance by any Lessor (or by any receiver, trustee, custodian or other
party that succeeds to the rights of any Lessor) as described in Section 5.2.8
above, and Beneficiary elects to have Trustor remain in possession under any
legal right, Trustor may have to occupy the premises leased pursuant to any
Ground Leases, then (i) Trustor shall remain in such possession and shall
perform all facts necessary for Trustor to retain its right to remain in such
possession, whether such acts are required under the then existing terms and
provisions of the Ground Leases or otherwise, (ii) all of the terms and
provisions of this Deed of Trust and the lien created hereby shall remain in
full force and effect and shall be extended automatically to such possession,
occupancy, and interest of the Trustor, to all rights of Trustor to such
possession, occupancy and interest, and to all of Trustor's rights and remedies
against the Lessor under the Bankruptcy Laws, and (iii) Trustor hereby agrees
with Beneficiary that if Trustor shall seek to offset against the rent reserved
in the Ground Leases any damages or other amounts pursuant to any right of
offset available to lessees under any Bankruptcy Laws for any damages sustained
by reason of the failure by the applicable Lessors to perform their obligations,
then not less than thirty (30) days prior to effecting any such offset, Trustor
shall give written notice to Beneficiary of the amount of the proposed offset
and the basis therefor, and if Beneficiary objects, within thirty (30) days
after receipt of such notice, to the offset on the basis that it may constitute
a breach of the Ground Leases, then Trustor shall not effect the offset of any
amounts so objected to by Beneficiary and Trustor agrees that any such election,
if made by Trustor without the prior written consent of Beneficiary, shall be
void and of no force or effect.
5.2.10 Trustor shall use its commercially reasonable efforts
(not including the payment of any money or other consideration to any third
party) to obtain from time to time, promptly after request by Beneficiary, from
the Lessor and deliver to Beneficiary, at no cost to Beneficiary, a Lessor's
estoppel certificate thereunder in such form as may reasonably be requested by
Beneficiary. Notwithstanding the foregoing, Trustor's failure to obtain an
estoppel certificate from any Lessor shall not be deemed an Event of Default
hereunder provided Trustor has used its commercially reasonable efforts (as
modified above).
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5.2.11 If at any time Trustor fails to comply in any material
respect with any of Trustor's material obligations under any Ground Leases and
the Lessor notifies Beneficiary thereof, then Beneficiary or Trustee may, but
without obligation to do so and after providing reasonable notice to Trustor
(provided that no notice shall be required in the event of an emergency or if
the Ground Leases is in danger of being terminated) and without releasing
Trustor from any obligation hereunder or removing or waiving any default
hereunder, perform on behalf of Trustor any such obligations, and any and all
costs and expenses (including, without limitation, attorneys fees) incurred by
Beneficiary or Trustee in connection therewith shall be repayable upon demand by
Trustor, with interest thereon at the Default Rate, and shall be secured hereby;
provided that the foregoing shall not be construed to require Beneficiary or
Trustee to incur any expense or take any action with respect to Trustor's
failure to comply with any of Trustor's obligations under any Ground Leases.
5.2.12 Trustor, promptly upon receiving written notice of a
breach by the Lessor (or by any receiver, trustee, custodian or other party that
succeeds the rights of the Lessor) or of any inability of the Lessor to perform
the terms and provisions of any Ground Leases (including, without limitation, by
reason of a termination, rejection, or disaffirmance by such Lessor pursuant to
any Bankruptcy Laws), which would materially impair the value of any Ground
Leases, will notify Beneficiary in writing of any such breach or inability.
Trustor hereby assigns to Beneficiary the proceeds of any claims that Trustor
may have against such Lessor for any such breach or inability by such Lessor. So
long as no Event of Default has occurred and is continuing, Trustor shall have
the sole right to proceed against such Lessor in Trustor's and Beneficiary's
behalf and to receive and retain all proceeds of such claims, except as
otherwise provided in the Loan Agreement. During the continuance of an Event of
Default, Beneficiary shall have the sole right to proceed against Lessor, and
Trustor shall cooperate with Beneficiary in such endeavor. Trustor shall, at its
expense, diligently prosecute any such proceedings, shall deliver to Beneficiary
copies of all papers served in connection therewith, and shall consult and
cooperate with Beneficiary and its attorneys and agents in the carrying on and
defense of any such proceedings.
5.2.13 Notwithstanding anything to the contrary in this
paragraph, if there is an Event of Default which remains uncured, then
Beneficiary shall have the right, but not the obligation, to conduct and
control, through counsel of Beneficiary's choosing, all litigation and other
proceedings under the Bankruptcy Laws relating to the Lessor, and any expenses
incurred by Beneficiary in such litigation and proceedings will be additional
indebtedness of Trustor secured by this Deed of Trust, will bear interest at the
Default Rate and will be payable by Trustor upon demand. No settlement of any
such proceeding shall be made by Trustor without Beneficiary's prior written
consent.
5.2.14 In addition to any and all other assignments contained in
this Deed of Trust, Trustor hereby absolutely, presently and unconditionally
assigns, transfers and sets over to Beneficiary all of Trustor's claims and
rights to the payment of damages, and any other remedies available to Trustor,
arising from any rejection of any Ground Leases by the Lessor thereunder
pursuant to any Bankruptcy Law. This assignment constitutes a present, absolute,
irrevocable and unconditional assignment of the foregoing claims, rights and
remedies, and shall
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continue in effect until all the indebtedness and obligations secured by this
Deed of Trust shall have been satisfied and discharged in full. Notwithstanding
the foregoing, so long as no uncured Event of Default has occurred and is
continuing, Trustor shall have an absolute license to assert and settle any and
all such claims, and to receive and apply all proceeds thereof as Trustee shall
determine in its discretion.
ARTICLE 6.
NEGATIVE COVENANTS
Trustor hereby covenants to and agrees with Beneficiary as follows:
Section 6.1 Restrictive Uses. Trustor covenants not to suffer any liens
against the Trust Estate (other than Permitted Liens).
Section 6.2 No Cooperative or Condominium. Trustor shall not operate or
permit the Property to be operated as a cooperative or condominium building or
buildings in which the tenants or occupants participate in the ownership,
control or management of the Property or any part thereof, as tenant
stockholders or otherwise.
ARTICLE 7.
CASUALTIES AND CONDEMNATION
Section 7.1 Casualties.
7.1.1 Trustor will notify Beneficiary in writing promptly after
loss or damage caused by fire, wind or other casualty to the Property
("Casualty").
7.1.2 Any and all proceeds from Insurance Policies payable to
Beneficiary under the Loan Agreement shall be treated in accordance with Section
6.10 of the Loan Agreement and shall be released to Trustor or applied to the
discharge of the Secured Obligations as set forth in the Loan Agreement.
Section 7.2 Condemnation. Trustor, immediately upon obtaining knowledge
of the institution of any proceedings for the condemnation of the entire
Property or any material portion thereof, will notify Trustee and Beneficiary of
the pendency of such proceedings. Trustee and Beneficiary may participate in any
such proceedings and Trustor from time to time will deliver to Beneficiary all
instruments requested by Beneficiary to permit such participation; provided,
however, that Trustor shall have the sole right to participate in and settle any
and all such proceedings unless an Event of Default then exists. In any such
condemnation proceedings Beneficiary may be represented by counsel selected by
Beneficiary at the sole cost and expense of Trustor. Trustor shall cause the net
proceeds of any award or compensation or payment in lieu or settlement thereof,
to be applied as set forth in Section 6.10 of the Loan Agreement. To the extent
permitted by applicable law, Trustor hereby specifically, unconditionally and
irrevocably
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waives all rights of a property owner granted under applicable law, including
NRS 37.115, which provide for allocation of condemnation proceeds between a
property owner and a lienholder.
ARTICLE 8.
REMEDIES OF BENEFICIARY
Section 8.1 Event of Default. Subject to any applicable cure period
provided for in the Loan Agreement or in this Deed of Trust, or if no cure
period has been specified, then 30 days after Beneficiary has provided written
notice to Trustor with respect thereto (any such cure periods to run
concurrently, and not consecutively, with any other cure periods provided herein
or by law) any of the following shall be deemed to be an "Event of Default"
hereunder:
8.1.1 The occurrence of one or more "Events of Default" (as
defined in Section 8.1 of the Loan Agreement) shall constitute an Event of
Default under this Deed of Trust;
8.1.2 Failure of Trustor to perform any of the terms, covenants
and conditions in this Deed of Trust or any of the other Loan Documents;
8.1.3 Any statement, representation or warranty given by Trustor
to Trustee or Beneficiary in any of the Loan Documents, in connection with the
Loan Agreement or in any other document provided by Trustor, including this Deed
of Trust, is found to be materially false or misleading;
8.1.4 A material default under or the institution of foreclosure
or other proceedings to enforce, any lien or Permitted Lien of any kind upon the
Property or any portion thereof.
In addition, to the maximum extent permitted by applicable law, it shall be an
Event of Default hereunder if Trustor, or any other "borrower" (as that term is
defined in NRS 106.310) who may send a notice pursuant to NRS 106.380(1), with
respect to this Deed of Trust, (i) delivers, sends by mail or otherwise gives,
purports to deliver, send by mail or otherwise give, to Beneficiary (A) any
notice of an election to terminate the operation of this Deed of Trust as
security for any secured obligation, including, without limitation, any
obligation to repay any "future advance" (as defined in NRS 106.320) of
"principal" (as defined in NRS 106.345), or (B) any other notice pursuant to NRS
106.380(1), (ii) records a statement pursuant to NRS 106.380(3), or (iii) causes
this Deed of Trust, any secured obligation, Beneficiary to be subject to NRS
106.380(2), 106.380(3) or 106.400 shall be in default hereunder.
Section 8.2 Remedies. At any time after an Event of Default, subject to
any restrictions contained in any Intercreditor Agreement Beneficiary may:
8.2.1 In person, by agent or by a receiver, and without regard
to the adequacy of security, the solvency of Trustor or any other matter, (i)
enter upon and take possession of the Property, or any part thereof, in its own
name or in the name of Trustee,
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(ii) inspect the Property for the purpose of determining the existence,
location, nature and magnitude of any past or present release of Hazardous
Materials into, onto, beneath or from the Property, (iii) negotiate with
governmental authorities with respect to compliance with Environmental
Requirements and remedial measures, (iv) take any action necessary to ensure
compliance with Environmental Requirements, including, but not limited to,
spending Rents in connection with any cleanup, remediation or other response
action with respect to Hazardous Materials or (v) sue for or otherwise collect
the Rents, issues and profits thereof and apply the same, less costs and
expenses of operation and collection, including reasonable attorneys fees
actually incurred, to the Secured Obligations, all in such order as Beneficiary
may determine. The entering upon and taking possession of said Property, the
collection of such Rents, issues and profits and the application thereof as
aforesaid shall not cure or waive any default or notice of default hereunder or
invalidate any act done pursuant to such notice, or deprive Beneficiary of the
benefits of any indemnity set forth herein;
8.2.2 Commence an action to foreclose this Deed of Trust in the
manner provided by Applicable Laws for the foreclosure of mortgages or deeds of
trust of real property;
8.2.3 Seek a judgment that Trustor has breached its covenants,
representations and/or warranties set forth in this Deed of Trust or any other
Loan Document regarding Environmental Requirements and/or Hazardous Materials,
by commencing, maintaining and concluding, and enforcing a judgment arising
from, an action for breach of contract, without regard to whether Beneficiary
has commenced an action to foreclose this Deed of Trust, and to seek injunctive
or other appropriate equitable relief and/or the recovery of any and all
Environmental Damages, it being conclusively presumed between Trustor and
Beneficiary that any reasonable costs advanced or expenses actually incurred by
Beneficiary relating to the cleanup, remediation or other response action with
respect to the Property were made or incurred by Beneficiary in good faith;
8.2.4 Deliver to Trustee a written declaration of default and
demand for sale, and a written notice of default and election to cause the
Property to be sold, which notice Trustee or Beneficiary shall cause to be duly
filed for record;
8.2.5 In accordance with NRS 40.512, Beneficiary may waive its
lien against any parcel of the Property or portion thereof or all or any portion
of the Fixtures or Personalty attached to the Property, to the extent such
property is determined to be environmentally impaired, and to exercise any and
all rights and remedies of an unsecured creditor against Trustor and all of
Trustor's assets for the recovery of any deficiency, including, but not limited
to, seeking an attachment order under NRS Chapter 31. No such waiver shall be
final or binding on Beneficiary unless and until a final money judgment is
obtained against Trustor. As between Beneficiary and Trustor, Trustor shall have
the burden of proving that any "release" (as defined in NRS 40.505) or
threatened release was not knowingly or negligently caused or contributed to, or
knowingly or willfully permitted or acquiesced to by Trustor or any related
party (or any affiliate or agent of Trustor or any related party) and that
Trustor made written disclosure of the release to Beneficiary or that
Beneficiary otherwise obtained actual knowledge thereof. Trustor's obligations
hereunder shall survive the foreclosure, deed in lieu of
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foreclosure, release, reconveyance or any other transfer of the Property or this
Deed of Trust. For the purposes of any action brought under this Section 8.2.5,
Trustor hereby waives the defense of laches and any applicable statute of
limitations. Trustor acknowledges and agrees that notwithstanding anything to
the contrary, express or implied, in this Deed of Trust or in any of the other
Loan Documents (including, without limitation, any nonrecourse or exculpatory
language, if any), Trustor shall be personally liable for any recovery described
in this Section 8.2.5 and such liability shall not be limited to the amount of
the Secured Obligations;
8.2.6 With respect to any Personalty, proceed as to both the
real and personal property in accordance with Beneficiary's rights and remedies
in respect of the Property, or proceed to sell said Personalty separately and
without regard to the Property in accordance with Beneficiary's rights and
remedies; provided that Lender shall first apply for and receive all required
approvals of any Gaming Authority having jurisdiction over the sale or
disposition of Gaming Equipment prior to the sale or disposition thereof; and/or
8.2.7 Pursue any and all other remedies it may have, at law or
in equity, or under any other document or instrument, except as otherwise
provided in the Loan Agreement.
Section 8.3 Power of Sale. Should Beneficiary elect to foreclose by
exercise of the power of sale herein contained, Beneficiary shall notify Trustee
and shall deposit with Trustee this Deed of Trust and such receipts and evidence
of expenditures made and secured hereby as Trustee may require.
8.3.1 Upon receipt of such notice from Beneficiary, Trustee
shall cause to be recorded, published and delivered to Trustor notices of
default and sale to be given in accordance with the provisions of Applicable
Laws, including NRS Chapter 107. Trustee shall, without demand on Trustor, after
lapse of such time as may then be required by Applicable Laws and after
recordation of such notice of default and after notice of sale having been given
as required by law, sell the Trust Estate at the time and place of sale fixed by
it in said notice of sale, either as a whole, or in separate lots or parcels or
items as Trustee shall deem expedient and in such order as it may determine, at
public auction to the highest bidder for cash in lawful money of the United
States payable at the time of sale. Trustee shall deliver to such purchaser or
purchasers thereof its good and sufficient deed or deeds conveying the property
so sold, but without any covenant or warranty, express or implied. The recitals
in such deed of any matters or facts shall be conclusive proof of the
truthfulness thereof any Person, including, without limitation, Trustor or
Beneficiary, may purchase at such sale and Trustor hereby covenants to warrant
and defend the title of such purchaser or purchasers against the claims of all
Persons claiming by, through or under Trustor. To the maximum extent allowed by
Applicable Laws, Beneficiary, if it is the purchaser, may apply the amount of
the Secured Obligations then due and payable toward payment of the purchase
price. To the maximum extent permitted by Applicable Laws, Trustor hereby waives
its right, if any, to require that the Property be sold as separate tracts or
units in the event of foreclosure.
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8.3.2 Trustee, upon such sale, shall make (without any covenant
or warranty, express or implied), execute and, after due payment made, deliver
to purchaser or purchasers, or his or their heirs or assigns, a deed or deeds,
or other record or records of interest, as the case may be, in and to the
Property so sold that shall convey to the purchaser all the title and interest
of Trustor in the Property (or the portion thereof sold), and after deducting
all costs, fees and expenses of Trustee and of this Deed of Trust, including
costs of evidence of title in connection with sale, shall apply the proceeds of
sale to payment of (i) all sums expended under the terms hereof, not then
repaid, with accrued interest at the Default Rate and (ii) all other sums then
secured hereby and the remainder, if any, to the Person or Persons legally
entitled thereto.
8.3.3 Trustee may postpone sale of all or any portion of the
Trust Estate by public announcement at such time and place of sale, or as
otherwise permitted by Applicable Laws, and from time to time thereafter may
postpone such sale by public announcement at the time fixed by the preceding
postponement or subsequently noticed sale, and without further notice make such
sale at the time fixed by the last postponement, or may, in its discretion, give
a new notice of sale. Beneficiary may rescind any notice of default at any time
before Trustee's sale by executing a notice of rescission and recording the
same. The recordation of such notice of rescission shall constitute a
cancellation of any prior declaration of default and demand for sale. The
exercise by Beneficiary of the right of rescission shall not constitute a waiver
of any default then existing or subsequently occurring, or impair the right of
Beneficiary to execute other declarations of default and demand for sale, or
notices of default and of election to cause the Property to be sold nor
otherwise affect the Loan Documents or this Deed of Trust, or any of the rights,
obligations or remedies of Beneficiary or Trustee hereunder.
8.3.4 Beneficiary and Trustee acknowledge, understand and agree
that, to the extent the prior approval of the Gaming Authorities of the State of
Nevada is required pursuant to applicable law for the exercise, operation and
effectiveness of any remedy hereunder or under any other Loan Document, or the
taking of any action that may be taken by Beneficiary or Trustee hereunder or
under any other Loan Document, including without limitation the taking of
possession and disposition of collateral consisting of gaming devices, cashless
wagering systems and associated equipment (as those terms are defined in Nevada
Revised Statutes 463.0155, 463.014 and 463.0136), such remedy or action shall be
subject to such prior approval of the gaming authorities of the State of Nevada
and the Beneficiary or Trustee may be subject to being called forward for
licensing or a finding of suitability. All rights, remedies and powers provided
in this Deed of Trust may be exercised only to the extent that the exercise
thereof does not violate any provision of Applicable Gaming Laws, and all
provisions of this Deed of Trust are intended to be subject to all mandatory
provisions of the Applicable Gaming Laws, which may be controlling.
Section 8.4 Proof of Default. In the event of a sale of the Property, or
any part thereof, and the execution of a deed or deeds therefor, the recital
therein of default, and of recording notice of breach and election to sell, and
of the elapsing of the required time (if any) between the foregoing recording
and the following notice, and of the giving of
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notice of sale, and of a demand by Beneficiary, or its successors or assigns,
that such sale should be made, shall be conclusive proof of such default,
recording, election, elapsing of time, and of the due giving of such notice, and
that the sale was regularly and validly made on due and proper demand by
Beneficiary, its successors or assigns; and any such deed or deeds with such
recitals therein shall be effectual and conclusive against Trustor, its
successors and assigns, and all other Persons and the receipt for the purchase
money recited or contained in any deed executed to the purchaser as aforesaid
shall be sufficient discharge to such purchaser from all obligations to see to
the proper application of the purchase money.
Section 8.5 Protection of Security. If an Event of Default shall have
occurred and be continuing, then upon at least 15 days prior written notice to
Trustor and without releasing Trustor from any obligations or defaults
hereunder, Beneficiary or Trustee shall have the right, but not the obligation,
to: (i) make payment or otherwise perform such obligations of Trustor upon which
such Event of Default is based in such manner and to such extent as either may
reasonably deem necessary to protect the security hereof, Beneficiary and
Trustee being authorized to enter upon the Property for such purpose; (ii)
appear in and defend any action or proceeding purporting to affect, in any
manner whatsoever, the Secured Obligations, the security hereof or the rights or
powers of Beneficiary or Trustee; (iii) pay, purchase or compromise any
encumbrance, charge or lien (other than Permitted Liens); (iv) advance any and
all costs and expenses reasonably necessary to cure or pay Environmental Damages
or otherwise to comply Environmental Requirements; and (v) in exercising any
such powers, pay necessary expenses, employ counsel and pay attorneys fees.
Trustor hereby agrees to repay with thirty (30) days after receipt of written
demand all reasonable sums actually expended Trustee or Beneficiary pursuant to
this Section 8.5. with interest at the Default Rate from the date of expenditure
by Beneficiary, and such sums, with interest, shall be secured hereby.
Section 8.6 Receiver. If an Event of Default shall have occurred and be
continuing, Beneficiary, as a matter of strict right and without regard to the
then value of the Property, shall have the right to apply to any court having
jurisdiction to appoint a Receiver or Receivers of the Property. Any such
Receiver or Receivers shall have all the powers and duties of receivers under
Applicable Laws in like or similar cases and all the powers and duties of
Beneficiary in case of entry as provided in this Deed of Trust, and shall
continue as such and exercise all such powers until the date of confirmation of
sale, unless such receivership is sooner terminated.
Section 8.7 Curing of Defaults.
8.7.1 If Trustor shall at any time fail to perform or comply
with any of the terms, covenants and conditions required on Trustor's part to be
performed and complied with under this Deed of Trust or any other Loan Document
relating to the Trust Estate (after the lapse of any cure period provided
therein), then Beneficiary shall have the right, but not the obligation, without
waiving or releasing any of the Secured Obligations, to:
8.7.1.1 make any payments thereunder payable by Trustor
and take out, pay for and maintain any of the insurance policies provided for
therein, and/or
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8.7.1.2 after the expiration of any applicable grace
period and subject to Trustor's rights to contest certain obligations
specifically granted hereby, perform any such other acts thereunder on the part
of Trustor to be performed and enter upon the Property and incur reasonable
attorneys fees and expenses for such purpose.
8.7.2 The making by Beneficiary of such payment out of
Beneficiary's own funds shall not however, be deemed to cure such default by
Trustor, and the same shall not be so cured unless and until Trustor shall have
reimbursed Beneficiary within the applicable cure period for such payment
including interest at the Default Rate from the date of such expenditure. All
sums so paid and all reasonable costs and expenses actually incurred and paid by
Beneficiary in connection with the performance of any such act, together with
interest on unpaid balances thereof at the Default Rate from the respective
dates of Beneficiary's making of each such payment shall be secured by the lien
of this Deed of Trust prior to any right title or interest in or claim upon the
Property attaching or accruing subsequent to the lien of this Deed of Trust and
shall be payable by, Trustor to Beneficiary within thirty (30) days after
receipt of written demand.
Section 8.8 Remedies Cumulative. All remedies of Beneficiary provided
for herein are cumulative and shall be in addition to any and all other rights
and remedies provided in the other Loan Documents or provided by Applicable Law,
including any banker's lien and right of offset. The exercise of any right or
remedy by Beneficiary hereunder shall not in any way constitute a cure or waiver
of default hereunder or under the Loan Documents, or invalidate any act done
pursuant to any notice of default, or prejudice Beneficiary in the exercise of
any of its rights hereunder or under the Loan Documents unless, in the exercise
of said rights, all Secured Obligations are fully discharged.
Section 8.9 Marshaling. To the extent permitted by Applicable Laws,
Trustor waives all rights, legal and equitable, it may now or hereafter have to
require marshaling of assets or to require foreclosure sales of assets in a
particular order, including any rights provided by NRS 100.040 and 100.050. Each
successor and assign of Trustor, including any holder of a lien or security
interest subordinate to this Deed of Trust, by acceptance of its interest or
lien or security interest agrees that it shall be bound by the above waiver, as
if it had given the waiver itself.
Section 8.10 Adoption of Covenants. Where not inconsistent with the
above, the following covenants, Nos. 1; 2 (full replacement value); 3; 4
(Default Rate under the Loan Agreement); 5; 6; 7 ( a reasonable percentage); 8
and 9 of NRS Section 107.030 are hereby adopted and made a part of this Deed of
Trust.
ARTICLE 9.
SECURITY AGREEMENT AND FIXTURE FILING
Section 9.1 Grant of Security Interest. To secure the payment and
performance of the Secured Obligations as and when due, Trustor (as debtor)
hereby grants, conveys, pledges,
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assigns and transfers to Beneficiary (as secured party), as agent and
representative, security interests (collectively, the "Security Interest") in,
all right, title, claim, estate and interest in and to all Personalty and
Fixtures, whether now owned and existing or hereafter acquired or arising, and
wherever located, including, without limitation, the following, but expressly
excluding in each case any Excluded Assets:
9.1.1 Any and all "chattel paper" as such term is defined in
Section 9105(b) of the UCC (the "Chattel Paper");
9.1.2 Any and all "accounts" as such term is defined in Section
9106 of the UCC (the "Accounts");
9.1.3 Any and all rights to payment for goods sold or leased or
services rendered, whether or not earned by performance and all rights in
respect of the Account Debtor, including without limitation all such rights
constituting or evidenced by any Account, Chattel Paper or Instrument (as
defined in Section 9.1.14 hereof), together with (a) any collateral assigned,
hypothecated or held to secure any of the foregoing and the rights under any
security agreement granting a security interest in such collateral, (b) all
goods, the sale of which gave rise to any of the foregoing, including, without
limitation, all rights in any returned or repossessed goods and unpaid seller's
rights, (c) all guarantees, endorsements and indemnifications on, or of, any of
the foregoing and (d) all powers of attorney for the execution of any evidence
of indebtedness or security or other writing in connection therewith Any and all
negotiable instruments, promissory notes, acceptances, drafts, checks,
certificates of deposit and other writings that evidence a right to the payment
of money by any other Person ("Receivables").
9.1.4 Any and (a) all original copies of all documents,
instruments or other writings evidencing the Receivables, (b) all books,
correspondence, credit or other files, records, ledger sheets or cards,
invoices, and other papers relating to Receivables, including without limitation
all tapes, cards, computer tapes, computer discs, computer runs, record keeping
systems and other papers and documents relating to the Receivables, whether in
the possession or under the control of any Trustor or any computer bureau or
agent from time to time acting for any Trustor or otherwise and (c) all credit
information, reports and memoranda relating thereto ("Receivables Records");
9.1.5 Any and all rights to payment:
9.1.5.1 to the extent not included in Accounts,
Receivables or Chattel Paper, receivables from any credit card company (such as
Visa, MasterCard, American Express and Diner's Club), whether arising out of or
relating to the sale of lodging, goods and services by Trustor or otherwise; and
9.1.5.2 of money not listed above and any and all
rights, titles, interests, securities, liens and guaranties evidencing,
securing, guaranteeing payment of or in any way relating to any Receivables;
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9.1.6 Any and all "inventory" as such term is defined in Section
9109(4) of the UCC, including without limitation and in any event, all goods
(whether such goods are in the possession of Trustor or a lessee, bailee or
other Person for sale, lease, storage, transit, processing, use or otherwise and
whether consisting of whole goods, spare parts, components, supplies, materials
or consigned or returned or repossessed goods) which are held for sale or lease
or are to be furnished (or which have been furnished) under any contract of
service or which are raw materials or work in progress or materials used or
consumed in any Trustor's business ("Inventory");
9.1.7 Any and all "equipment" as such term is defined in Section
9109(2) of the UCC, including, but not limited to, Gaming Equipment:
9.1.7.1 machinery, machine tools, manufacturing
equipment, data processing equipment, computers, office equipment, furniture,
appliances, rolling stock, motors, pumps, controls, tools, parts, works of art,
furnishings and trade fixtures, all athletic equipment and supplies and all
molds, dies, drawings, blueprints, reports, catalogs and computer programs
related to any of the above;
9.1.7.2 ships, boats, barges and vessels (whether under
construction or completed) and any and all masts, bowsprits, boilers, engines,
sails, fittings, anchors, cables, chains, riggings, tackle, apparel, capstans,
outfits, gears, appliances, fittings and spare and replacement parts and other
appurtenances, accessories and additions, improvements and replacements thereto,
whether on board or not on board, in or to any ship, boat, barge or vessel;
9.1.7.3 slot machines, electronic gaming devices and
related equipment, crap tables, blackjack tables, roulette tables, baccarat
tables, keno apparatus, cards, dice, gaming chips and plaques, tokens, chip
racks, dealing shoes, dice cups, dice sticks, layouts, paddles, roulette balls
and other supplies and items used in connection with gaming operations; and
9.1.7.4 stones, wood, steel and other materials used or
to be used in the building, construction, repair, renovation, refurbishment or
otherwise with respect to improvements or ships, boats, barges or vessels.
9.1.8 Any and all "fixtures" as such term is defined in Section
9313 of the UCC, including without limitation, machinery, equipment or
appliances for generating, storing or distributing air, water, heat electricity,
light fuel or refrigeration, for ventilating or sanitary purposes, elevators,
safes, laundry, kitchen and athletic equipment, trade fixtures, and telephone,
television and other communications equipment (the "Fixtures");
9.1.9 Any and all "documents" as such term is defined in Section
9105(f) of the UCC (the "Documents");
9.1.10 Any and all "general intangibles" as such term is defined
in Section 9106 of the UCC (together with any property listed under Section
9.1.4 relating thereto,
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the "General Intangibles"), including, without limitation and in any event,
rights to the following: payment of money, Trademark Collateral (as defined in
the Trademark Security Agreement), Copyright Collateral (as defined in the
Copyright Security Agreement), patents, patent licenses and Contracts (as
defined in Section 9.1.16 hereof), licenses (including all Casino Licenses) and
franchises (except, in the case of licenses and franchises if, and for so long
as, the agreement in respect of such license or franchise prohibits by its terms
any assignment or grant of a security interest therein without the consent of
the other party thereto, would not give any other party to such franchise or
license the right to terminate its obligations thereunder), limited and general
partnership interests and joint venture interests, federal income tax refunds,
trade names, distributions on certificated securities (as defined in Section
8102(1)(a) of the UCC, and uncertificated securities (as defined in Section
8102(1)(b) of the UCC, computer programs and other computer software,
inventions, designs, trade secrets, goodwill, proprietary rights, customer
lists, Player Tracking Systems, supplier contracts, sale orders, correspondence,
advertising materials, payments due in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of any property, reversion,
any interests in pension and profit-sharing plans and reversionary, beneficial
and residual interests in trusts, credits with and other claims against any
Person, together with any collateral for any of the foregoing and the rights
under any security agreement granting a security interest in such collateral.
9.1.11 The Designated Account established and maintained
pursuant to Section 2.9 of the Loan Agreement ("Designated Account").
9.1.12 Any and all (i) shares of capital stock of any Subsidiary
(as defined in Section 1.1 of the Loan Agreement) of Trustor, from time to time
owned by Trustor or options or rights to acquire any such shares or interests
now or hereafter owned by Trustor, (ii) Distributions (as defined below) on
Pledged Shares (as defined in the Guarantor Stock Pledge Agreement), owned by
Trustor or in which Trustor has an interest ("Pledged Securities") (as
constituted immediately prior to such Distribution) constituting securities,
whether debt or equity securities or otherwise, (iii) other or additional stock,
notes, securities or property paid or distributed in respect of Pledged
Securities (as constituted immediately prior to such payment or distribution) by
way of stock-split, spin-off, splitup, reclassification, combination of shares
or similar rearrangement and (iv) other or additional stock, notes, securities
or property (including cash) that may be paid in respect of Pledged Securities
(as constituted immediately prior to such payment) by reason of any
consolidation, merger, exchange of stock, conveyance of assets, liquidation,
bankruptcy or similar corporate reorganization or other disposition of Pledged
Securities ("Pledged Securities").
9.1.13 Any and all dividends, distributions, payments of
interest and principal and other amounts (whether consisting of cash,
securities, personalty or other property) from time to time received, receivable
or otherwise distributed in respect of or in exchange or substitution for any of
the Pledged Securities ("Distributions");
9.1.14 Any and all "instruments" as such term is defined in
Section 9105(1)(i) of the UCC ("Instruments");
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9.1.15 [Intentionally Omitted].
9.1.16 Any and all contracts between Trustor and one or more
additional parties ("Contracts");
9.1.17 Any and all interest rate or currency protection or
hedging arrangements, including without limitation, caps, collars, floors,
forwards and any other similar or dissimilar interest rate or currency exchange
agreements or other interest rate or currency hedging arrangements ("Hedging
Agreements");
9.1.18 Any and all motor vehicles, tractors, trailers and other
like property, if title thereto is governed by a certificate of title ownership
("Motor Vehicles");
9.1.19 Any and all books, records, computer software, computer
printouts, customer lists, blueprints, technical specifications, manuals, and
similar items which relate to any Personalty or Fixtures other than such items
obtained under license or franchise agreements that prohibit assignment or
disclosure of such items ("Books and Records");
9.1.20 Any and all accessions, appurtenances, components,
repairs, repair parts, spare parts, renewals, improvements, replacements,
substitutions and additions to, of or with respect to any of the foregoing;
9.1.21 Any and all rights, remedies, powers and privileges of
Trustor with respect to any of the foregoing; and
9.1.22 Any and all proceeds and products of any of the
foregoing, whether now held and existing or hereafter acquired or arising,
including all rents, issues, income and profits of or from any of the foregoing
(collectively, the "Proceeds "). "Proceeds" shall include (i) whatever is now or
hereafter received by Trustor upon the sale, exchange, collection, other
disposition or operation of any item of Personalty, whether such proceeds
constitute accounts, general intangibles, instruments, securities, documents,
letters of credit, chattel paper, deposit accounts, money, goods or other
personal property, (ii) any amounts now or hereafter payable under any insurance
policy by reason of any loss of or damage to any Personalty or the business of
Trustor, (iii) all rights to payment and payments for hotel room occupancy (and
related reservations) and the sale of services or products in connection
therewith, (iv) the right to further transfer, including by pledge, mortgage,
license, assignment or sale, any of the foregoing, and (v) any items that are
now or hereafter acquired by Trustor with any of the foregoing; provided,
however, that "Proceeds" shall not include Excluded Assets.
Section 9.2 Remedies, etc. This Deed of Trust constitutes a security
agreement with respect to the Personalty, in which Beneficiary is granted a
security interest hereunder, and Beneficiary shall have all of the rights and
remedies of a secured party under the UCC and the other Loan Documents as well
as all other rights and remedies available at law or in equity. Upon the
occurrence and during the continuance of any Event of Default hereunder,
Beneficiary shall have (i) the right to cause any of the Personalty which is
personal property to be sold at any
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one or more public or private sales as permitted by Applicable Laws and apply
the proceed thereof to the Secured Obligations, (ii) the right to collect and
apply to the Secured Obligations any Personalty which is cash, notes receivable,
other rights to payment or Chattel Paper, and (iii) all other rights and
remedies, whether at law, in equity, or by statute as are available to secured
creditors under Applicable Laws. Any such disposition may be conducted by an
employee or agent of Beneficiary or Trustee. To the maximum extent permitted by
Applicable Law, any Person, including either or both of Trustor and Beneficiary,
shall be eligible to purchase any part or all of such Personalty at any such
disposition. Beneficiary shall give Trustor at least 10 days prior written
notice of the time and place of any public sale or other disposition of such
Personalty or of the time of or after which any private sale or any other
intended disposition is to be made, and if such notice is sent to Trustor in the
manner provided for the mailing of notices herein, it is hereby deemed such
notice shall be and is commercially reasonable notice to Trustor.
Section 9.3 Expenses. Reasonable expenses actually incurred of retaking,
holding, preparing for sale, selling or the like shall be borne by Trustor and
shall include Beneficiary's and Trustee's reasonable attorneys fees, charges and
disbursements (including, without limitation, any and all costs of appeal).
Section 9.4 Fixture Filing.
9.4.1 This Deed of Trust shall be effective as a Financing
Statement filed as a fixture filing from the date of the recording hereof in
accordance with NRS 104.9402. In connection therewith, the addresses of Trustor
as debtor ("Debtor") and Beneficiary as secured party ("Secured Party") are set
forth on Schedule 12.8. The address of Beneficiary, as the Secured Party, is
also the address from which information concerning the security interest may be
obtained by any interested party.
9.4.1.1 The property subject to this fixture filing is
described in Sections 9.1.7 and 9.1.8.
9.4.1.2 Portions of the property subject to this fixture
filing as identified in Section 9.4.1.1 above are or are to become fixtures
related to the real estate described on EXHIBIT "A" to this Deed of Trust.
9.4.1.3 Secured Party is: Foothill Capital Corporation,
a California corporation.
9.4.1.4 Debtor is: Fitzgeralds Las Vegas, Inc., a Nevada
corporation.
9.4.1.5 The record owner or lessee of the Property is:
Fitzgeralds Las Vegas, Inc., a Nevada corporation.
9.4.2 In the event Trustor shall fail, beyond any applicable
notice and grace periods, to make any payment or perform any covenant related to
any security interest in
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favor of any Person other than Beneficiary, Beneficiary may, at its option,
within 15 days after notice to Trustor or if Beneficiary's immediate action is
reasonably necessary to protect the lien hereof or its security for the Secured
Obligations, at any time without prior notice to Trustor, pay the amount secured
by such security interest, and the amount so paid shall be (i) secured by this
Deed of Trust and shall be a lien on the Property enjoying the same priorities
vis-a-vis the estates and interests encumbered hereby as this Deed of Trust,
(ii) added to the amount of the Secured Obligations, and (iii) payable within 30
days after receipt of written demand with interest at the Default Rate from the
time of such payment; or Beneficiary shall have the privilege of acquiring by
assignment from the holder of such security interest any and all contract
rights, accounts receivable, chattel paper, negotiable or non-negotiable
instruments and other evidence of Trustor's indebtedness secured by such
fixtures, and, upon acquiring such interest by assignment, shall have the right
to enforce the security interest as assignee thereof, in accordance with the
terms and provisions of the UCC, as amended or supplemented, and in accordance
with other Applicable Laws.
ARTICLE 10.
ASSIGNMENT OF RENTS
Section 10.1 Assignment of Rents. Subject to Section 10.2 and to
Applicable Gaming Laws, as of the execution of this Deed of Trust, Trustor
hereby absolutely and unconditionally assigns and transfers to Beneficiary all
of the Rents, whether now due, past due or to become due, and hereby gives to
and confers upon Beneficiary the right, power and authority to collect such
Rents and apply the same to the Secured Obligations secured hereby. Trustor
irrevocably appoints Beneficiary, as its true and lawful attorney, at the option
of Beneficiary at any time while an Event of Default exists, to demand, receive
and enforce payment to give receipts, releases and satisfactions, and to sue,
either in the name of Trustor or in the name of Beneficiary, for all such Rents
and apply the same to the Secured Obligations secured hereby. It is hereby
recognized that the power of attorney herein granted is coupled with an interest
and shall not be revocable. It is understood and agreed that neither the
foregoing assignment of Rents to Beneficiary nor the exercise by Beneficiary or
any of its rights or remedies under this Deed of Trust shall be deemed to make
Beneficiary a "mortgagee-in-possession" or otherwise responsible or liable in
any manner with respect to the Property or the use, occupancy, enjoyment or
operation of all or any portion thereof, unless and until Beneficiary, in person
or by its own agent assumes actual possession thereof, nor shall appointment of
a Receiver for the Property by any court at the request of Beneficiary or by
agreement with Trustor or the entering into possession of the Property or any
part thereof by such Receiver be deemed to make Beneficiary a
"mortgagee-in-possession" or otherwise responsible or liable in any manner with
respect to the Property or the use, occupancy, enjoyment or operation of all or
any portion thereof.
Section 10.2 Collection of Rents. Notwithstanding anything to the
contrary contained herein, so long as no Event of Default with respect to the
Loan Agreement shall occur and be continuing, Trustor shall have a license,
revocable upon the occurrence and during the continuance of an Event of Default
to collect all Rents from the Property and to retain, use and enjoy the same and
to otherwise exercise all rights with respect thereto, subject to the terms
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hereof. Upon the occurrence and during the continuance of an Event of Default
the license hereinabove granted to Trustor shall, without the requirement of the
giving of notice or taking of any action by any party, be revoked, and
Beneficiary shall have the complete right and authority to exercise and enforce
any and all of its rights and remedies provided herein or by Applicable Laws.
ARTICLE 11.
ENVIRONMENTAL MATTERS
Section 11.1 Representations and Warranties. In the ordinary course of
business, Trustor conducts a periodic review of the effect of Environmental Laws
on its business, operations and properties in the course of which it identifies
and evaluates associated costs and liabilities (including, without limitation,
any capital or operating expenditures required for cleanup, closure of
properties or compliance with Environmental Laws or any Permit any related
constraints on operating activities and any potential liabilities to third
parties). On the basis of such review, Trustor has reasonably concluded that
such associated costs and liabilities could not reasonably be expected, singly
or in the aggregate, to cause a Material Adverse Change (as defined in Loan
Agreement).
11.1.1 Trustor (i) has obtained all Permits that are required
with respect to the operation of its business, property and assets under the
Environmental Laws and is in compliance with all terms and conditions of such
required Permits, and (ii) is in compliance with all Environmental Laws
(including, without limitation, compliance with standards, schedules and
timetables therein);
11.1.2 No portion of the Trust Estate is listed or proposed for
listing on the National Priorities List or the Comprehensive Environmental
Response, Compensation, and Liability Information System, both promulgated under
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA"), or on any other state or local list established
pursuant to any Environmental Law, and Trustor has not received any notification
of potential or actual liability or request for information under CERCLA or any
comparable state or local law;
11.1.3 No underground storage tank or other underground storage
receptacle, or related piping, is located on the Land in violation of any
Environmental Law;
11.1.4 There have been no releases (any past or present
releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, disposing or dumping, on-site or, to the
knowledge of the Trustor after due inquiry, off-site) of Hazardous Materials by
Trustor or any predecessor in interest or any person or entity whose liability
for any release of Hazardous Materials, Trustor has retained or assumed either
contractually or by operation of law at, on, under, from or into any facility or
real property owned, operated, leased, managed or controlled by any such person;
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11.1.5 Neither Trustor nor any person or entity whose liability
Trustor has retained or assumed either contractually or by operation of law has
any liability, absolute or contingent under any Environmental Law, and there is
no proceeding pending or threatened against any of them under any Environmental
Law; and
11.1.6 There are no events, activities, practices, incidents or
actions or conditions, circumstances or plans that may interfere with or prevent
compliance by Trustor with any Environmental Law, or that may give rise to any
liability under any Environmental Laws.
11.1.7 The above representations and warranties contained in
this Section 11.1 shall survive the termination, release and/or reconveyance of
this Deed of Trust and the discharge of Trustor's other obligations hereunder.
Section 11.2 Environmental Covenants. Trustor shall at all times comply
with the following requirements:
11.2.1 Trustor shall not cause or permit any material amount of
Hazardous Material to be brought upon, treated, kept, stored, disposed of,
discharged, released, produced, manufactured, generated, refined or used upon,
within or, beneath the Property or any portion thereof by Trustor, its agents,
employees, contractors, or invitees, or any other Person, except in compliance
with all Environmental Requirements and only in the course of such Person's
legitimate business operations at the Property (which shall not include any
business primarily for treatment, storage, disposal, discharge, release,
production, manufacture, generation, refinement or use of Hazardous Materials).
11.2.2 Trustor shall not cause or permit the existence or the
commission by Trustor, its agents, employees, contractors or invitees, or by any
other Person of a material violation of any Environmental Requirements upon,
within or beneath the Property or any portion thereof.
11.2.3 Trustor shall not dispose of, discharge or release or
cause or permit the disposal, discharge or release of any material amount of
Hazardous Materials from the Property into any Public Waters in material
violation of any Environmental Requirements.
11.2.4 Trustor shall not create or suffer to exist with respect
to the Property or permit any of its agents to create or suffer to exist any
environmental lien, security interest or other charge or encumbrance of any kind
(other than a Permitted Lien), including, without limitation, any lien imposed
pursuant to Section 107(f) of the Superfund Amendments and Reauthorization Act
of 1986 (42 U.S.C. Section 9607(l)) or any similar state statute.
11.2.5 Trustor shall, at its sole cost and expense, promptly
take any and all actions required by any federal, state or local governmental
agency or political subdivision or reasonably necessary (as hereinafter
provided) to mitigate Environmental Damages, which requirements or necessity
arise from the presence upon, about or beneath the Property, of a material
amount of Hazardous Material or a material violation of Environmental
Requirements
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or the disposal, discharge or release of a material amount of Hazardous
Materials from the Property into the Public Waters. Such actions shall include,
but not be limited to, the investigation of the environmental condition of the
Property, the preparation of any feasibility studies, reports or remedial plans,
and the performance of any cleanup, remediation, containment, operation,
maintenance, monitoring or restoration work, whether on or off of the Property
(provided that Trustor shall be obligated to take actions off of the Property
only if Trustor shall have the legal right to do so and shall be expressly
required to do so by Environmental Requirements). Trustor shall take all actions
as are reasonably necessary to restore the Property or the Public Waters to
substantiality the condition existing prior to the introduction of Hazardous
Material by Trustor upon, about or beneath the Property, notwithstanding any
lesser standard of remediation allowable under Applicable Laws or governmental
policies, but recognizing the economic impracticability of remediating to a
level where Hazardous Materials are no longer detectable. Trustor shall proceed
continuously and diligently with such investigatory and remedial actions,
provided that in all cases such actions shall be in accordance with Applicable
Laws. Any such actions shall be performed in a good, safe and workmanlike manner
and shall minimize any impact on the business conducted at the Property. Trustor
shall pay all costs in connection with such investigatory and remedial
activities, including, but not limited to, all power and utility costs, and any
and all taxes or fees that may be applicable to such activities. Trustor shall
promptly provide to Beneficiary copies of testing results and reports that are
generated in connection with the above activities. Promptly upon completion of
such investigation and remediation, Trustor shall permanently seal or cap all
monitoring wells and test holes to industrial standards in compliance with
Applicable Laws and regulations, remove all associated equipment, and restore
the Property to the extent reasonably possible, which shall include, without
limitation, the repair of any surface damage, including paving, caused by such
investigation or remediation hereunder.
11.2.6 If Trustor shall become aware of or receive notice or
other communication concerning any actual, alleged, suspected or threatened
violation of Environmental Requirements, or liability of Trustor for
Environmental Damages in connection with the Property or past or present
activities of any Person thereon, including, but not limited to, notice or other
communication concerning any actual or threatened investigation, inquiry,
lawsuit, claim, citation, directive, summons, proceedings, complaint, notice,
order, writ or injunction, relating to same, then Trustor shall deliver to
Beneficiary, within 15 days of the receipt of such notice or communication by
Trustor, a written description of said violation, liability, or actual or
threatened event or condition, together with copies of any documents evidencing
same. Receipt of such notice shall not be deemed to create any obligation on the
part of Beneficiary to defend or otherwise respond to any such notification.
11.2.7 Trustor agrees to indemnify, reimburse, defend,
exonerate, pay and hold harmless Beneficiary, its successors and assigns, and
its directors, officers, shareholders, employees, agents, contractors,
subcontractors, experts, licensees, affiliates, lessees, trustees, and invitees
(collectively, the "Indemnitees") from and. against any and all Environmental
Damages arising from the discharge, disposal or release of Hazardous Materials
from the Property into the Public Waters or from the presence of Hazardous
Materials upon, about or beneath the Property
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or migrating to or from the Property, or arising in any manner whatsoever out of
the violation of any Environmental Requirements pertaining to the Property and
the activities thereon, whether foreseeable or unforeseeable, and regardless of
when such Environmental Damages occurred, except to the extent directly caused
by conduct (other than inaction) on the part of such Indemnitee with respect to
the Property or any such Indemnitee's grossly negligent or willful inaction or
other conduct. The indemnity obligations of Trustor contained in this Section
11.2.7 shall survive the termination, release and/or reconveyance of this Deed
of Trust and the discharge of Trustor's other obligations hereunder.
11.2.8 Except for the last sentence of Section 4.5, and except
for Sections 4.6, 4.7, 4.15 and 8.5, the other covenants of this Deed of Trust
shall not apply to the subject matter of this Article 11.
11.2.9 In accordance with, and subject to limitations of, NRS
40.508 and NRS 40.509, Beneficiary may seek a judgment that Trustor has breached
its covenants, representations and/or warranties with respect to the
environmental matters contained in Sections 11.2.1 through 11.2.9, inclusive, of
this Deed of Trust (the "Environmental Provisions"), and may commence and
maintain an action or actions in any court of competent jurisdiction for
enforcement of the Environmental Provisions and/or recovery of any and all
costs, damages, expenses, fees, penalties, fines, judgments, indemnification
payments to third parties, and other out of pocket costs or expenses (including,
without limitation, court costs, reasonable consultants' fees and reasonable
attorney's fees whether incurred in litigation or not and whether before or
after judgment), incurred or advanced by Beneficiary pursuant to the
Environmental Provisions (collectively, the "Environmental Costs"). Trustor
acknowledges and agrees that notwithstanding any term or provision contained in
this Deed of Trust or in the other Loan Documents, Environmental Costs shall be
exceptions to any nonrecourse or exculpatory provisions, if any, and Trustor
shall be fully and personally liable for Environmental Costs. Such liability
shall not be limited to the original principal amount of the obligations secured
by this Deed of Trust. Trustor's obligations hereunder shall survive any
foreclosure, deed in lieu of foreclosure, release, reconveyance or any other
transaction with respect to the Property or this Deed of Trust. For the purposes
of any action brought under this subsection 11.2.9, Trustor hereby waives the
defense of any applicable statute of limitations.
ARTICLE 12.
MISCELLANEOUS
Section 12.1 Beneficiary's Expenses, including Attorney's Fees.
Regardless of the occurrence of a Default or Event of Default, Trustor agrees to
pay to Beneficiary any and all advances, charges, costs and expenses, including
the reasonable fees and expenses of counsel and any experts or agents, that
Beneficiary may reasonable incur in connection with (i) the administration of
this Deed of Trust, including any amendment thereto or any workout or
restructuring, (ii) the creation, perfection or continuation of the lien of this
Deed of Trust or protection of its priority or the Trust Estate, including the
discharging of any prior or junior lien or adverse claim against the Trust
Estate or any part thereof that is not permitted hereby or by the Loan
Agreement, (iii) the custody, preservation or sale of, collection from, or other
realization
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upon, any of the Trust Estate, (iv) the exercise or enforcement of any of the
rights, powers or remedies of Beneficiary under this Deed of Trust or under
Applicable Laws (including attorneys fees and expenses incurred by Beneficiary
in connection with the operation, maintenance or foreclosure of the lien of this
Deed of Trust) or any bankruptcy proceeding or (v) the failure by Trustor to
perform or observe any of the provisions hereof. All such amounts and all other
amounts payable hereunder shall be payable on demand, together with interest at
the Default Rate.
Section 12.2 Indemnity. Trustor hereby agrees to indemnify and hold
harmless the Indemnitees against (A) any and all transfer taxes, documentary
taxes, assessments or charges made by any governmental authority by reason of
the execution and delivery of this Deed of Trust and the other Loan Documents,
and (B) any and all claims, actions, liabilities, costs and expenses of any kind
or nature whatsoever (including fees and disbursements of counsel) that may be
imposed on, incurred by, or asserted against any of them, in any way relating to
or arising out of this Deed of Trust or any action taken or omitted by them
hereunder, except to the extent that they resulted from the gross negligence or
willful misconduct of any such Indemnitee.
Section 12.3 Waivers; Modifications in Writing. No amendment of any
provision of this Deed of Trust (including a waiver thereof or consent relating
thereto) shall be effective unless the same shall be in writing and signed by
Beneficiary and Trustor. Any waiver or consent relating to any provision of this
Deed of Trust shall be effective only in the specific instance and for the
specific purpose for which given. No notice to or demand on Trustor in any case
shall entitle Trustor to any other or further notice or demand in similar
circumstances, except as otherwise provided herein or as required by law.
Section 12.4 Cumulative Remedies; Failure or Delay. The rights and
remedies provided for under this Deed of Trust are cumulative and are not
exclusive of any rights and remedies that may be available to Beneficiary under
Applicable Laws, the other Loan Documents or otherwise. No failure or delay on
the part of Beneficiary in the exercise of any power, right or remedy under this
Deed of Trust shall impair such power, right or remedy or shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or remedy preclude other or further exercise of such or any other power,
right or remedy.
12.4.1 Successors and Assigns. This Agreement shall be
binding upon and, subject to the next sentence, inure to the benefit of Trustor
and Beneficiary and their respective successors and assigns. Trustor shall not
assign. or transfer any of its rights or obligations hereunder without the prior
written consent of Beneficiary. The benefits of this Deed of Trust shall pass
automatically with any assignment of the Secured Obligations (or any portion
thereof), to the extent of such assignment.
Section 12.5 Independence of Covenants. All covenants under this Deed of
Trust shall each be given independent effect so that, if a particular action or
condition is not permitted by any such covenant the fact that it would be
permitted by another covenant or by an exception thereto shall not avoid the
occurrence of a Default or an Event of Default if such action is taken or
condition exists. All rights, remedies and powers in this Deed of Trust may be
exercised only
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to the extent that the exercise thereof does not violate any provision of the
Applicable Gaming Laws, and all the provisions of this Deed of Trust are
intended to be subject to all mandatory provisions of the Applicable Gaming Laws
which may be controlling.
Section 12.6 Change of Law. In the event of the passage, after the date
of this Deed of Trust of any law changing in any way the laws now in force for
the taxation of mortgages, deeds of trust or debts secured by mortgage or deed
of trust (other than laws imposing taxes on income), or the manner of the
collection of any such taxes, so as to affect adversely the rights of
Beneficiary under this Deed of Trust then an Event of Default shall be deemed to
have occurred under Section 6.1 of the Loan Agreement; provided, however, that
no Event of Default shall be deemed to have occurred (i) if Trustor, within
thirty (30) days after the passage of such law, shall assume the payment of any
tax or other charge so imposed upon Beneficiary for the period remaining until
discharge in full of the Secured Obligations; provided, however, that such
assumption is permitted by Applicable Laws, (ii) if the adverse effect upon
Beneficiary of such tax or other charge is not material, or (iii) if and so long
as Trustor, at its expense, shall contest the amount or validity or application
of any such tax or other charge by appropriate legal proceedings promptly
initiated and conducted in good faith and with due diligence; provided that (A)
neither the Property nor any substantial part thereof will be in danger of being
sold, forfeited, terminated, canceled, or lost as a result of such contest and
(B) except in the case of a tax or charge junior. to the lien of this Deed of
Trust, Trustor shall have posted such bond or furnished such other security as
may be required by law to release such tax or charge.
Section 12.7 No Waiver. No waiver by Beneficiary of any Default or
breach by Trustor hereunder shall be implied from any omission by Beneficiary to
take action on account of such Default if such Default persists or is repeated,
no express waiver shall affect any Default other than the Default in the waiver,
and such waiver shall be operative only for the time and to the extent therein
stated. Waivers of any covenant, term or condition contained herein shall not be
construed as a waiver of any subsequent breach of the same covenant term or
condition. The consent or approval by Beneficiary to or of any act by Trustor
requiring further consent or approval shall not be deemed to waive or render
unnecessary the consent or approval to or of any subsequent similar act.
Section 12.8 Notices. All notices and other communications under this
Deed of Trust shall be in writing and shall be personally delivered or sent by
prepaid courier, by overnight, registered or certified mail (postage prepaid) or
by prepaid telex, telecopy or telegram, and shall be deemed given when received
by the intended recipient thereof Unless otherwise specified in a notice given
in accordance with the foregoing provisions of this Section 12.8., notices and
other communications shall be given to the parties hereto at their respective
addresses (or to their respective telex or telecopier numbers) indicated in
Schedule 12.8 hereto.
Section 12.9 References to Foreclosure. References hereto to
"foreclosure" and related phrases shall be deemed references to the appropriate
procedure in connection with Trustee's private power of sale, any judicial
foreclosure proceeding, and any deed given in lieu of any such Trustee's sale or
judicial foreclosure.
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Section 12.10 Joinder of Foreclosure. Should Beneficiary hold any other
or additional security for the payment and performance of any Secured
Obligation, its sale or foreclosure, upon any default in such payment or
performance, in the sole discretion of Beneficiary, may be prior to, subsequent
to, or joined or otherwise contemporaneous with any sale or foreclosure
hereunder. Except as otherwise provided in the Loan Agreement, in addition to
the rights herein specifically conferred, Beneficiary, at any time and from time
to time, may exercise any right or remedy now or hereafter given by law to
beneficiaries under deeds of trust generally, or to the holders of any
obligations of the kind hereby secured.
Section 12.11 Rights and Secured Obligations of Beneficiary and Trustee.
At any time or from time to time, without liability therefor and without notice,
and without releasing or otherwise affecting the liability of any Person for
payment of any Secured Obligations, Beneficiary at its sole discretion and only
in writing may subordinate the liens or either of them, or charge hereof to the
extent not prohibited by the Loan Agreement. Beneficiary and Trustee shall,
however, promptly upon Trustor's request from time to time, join in the
following actions (including the execution and delivery of documents) as Trustor
determines are reasonably necessary for the development, use and operation of
the Trust Estate: (i) the making of any map or plat of the Property, (ii) the
granting, creating, amending and modifying of any customary easements,
covenants, conditions and restrictions with respect to the Property and (iii)
the application for and prosecution of any development building, use and similar
permits and land use and utility approvals and installations regarding the
Property; provided, however, that Beneficiary and Trustee shall not be required
to join in or take any such action (a) while an Event of Default exists, (b) to
the extent such action would impair the liens of this Deed of Trust or the first
priority thereof or (c) to the extent prohibited by the Loan Agreement. Any such
request shall be accompanied by an Officers Certificate (as defined in the Loan
Agreement). Upon written request of Beneficiary and surrender of this Deed of
Trust to Trustee for cancellation, and upon payment to Trustee of its reasonable
fees and expenses actually incurred, Trustee shall cancel and reconvey this Deed
of Trust.
Section 12.12 Copies. Trustor will promptly give to Beneficiary copies
of all notices of material violations relating to the Property that Trustor
receives from any governmental authority.
Section 12.13 Subordination. At the option of Beneficiary, this Deed of
Trust shall become subject and subordinate in whole or in part (but not with
respect to priority of entitlement to any insurance proceeds, damages, awards,
or compensation resulting from damage to the Property or condemnation or
exercise of power of eminent domain), to any and all contracts of sale and/or
any and all leases of all or any part of the Property upon the execution by
Beneficiary and recording thereof in the official records of Clark County,
Nevada of a unilateral declaration to that effect. Beneficiary may require the
issuance of such title insurance endorsements to the Title Policy, in connection
with any such subordination as Beneficiary, in its judgment, shall determine are
appropriate, and Trustor shall be obligated to pay any cost or expense incurred
in connection with the issuance thereof.
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Section 12.14 Personally Security Instruments. Trustor covenants and
agrees that if Beneficiary at any time holds additional security for any Secured
Obligations secured hereby, it may enforce the terms thereof or otherwise
realize upon the same, at its option, either before or concurrently herewith or
after a sale is made hereunder, and may apply the proceeds upon the Secured
Obligations without affecting the status or of waiving any right to exhaust all
or any other security, including the security hereunder, and without waiving any
breach or Default or any right or power whether exercised hereunder or contained
herein or in any such other security.
Section 12.15 Suits to Protect Property. Trustor covenants and agrees to
appear in and defend any action or proceeding the consequence of which, if
successful, would be that the liens, or either of them, of this Deed of Trust
would not satisfy the requirements as to extent, perfection or priority set
forth in the Loan Agreement, and to pay all reasonable costs and expenses
actually incurred by Trustee and Beneficiary, including cost of evidence of
title and attorneys fees in a reasonable sum, in any such action or proceeding
in which Beneficiary and/or Trustee may appear or be made a party.
Section 12.16 Trustor Waiver of Rights. Trustor waives the benefit of
all laws now existing or that hereafter may be enacted providing for (i) any
appraisement before sale of any portion of the Trust Estate, and (ii) the
benefit of all laws that may be hereafter enacted in any way extending the time
for the enforcement of the Secured Obligations or creating or extending a period
of redemption from any sale made in collecting said debt. To the full extent
Trustor may do so, Trustor agrees that Trustor will not at any time insist upon,
plead, claim or take the benefit or advantage of any law now or hereafter in
force providing for any appraisement, valuation, stay, extension or redemption,
and Trustor, for Trustor, Trustor's heirs, devisees, representatives, successors
and assigns, and for any and all Persons ever claiming any interest in the Trust
Estate, to the extent permitted by law, hereby waives and releases all rights of
redemption, valuation, appraisement, stay of execution, and marshaling in the
event of foreclosure of the liens hereby created. If any law referred to in this
Section 12.16 and now in force, of which Trustor, Trustor's heirs, devisees,
representatives, successors and assigns or other Person might take advantage
despite this Section 12.16, shall hereafter be repealed or cease to be in force,
such law shall not thereafter be deemed to preclude the application of this
Section 12.16. To the extent permitted by Applicable Laws, Trustor expressly
waives and relinquishes any and 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.
Section 12.17 Charges for Statements. Trustor agrees to pay
Beneficiary's customary charge, to the maximum amount permitted by Applicable
Laws, for any statement regarding the Secured Obligations requested by Trustor
or in its behalf.
Section 12.18 Complete Agreement. This Deed of Trust, together with the
exhibits and schedules hereto, and the other Loan Documents, is intended by the
parties as a final expression of their agreement regarding the subject matter
hereof and is intended as a complete and exclusive statement of the terms and
conditions of such agreement.
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Section 12.19 Payments Set Aside. Notwithstanding anything to the
contrary herein contained, this Deed of Trust the Secured Obligations and the
lien and security interest of this Deed of Trust shall continue to be effective
or be reinstated, as the case may be, if at any time any payment or any part
thereof, of any or all of the Secured Obligations is rescinded, invalidated,
declared to be fraudulent or preferential or otherwise required to be restored
or returned by Beneficiary in connection with any bankruptcy, reorganization or
similar proceeding involving Trustor, any other party liable with respect to the
Secured Obligations or otherwise, if the proceeds of the Trust Estate are
required to be returned by Beneficiary under any such circumstances; or if
Beneficiary reasonably elects to return any such payment or proceeds or any part
thereof in its discretion, all as though such payment had not been made or such
proceeds not been received. Without limiting the generality of the foregoing, if
prior to any such rescission, invalidation, declaration, restoration or return,
this Deed of Trust shall have been terminated, released and/or reconveyed and
the lien and security interest or any of the Trust Estate shall have been
released or terminated in connection with such termination, release and/or
reconveyance, this Deed of Trust and the lien and security interest and such
portion of the Trust Estate shall be reinstated in full force and effect and
such prior termination, release and/or reconveyance shall not diminish,
discharge or otherwise affect the obligations of Trustor in respect of the
amount of the affected payment or application of proceeds, the lien, the
security interest or such portion of the Trust Estate.
Section 12.20 Substitution. Beneficiary may at any time, without giving
notice to Trustor or the original or successor Trustee, and without regard to
the willingness or inability of any original or successor Trustee to execute
this trust, appoint another Person or succession of Persons to act as Trustee,
and such appointee in the execution of this trust shall have all the powers
vested-in and obligations imposed upon Trustee. Should Beneficiary be a
corporation or unincorporated association, then any officer thereof may make
such appointment.
Section 12.21 Choice of Forum.
12.21.1 Subject to Section 12.21.2 and Section 12.21.3, all
actions or proceedings arising in connection with this Deed of Trust shall be
tried and litigated in state or Federal courts located in the County of Clark,
State of Nevada, unless such actions or proceedings are required to be brought
in another court to obtain subject matter jurisdiction over the matter in
controversy. Trustor waives any right it may have to assert the doctrine of
forum non conveniens, to assert that it is not subject to the jurisdiction of
such courts or to object to venue to the extent any proceeding is brought in
accordance with this Section 12.21.1.
12.21.2 Nothing contained in this Section shall preclude
Beneficiary from bringing any action or proceeding arising out of or relating to
this Deed of Trust in any court not referred to in Section 12.21.1. Service of
process, sufficient for personal jurisdiction in any action against Trustor, may
be made by certified mail, return receipt requested, to its address indicated in
Section 12.8 hereof.
12.21.3 Notwithstanding Section 12.21.1 hereof, in the sole
and absolute discretion of beneficiary, all actions or proceedings relating to
the Collateral referred to in
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Article 9 hereof, other than Fixtures, shall be tried and litigated in any
California state court sitting in the County of Los Angeles, State of California
or any federal court sitting in the County of Los Angeles, State of California.
Trustor hereby irrevocably submits to the jurisdiction of such courts to the
extent any proceeding is brought in accordance with this Section 12.21.3.
Trustor irrevocably waives, to the fullest extent it may effectively do so under
Applicable Law, trial by jury and any objection that it may now or hereafter
have to the laying of the venue of any such suit, action or proceeding brought
in any such court and any claim that any such suit, action or proceeding brought
in any such court has been brought in an inconvenient forum. Trustor irrevocably
consents, to the fullest extent it may effectively do so under Applicable Law,
to the service of process of any of the aforementioned courts in any such action
or proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to Trustor at its said address, such service to become
effective 30 days after such mailing, Nothing shall affect the right of
Beneficiary to serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against Trustor in any other
jurisdiction.
Section 12.22 Regulatory Matters. Whenever in this Deed of Trust a
right is given to Beneficiary, which right is affected by Applicable Gaming Laws
or the enforcement of which is subject to Applicable Gaming Laws, the
enforcement of any such right shall be subject to Applicable Gaming Laws and
approval, if so required, of the applicable Gaming Authorities. Without limiting
the generality of the foregoing, Beneficiary acknowledges that (a) Beneficiary
is subject to being called forward by the Gaming Authority of the State of
Nevada, in their discretion, for licensing or a finding of suitability as a
lender to a gaming licensee, and (b) to the extent the prior approval of the
Gaming Authority of the State of Nevada is required pursuant to applicable law
for the exercise, operation and effectiveness of any remedy hereunder or under
any other Loan Document, or the taking of any action that may be taken by
Beneficiary or under any other Loan Document, such remedy or action shall be
subject to such prior approval of the Gaming Authority of the State of Nevada.
Section 12.23 Guarantor Waivers. If and to the extent that Trustor (for
the purposes of this Section 12.23, "Guarantor") would be deemed or construed to
be a guarantor or surety under applicable law with respect to its obligations
hereunder, Guarantor hereby agrees as follows:
12.23.1 Guarantor expressly agrees that until each and every
term, covenant and condition of this Deed of Trust is fully performed, Guarantor
shall not be released by any act or event which, except for this provision of
this Deed of Trust might be deemed a legal or equitable discharge or exoneration
of a surety, or because of any waiver, extension, modification, forbearance or
delay or other act or omission of Beneficiary or its failure to proceed promptly
or otherwise as against Fitzgeralds or any other Guarantor, as the case may be
(individually and collectively, in its or their capacity as the entity or
entities the obligations of which are guaranteed hereunder by Guarantor, the
"Principal") or Guarantor, or because of any action taken or omitted or
circumstance which might vary the risk or affect the rights or remedies of
Guarantor as against the Principal, or because of any further dealings between
the Principal and Beneficiary, whether relating to this Deed of Trust or
otherwise. Guarantor hereby expressly waives and surrenders any defense to
Guarantor's liability under this Deed of Trust based upon
47
<PAGE> 53
any of the foregoing acts, omissions, things, agreements, waivers or any of
them. It is the purpose and intent of this Deed of Trust that the obligations of
Guarantor under it shall be absolute and unconditional under any and all
circumstances, subject to and in accordance with the terms and conditions of
this Deed of Trust.
12.23.2 Without in any way limiting the provisions of Section
12.23.1, to the extent permitted under NRS Section 40.495, Guarantor waives the
applicable provisions of NRS Section 40.430 and further Guarantor waives:
12.23.2.1 all statutes of limitations as a defense to
any action or proceeding brought against Guarantor by Beneficiary, to the
fullest extent permitted by law;
12.23.2.2 any right it may have to require Beneficiary
to proceed against the Principal or pursue any other remedy in Beneficiary's
power to pursue, it being acknowledged and agreed that the obligations of
Guarantor hereunder are independent of the obligations of the Principal
hereunder, and Beneficiary shall not be required to make any demand upon,
exercise any right to declare a default by, or proceed against, the Principal
prior to proceeding against Guarantor to the full extent of Guarantor's
obligations hereunder;
12.23.2.3 any defense based on any legal disability of
the Principal and any discharge, release or limitation of the liability of the
Principal to Beneficiary, whether consensual or arising by operation of law or
any bankruptcy, reorganization, receivership, insolvency, or debtor relief
proceeding, or from any other cause, or any claim that Guarantor's obligations
exceed or are more burdensome than those of the Principal;
12.23.2.4 all presentments, demands for performance,
notices of nonperformance, protests, notices of protest, notices of dishonor,
notices of acceptance of this Deed of Trust and of the existence, creation, or
incurring of new or additional indebtedness, and demands and notices of every
kind;
12.23.2.5 any defense based on or arising out of any
defense that the Principal may have to the payment or performance of any
obligation set forth in this Deed of Trust; and
12.23.2.6 until all obligations under this Deed of Trust
have been paid and performed in full, all rights of subrogation and all rights
to enforce any remedy that Guarantor may have against the Principal, all
regardless of whether Guarantor may have made any payments to Beneficiary.
12.23.3 Guarantor assumes full responsibility for keeping
informed of the financial condition and business operations of the Principal and
all other circumstances affecting the Principal's ability to pay for and perform
its obligations, and agrees that Beneficiary shall have no duty to disclose to
Guarantor any information which Beneficiary may receive about the Principal's
financial condition, business operations, or any other circumstances bearing on
its ability to perform.
48
<PAGE> 54
12.23.4 Notwithstanding anything to the contrary provided
elsewhere herein, in no event shall Guarantor have any liability under this Deed
of Trust beyond its interest in the Property, and in no event shall Guarantor's
obligations hereunder be enforced against any property of Guarantor other than
its interest in the Property.
Section 12.24 Waiver of Trial by Jury. Trustor and Beneficiary waive the
right to a trial by jury in any action under this Deed of Trust or any other
Loan Document or any other action arising out of the transactions contemplated
hereby or thereby, regardless of which party initiates such action or actions.
[Signature page to follow.]
49
<PAGE> 55
IN WITNESS WHEREOF, Trustor has caused this Deed of Trust to be executed as of
the day and year first above written.
Trustor:
Fitzgeralds Las Vegas, Inc., a Nevada
corporation
By: /s/ MICHAEL E. MCPHERSON
-----------------------------------
Name: Michael E. McPherson
---------------------------------
Title: Senior Vice President/CFO
--------------------------------
S-1
<PAGE> 56
STATE OF CALIFORNIA )
) ss.
COUNTY OF LOS ANGELES )
This instrument was acknowledged before me on October ___, 1998,
by Michael E. McPherson, as Senior Vice President/CFO of Fitzgeralds Las Vegas,
Inc., a Nevada corporation.
-----------------------------------------
[SEAL] Notary Public
My Commission Expires: June 14, 2000
S-2
<PAGE> 57
SCHEDULE 12.8
ADDRESSES
TRUSTOR:
Fitzgeralds Las Vegas, Inc.
301 Fremont Street
Las Vegas, Nevada 89101
Attention: Chief Financial Officer
Telecopier: (702) 382-5562
BENEFICIARY:
Foothill Capital Corporation
11111 Santa Monica Boulevard
Suite 1500
Los Angeles, California 90025-3333
Attention: Business Finance Division Manager
Telecopier: (310) 478-9788
TRUSTEE:
Lawyers Title Insurance Corporation
3636 North Central Avenue, Suite 350
Phoenix, Arizona 85012
Attention: Ms. Mary Garcia
Telecopier: (602) 263-0433
<PAGE> 58
EXHIBIT "A"
LEGAL DESCRIPTION
OWNED LAND
(CLARK COUNTY)
All that certain real property situate in Clark County, Nevada, described as
follows:
PARCEL THREE (3):
LOTS THIRTEEN (13) THROUGH SIXTEEN (16) IN BLOCK THIRTY (30) OF CLARK'S LAS
VEGAS TOWNSITE, AS SHOWN BY MAP THEREOF ON FILE IN BOOK 1 OF PLATS, PAGE 37, IN
THE OFFICE OF THE COUNTY RECORDER OF CLARK COUNTY, NEVADA.
TOGETHER WITH THAT PORTION OF VACATED ALLEY AS PROVIDED FOR IN THAT CERTAIN
ORDER OF VACATION RECORDED APRIL 9, 1979 AS DOCUMENT NO. 995695 OF OFFICIAL
RECORDS OF CLARK COUNTY, NEVADA, AS FOLLOWS:
THAT PORTION OF THAT CERTAIN NORTHWEST-SOUTHWEST ALLEY IN BLOCK THIRTY (30) OF
CLARK'S LAS VEGAS TOWNSITE, AS SHOWN BY MAP THEREOF ON FILE IN BOOK 1 OF PLATS,
PAGE 37, IN THE OFFICE OF THE COUNTY RECORDER OF CLARK COUNTY, NEVADA, DESCRIBED
AS FOLLOWS:
BEGINNING AT THE MOST NORTHERLY CORNER OF LOT THIRTEEN (13) IN BLOCK THIRTY (30)
OF SAID CLARK'S LAS VEGAS TOWNSITE;
THENCE SOUTHEASTERLY ALONG THE NORTHERLY LINE OF SAID LOT THIRTEEN (13) A
DISTANCE OF 140.00 FEET TO THE MOST EASTERLY CORNER OF SAID LOT THIRTEEN (13);
THENCE AT RIGHT ANGLES TO SAID NORTHERLY LINE, NORTHEASTERLY A DISTANCE OF 10
FEET TO A POINT;
THENCE NORTHWESTERLY AND 10 FEET DISTANT FROM THE SOUTHERLY LINE OF LOTS ONE (1)
THROUGH SIX (6) IN SAID BLOCK THIRTY (30) A DISTANCE OF 140 FEET TO A POINT;
THENCE SOUTHWESTERLY A DISTANCE OF 10 FEET TO THE TRUE POINT OF BEGINNING.
Ex. A-Pg. 1
<PAGE> 59
EXHIBIT "A"
LEGAL DESCRIPTION
OWNED LAND
(CLARK COUNTY)
(continued)
PARCEL SIX (6):
LOTS TWENTY (20), TWENTY-ONE (21), AND TWENTY-TWO (22) IN BLOCK THIRTY (30) OF
CLARK'S LAS VEGAS TOWNSITE, AS SHOWN BY MAP THEREOF ON FILE IN BOOK 1 OF PLATS,
PAGE 37, IN THE OFFICE OF THE COUNTY RECORDER OF CLARK COUNTY, NEVADA.
PARCEL SEVEN (7):
ALL OF LOTS TWENTY-THREE (23), TWENTY-FOUR (24), TWENTY-FIVE (25), TWENTY-SIX
(26) AND TWENTY-SEVEN (27) OF BLOCK THIRTY (30) OF CLARK'S LAS VEGAS TOWNSITE AS
SHOWN BY MAP THEREOF ON FILE IN BOOK 1 OF PLATS, PAGE 37, IN THE OFFICE OF THE
COUNTY RECORDER OF CLARK COUNTY, NEVADA.
* * * * *
Ex. A-Pg. 2
<PAGE> 60
EXHIBIT "B-1"
LEASE AGREEMENT
(CLARK COUNTY)
Parcel: 1
Lease Date: July 21, 1954
Lessor: Las Vegas, Lodge No. 32, Free & Accepted Masons of Las Vegas, Clark
County, Nevada
Owner of Lessee's Interest: Fitzgerald's Las Vegas, Inc., a Nevada corporation
Lease/Memorandum Recorded: July 1, 1954 in Book 17 as Document No. 16355
Parcel: 2
Lease Date: February 27, 1976
Lessor: A.W. Ham, Jr., Trustee under the Wills of A.W. Ham and Alta M. Ham,
Deceased
Owner of Lessee's Interest: Fitzgerald's Las Vegas, Inc., a Nevada corporation
Lease/Memorandum Recorded: March 10, 1976 in Book 602 as Document No. 561142
Parcels: 4 and 5
Lease Date: September 1, 1978
Lessor: Jenel French Nolan and Julie La Moyne Nolan, David Kramer and Betty
Bennett and Richard James Tinkler
Owner of Lessee's Interest: Fitzgerald's Las Vegas, Inc., a Nevada corporation
Lease/Memorandum Recorded: June 19, 1979 in Book 1072 as Document No. 1031691
Parcels: 8 and 9
Lease Date: November 30, 1995
Lessor: Fitzgerald's Reno, Inc., a Nevada corporation
Owner of Lessee's Interest: Fitzgerald's Las Vegas, Inc., a Nevada corporation
Lease/Memorandum Recorded: December 14, 1995 in Book 951214 as Document No.
00164
Parcel: 10
Lease Date: September 5, 1995
Lessor: John A. Kramer, Sr., Trustee; Helen M. Kramer; Elizabeth Thatcher Brooks
and Betty Bennett, Executrix of the Estate of John David Kramer
Owner of Lessee's Interest: Fitzgerald's Las Vegas, Inc., a Nevada corporation
Lease/Memorandum Recorded: October 13, 1995 in Book 951113 as Document No. 00221
Ex. B-1-Pg. 1
<PAGE> 61
EXHIBIT "B-2"
DESCRIPTION OF LEASED LAND
(CLARK COUNTY)
All that certain real property situate in Clark County, Nevada, described as
follows:
PARCEL ONE (1):
LOTS ONE (1) THROUGH FOUR (4) IN BLOCK THIRTY (30) OF CLARK'S LAS VEGAS
TOWNSITE, AS SHOWN BY MAP THEREOF ON FILE IN BOOK 1 OF PLATS, PAGE 37, IN THE
OFFICE OF THE COUNTY RECORDER OF CLARK COUNTY, NEVADA.
TOGETHER WITH THAT PORTION OF VACATED ALLEY AS PROVIDED FOR IN THAT CERTAIN
ORDER OF VACATION RECORDED APRIL 9, 1979 AS DOCUMENT NO. 995695 OF OFFICIAL
RECORDS OF CLARK COUNTY, NEVADA, AS FOLLOWS:
THAT PORTION OF THAT CERTAIN NORTHWEST-SOUTHWEST ALLEY IN BLOCK THIRTY (30) OF
CLARK'S LAS VEGAS TOWNSITE, AS SHOWN BY MAP THEREOF ON FILE IN BOOK 1 OF PLATS,
PAGE 37, IN THE OFFICE OF THE COUNTY RECORDER OF CLARK COUNTY, NEVADA, DESCRIBED
AS FOLLOWS:
COMMENCING AT THE SOUTHWESTERLY CORNER OF LOT ONE (1) IN BLOCK THIRTY (30) OF
SAID CLARK'S LAS VEGAS TOWNSITE;
THENCE SOUTHEASTERLY ALONG THE SOUTHERLY LINE OF LOTS ONE (1) THROUGH FOUR (4)
OF SAID BLOCK THIRTY (30) A DISTANCE OF 100 FEET TO A POINT; THENCE AT RIGHT
ANGLES TO THE SOUTHWESTERLY LINE OF SAID LOTS A DISTANCE OF 10 FEET TO A POINT;
THENCE NORTHWESTERLY AND PARALLEL TO THE SOUTHWESTERLY LINE OF LOTS ONE (1)
THROUGH FOUR (4) IN BLOCK THIRTY (30) A DISTANCE OF 100 FEET TO A POINT; THENCE
NORTHEASTERLY A DISTANCE OF 10 FEET TO THE TRUE POINT OF BEGINNING.
Ex. B-2-Pg. 1
<PAGE> 62
EXHIBIT "B-2"
DESCRIPTION OF LEASED LAND
(CLARK COUNTY)
(continued)
PARCEL TWO (2):
LOTS FIVE (5) AND SIX (6) IN BLOCK THIRTY (30) OF CLARK'S LAS VEGAS TOWNSITE, AS
SHOWN BY MAP THEREOF ON FILE IN BOOK 1 OF PLATS, PAGE 37, IN THE OFFICE OF THE
COUNTY RECORDER OF CLARK COUNTY, NEVADA.
TOGETHER WITH THAT PORTION OF VACATED ALLEY AS PROVIDED FOR IN THAT CERTAIN
ORDER OF VACATION RECORDED APRIL 9, 1979 AS DOCUMENT NO. 995695 OF OFFICIAL
RECORDS OF CLARK COUNTY, NEVADA, AS FOLLOWS:
THAT PORTION OF THE NORTHWEST-SOUTHWEST ALLEY IN BLOCK THIRTY (30) OF CLARK'S
LAS VEGAS TOWNSITE, AS SHOWN BY MAP THEREOF ON FILE IN BOOK 1 OF PLATS, PAGE 37,
IN THE OFFICE OF THE COUNTY RECORDER OF CLARK COUNTY, NEVADA, DESCRIBED AS
FOLLOWS:
COMMENCING AT THE SOUTHWESTERLY CORNER OF LOT ONE (1) IN BLOCK THIRTY (30) IN
SAID CLARK'S LAS VEGAS TOWNSITE; THENCE SOUTHEASTERLY ALONG THE SOUTHERLY LINE
OF LOTS ONE (1) THROUGH FOUR (4) OF SAID BLOCK THIRTY (30) A DISTANCE OF 100
FEET TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING ALONG THE SOUTHERLY LINE
OF LOTS FIVE (5) AND SIX (6) A DISTANCE OF 40 FEET TO A POINT; THENCE
SOUTHWESTERLY AND PARALLEL TO THE EAST LINE OF SAID LOT SIX (6) IN BLOCK THIRTY
(30) A DISTANCE OF 10 FEET TO A POINT; THENCE NORTHWESTERLY AND PARALLEL TO THE
SOUTHERLY LINE OF LOTS FIVE (5) AND SIX (6) A DISTANCE OF 40 FEET TO A POINT;
THENCE NORTH AND PARALLEL TO THE NORTHWESTERLY LINE OF LOT FIVE (5) A DISTANCE
OF 10 FEET TO THE TRUE POINT OF BEGINNING.
PARCEL FOUR (4):
LOTS SEVENTEEN (17), EIGHTEEN (18), AND NINETEEN (19) IN BLOCK THIRTY (30) OF
CLARK'S LAS VEGAS TOWNSITE, AS SHOWN BY MAP THEREOF ON FILE IN BOOK 1 OF PLATS,
PAGE 37, IN THE OFFICE OF THE COUNTY RECORDER OF CLARK COUNTY, NEVADA.
SAVING AND EXCEPTING THE SOUTHWESTERLY 15.97 FEET OF LOT NINETEEN (19) IN BLOCK
THIRTY (30) OF CLARK'S LAS VEGAS TOWNSITE, AS
Ex. B-2-Pg. 2
<PAGE> 63
EXHIBIT "B-2"
DESCRIPTION OF LEASED LAND
(CLARK COUNTY)
(continued)
SHOWN BY MAP THEREOF ON FILE IN BOOK 1 OF PLATS, PAGE 37, IN THE OFFICE OF THE
COUNTY RECORDER OF CLARK COUNTY, NEVADA.
TOGETHER WITH ALL OF THAT PORTION OF THE SOUTHWESTERLY 15.97 FEET OF LOT
NINETEEN (19) AND LOT TWENTY (20) AND THAT PORTION OF THE NORTHEASTERLY 5.05
FEET OF LOT TWENTY-ONE (21), ALL IN BLOCK THIRTY (30) OF CLARK'S LAS VEGAS
TOWNSITE, AS SHOWN BY MAP THEREOF ON FILE IN BOOK 1 OF PLATS, PAGE 37, IN THE
OFFICE OF THE COUNTY RECORDER OF CLARK COUNTY, NEVADA, LYING ABOVE THAT
PARTICULAR HORIZONTAL PLANE ESTABLISHED AS ELEVATION 2,033.64 FEET BASED ON THE
CITY OF LAS VEGAS BENCH MARK NO. 06134A11, SAID ELEVATION BEING ALSO THE TOP OF
A STRUCTURAL CONCRETE FLOOR.
PARCEL FIVE (5):
THE SOUTHWESTERLY 15.97 FEET OF LOT NINETEEN (19) IN BLOCK THIRTY (30) OF
CLARK'S LAS VEGAS TOWNSITE, AS SHOWN BY MAP THEREOF ON FILE IN BOOK 1 OF PLATS,
PAGE 37, IN THE OFFICE OF THE COUNTY RECORDER OF CLARK COUNTY, NEVADA.
SAVING AND EXCEPTING ALL OF THAT PORTION OF THE SOUTHWESTERLY 15.97 FEET OF LOT
NINETEEN (19) AND LOT TWENTY (20) AND THAT PORTION OF THE NORTHEASTERLY 5.05
FEET OF LOT TWENTY-ONE (21), ALL IN BLOCK THIRTY (30) OF CLARK'S LAS VEGAS
TOWNSITE, AS SHOWN BY MAP THEREOF ON FILE IN BOOK 1 OF PLATS, PAGE 37, IN THE
OFFICE OF THE COUNTY RECORDER OF CLARK COUNTY, NEVADA, LYING ABOVE THAT
PARTICULAR HORIZONTAL PLANE ESTABLISHED AS ELEVATION 2,033.64 FEET BASED ON THE
CITY OF LAS VEGAS BENCH MARK NO. 06134A11, SAID ELEVATION BEING ALSO THE TOP OF
A STRUCTURAL CONCRETE FLOOR.
Ex.B-2-Pg.3
<PAGE> 64
EXHIBIT "B-2"
DESCRIPTION OF LEASED LAND
(CLARK COUNTY)
(continued)
PARCEL EIGHT (8):
LOTS TWENTY-EIGHT (28) AND TWENTY-NINE (29) AND THE SOUTH HALF (S 1/2) OF LOT
THIRTY (30) IN BLOCK THIRTY (30) OF CLARK'S LAS VEGAS TOWNSITE, AS SHOWN BY MAP
THEREOF ON FILE IN BOOK 1 OF PLATS, PAGE 37, IN THE OFFICE OF THE COUNTY
RECORDER OF CLARK COUNTY, NEVADA.
PARCEL NINE (9):
LOTS THIRTY-ONE (31) AND THIRTY-TWO (32) AND NORTH HALF (N 1/2) OF LOT THIRTY
(30) IN BLOCK THIRTY (30) OF CLARK'S LAS VEGAS TOWNSITE, SHOWN BY MAP THEREOF ON
FILE IN BOOK 1 OF PLATS, PAGE 37 IN THE OFFICE OF THE COUNTY RECORDER OF CLARK
COUNTY, NEVADA.
PARCEL TEN (10):
LOTS SEVEN (7) AND EIGHT (8) IN BLOCK THIRTY (30) OF CLARK'S LAS VEGAS TOWNSITE,
AS SHOWN BY MAP THEREOF ON FILE IN BOOK 1 OF PLATS, PAGE 37, IN THE OFFICE OF
THE COUNTY RECORDER OF CLARK COUNTY, NEVADA.
* * * * *
Ex.B-2-Pg.4
<PAGE> 1
EXHIBIT 10.11
AFTER RECORDING, MAIL TO:
Brobeck, Phleger & Harrison LLP
550 South Hope Street
Los Angeles, California 90071
Attention: James D. Prendergast, Esq.
DEED OF TRUST, SECURITY AGREEMENT AND
FIXTURE FILING WITH ASSIGNMENT OF RENTS
(WASHOE COUNTY)
FITZGERALDS RENO, INC,
a Nevada corporation,
as Trustor
LAWYERS TITLE INSURANCE CORPORATION,
a Virginia corporation,
as Trustee
FOOTHILL CAPITAL CORPORATION,
a California corporation,
as Beneficiary
Dated as of October 29, 1998
* * * * *
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
GRANTING CLAUSE ONE
[Land]...............................................................................2
GRANTING CLAUSE TWO
[Improvements].......................................................................3
GRANTING CLAUSE THREE
[Rents, etc.]........................................................................3
GRANTING CLAUSE FOUR
[Leases, Including Deposits and Advance Rentals].....................................3
GRANTING CLAUSE FIVE
[Options to Purchase, etc.]..........................................................4
GRANTING CLAUSE SIX
[Personalty].........................................................................4
GRANTING CLAUSE SEVEN
[Condemnation Awards, etc.]..........................................................4
GRANTING CLAUSE EIGHT
[Insurance Proceeds].................................................................5
GRANTING CLAUSE NINE
[Claims for Damages, etc.]...........................................................5
GRANTING CLAUSE TEN
[Deposits, Advance Payments and Refunds of Insurance, Utilities, etc.]...............5
GRANTING CLAUSE ELEVEN
[Water Rights, etc.].................................................................5
GRANTING CLAUSE TWELVE
[Minerals, etc.].....................................................................5
GRANTING CLAUSE THIRTEEN
[Accessions, etc.]...................................................................5
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE 1.
DEFINITIONS AND RELATED MATTERS......................................................7
Section 1.1 Certain Defined Terms........................................7
Section 1.2 Related Matters.............................................13
1.2.1 Terms Used in the UCC..........................13
1.2.2 Construction...................................13
1.2.3 Determinations.................................14
1.2.4 Governing Law..................................14
1.2.5 Headings.......................................14
1.2.6 Severability...................................14
1.2.7 Exhibits and Schedules.........................15
ARTICLE 2.
[RESERVED]..........................................................................15
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES......................................................15
Section 3.1 Corporate Existence.........................................15
Section 3.2 Authorization; Approvals....................................15
Section 3.3 Enforceability..............................................15
Section 3.4 Validity and Perfection of Security Interests...............15
Section 3.5 Title to and Right to Use Assets............................16
Section 3.6 Non-Contravention...........................................16
Section 3.7 Contracts...................................................17
Section 3.8 Leases......................................................17
Section 3.9 No Other Property...........................................17
Section 3.10 Compliance with Laws........................................17
Section 3.11 Property Use; Mechanics Liens...............................17
Section 3.12 Condemnation................................................18
Section 3.13 Litigation..................................................18
Section 3.14 Construction of Improvements................................18
ARTICLE 4.
AFFIRMATIVE COVENANTS...............................................................18
Section 4.1 Secured Obligations of Trustor..............................18
Section 4.2 Compliance with Law: Maintenance of Approvals...............18
Section 4.3 Other Reports...............................................19
Section 4.4 Insurance...................................................19
Section 4.5 Waste and Repair............................................19
Section 4.6 Impositions; Impounds; Taxes, Capital Costs.................19
4.6.1 Impositions Affecting the Property.............19
4.6.2 Impounds; Impound Account......................19
Section 4.7 Further Assurances..........................................20
Section 4.8 Reimbursement: Waiver of Offsets............................20
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Section 4.9 Litigation..................................................21
Section 4.10 Certain Reports.............................................21
Section 4.11 Tax Receipts................................................21
Section 4.12 FIRPTA Affidavit............................................21
Section 4.13 Preservation of Contractual Rights..........................22
Section 4.14 Tax Service Contract........................................22
Section 4.15 Liens.......................................................22
Section 4.16 Inspection..................................................23
ARTICLE 5.
LEASEHOLD PROVISIONS................................................................23
Section 5.1 Deed of Trust Subject to Ground Lease.......................23
Section 5.2 Certain Covenants...........................................23
ARTICLE 6.
NEGATIVE COVENANTS..................................................................27
Section 6.1 Restrictive Uses............................................27
Section 6.2 No Cooperative or Condominium...............................27
ARTICLE 7.
CASUALTIES AND CONDEMNATION.........................................................27
Section 7.1 Casualties..................................................27
Section 7.2 Condemnation................................................28
ARTICLE 8.
REMEDIES OF BENEFICIARY.............................................................28
Section 8.1 Event of Default............................................28
Section 8.2 Remedies....................................................29
Section 8.3 Power of Sale...............................................31
Section 8.4 Proof of Default............................................32
Section 8.5 Protection of Security......................................32
Section 8.6 Receiver....................................................33
Section 8.7 Curing of Defaults..........................................33
Section 8.8 Remedies Cumulative.........................................34
Section 8.9 Marshaling..................................................34
Section 8.10 Adoption of Covenants.......................................34
ARTICLE 9.
SECURITY AGREEMENT AND FIXTURE FILING...............................................34
Section 9.1 Grant of Security Interest..................................34
Section 9.2 Remedies, etc...............................................39
Section 9.3 Expenses....................................................39
Section 9.4 Fixture Filing..............................................39
</TABLE>
iii
<PAGE> 5
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE 10.
ASSIGNMENT OF RENTS.................................................................40
Section 10.1 Assignment of Rents.........................................40
Section 10.2 Collection of Rents.........................................41
ARTICLE 11.
ENVIRONMENTAL MATTERS...............................................................41
Section 11.1 Representations and Warranties..............................41
Section 11.2 Environmental Covenants.....................................42
ARTICLE 12.
MISCELLANEOUS.......................................................................45
Section 12.1 Beneficiary's Expenses, including Attorney's Fees...........45
Section 12.2 Indemnity...................................................45
Section 12.3 Waivers; Modifications in Writing...........................45
Section 12.4 Cumulative Remedies; Failure or Delay.......................46
12.4.1 Successors and Assigns.........................46
Section 12.5 Independence of Covenants...................................46
Section 12.6 Change of Law...............................................46
Section 12.7 No Waiver...................................................47
Section 12.8 Notices.....................................................47
Section 12.9 References to Foreclosure...................................47
Section 12.10 Joinder of Foreclosure......................................47
Section 12.11 Rights and Secured Obligations of Beneficiary and
Trustee.....................................................48
Section 12.12 Copies......................................................48
Section 12.13 Subordination...............................................48
Section 12.14 Personally Security Instruments.............................49
Section 12.15 Suits to Protect Property...................................49
Section 12.16 Trustor Waiver of Rights....................................49
Section 12.17 Charges for Statements......................................50
Section 12.18 Complete Agreement..........................................50
Section 12.19 Payments Set Aside..........................................50
Section 12.20 Substitution................................................50
Section 12.21 Choice of Forum.............................................50
Section 12.22 Regulatory Matters..........................................51
Section 12.23 Guarantor Waivers...........................................52
Section 12.24 Waiver of Trial by Jury.....................................53
</TABLE>
iv
<PAGE> 6
DEED OF TRUST, SECURITY AGREEMENT AND
FIXTURE FILING WITH ASSIGNMENT OF RENTS
(WASHOE COUNTY)
THIS DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING WITH
ASSIGNMENT OF RENTS (this "Deed of Trust") is made as of the 29th day of
October, 1998, by Fitzgeralds Reno, Inc., a Nevada corporation,("Trustor"),
whose principal place of business is located at 301 Fremont Street, Las Vegas,
Nevada, 89101, in favor of Lawyers Title Insurance Corporation, a Virginia
corporation, as the trustee ("Trustee"), for the benefit of Foothill Capital
Corporation, a California corporation, as beneficiary ("Beneficiary"), whose
principal place of business is located at 11111 Santa Monica Boulevard, Suite
1500, Los Angeles, California 90025.
THIS INSTRUMENT SECURES FUTURE ADVANCES, AS DEFINED IN NRS 106.320, AND
IS TO BE GOVERNED BY NRS 106.300 TO 106.400, INCLUSIVE. THE MAXIMUM AMOUNT OF
PRINCIPAL TO BE SECURED HEREBY IS $15,000,000.00.
R E C I T A L S:
A. Pursuant to that certain Loan and Security Agreement dated as of
October 29, 1998 (as supplemented and otherwise amended from time to time, the
"Loan Agreement"), by and among Fitzgeralds Gaming Corporation ("Fitzgeralds"),
as the borrower, and Beneficiary, as the lender, pursuant to which Beneficiary
has agreed to make a loan to Fitzgeralds on the terms and conditions set forth
therein. Unless the context other requires, all capitalized terms used and not
otherwise defined herein shall have the meanings ascribed thereto in the Loan
Agreement.
B. Pursuant to the Guaranty, the Guarantors (including Trustor) have
guaranteed the Guarantied Obligations.
C. Pursuant to the Loan Agreement, the Guarantied Obligations are
required to be secured by, among other things, this Deed of Trust.
D. The parties acknowledge that certain provisions of this Deed of Trust
may be subject to the laws, rules and regulations ("Applicable Gaming Laws") of
the gaming authorities (collectively, "Gaming Authority") of the State of Nevada
and of other governmental jurisdictions, including, but not limited to, the
Nevada State Gaming Control Board, the Nevada Gaming Commission and the City of
Reno and any other local agencies which regulate the gaming activities of
Trustor.
1
<PAGE> 7
WITNESSETH:
In consideration of the foregoing premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Trustor does hereby irrevocably grant, bargain, sell, transfer,
convey and assign to Trustee, its successors and assigns, in trust, with power
of sale, for the benefit and security of Beneficiary, the following (but
excluding in each of every case all Excluded Assets as defined below), whether
now owned or hereafter acquired:
GRANTING CLAUSE ONE
[LAND]
All of Trustor's right, title and interest in the real property located
in the County of Washoe, State of Nevada, described in EXHIBIT "A" attached
hereto and by this reference incorporated herein (the "Owned Land"), together
with all and singular the tenements, hereditament, rights, reversions,
remainders, development rights, privileges, benefits, easements (in gross or
appurtenant), rights-of-way, gores or strips of land, streets, ways, alleys,
passages, sewer rights, water courses, water rights and powers, and all
appurtenances whatsoever and claims or demands of Trustor at law or in equity,
in any way belonging, benefiting, relating or appertaining to the Owned Land,
the airspace over the Owned Land, the "Improvements" (as hereinafter defined) to
the Owned Land, or relating or appertaining to any number of them, or which
hereinafter shall in any way belong, relate or be appurtenant thereto.
To the fullest extent allowed by Applicable Law and the Ground Lease (as
defined below), all of Trustor's right, title and interest in the subleasehold
estate (herein "leasehold estate") created by those certain sublease agreements
described in EXHIBIT "B-1" attached hereto and by this reference incorporated
herein ("Ground Lease"), wherein Trustor is the owner of the sublessee's
interest thereunder ("lessee's interest"), and that certain party referenced on
said Exhibit is the sublessor ("Lessor"), as the same may be amended, restated,
renewed or extended from time to time, in that certain real property located in
the County of Washoe, State of Nevada, described in EXHIBIT "B-2" (the "Leased
Land"), together with all and singular the tenements, hereditaments, rights,
reversions, remainders, development rights, privileges, benefits, easements (in
gross or appurtenant), rights-of-way, gores or strips of land, streets, ways,
alleys, passages, sewer rights, water courses, water rights and powers, and all
appurtenances whatsoever and claims or demands of Trustor at law or in equity,
in any way belonging, benefiting, relating or appertaining to the Leased Land,
the air space over the Leased Land, the "Improvements" (as hereinafter defined)
to the Leased Land, or relating or appertaining to any number of them, or which
hereinafter shall in any way belong, relate or be appurtenant thereto). The
Owned Land and the Leased Land are herein collectively referred to as the
"Land".
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GRANTING CLAUSE TWO
[IMPROVEMENTS]
TOGETHER WITH, any and all structures, buildings, facilities and
improvements of every nature whatsoever now or hereafter erected on the Land,
including, but not limited to, the "Fixtures" (as hereinafter defined)
(collectively, the "Improvements") (the Land and Improvements are referred to
collectively as the "Property").
For purposes of this Deed of Trust, Fixtures shall be deemed to include,
to the full extent allowed by law, fixtures and all other equipment and
machinery now or at any time hereafter owned by Trustor and located or included
in or on or appurtenant to the Property and used in connection therewith and
which are or become so related to the real property encumbered hereby that an
interest arises in them under real estate law which may include, but is not
limited to: all docks, piers, barges, vessels, machinery, equipment (including,
without limitation, pipes, furnaces, conveyors, drums, fire sprinklers and alarm
systems, and air conditioning, heating, refrigerating, electronic monitoring,
stoves, ovens, ranges, dishwashers, disposals, food storage, food processing
(including restaurant fixtures), trash and garbage removal and maintenance
equipment), office equipment, all built-in tables, chairs, mantels, screens,
plumbing, bathtubs, sinks, basins, faucets, laundry equipment, planters, desks,
sofas, shelves, lockers and cabinets, laundry equipment, all safes, furnishings,
appliances (including, without limitation, food warming and holding equipment,
iceboxes, refrigerators, fans, heaters, water heaters and incinerators), rugs,
carpets and other floor coverings, draperies and drapery rods and brackets,
awnings, window shades, venetian or other blinds, curtains, lamps, chandeliers
and other lighting fixtures.
GRANTING CLAUSE THREE
[RENTS, ETC.]
TOGETHER WITH all rents, income, security or similar deposits, including
without limitation, receipts, issues, royalties, earnings, products or proceeds,
profits, maintenance, license and concession fees and other revenues to which
Trustor may now or hereafter be entitled, including, without limitation, all
rights to payment for hotel room occupancy by hotel guests, which includes any
payment or monies received or to be received in whole or in part, whether actual
or deemed to be, for the sale of services or products in connection therewith
and/or in connection with such occupancy, advance registration fees by hotel
guests, tour or junket proceeds and deposits for conventions and/or party
reservations (collectively, the "Rents"), subject to the revocable license
hereinafter given to Trustor to collect and apply such Rents.
GRANTING CLAUSE FOUR
[LEASES, INCLUDING DEPOSITS AND ADVANCE RENTALS]
TOGETHER WITH (a) all estate, right, title and interest of Trustor in,
to and under any and all leases, subleases, lettings, licenses, concessions,
operating agreements, management agreement franchise agreements and all other
agreements affecting or covering the Property or
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any portion thereof now or hereafter existing or entered into, together with all
amendments, extensions and renewals of any of the foregoing, (b) all right,
title, claim, estate and interest of Trustor thereunder, including, without
limitation, all claims of the lessor thereunder, letters of credit, guarantees
or security deposits, advance rentals, and any and all deposits or payments of
similar nature and (c) the right to enforce against any tenants thereunder and
otherwise any and all remedies under any of the foregoing, including Trustor's
right to evict from possession any tenant thereunder or to retain, apply, use,
draw upon, pursue, enforce or realize upon any guaranty thereof, to terminate,
modify, or amend any such agreement; to obtain possession of, use, or occupy,
any of the real or personal property subject to any such agreement; and to
enforce or exercise, whether at law or in equity or by any other means, all
provisions of any such agreement and all obligations of the tenants thereunder
based upon (i) any breach by such tenant thereunder (including any claim that
Trustor may have by reason of a termination, rejection, or disaffirmance of such
agreement pursuant to any Bankruptcy Law), and (ii) the use and occupancy of the
premises demised, whether or not pursuant to the applicable agreement (including
any claim for use and occupancy arising under landlord-tenant law of the State
of Nevada or any Bankruptcy Law).
GRANTING CLAUSE FIVE
[OPTIONS TO PURCHASE, ETC.]
TOGETHER WITH all right, title and interest of Trustor in and to all
options and other rights to purchase or lease the Property or any portion
thereof or interest therein, if any, and any greater estate in the Property
owned or hereafter acquired by Trustor.
GRANTING CLAUSE SIX
[PERSONALTY]
TOGETHER WITH all right, title and interest of Trustor in and to all
Tangible Property and Intangible Property (except, with respect to Casino
Licenses, as prohibited by Applicable Gaming Laws) now or at any time hereafter
located on or appurtenant to the Property and used or useful in connection with
the ownership, management or operation of the Property, including, without
limitation, the Personalty.
GRANTING CLAUSE SEVEN
[CONDEMNATION AWARDS, ETC.]
TOGETHER WITH all the estate, interest right title, other claim or
demand, which Trustor now has or may hereafter acquire in any and all awards,
payments or other consideration made for the taking by eminent domain, or by any
proceeding or purchase in lieu thereof, of the whole or any part of the
Property, including, without limitation, any awards, payments or other
consideration resulting from a change of grade of streets and for severance
damages.
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<PAGE> 11
GRANTING CLAUSE EIGHT
[INSURANCE PROCEEDS]
TOGETHER WITH, all the estate, interest, right, title and other claim or
demand which Trustor now has or may hereafter acquire with respect to the
proceeds of insurance in effect with respect to all or any part of the Property,
together with all interest thereon and the right to collect and receive the
same.
GRANTING CLAUSE NINE
[CLAIMS FOR DAMAGES, ETC.]
TOGETHER WITH all the estate, interest, right, title and other claim or
demand which Trustor now has or may hereafter acquire against anyone with
respect to any damage to all or any part of the Property, including, without
limitation, damage arising from any defect in or with respect to the design or
construction of all or any part of the Improvements and damage resulting
therefrom.
GRANTING CLAUSE TEN
[DEPOSITS, ADVANCE PAYMENTS AND REFUNDS OF INSURANCE, UTILITIES, ETC.]
TOGETHER WITH all deposits or other security or advance payments
including rental payments made by or on behalf of Trustor to others, and all
refunds made by others to Trustor, with respect to (i) insurance policies
relating to all or any part of the Property, (ii) utility service for all or any
part of the Property, (iii) cleaning, maintenance, repair, or similar services
for all or any part of the Property, (iv) refuse removal or sewer service for
all or any part of the Property, (v) rental of equipment, if any, used in the
operation, maintenance or repair by or on behalf of Trustor of all or any part
of the Property and (vi) parking or similar services or rights afforded to all
or any part of the Property.
GRANTING CLAUSE ELEVEN
[WATER RIGHTS, ETC.]
TOGETHER WITH all water rights, water stock, water permits and other
rights to the use of water that are now or that may be hereinafter used in
connection with the said Property, or any part thereof, or any improvements or
appurtenances thereto.
GRANTING CLAUSE TWELVE
[MINERALS, ETC.]
TOGETHER WITH all oil and gas and other mineral rights, if any, in or
pertaining to the Land and all royalty, leasehold and other rights of Trustor
pertaining thereto.
GRANTING CLAUSE THIRTEEN
[ACCESSIONS, ETC.]
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TOGETHER WITH all extensions, improvements, betterments, renewals,
substitutes for and replacements of, and all additions, accessions, and
appurtenances to, any of the foregoing that Trustor may subsequently acquire,
and all conversions of any of the foregoing; Trustor agrees that all property
hereafter acquired by Trustor and required by the Loan Agreement, this Deed of
Trust or any other Loan Document to be subject to the lien and security
interests created by this Deed of Trust shall forthwith upon the acquisition
thereof by Trustor be subject to the lien and security interests of this Deed of
Trust as if such property were now owned by Trustor and were specifically
described in this Deed of Trust and granted hereby or pursuant hereto, and the
Beneficiary is hereby authorized to receive any and all such property as and for
additional security for the Guarantied Obligations.
The entire estate, property and interest hereby conveyed to Trustee may
hereafter be referred to as the "Trust Estate."
FOR THE PURPOSE OF SECURING:
A. the Guarantied Obligations (as defined in the Guaranty);
B. the due and punctual payment and performance of any and all present
and future obligations and liabilities of Trustor of every type or description
to Beneficiary, arising under or in connection with this Deed of Trust or any
other Loan Document including for reimbursement of amounts permitted to be
advanced or expended by Beneficiary (i) to satisfy amounts required to be paid
by Trustor under this Deed of Trust or any other Loan Document together with
interest thereon to the extent provided, or (ii) to protect the Trust Estate,
together with interest thereon to the extent provided; and
C. all future advances pursuant to the Indenture or any other of the
Loan Documents, as future advances is defined by Nevada Revised Statutes ("NRS")
106.320;
in each case whether due or not due, direct or indirect, joint and/or several,
absolute or contingent, voluntary or involuntary, liquidated or unliquidated,
determined or undetermined, now or hereafter existing, renewed or restructured,
whether or not from time to time decreased or extinguished and later increased,
created or incurred, whether or not arising after the commencement of a
proceeding under the Bankruptcy Code (including post-petition interest) and
whether or not allowed or allowable as a claim in any such proceeding (all
obligations and liabilities described herein, including, without limitation, the
Guarantied Obligations, are collectively referred to herein as the "Secured
Obligations").
To protect the security of its Deed of Trust, Trustor hereby covenants
and agrees as follows:
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ARTICLE 1.
DEFINITIONS AND RELATED MATTERS
Certain Defined Terms As used herein, the following terms shall
have the following meanings:
"Accounts" shall have the meaning set forth in 9.1.2 hereof.
"Applicable Gaming Laws" has the meaning set forth in Recital D above.
"Applicable Laws" has the meaning set forth in Section 3.7 hereof.
"Beneficiary" has the meaning set forth in the Preamble.
"Casino" means a gaming establishment owned, directly or indirectly, by
Trustor and any hotel, building, restaurant, theater, amusement park, other
entertainment facility, parking facilities, retail shops, land, equipment and
other property asset directly ancillary thereto and used or to be used in
connection therewith.
"Casino License" means any material license, franchise or other approval
or authorization required to own, lease or operate a Casino, or otherwise
conduct gaming in any jurisdiction in which Trustor conducts, or proposes in
good faith to conduct, gaming business, including any applicable liquor license.
"Chattel Paper" has the meaning set forth in Section 9. 1. 1.
"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations thereunder.
"Documents" has the meaning set forth in Section 9.1.9.
"Environmental Damages" means all claims, judgments, damages, losses,
penalties, fines, liabilities (including strict liability), encumbrances, liens,
costs and expenses of investigation and defense of any claim, whether or not
such is ultimately defeated, and of any settlement or judgment, of whatever kind
or nature, contingent or otherwise, matured or unmatured, foreseeable or
unforeseeable, including, without limitation, reasonable attorneys fees, charges
and disbursements (including, without limitation, costs of appeal), and
consultants fees, any of which are actually incurred at any time as a result of
the existence or alleged existence of Hazardous Materials upon, about or beneath
the Property or migrating or threatening to migrate to or from the Property, or
the existence or alleged existence of a violation of Environmental Requirements
pertaining to the Property regardless of whether the existence of such Hazardous
Materials or the violation of Environmental Requirements arose prior to the
present ownership or operation of the Property, and including, without
limitation:
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(i) damages for personal injury, or injury to property or natural
resources occurring upon or off of the Property, foreseeable or unforeseeable,
including, without limitation, lost profits, consequential damages, the cost of
demolition and rebuilding of any improvements on real property, interest and
penalties including, but not limited to, claims brought by or on behalf of
employees of Trustor, with respect to which Trustor waives, for the benefit of
Beneficiary only, any immunity to which it may be entitled under any industrial
or workers compensation laws;
(ii) reasonable fees actually incurred for the services of
attorneys, consultants, contractors, experts, laboratories and all other costs
incurred in connection with the investigation or remediation of such Hazardous
Materials or violation of Environmental Requirements including, but not limited
to, the preparation of any feasibility studies or reports or the performance of
any cleanup, remedial, removal, abatement containment, closure, restoration or
monitoring work required by any federal, state or local governmental agency or
political subdivision, or reasonably necessary to make full economic use of the
Property or any other property or otherwise expended in connection with such
conditions, and including, without limitation, any reasonable attorneys fees,
charges and disbursements (including, without limitation, costs of appeal)
actually incurred in enforcing this Deed of Trust or collecting any sums due
hereunder; and
(iii) liability to any Person to indemnify such Person for actual
costs incurred in good faith in connection with the items referenced in
subparagraphs (i) and (ii) hereof
"Environmental Requirements" means the common law and all applicable
present and future statutes, regulations, rules, ordinances, codes, licenses,
permits, orders, approvals, plans, authorizations, concessions, franchises and
similar items, of all a governmental agencies, departments, commissions, boards,
bureaus or instrumentalities of the United States, states and political
subdivisions thereof and all applicable judicial and administrative and
regulatory decrees, injunctions, judgments and orders relating to the
environment, including, without limitation:
(i) all requirements, including, but not limited to, those
relating or pertaining to (A) reporting, licensing, permitting, investigation
and remediation of emissions, discharges, releases or threatened releases of
Hazardous Materials or other chemical substances, pollutants, contaminants or
hazardous or toxic substances, materials or wastes whether solid, liquid or
gaseous in nature, into the environment (including, without limitation, ambient
air, surface water, groundwater or land surface or subsurface strata), (B) the
manufacture, processing, distribution, use, generation, treatment, storage,
disposal, transport or handling of chemical substances, materials or wastes,
whether solid, liquid or gaseous in nature, including without limitation,
Hazardous Materials or (C) underground storage tanks and related piping, and
emissions, discharges, releases or threatened releases of Hazardous Materials or
other chemical substances, pollutants, contaminants or hazardous or toxic
substances, materials or wastes whether solid, liquid or gaseous in nature
therefrom; and
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(ii) all other requirements pertaining to the protection of the
health and safety of employees or the public with respect to Hazardous
Materials.
"Equipment" has the meaning set forth in Section 9.1.7.
"Excluded Assets" has the meaning set forth in the Loan Agreement.
"Fixtures" has the meaning set forth in Section 9.1.7.
"Gaming Authority" has the meaning set forth in Recital D above.
"Gaming Equipment" means all equipment and supplies used in the
operation of a casino, including, without limitation, slot machines, gaming
tables, cards, dice, gaming chips, player tracking systems, and all other gaming
devices (as defined in NRS 463.0155), cashless wagering systems (as defined in
NRS 463.014) and associated equipment (as defined in NRS 463.0136).
"General Intangibles" has the meaning set forth in Section 9.1.10.
"Ground Lease" shall have the meaning set forth in Granting Clause One
above.
"Guarantied Obligations" has the meaning ascribed to such term in the
Guaranty.
"Guaranty" means that certain Guaranty, dated as of even date herewith,
made by each of the Guarantors in favor of Beneficiary.
"Hazardous Materials" means any chemical, material or substance:
(i) the presence of which requires investigation or remediation
under any federal, state or local law, statute, code, regulation, ordinance,
order, action or policy; or
(ii) which is or becomes defined as or included in the definition
of "hazardous substances," "hazardous wastes," "hazardous materials," extremely
hazardous waste," "restricted hazardous waste" or "toxic substances" or words of
similar import under any applicable local, state or federal law or under
regulations adopted or publications promulgated pursuant thereto, including, but
not limited to, any such laws or regulations promulgated by governmental
authorities of the State of Nevada; the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et
seq.; the Hazardous Materials Transportation Act as amended, 49 U.S.C.
Section 1801, et seq., the Resource Conservation and Recovery Act as amended, 42
U.S.C. Section 6901, et seq.; the Federal Water Pollution Control Act, as
amended, 33 U.S.C. Section 1251, et seq.; or any substance defined as a
"hazardous substance," "hazardous waste," "hazardous substance," "highly
hazardous substance," "hazardous material" or words of similar meaning as
referred to in Nevada Revised Statutes ("NRS") Chapters 459, 444, 445A, 445B,
590, NRS Sections 618.750-618.850, inclusive, NRS Section 477.045, and the
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Uniform Fire Code (1988 edition), as now existing and as hereafter amended, and
any administrative regulations adopted pursuant thereto;
(iii) which is toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic, or otherwise hazardous and is
or a becomes regulated by any governmental authority, agency, department,
commission, board, agency or instrumentality of the United States, any state of
the United States, or any political subdivision thereof ("governmental
authority"); or
(iv) the presence of which on the Property causes or threatens to
pose a hazard to the Property or to the health or safety of Persons on or about
the Property; or
(v) without limitation, which contains gasoline, crude oil,
diesel fuel or other petroleum hydrocarbons in violation of applicable
Environmental Requirements; or
(vi) without limitation, which contains "PCBs" (as hereinafter
defined) or asbestos or urea formaldehyde foam insulation or radon gas.
"Impositions" means any and all (i) real estate and personal property
taxes and other taxes and assessments, water and sewer rates and charges levied
or assessed upon or with respect to the Property, and any and all other
governmental charges (including any penalties and other charges imposed by any
Gaming Authority) and any interest or costs or penalties with respect thereto,
in each case whether general, special, ordinary or extraordinary, foreseen or
unforeseen, of any kind and nature whatsoever that at any time prior to or after
the execution hereof may be assessed, levied, imposed, or become a lien upon the
Property or the Rents, but excluding taxes on Trustor's income or operating
revenues; (ii) charges for any easement or agreement maintained for the benefit
of the Property and (iii) other charges, expenses, payments or assessments of
any nature, if any, which are or may be assessed, levied, imposed or become a
lien upon the Property or the Rents, including mechanics and other Permitted
Liens.
"Impound Account" means the account that Trustor may be required to
maintain pursuant to Section 4.6.2 of this Deed of Trust for the deposit of
amounts required to pay Impositions and insurance premiums.
"Improvements" has the meaning set forth in Granting Clause Two.
"Indemnitees" has the meaning set forth in Section 11.2.7.
"Intangible Property" means any and all intangible personal property,
including, without limitation, (a) the rights to use all names and all
derivations thereof now or hereafter used by Trustor in connection with the
Land, or the Improvements, including, without limitation, the name "Fitzgeralds
Reno, Inc." and any variations thereof, together with the goodwill associated
therewith, and all names, logos, and designs used by Trustor, or in connection
with the Land or the Improvements or in which Trustor has rights, with the
exclusive right to use such names,
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logos and designs wherever they are now or hereafter used in connection with the
Land or the Improvements, and any and all other trade names, trademarks or
service marks, whether or not registered, now or hereafter used in the operation
of the Land or the Improvements, including, without limitation, any interest as
a licensee or franchisee, and, in each case, together with the goodwill
associated therewith; (b) maps, plans, specifications, surveys, studies, tests,
reports, data and drawings relating to the development of the Land or the
Improvements and the construction of the Improvements, including, without
limitation, all marketing plans, feasibility studies, soils tests, design
contracts and all contracts and agreements of Trustor relating thereto and all
architectural, structural, mechanical and engineering plans and specifications,
studies, data and drawings prepared for or relating to the development of the
Land or the Property or the construction, renovation or restoration of any of
the Improvements or the extraction of minerals, sand, gravel or other valuable
substances from the Land; (c) any and all books, records, customer lists
(including lists or information derived from or related to the Player Tracking
System described within the definition of "Tangible Property"), concession
agreements, supply or service contracts, licenses, permits, governmental
approvals (to the extent such licenses, permits and approvals may be pledged
under applicable law), signs, goodwill, casino and hotel credit and charge
records, supplier lists, checking accounts, safe deposit boxes (excluding the
contents of such deposit boxes owned by Persons other than Trustor), cash,
instruments, Chattel Papers, documents, unearned premiums, deposits, refunds,
including but not limited to income tax refunds, prepaid expenses, rebates, tax
and insurance escrow and impound accounts, if any, actions and rights in action,
and all other claims, and all other contract rights and general intangibles
resulting from or used in connection with the operation of the Trust Estate and
in which Trustor now or hereafter has rights; (d) all of Trustor's documents,
instruments, contract rights, and general intangibles including, without
limitation, all insurance policies, permits, licenses, franchises and agreements
required for the use, occupancy or operation of the Land, or any of the
Improvements (to the extent such licenses, permits and approvals are not
prohibited from being pledged under applicable law); (e) general intangibles,
vacation license resort agreements or other time share license or right to use
agreements with respect to the Land, the Improvements and/or the business being
conducted thereon, including, without limitation, all rents, issues, profits,
income and maintenance fees resulting therefrom; whether any of the foregoing is
now owned or hereafter acquired and (f) any and all 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) now or hereafter obtained by Trustor from any
governmental authority having or claiming jurisdiction over the Land, the
Tangible Property, the Property or any other element of the Trust Estate or
providing access thereto, or the operation of any business on, at, or from the
Land, including, without limitation, any Casino Licenses.
"Intellectual Property Collateral" shall have the meaning set forth in
Section 9.1.15.
"Inventory" has the meaning set forth in Section 9.1.6.
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"Negotiable Collateral" means all of the Trustor's present and future
letters of credit, notes, drafts, instruments, Investment Property, documents,
personal property leases (wherein Trustor is the lessor), chattel paper, and
books and records relating to any of the foregoing.
"Land" has the meaning set forth in Granting Clause One.
"Leases" means any and all leases, subleases, lettings, licenses,
concessions, operating agreements, management agreements and all other
agreements affecting or covering the Property or any portion thereof now or
hereafter existing or entered into, together with all amendments, extensions and
renewals of any of the foregoing.
"Loan Documents" has the meaning set forth in the Loan Agreement.
"NRS" means the Nevada Revised Statutes.
"PCBs" means polychlorinated biphenyls.
"Personalty" means the Intangible Property and the Tangible Property.
"Proceeds" has the meaning set forth in Section 9.1.22.
"Property" has the meaning set forth in Granting Clause Two.
"Public Waters" means any river, lake, stream, sea, ocean, gulf, bay or
other public body of water.
"Receiver" means any trustee, receiver, custodian, fiscal agent,
liquidator or similar officer.
"Rents" has the meaning set forth in Granting Clause Three.
"Tangible Property" means any and all tangible personal property,
including, without limitation, all goods, equipment, supplies, building and
other materials of every nature whatsoever and all other tangible personal
property constituting a part or portion of the Property and/or used in the
operation of any hotel, casino, restaurant store, parking facility, special
events arena, theme park, and any other commercial operations on the Property,
including but not limited to Inventory, communication systems, visual and
electronic surveillance systems and transportation systems and not constituting
a part of the real property subject to the real property lien of this Deed of
Trust and including all property and materials stored on all or any portion of
the Property in which Trustor has an interest and all tools, utensils, food and
beverage, liquor, uniforms, linens, housekeeping and maintenance supplies,
vehicles, fuel, advertising and promotional material, blueprints, surveys, plans
and other documents relating to the Land or the Improvements, and all
construction materials and all Fixtures, including, but not limited to, all
gaming equipment and devices which are used in connection with the operation of
the Property and those items of Fixtures which are purchased or leased by
Trustor, machinery and any other
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item of personal property in which Trustor now or hereafter owns or acquires an
interest or right, and which are used or useful in the construction, operation,
use and occupancy of the Property; to the extent permitted by the applicable
contract or applicable law, all financial equipment computer equipment, player
tracking systems (including all computer hardware, operating software programs
and all right, title and interest in and to any applicable license therefor and
all equipment included within the definition of "associated equipment" under NRS
463.0136), calculators, adding machines, video game and slot machines, and any
other electronic equipment of every nature used or located on any part of the
Property, and all present and future right, title and interest of Trustor in and
to any casino operator's agreement, license agreement or sublease agreement used
in connection with the Property.
"Title Policy" means the title insurance policy or policies in favor of
Beneficiary insuring the lien of this Deed of Trust.
"Trademarks" means trademarks, servicemarks and trade names (including
without limitation, the trademarks listed on Schedule A to the Trademark
Security Agreement, all registrations and applications to register such
trademarks, servicemarks and trade names and all renewals thereof, and the
goodwill of the business associated with or relating to such trademarks,
servicemarks and trade names, including without limitation any and all licenses
and rights granted to use any trademark, serviceman or trade name owned by any
other Person.
"Trust Estate" has the meaning set forth hereinabove.
"UCC" means the Uniform Commercial Code (as amended from time to time)
as adopted by the State of California.
Section 1.2 Related Matters
1.2.1 Terms Used in the UCC. Unless the context clearly
otherwise requires, all lower case terms used in Section 9 of this Deed of Trust
and not otherwise defined herein that are used or defined in Article 9 (or any
equivalent subpart) of the UCC have the same meanings herein.
1.2.2 Construction. Unless the context of this Deed of Trust
clearly requires otherwise, references to the plural include the singular, the
singular includes the plural, the part includes the whole, and "including" is
not limiting. The words "hereof," "herein," "hereby," "hereunder" and similar
terms in this Deed of Trust refer to this Deed of Trust as a whole (including
the Preamble, the Recitals and all Schedules and Exhibits, but subject to
Section 1.2.5) and not to any particular provision of this Deed of Trust.
Article, section, subsection, exhibit, recital, preamble and schedule references
in this Deed of Trust are to this Deed of Trust unless otherwise specified.
References in this Deed of Trust to any agreement, other document or law "as
amended" or "as may be amended from time to time," or to amendments of any
document or law, shall include any amendments, supplements, replacements,
renewals or other modifications.
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1.2.3 Determinations. Any determination or calculation
contemplated by this Deed of Trust that is made by Beneficiary shall be final
and conclusive and binding upon the Trustor and Fitzgeralds in the absence of
manifest error. References in this Deed of Trust to "determination" by
Beneficiary include good faith estimates (in the case of quantitative
determinations) and good faith beliefs (in the case of qualitative
determinations). All references herein to "discretion" of Beneficiary (or terms
of similar import) shall mean "absolute and sole discretion." All consents and
other actions of Beneficiary contemplated by this Deed of Trust may be given,
taken, withheld or not taken in Beneficiary's discretion (whether or not so
expressed), except as otherwise expressly provided herein. No approval or
consent of Beneficiary shall be effective unless the express written approval or
consent of Beneficiary is received by Trustor.
1.2.4 Governing Law. This Deed of Trust shall be governed by,
and construed in accordance with, the laws (other than the rules regarding
conflicts of laws) of the State of California, except the provisions hereof
relating to the creation, perfection and enforcement of the lien and security
interest in that portion of the Trust Estate which is real property or fixtures
which shall be governed by the laws of the State of Nevada. Notwithstanding
anything to the contrary set forth in this Section 1.24, this Deed of Trust is
subject to the Applicable Gaming Laws of the State of Nevada. Beneficiary and
Trustee each agrees to cooperate with the Gaming Authorities of the State of
Nevada in connection with the administration of their regulatory jurisdiction
over Trustor, including the provision of such documents or other information as
may be requested by the Gaming Authorities of the State of Nevada relating to
Trustor or to the Loan Documents.
1.2.5 Headings. The Article and Section headings used in this
Deed of Trust are for convenience of reference only and shall not affect the
construction hereof.
1.2.6 Severability. If any provision of this Deed of Trust or
any lien or other right hereunder shall be held to be invalid, illegal or
unenforceable under Applicable Law in any jurisdiction, such provision, lien or
other right shall be ineffective only to the extent of such invalidity,
illegality or unenforceability, which shall not affect any other provisions
herein or any other lien or right granted hereby or the validity, legality or
enforceability of such provision, lien or right in any other jurisdiction.
1.2.7 Exhibits and Schedules. All of the appendices, exhibits
and schedules attached to this Deed of Trust shall be deemed incorporated herein
by reference.
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ARTICLE 2.
[RESERVED]
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES
Trustor hereby represents and warrants to Beneficiary and Trustee that:
Section 3.1 Corporate Existence. Trustor (a) is a corporation
duly incorporated, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated, and (b) has the corporate power and
authority to own its property and assets and to transact the business in which
it is engaged or presently proposes to engage, (c) is duly qualified and is
authorized to do business and is in good standing as a foreign corporation in
every jurisdiction in which it owns or leases real property or in which the
nature of its business requires it to be so qualified; and (d) the principal
place of business (as defined in the UCC) of Trustor is in Nevada.
Section 3.2 Authorization; Approvals. The execution, delivery
and performance by Trustor of this Deed of Trust are within Trustor's corporate
powers and authority, have been duly authorized by all necessary corporate
action, and do not contravene (a) Trustor's charter or by-laws or (b) any law or
any contractual restriction binding on or affecting Trustor or the Property. All
authorizations or approvals or other actions by, or notice to or filing with,
any governmental authority required for the due execution, delivery and
performance by Trustor of this Deed of Trust have been duly obtained and are in
full force and effect.
Section 3.3 Enforceability. This Deed of Trust has been duly
executed and delivered by Trustor and is the legal, valid and binding obligation
of Trustor, enforceable against Trustor in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium, reorganization or other similar
laws affecting creditors rights generally and general principles of equity.
Section 3.4 Validity and Perfection of Security Interests. The
liens and security interests in the Trust Estate created in accordance with the
terms hereof constitute valid security interests, and, (a) upon recordation of
this Deed of Trust in the appropriate office in Washoe County, Nevada, (b) upon
the filing of financing statements naming Trustor as "Debtor" and Beneficiary as
"Secured Party" and describing the Trust Estate in the filing offices of the
Secretary of State of Nevada and in the real estate records of Washoe County,
Nevada, (c) upon the delivery of any instruments and Chattel Paper which are
included in the Trust Estate to Beneficiary, (d) to the extent subject to U.S.
federal law and not Article 9 of the UCC, upon recordation of the security
interests granted in patents, if any, Trademarks (as defined in the Trademark
Security Agreement) and Copyrights (as defined in the Copyright Security
Agreement) in the U.S. Patent and Trademark Office and the U.S. Copyright
Office, as applicable, along with the registration of all U.S. Copyrights in the
U.S. Copyright Office and, to the extent governed by foreign law, the taking of
all steps necessary under applicable foreign law to perfect or record the
security interest in all foreign Intellectual Property Collateral applications
and registrations and (e) to the extent ownership of Collateral is represented
by a certificate, a notation on the certificate of the lien granted hereby, the
security interests granted to Beneficiary hereunder will constitute perfected
security interests
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therein superior and prior to all liens, rights or claims of all other Persons
other than Permitted Liens.
Section 3.5 Title to and Right to Use Assets. Trustor has good
and marketable fee simple title in the Land and is the legal and beneficial
owner of the remainder of the Trust Estate (and as to the Trust Estate whether
now existing or hereafter acquired, Trustor will continue to own each item
thereof), free and clear of all liens except Permitted Liens. Trustor has the
right to hold, occupy and enjoy its interest in the Trust Estate subject to the
terms of the Casino Licenses and subject to the Permitted Liens, and has valid
right, full power and legal authority, subject to Applicable Gaming Laws, to
mortgage and pledge the same as provided herein, and Trustor shall defend the
Trust Estate against all claims and demands of all Persons at any time claiming
the same or any interest therein adverse to Beneficiary (except for Permitted
Liens) and Beneficiary may, subject to Applicable Gaming Laws, at all times
peaceably and quietly enter upon, hold, occupy and enjoy the entire Trust Estate
in accordance with the terms hereof.
Section 3.6 Non-Contravention. Neither the execution, delivery
or performance of this Deed of Trust by the Trustor nor the consummation of the
transactions herein contemplated nor the fulfillment of the terms hereof (i)
violate the terms of or constitute a default under any agreement, indenture,
mortgage, deed of trust, equipment lease, instrument or other document to which
the Trustor is a party or by which it or any of its property or assets is bound
or to which it may be subject, (ii) conflict with any law, order, rule or
regulation applicable to the Trustor of any court or any government, regulatory
body or administrative agency or other governmental body having jurisdiction
over the Trustor or the Trust Estate, or (iii) result in or require the creation
or imposition of (or the obligation to create or impose) any lien (other than
the lien contemplated hereby or by any other Loan Document), upon or with
respect to any of the property or assets now owned or hereafter acquired by
Trustor.
Section 3.7 Contracts. Each material contract which is part of
the Trust Estate (each, a "Contract"), (i) is the genuine, legal, valid, and
binding obligation of Trustor, (ii) is enforceable against Trustor in accordance
with its terms, (iii) is in full force and effect and is, to Trustor's
knowledge, not subject to any setoffs, defenses, overdue taxes, counterclaims or
other claims, nor have any of the foregoing been asserted or alleged as to any
Contract, and (iv) is, in all material respects, in compliance with all
applicable laws, whether federal, state, local or foreign ("Applicable Laws").
Neither Trustor nor, to the best knowledge of Trustor, any other party to any
Contract is in default in the performance or observance of any of the terms
thereof. No party to any Contract is the United States government or an
instrumentality thereof.
Section 3.8 Leases. Trustor has delivered to Beneficiary true,
correct and complete copies of all Leases and the Ground Lease, including all
amendments thereof and modifications thereto. Each Lease and each Ground Lease
(i) is the genuine, legal, valid and binding obligation of Trustor, (ii) is
enforceable against Trustor and, to the best of Trustor's knowledge, the other
party thereto, in accordance with its terms, (iii) is in full force and effect
and is not subject to any setoffs, defenses, taxes, counterclaims or other
claims, nor have any of
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the foregoing been asserted or alleged as to any Lease, and (iv) is in
compliance with all applicable laws, whether federal, state, local or foreign.
Section 3.9 No Other Property. The Trust Estate constitutes all
of the property (whether owned, leased or otherwise) currently used by Trustor
in connection with the operation of the Fitzgeralds Reno Casino, other than
Exluded Assets.
Section 3.10 Compliance with Laws. To the best knowledge of
Trustor, except as otherwise disclosed in writing to Beneficiary, the Trust
Estate and the proposed and actual use thereof comply in all material respects
with all Applicable Laws, and there is no proceeding pending or, to the best
knowledge of Trustor, threatened before any court, quasi-judicial body,
governmental authority or administrative agency relating to the validity of the
Loan Documents or the proposed or actual use of the Trust Estate.
Section 3.11 Property Use; Mechanics Liens. The Property is not
used principally or primarily for agricultural or grazing purposes. All costs
for labor and material for the removal, construction and renovation of the
Improvements (including, without limitation, any additions and alterations
thereto) have been paid in full or will be paid in accordance with Section 4.15
hereof.
Section 3.12 Condemnation. There are no pending or, to the best
knowledge of Trustor, threatened condemnation or eminent domain proceedings
against the Trust Estate or any part thereof.
Section 3.13 Litigation. Except as disclosed in writing to
Beneficiary on the date hereof, there are no pending or, to the best knowledge
of Trustor, threatened, actions, claims, proceedings, investigations, suits or
proceedings before any court, governmental agency or arbitrator.
Section 3.14 Construction of Improvements. All Improvements have
been and will be constructed in all material respects in accordance with
Applicable Laws and all requirements of governmental authorities and
governmental approvals. To the best knowledge of Trustor, the Improvements are
free from latent and patent defects, and do not require any material repairs,
reconstruction or replacement on the date hereof (except for any material
repairs, reconstruction or replacement that do not have a material adverse
effect on the value of the Improvements and do not materially and adversely
affect Trustor's use and operation of the Improvements).
ARTICLE 4.
AFFIRMATIVE COVENANTS
Trustor hereby covenants to and agrees with Beneficiary as follows:
Section 4.1 Secured Obligations of Trustor. Trustor will
perform, observe and comply with its Secured Obligations arising under this Deed
of Trust and shall continue to be
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liable for the performance of its Secured Obligations arising under this Deed of
Trust until discharged in full, notwithstanding any actions of partial
foreclosure that may be brought hereunder to recover any amount or amounts
expended by Beneficiary on behalf of Trustor in order to cure any of Trustor's
defaults or to satisfy any of Trustor's obligations or covenants under any
agreement relating to the Trust Estate and to which Trustor is a party or by
which the Trust Estate is bound.
Section 4.2 Compliance with Law: Maintenance of Approvals.
Except as expressly permitted by the Loan Agreement, Trustor shall (i) comply
with all requirements of law applicable to the ownership, operation, use and
occupancy of all or any portion of the Trust Estate, whether or not such
compliance requires work or remedial measures that are ordinary or
extraordinary, foreseen or unforeseen, or structural or nonstructural, and (ii)
maintain in full force and effect all authorizations, approvals or other
actions, including, without limitation, Casino Licenses and liquor licenses and
permits, which are necessary or desirable for the performance of Trustor's
obligations pursuant to this Deed of Trust or for the business conducted by
Trustor on the Property.
Section 4.3 Other Reports. Trustor shall provide from time to
time such additional information regarding Trustor or the Trust Estate as are
required under the Loan Agreement or as Beneficiary may reasonably request.
Section 4.4 Insurance. Trustor, at its sole cost and expense,
will provide, maintain and keep in force the insurance required by Section 6.10
of the Loan Agreement ("Insurance Policies").
Section 4.5 Waste and Repair. Except as may be expressly
permitted by the Loan Agreement, Trustor shall at all times cause the Trust
Estate to be maintained in normal working order and condition (reasonable wear
and tear excepted). Trustor shall not suffer any waste of the Property or do or
permit to be done thereon anything not otherwise permitted in the Loan Agreement
that may in any way impair the security of this Deed of Trust. Trustor shall not
abandon the Property nor leave the Property unprotected or deserted.
Section 4.6 Impositions; Impounds; Taxes, Capital Costs.
Section 4.6.1 Impositions Affecting the Property. Trustor shall
pay when due all Impositions (or currently payable installments thereof) that
are or that may become a lien on the Property or are assessed against the
Property or the Rents; provided, however, that Trustor may, at its expense,
contest the amount or validity or application of any such Impositions by
appropriate legal proceedings promptly initiated and conducted in good faith and
with due diligence; provided, that (i) neither the Property nor any substantial
part thereof will be in danger of being sold, forfeited, terminated, canceled,
or lost as a result of such contest, and (ii) except in the case of a lien
junior to the lien of this Deed of Trust, Trustor shall have posted such bond or
furnished such other security as may be required by law to release such lien.
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4.6.2 Impounds; Impound Account. Upon the occurrence and during
the continuance of an Event of Default and at the request of Beneficiary,
Trustor will pay to Beneficiary monthly an amount equal to one-twelfth (1/12th)
of the annual cost (or such greater amount as may be reasonably necessary for
Beneficiary to have on hand sufficient funds to pay the next installment prior
to delinquency) of Impositions on the Property (but only those Impositions
defined in clause (i) of the definition of "Impositions"), together with an
amount equal to the estimated next hazard and other required insurance premiums
in order to accumulate with Beneficiary sufficient funds to pay such Impositions
and premiums at least 30 days prior to their respective due dates. Such funds
shall be held by Beneficiary on a commingled basis and shall not bear interest.
Said accumulated funds shall be paid and applied by Beneficiary with respect to
such Impositions and insurance premiums as and when due.
Section 4.7 Further Assurances. Trustor shall, at its own
expense, perform such acts as may be necessary, or that Beneficiary may request
at any time, to execute, acknowledge and deliver all such additional papers and
instruments (including, without limitation, a declaration of no setoff) and all
such further assurances of title and will do or cause to be done all further
acts and things as may be proper or reasonably necessary to carry out the
purpose hereof and to subject to the liens hereof any property intended by the
terms hereof to be covered thereby and any renewals, additions, substitutions,
replacements or betterments thereto.
Section 4.8 Reimbursement: Waiver of Offsets.
4.8.1 In the event any tax, stamp tax, assessment water rate,
sewer rate, insurance premium, repair, rent charge, debt, claim, inspection,
Imposition or lien having priority over the lien of this Deed of Trust or in the
event any other amount required to be paid by Trustor hereunder shall remain
unpaid and Trustor is not contesting such amount pursuant to the terms hereof or
the Loan Agreement, Beneficiary shall have the right to pay such amount and
shall have the right to declare immediately due and payable any such amount so
paid. Any amount so paid by Beneficiary shall bear interest at the default
interest rate specified in Section 2.6(c) of the Loan Agreement ("Default Rate")
from the date of payment by Beneficiary, shall constitute an additional Secured
Obligation secured hereby, prior to any right, title or interest in or claim
upon the Trust Estate attaching or accruing subsequent to the lien of this Deed
of Trust, shall be secured by this Deed of Trust and shall be payable by Trustor
to Beneficiary within thirty (30) days after receipt by Trustor of written
demand.
4.8.2 Except as otherwise provided herein, in the Loan Agreement
or in the other Loan Documents, all sums payable by Trustor hereunder or under
the other Loan Documents shall be paid without notice, demand, counterclaim,
setoff, deduction or defense and without abatement, suspension, deferment,
diminution or reduction, and the obligations and liabilities of Trustor
hereunder shall in no way be released, discharged or otherwise affected by
reason of: (i) any damage to or destruction of or any condemnation or similar
taking of the Trust Estate or any part thereof, (ii) any restriction or
prevention of or interference with any use of the
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Trust Estate or any part thereof, (iii) any title defect or encumbrance or any
eviction from the Property or the Improvements or any part thereof by title
paramount or otherwise; (iv) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other like proceeding
relating to Beneficiary, or any action taken with respect to this Deed of Trust
by any trustee or receiver of Beneficiary, or by any court, in any such
proceeding; (v) any claim which Trustor has or might have against Beneficiary;
(vi) any default or failure on the part of Beneficiary to perform or comply with
any of the terms hereof or of any other agreement with Trustor or (vii) any
other occurrence whatsoever, whether similar or dissimilar to the foregoing;
whether or not Trustor shall have notice or knowledge of any of the foregoing.
Trustor waives all rights now or hereafter conferred by statute or otherwise to
any abatement, suspension, deferment, diminution or reduction of any sum secured
hereby and payable by Trustor.
Section 4.9 Litigation. Trustor will, promptly upon obtaining actual
knowledge thereof, give notice in writing to Beneficiary of any litigation
commenced that is likely to have a material adverse effect on the Property or
the liens created hereby other than unlawful detainer proceedings brought by
Trustor.
Section 4.10 Certain Reports. Trustor will, promptly and in any event
within fifteen days after actual receipt by Trustor thereof, deliver to
Beneficiary a copy of any written notice or citation concerning any actual,
alleged or suspected violation of Environmental Requirements or liability of
Trustor for Environmental Damages in connection with the Property or past or
present activities of any Person thereon.
Section 4.11 Tax Receipts. Subject to the provisions of Section 4.6.1
hereof, Trustor shall provide to Beneficiary, within 30 days after demand made
therefor, bills (which shall be receipted from and after the date receipted
bills are obtainable) showing the payment to the extent then due of all taxes,
assessments (including those payable in periodic installments), water rates,
sewer rates, and/or any other Imposition that have become a lien (other than an
inchoate lien) upon the Trust Estate.
Section 4.12 FIRPTA Affidavit. Trustor hereby represents and warrants to
Beneficiary under penalty of perjury:
(i) Trustor's U.S. Taxpayer Identification Number is 88-0203246;
(ii) Trustor's business address is set forth in the preamble
hereto; and
(iii) Trustor is not a "foreign person" within the meaning of
Sections 1445 and 7701 of the Code (i.e., Trustor is not a nonresident
alien, foreign corporation, foreign partnership, foreign trust or
foreign estate as those terms are defined in the Code and regulations
promulgated thereunder).
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Trustor agrees to indemnify, defend, protect and hold Beneficiary
and Beneficiary's agents harmless of, from and against any and all loss,
liability, costs, damages, claims or causes of action including
reasonable attorneys fees, costs and expenses which may be actually
incurred by Beneficiary or Beneficiary's agents by reason of any failure
of any representation or warranty made by Trustor in this Section 4.12
to be true and correct in all respects, including, but not limited to,
any liability for failure to withhold any amount required under Code
Section 1445 in the event of foreclosure or other transfer of the
Property.
Section 4.13 Preservation of Contractual Rights. Except as otherwise
expressly permitted by the Loan Agreement, Trustor shall, prior to delinquency,
default or forfeiture, perform all obligations and satisfy all material
conditions required on its part to be satisfied to preserve its rights and
privileges under any contract, lease, license, permit or other authorization (a)
under which it holds any Tangible Property, or (b) which constitutes part of the
Intangible Property.
Section 4.14 Tax Service Contract. At any time after the occurrence of
an Event of Default (whether or not such Event of Default is cured), at the
request of Beneficiary and at Trustor's and/or its permitted successor's sole
expense, Beneficiary shall be furnished a tax service contract in form
satisfactory to Beneficiary issued by a tax reporting agency satisfactory to
Beneficiary, which contract shall remain in force until indefeasible discharge
in full of the Secured Obligations.
Section 4.15 Liens. Trustor shall pay and promptly discharge, at
Trustor's cost and expense, all liens upon the Trust Estate, or any part thereof
or interest therein other than the Permitted Liens. Trustor shall have the right
to contest in good faith the validity of any such lien, provided Trustor shall
first post such bond or furnish such other security as may be required by law to
release such lien, and provided however that Trustor shall thereafter diligently
proceed to cause such lien to be removed and discharged. If Trustor shall fail
to discharge any such lien, 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 by depositing in court a bond for the amount claimed or otherwise
giving security for such lien, or in such manner as is or may be prescribed by
law. Any amount so paid by Beneficiary shall bear interest at the Default Rate
from the date of payment by Beneficiary, shall constitute an additional Secured
Obligation secured hereby, prior to any right, title or interest in or claim
upon the Trust Estate attaching or accruing subsequent to the lien of this Deed
of Trust shall be secured by this Deed of Trust and shall be payable by Trustor
to Beneficiary upon demand.
Section 4.16 Inspection. Trustor shall permit Beneficiary, upon 24 hours
prior notice, to enter upon and inspect during normal business hours, the
Property and the construction and operation thereof, for such purposes
reasonably deemed necessary by Beneficiary, it being agreed by Trustor that
Beneficiary's good faith belief of the existence of a past or present release or
threatened release of any Hazardous Material into, onto, beneath or from the
Property
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shall be conclusively deemed reasonable; provided, however, that no such prior
notice shall be necessary and such inspection may occur at any time if (i)
Beneficiary reasonably believes that an emergency exists or is imminent or (ii)
the giving or delivery of such notice is prohibited or stayed by Applicable
Laws.
ARTICLE 5.
LEASEHOLD PROVISIONS
Section 5.1 Deed of Trust Subject to Ground Lease. This Deed of Trust is
made subject to whatever rights and interest the Lessor(s) may have under each
lease defined herein as one of the Ground Lease and the covenants, conditions
and restrictions set forth therein. This Deed of Trust shall not be construed so
as to constitute a default under any Ground Lease pursuant to Applicable Law or
the terms of such Ground Lease, and this Deed of Trust and the lien created
hereby shall be of no further force and effect if deemed by a court of competent
jurisdiction to violate the terms of such Ground Lease or Applicable Law.
Section 5.2 Certain Covenants. Trustor covenants and agrees as follows:
5.2.1 Trustor shall keep and perform, in all material respects,
the covenants, agreements and obligations of the lessee set forth in the Ground
Lease, and not to commit, suffer or permit any material breach thereof. If
Trustor shall default under any of the Ground Lease, Beneficiary shall have the
right, but not the obligation, to take any action necessary or desirable to cure
any default by Trustor in the performance of any of the terms, covenants and
conditions of the Ground Lease, Beneficiary being authorized to enter upon the
leased premises for such purposes. Any default by the Trustor as lessee under
any of the leases defined herein as the "Ground Lease" or breach of an
obligation thereunder shall be a default hereunder, provided that such shall not
constitute a default hereunder until the expiration of any applicable lessee
notice and grace period under the Ground Lease and the failure of Trustor to
cure such default or breach under the Ground Lease within such grace period.
5.2.2 Trustor shall give prompt notice to Beneficiary of the
actual receipt by it of written notice of default served on Trustor from the
holder of the lessor's interest under the Ground Lease ("Lessor"), and to
furnish to Beneficiary all information that it may reasonably request concerning
the performance by Trustor of the covenants of the Ground Lease, including,
without limitation, evidence of payment of ground rent, taxes, insurance
premiums and operating expenses.
5.2.3 So long as this Deed of Trust is in effect, there shall be
no merger of the Ground Lease or any interest therein nor of the leasehold
estate created thereby with the fee estate in the land leased thereunder
("Leased Land") or any portion thereof by reason of the fact that the Ground
Lease or such interest therein or such leasehold estate may be held directly or
indirectly by or for the account of any person who shall hold the fee estate in
the Leased Land
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or any portion thereof or any interest of the Lessor. In case Trustor acquires
the fee title or any other estate, title or interest in the Leased Land covered
by the Ground Lease, this Deed of Trust shall attach to and cover and be a lien
upon the fee title or any other estate, title or interest in the Leased Land
covered by the Ground Lease, this Deed of Trust shall attach to and cover and be
a lien upon the fee title or such other estate so acquired, and such fee title
or other estate shall, without further assignment, mortgage or conveyance,
become and be subject to the lien of and covered by this Deed of Trust. Trustor
shall notify Beneficiary of any such acquisition by Trustor and, on written
request by Beneficiary, shall at its own expense cause to be executed and
recorded all such other and further assurances or other instruments in writing
as may in the opinion of Beneficiary be required to carry out the intent and
meaning hereof.
5.2.4 Trustor shall not surrender any Ground Lease (except a
surrender upon the expiration of the term of the applicable Ground Lease or upon
the termination by the Lessor thereunder pursuant to the provisions thereof) to
the Lessor thereunder, or any portion thereof or of any interest therein, and no
termination of any Ground Lease, by Trustor as lessee thereunder, shall be valid
or effective, and the Ground Lease shall not be surrendered or canceled,
amended, other than in immaterial respects, or subordinated to any fee mortgage,
to any lease, or to any other interest, either orally or in writing, without the
prior written consent of Beneficiary so long as this Deed of Trust is in effect.
Any attempted surrender, amendment (except in immaterial respects), cancellation
or termination of any Ground Lease by Trustor without obtaining the prior
written consent of Beneficiary shall be null and void and without force and
effect on the Ground Lease, and such attempt shall constitute a default
hereunder.
5.2.5 If and to the extent required by the terms of the Ground
Lease, Trustor shall, promptly after the execution and delivery of this Deed of
Trust or of any instrument or agreement supplemental thereto, notify such Lessor
in writing of the execution and delivery thereof and deliver to each such Lessor
a copy of such Deed of Trust, instrument or agreement, as the case may be.
5.2.6 If any Ground Lease is terminated prior to natural
expiration of its term by reason of default of Trustor, and if, pursuant to any
provision of the Ground Lease, or otherwise, Beneficiary or its designee shall
acquire from the Lessor thereunder a new lease of the Leased Land, or of any
part of the Leased Land, Trustor shall have no right, title or interest in or to
such new lease or the leasehold estate created thereby.
5.2.7 Trustor hereby warrants the quiet and peaceful possession
of the Property by Trustee for the benefit of Beneficiary after the occurrence
of an Event of Default for so long as the Deed of Trust is in effect and further
warrants and agrees to defend the leasehold estate created under each Ground
Lease for the remainder of the term set forth therein against each and every
person claiming the same or any part thereof.
5.2.8 In the event of the termination, rejection or
disaffirmance by the Lessor (or by any receiver, trustee, custodian, or other
party that succeeds to the rights of any Lessor, pursuant to any section or
chapter of the Bankruptcy Code, or any similar law, whether
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state, federal or otherwise, relating to insolvency, reorganization or
liquidation, or for the relief of debtors (each such law referred to herein as a
"Bankruptcy Law" and all such laws collectively referred to herein as
"Bankruptcy Laws"), Trustor hereby presently, absolutely, and irrevocably grants
and assigns to Beneficiary the sole and exclusive right to make or refrain from
making any election available to lessees under any Bankruptcy Law (including,
without limitation, the election available pursuant to Section 365(h) of the
Bankruptcy Code, 11 U.S.C. Section 365(h), and any successor provision), and
Trustor agrees that any such election, if made by Trustor without the prior
written consent of Beneficiary (which Beneficiary would not anticipate granting
due to the importance of the Ground Lease as security), shall be void and of no
force or effect.
5.2.9 In the event there is a termination, rejection or
disaffirmance by any Lessor (or by any receiver, trustee, custodian or other
party that succeeds to the rights of any Lessor) as described in Section 5.2.8
above, and Beneficiary elects to have Trustor remain in possession under any
legal right, Trustor may have to occupy the premises leased pursuant to any
Ground Lease, then (i) Trustor shall remain in such possession and shall perform
all facts necessary for Trustor to retain its right to remain in such
possession, whether such acts are required under the then existing terms and
provisions of the Ground Lease or otherwise, (ii) all of the terms and
provisions of this Deed of Trust and the lien created hereby shall remain in
full force and effect and shall be extended automatically to such possession,
occupancy, and interest of the Trustor, to all rights of Trustor to such
possession, occupancy and interest, and to all of Trustor's rights and remedies
against the Lessor under the Bankruptcy Laws, and (iii) Trustor hereby agrees
with Beneficiary that if Trustor shall seek to offset against the rent reserved
in the Ground Lease any damages or other amounts pursuant to any right of offset
available to lessees under any Bankruptcy Laws for any damages sustained by
reason of the failure by the applicable Lessors to perform their obligations,
then not less than thirty (30) days prior to effecting any such offset, Trustor
shall give written notice to Beneficiary of the amount of the proposed offset
and the basis therefor, and if Beneficiary objects, within thirty (30) days
after receipt of such notice, to the offset on the basis that it may constitute
a breach of the Ground Lease, then Trustor shall not effect the offset of any
amounts so objected to by Beneficiary and Trustor agrees that any such election,
if made by Trustor without the prior written consent of Beneficiary, shall be
void and of no force or effect.
5.2.10 Trustor shall use its commercially reasonable efforts
(not including the payment of any money or other consideration to any third
party) to obtain from time to time, promptly after request by Beneficiary, from
the Lessor and deliver to Beneficiary, at no cost to Beneficiary, a Lessor's
estoppel certificate thereunder in such form as may reasonably be requested by
Beneficiary. Notwithstanding the foregoing, Trustor's failure to obtain an
estoppel certificate from any Lessor shall not be deemed an Event of Default
hereunder provided Trustor has used its commercially reasonable efforts (as
modified above).
5.2.11 If at any time Trustor fails to comply in any material
respect with any of Trustor's material obligations under any Ground Lease and
the Lessor notifies
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Beneficiary thereof, then Beneficiary or Trustee may, but without obligation to
do so and after providing reasonable notice to Trustor (provided that no notice
shall be required in the event of an emergency or if the Ground Lease is in
danger of being terminated) and without releasing Trustor from any obligation
hereunder or removing or waiving any default hereunder, perform on behalf of
Trustor any such obligations, and any and all costs and expenses (including,
without limitation, attorneys fees) incurred by Beneficiary or Trustee in
connection therewith shall be repayable upon demand by Trustor, with interest
thereon at the Default Rate, and shall be secured hereby; provided that the
foregoing shall not be construed to require Beneficiary or Trustee to incur any
expense or take any action with respect to Trustor's failure to comply with any
of Trustor's obligations under any Ground Lease.
5.2.12 Trustor, promptly upon receiving written notice of a
breach by the Lessor (or by any receiver, trustee, custodian or other party that
succeeds the rights of the Lessor) or of any inability of the Lessor to perform
the terms and provisions of any Ground Lease (including, without limitation, by
reason of a termination, rejection, or disaffirmance by such Lessor pursuant to
any Bankruptcy Laws), which would materially impair the value of any Ground
Lease, will notify Beneficiary in writing of any such breach or inability.
Trustor hereby assigns to Beneficiary the proceeds of any claims that Trustor
may have against such Lessor for any such breach or inability by such Lessor. So
long as no Event of Default has occurred and is continuing, Trustor shall have
the sole right to proceed against such Lessor in Trustor's and Beneficiary's
behalf and to receive and retain all proceeds of such claims, except as
otherwise provided in the Loan Agreement. During the continuance of an Event of
Default, Beneficiary shall have the sole right to proceed against Lessor, and
Trustor shall cooperate with Beneficiary in such endeavor. Trustor shall, at its
expense, diligently prosecute any such proceedings, shall deliver to Beneficiary
copies of all papers served in connection therewith, and shall consult and
cooperate with Beneficiary and its attorneys and agents in the carrying on and
defense of any such proceedings. 5.2.13 Notwithstanding anything to the contrary
in this paragraph, if there is an Event of Default which remains uncured, then
Beneficiary shall have the right, but not the obligation, to conduct and
control, through counsel of Beneficiary's choosing, all litigation and other
proceedings under the Bankruptcy Laws relating to the Lessor, and any expenses
incurred by Beneficiary in such litigation and proceedings will be additional
indebtedness of Trustor secured by this Deed of Trust, will bear interest at the
Default Rate and will be payable by Trustor upon demand. No settlement of any
such proceeding shall be made by Trustor without Beneficiary's prior written
consent.
5.2.14 In addition to any and all other assignments contained in
this Deed of Trust, Trustor hereby absolutely, presently and unconditionally
assigns, transfers and sets over to Beneficiary all of Trustor's claims and
rights to the payment of damages, and any other remedies available to Trustor,
arising from any rejection of any Ground Lease by the Lessor thereunder pursuant
to any Bankruptcy Law. This assignment constitutes a present, absolute,
irrevocable and unconditional assignment of the foregoing claims, rights and
remedies, and shall
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continue in effect until all the indebtedness and obligations secured by this
Deed of Trust shall have been satisfied and discharged in full.
Notwithstanding the foregoing, so long as no uncured Event of Default
has occurred and is continuing, Trustor shall have an absolute license to assert
and settle any and all such claims, and to receive and apply all proceeds
thereof as Trustee shall determine in its discretion.
ARTICLE 6.
NEGATIVE COVENANTS
Trustor hereby covenants to and agrees with Beneficiary as follows:
Section 6.1 Restrictive Uses. Trustor covenants not to suffer any liens
against the Trust Estate (other than Permitted Liens).
Section 6.2 No Cooperative or Condominium. Trustor shall not operate or
permit the Property to be operated as a cooperative or condominium building or
buildings in which the tenants or occupants participate in the ownership,
control or management of the Property or any part thereof, as tenant
stockholders or otherwise.
ARTICLE 7.
CASUALTIES AND CONDEMNATION
Section 7.1 Casualties.
7.1.1 Trustor will notify Beneficiary in writing promptly after
loss or damage caused by fire, wind or other casualty to the Property
("Casualty").
7.1.2 Any and all proceeds from Insurance Policies payable to
Beneficiary under the Loan Agreement shall be treated in accordance with Section
6.10 of the Loan Agreement and shall be released to Trustor or applied to the
discharge of the Secured Obligations as set forth in the Loan Agreement.
Section 7.2 Condemnation. Trustor, immediately upon obtaining knowledge
of the institution of any proceedings for the condemnation of the entire
Property or any material portion thereof, will notify Trustee and Beneficiary of
the pendency of such proceedings. Trustee and Beneficiary may participate in any
such proceedings and Trustor from time to time will deliver to Beneficiary all
instruments requested by Beneficiary to permit such participation; provided,
however, that Trustor shall have the sole right to participate in and settle any
and all such proceedings unless an Event of Default then exists. In any such
condemnation proceedings Beneficiary may be represented by counsel selected by
Beneficiary at the sole cost and expense of Trustor. Trustor shall cause the net
proceeds of any award or compensation or payment in lieu or settlement thereof,
to be applied as set forth in Section 6.10 of the Loan Agreement. To the extent
permitted by applicable law, Trustor hereby specifically, unconditionally and
irrevocably
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waives all rights of a property owner granted under applicable law, including
NRS 37.115, which provide for allocation of condemnation proceeds between a
property owner and a lienholder.
ARTICLE 8.
REMEDIES OF BENEFICIARY
Section 8.1 Event of Default. Subject to any applicable cure period
provided for in the Loan Agreement or in this Deed of Trust, or if no cure
period has been specified, then 30 days after Beneficiary has provided written
notice to Trustor with respect thereto (any such cure periods to run
concurrently, and not consecutively, with any other cure periods provided herein
or by law) any of the following shall be deemed to be an "Event of Default"
hereunder:
8.1.1 The occurrence of one or more "Events of Default" (as
defined in Section 8.1 of the Loan Agreement) shall constitute an Event of
Default under this Deed of Trust;
8.1.2 Failure of Trustor to perform any of the terms, covenants
and conditions in this Deed of Trust or any of the other Loan Documents;
8.1.3 Any statement, representation or warranty given by Trustor
to Trustee or Beneficiary in any of the Loan Documents, in connection with the
Loan Agreement or in any other document provided by Trustor, including this Deed
of Trust, is found to be materially false or misleading;
8.1.4 A material default under or the institution of foreclosure
or other proceedings to enforce, any lien or Permitted Lien of any kind upon the
Property or any portion thereof.
In addition, to the maximum extent permitted by applicable law, it shall be an
Event of Default hereunder if Trustor, or any other "borrower" (as that term is
defined in NRS 106.310) who may send a notice pursuant to NRS 106.380(1), with
respect to this Deed of Trust, (i) delivers, sends by mail or otherwise gives,
purports to deliver, send by mail or otherwise give, to Beneficiary (A) any
notice of an election to terminate the operation of this Deed of Trust as
security for any secured obligation, including, without limitation, any
obligation to repay any "future advance" (as defined in NRS 106.320) of
"principal" (as defined in NRS 106.345), or (B) any other notice pursuant to NRS
106.380(1), (ii) records a statement pursuant to NRS 106.380(3), or (iii) causes
this Deed of Trust, any secured obligation, Beneficiary to be subject to NRS
106.380(2), 106.380(3) or 106.400 shall be in default hereunder.
Section 8.2 Remedies. At any time after an Event of Default, subject to
any restrictions contained in any Intercreditor Agreement Beneficiary may:
8.2.1 In person, by agent or by a receiver, and without regard
to the adequacy of security, the solvency of Trustor or any other matter, (i)
enter upon and take
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possession of the Property, or any part thereof, in its own name or in the name
of Trustee, (ii) inspect the Property for the purpose of determining the
existence, location, nature and magnitude of any past or present release of
Hazardous Materials into, onto, beneath or from the Property, (iii) negotiate
with governmental authorities with respect to compliance with Environmental
Requirements and remedial measures, (iv) take any action necessary to ensure
compliance with Environmental Requirements, including, but not limited to,
spending Rents in connection with any cleanup, remediation or other response
action with respect to Hazardous Materials or (v) sue for or otherwise collect
the Rents, issues and profits thereof and apply the same, less costs and
expenses of operation and collection, including reasonable attorneys fees
actually incurred, to the Secured Obligations, all in such order as Beneficiary
may determine. The entering upon and taking possession of said Property, the
collection of such Rents, issues and profits and the application thereof as
aforesaid shall not cure or waive any default or notice of default hereunder or
invalidate any act done pursuant to such notice, or deprive Beneficiary of the
benefits of any indemnity set forth herein;
8.2.2 Commence an action to foreclose this Deed of Trust in the
manner provided by Applicable Laws for the foreclosure of mortgages or deeds of
trust of real property;
8.2.3 Seek a judgment that Trustor has breached its covenants,
representations and/or warranties set forth in this Deed of Trust or any other
Loan Document regarding Environmental Requirements and/or Hazardous Materials,
by commencing, maintaining and concluding, and enforcing a judgment arising
from, an action for breach of contract, without regard to whether Beneficiary
has commenced an action to foreclose this Deed of Trust, and to seek injunctive
or other appropriate equitable relief and/or the recovery of any and all
Environmental Damages, it being conclusively presumed between Trustor and
Beneficiary that any reasonable costs advanced or expenses actually incurred by
Beneficiary relating to the cleanup, remediation or other response action with
respect to the Property were made or incurred by Beneficiary in good faith;
8.2.4 Deliver to Trustee a written declaration of default and
demand for sale, and a written notice of default and election to cause the
Property to be sold, which notice Trustee or Beneficiary shall cause to be duly
filed for record;
8.2.5 In accordance with NRS 40.512, Beneficiary may waive its
lien against any parcel of the Property or portion thereof or all or any portion
of the Fixtures or Personalty attached to the Property, to the extent such
property is determined to be environmentally impaired, and to exercise any and
all rights and remedies of an unsecured creditor against Trustor and all of
Trustor's assets for the recovery of any deficiency, including, but not limited
to, seeking an attachment order under NRS Chapter 31. No such waiver shall be
final or binding on Beneficiary unless and until a final money judgment is
obtained against Trustor. As between Beneficiary and Trustor, Trustor shall have
the burden of proving that any "release" (as defined in NRS 40.505) or
threatened release was not knowingly or negligently caused or contributed to, or
knowingly or willfully permitted or acquiesced to by Trustor or any related
party (or any affiliate or agent of Trustor or any related party) and that
Trustor made
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written disclosure of the release to Beneficiary or that Beneficiary otherwise
obtained actual knowledge thereof. Trustor's obligations hereunder shall survive
the foreclosure, deed in lieu of foreclosure, release, reconveyance or any other
transfer of the Property or this Deed of Trust. For the purposes of any action
brought under this Section 8.2.5, Trustor hereby waives the defense of laches
and any applicable statute of limitations. Trustor acknowledges and agrees that
notwithstanding anything to the contrary, express or implied, in this Deed of
Trust or in any of the other Loan Documents (including, without limitation, any
nonrecourse or exculpatory language, if any), Trustor shall be personally liable
for any recovery described in this Section 8.2.5 and such liability shall not be
limited to the amount of the Secured Obligations;
8.2.6 With respect to any Personalty, proceed as to both the
real and personal property in accordance with Beneficiary's rights and remedies
in respect of the Property, or proceed to sell said Personalty separately and
without regard to the Property in accordance with Beneficiary's rights and
remedies; provided that Lender shall first apply for and receive all required
approvals of any Gaming Authority having jurisdiction over the sale or
disposition of Gaming Equipment prior to the sale or disposition thereof; and/or
8.2.7 Pursue any and all other remedies it may have, at law or
in equity, or under any other document or instrument, except as otherwise
provided in the Loan Agreement.
Section 8.3 Power of Sale. Should Beneficiary elect to foreclose by
exercise of the power of sale herein contained, Beneficiary shall notify Trustee
and shall deposit with Trustee this Deed of Trust and such receipts and evidence
of expenditures made and secured hereby as Trustee may require.
8.3.1 Upon receipt of such notice from Beneficiary, Trustee
shall cause to be recorded, published and delivered to Trustor notices of
default and sale to be given in accordance with the provisions of Applicable
Laws, including NRS Chapter 107. Trustee shall, without demand on Trustor, after
lapse of such time as may then be required by Applicable Laws and after
recordation of such notice of default and after notice of sale having been given
as required by law, sell the Trust Estate at the time and place of sale fixed by
it in said notice of sale, either as a whole, or in separate lots or parcels or
items as Trustee shall deem expedient and in such order as it may determine, at
public auction to the highest bidder for cash in lawful money of the United
States payable at the time of sale. Trustee shall deliver to such purchaser or
purchasers thereof its good and sufficient deed or deeds conveying the property
so sold, but without any covenant or warranty, express or implied. The recitals
in such deed of any matters or facts shall be conclusive proof of the
truthfulness thereof any Person, including, without limitation, Trustor or
Beneficiary, may purchase at such sale and Trustor hereby covenants to warrant
and defend the title of such purchaser or purchasers against the claims of all
Persons claiming by, through or under Trustor. To the maximum extent allowed by
Applicable Laws, Beneficiary, if it is the purchaser, may apply the amount of
the Secured Obligations then due and payable toward payment of the purchase
price. To the maximum extent permitted by Applicable
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Laws, Trustor hereby waives its right, if any, to require that the Property be
sold as separate tracts or units in the event of foreclosure.
8.3.2 Trustee, upon such sale, shall make (without any covenant
or warranty, express or implied), execute and, after due payment made, deliver
to purchaser or purchasers, or his or their heirs or assigns, a deed or deeds,
or other record or records of interest, as the case may be, in and to the
Property so sold that shall convey to the purchaser all the title and interest
of Trustor in the Property (or the portion thereof sold), and after deducting
all costs, fees and expenses of Trustee and of this Deed of Trust, including
costs of evidence of title in connection with sale, shall apply the proceeds of
sale to payment of (i) all sums expended under the terms hereof, not then
repaid, with accrued interest at the Default Rate and (ii) all other sums then
secured hereby and the remainder, if any, to the Person or Persons legally
entitled thereto.
8.3.3 Trustee may postpone sale of all or any portion of the
Trust Estate by public announcement at such time and place of sale, or as
otherwise permitted by Applicable Laws, and from time to time thereafter may
postpone such sale by public announcement at the time fixed by the preceding
postponement or subsequently noticed sale, and without further notice make such
sale at the time fixed by the last postponement, or may, in its discretion, give
a new notice of sale. Beneficiary may rescind any notice of default at any time
before Trustee's sale by executing a notice of rescission and recording the
same. The recordation of such notice of rescission shall constitute a
cancellation of any prior declaration of default and demand for sale. The
exercise by Beneficiary of the right of rescission shall not constitute a waiver
of any default then existing or subsequently occurring, or impair the right of
Beneficiary to execute other declarations of default and demand for sale, or
notices of default and of election to cause the Property to be sold nor
otherwise affect the Loan Documents or this Deed of Trust, or any of the rights,
obligations or remedies of Beneficiary or Trustee hereunder.
8.3.4 Beneficiary and Trustee acknowledge, understand and agree
that, to the extent the prior approval of the Gaming Authorities of the State of
Nevada is required pursuant to applicable law for the exercise, operation and
effectiveness of any remedy hereunder or under any other Loan Document, or the
taking of any action that may be taken by Beneficiary or Trustee hereunder or
under any other Loan Document, including without limitation the taking of
possession and disposition of collateral consisting of gaming devices, cashless
wagering systems and associated equipment (as those terms are defined in Nevada
Revised Statutes 463.0155, 463.014 and 463.0136), such remedy or action shall be
subject to such prior approval of the gaming authorities of the State of Nevada
and the Beneficiary or Trustee may be subject to being called forward for
licensing or a finding of suitability. All rights, remedies and powers provided
in this Deed of Trust may be exercised only to the extent that the exercise
thereof does not violate any provision of Applicable Gaming Laws, and all
provisions of this Deed of Trust are intended to be subject to all mandatory
provisions of the Applicable Gaming Laws, which may be controlling.
Section 8.4 Proof of Default. In the event of a sale of the Property, or
any part thereof, and the execution of a deed or deeds therefor, the recital
therein of default, and of
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recording notice of breach and election to sell, and of the elapsing of the
required time (if any) between the foregoing recording and the following notice,
and of the giving of notice of sale, and of a demand by Beneficiary, or its
successors or assigns, that such sale should be made, shall be conclusive proof
of such default, recording, election, elapsing of time, and of the due giving of
such notice, and that the sale was regularly and validly made on due and proper
demand by Beneficiary, its successors or assigns; and any such deed or deeds
with such recitals therein shall be effectual and conclusive against Trustor,
its successors and assigns, and all other Persons and the receipt for the
purchase money recited or contained in any deed executed to the purchaser as
aforesaid shall be sufficient discharge to such purchaser from all obligations
to see to the proper application of the purchase money.
Section 8.5 Protection of Security. If an Event of Default shall have
occurred and be continuing, then upon at least 15 days prior written notice to
Trustor and without releasing Trustor from any obligations or defaults
hereunder, Beneficiary or Trustee shall have the right, but not the obligation,
to: (i) make payment or otherwise perform such obligations of Trustor upon which
such Event of Default is based in such manner and to such extent as either may
reasonably deem necessary to protect the security hereof, Beneficiary and
Trustee being authorized to enter upon the Property for such purpose; (ii)
appear in and defend any action or proceeding purporting to affect, in any
manner whatsoever, the Secured Obligations, the security hereof or the rights or
powers of Beneficiary or Trustee; (iii) pay, purchase or compromise any
encumbrance, charge or lien (other than Permitted Liens); (iv) advance any and
all costs and expenses reasonably necessary to cure or pay Environmental Damages
or otherwise to comply Environmental Requirements; and (v) in exercising any
such powers, pay necessary expenses, employ counsel and pay attorneys fees.
Trustor hereby agrees to repay with thirty (30) days after receipt of written
demand all reasonable sums actually expended Trustee or Beneficiary pursuant to
this Section 8.5. with interest at the Default Rate from the date of expenditure
by Beneficiary, and such sums, with interest, shall be secured hereby.
Section 8.6 Receiver. If an Event of Default shall have occurred and be
continuing, Beneficiary, as a matter of strict right and without regard to the
then value of the Property, shall have the right to apply to any court having
jurisdiction to appoint a Receiver or Receivers of the Property. Any such
Receiver or Receivers shall have all the powers and duties of receivers under
Applicable Laws in like or similar cases and all the powers and duties of
Beneficiary in case of entry as provided in this Deed of Trust, and shall
continue as such and exercise all such powers until the date of confirmation of
sale, unless such receivership is sooner terminated.
Section 8.7 Curing of Defaults.
8.7.1 If Trustor shall at any time fail to perform or comply
with any of the terms, covenants and conditions required on Trustor's part to be
performed and complied with under this Deed of Trust or any other Loan Document
relating to the Trust Estate (after the lapse of any cure period provided
therein), then Beneficiary shall have the right, but not the obligation, without
waiving or releasing any of the Secured Obligations, to:
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8.7.1.1 make any payments thereunder payable by Trustor and take
out, pay for and maintain any of the insurance policies provided for therein,
and/or
8.7.1.2 after the expiration of any applicable grace period and
subject to Trustor's rights to contest certain obligations specifically granted
hereby, perform any such other acts thereunder on the part of Trustor to be
performed and enter upon the Property and incur reasonable attorneys fees and
expenses for such purpose.
8.7.2 The making by Beneficiary of such payment out of
Beneficiary's own funds shall not however, be deemed to cure such default by
Trustor, and the same shall not be so cured unless and until Trustor shall have
reimbursed Beneficiary within the applicable cure period for such payment
including interest at the Default Rate from the date of such expenditure. All
sums so paid and all reasonable costs and expenses actually incurred and paid by
Beneficiary in connection with the performance of any such act, together with
interest on unpaid balances thereof at the Default Rate from the respective
dates of Beneficiary's making of each such payment shall be secured by the lien
of this Deed of Trust prior to any right title or interest in or claim upon the
Property attaching or accruing subsequent to the lien of this Deed of Trust and
shall be payable by, Trustor to Beneficiary within thirty (30) days after
receipt of written demand.
Section 8.8 Remedies Cumulative. All remedies of Beneficiary provided
for herein are cumulative and shall be in addition to any and all other rights
and remedies provided in the other Loan Documents or provided by Applicable Law,
including any banker's lien and right of offset. The exercise of any right or
remedy by Beneficiary hereunder shall not in any way constitute a cure or waiver
of default hereunder or under the Loan Documents, or invalidate any act done
pursuant to any notice of default, or prejudice Beneficiary in the exercise of
any of its rights hereunder or under the Loan Documents unless, in the exercise
of said rights, all Secured Obligations are fully discharged.
Section 8.9 Marshaling. To the extent permitted by Applicable Laws,
Trustor waives all rights, legal and equitable, it may now or hereafter have to
require marshaling of assets or to require foreclosure sales of assets in a
particular order, including any rights provided by NRS 100.040 and 100.050. Each
successor and assign of Trustor, including any holder of a lien or security
interest subordinate to this Deed of Trust, by acceptance of its interest or
lien or security interest agrees that it shall be bound by the above waiver, as
if it had given the waiver itself.
Section 8.10 Adoption of Covenants. Where not inconsistent with the
above, the following covenants, Nos. 1; 2 (full replacement value); 3; 4
(Default Rate under the Loan Agreement); 5; 6; 7 ( a reasonable percentage); 8
and 9 of NRS Section 107.030 are hereby adopted and made a part of this Deed of
Trust.
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ARTICLE 9.
SECURITY AGREEMENT AND FIXTURE FILING
Section 9.1 Grant of Security Interest. To secure the payment and
performance of the Secured Obligations as and when due, Trustor (as debtor)
hereby grants, conveys, pledges, assigns and transfers to Beneficiary (as
secured party), as agent and representative, security interests (collectively,
the "Security Interest") in, all right, title, claim, estate and interest in and
to all Personalty and Fixtures, whether now owned and existing or hereafter
acquired or arising, and wherever located, including, without limitation, the
following, but expressly excluding in each case any Excluded Assets:
9.1.1 Any and all "chattel paper" as such term is defined in
Section 9105(b) of the UCC (the "Chattel Paper");
9.1.2 Any and all "accounts" as such term is defined in Section
9106 of the UCC (the "Accounts");
9.1.3 Any and all rights to payment for goods sold or leased or
services rendered, whether or not earned by performance and all rights in
respect of the Account Debtor, including without limitation all such rights
constituting or evidenced by any Account, Chattel Paper or Instrument (as
defined in Section 9.1.14 hereof), together with (a) any collateral assigned,
hypothecated or held to secure any of the foregoing and the rights under any
security agreement granting a security interest in such collateral, (b) all
goods, the sale of which gave rise to any of the foregoing, including, without
limitation, all rights in any returned or repossessed goods and unpaid seller's
rights, (c) all guarantees, endorsements and indemnifications on, or of, any of
the foregoing and (d) all powers of attorney for the execution of any evidence
of indebtedness or security or other writing in connection therewith Any and all
negotiable instruments, promissory notes, acceptances, drafts, checks,
certificates of deposit and other writings that evidence a right to the payment
of money by any other Person ("Receivables").
9.1.4 Any and (a) all original copies of all documents,
instruments or other writings evidencing the Receivables, (b) all books,
correspondence, credit or other files, records, ledger sheets or cards,
invoices, and other papers relating to Receivables, including without limitation
all tapes, cards, computer tapes, computer discs, computer runs, record keeping
systems and other papers and documents relating to the Receivables, whether in
the possession or under the control of any Trustor or any computer bureau or
agent from time to time acting for any Trustor or otherwise and (c) all credit
information, reports and memoranda relating thereto ("Receivables Records");
9.1.5 Any and all rights to payment:
9.1.5.1 to the extent not included in Accounts, Receivables or
Chattel Paper, receivables from any credit card company (such as Visa,
MasterCard, American
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Express and Diner's Club), whether arising out of or relating to the sale of
lodging, goods and services by Trustor or otherwise; and
9.1.5.2 of money not listed above and any and all
rights, titles, interests, securities, liens and guaranties evidencing,
securing, guaranteeing payment of or in any way relating to any Receivables;
9.1.6 Any and all "inventory" as such term is defined in
Section 9109(4) of the UCC, including without limitation and in any event, all
goods (whether such goods are in the possession of Trustor or a lessee, bailee
or other Person for sale, lease, storage, transit, processing, use or otherwise
and whether consisting of whole goods, spare parts, components, supplies,
materials or consigned or returned or repossessed goods) which are held for sale
or lease or are to be furnished (or which have been furnished) under any
contract of service or which are raw materials or work in progress or materials
used or consumed in any Trustor's business ("Inventory");
9.1.7 Any and all "equipment" as such term is defined in
Section 9109(2) of the UCC, including, but not limited to, Gaming Equipment:
9.1.7.1 machinery, machine tools, manufacturing
equipment, data processing equipment, computers, office equipment, furniture,
appliances, rolling stock, motors, pumps, controls, tools, parts, works of art,
furnishings and trade fixtures, all athletic equipment and supplies and all
molds, dies, drawings, blueprints, reports, catalogs and computer programs
related to any of the above;
9.1.7.2 ships, boats, barges and vessels (whether under
construction or completed) and any and all masts, bowsprits, boilers, engines,
sails, fittings, anchors, cables, chains, riggings, tackle, apparel, capstans,
outfits, gears, appliances, fittings and spare and replacement parts and other
appurtenances, accessories and additions, improvements and replacements thereto,
whether on board or not on board, in or to any ship, boat, barge or vessel;
9.1.7.3 slot machines, electronic gaming devices and
related equipment, crap tables, blackjack tables, roulette tables, baccarat
tables, keno apparatus, cards, dice, gaming chips and plaques, tokens, chip
racks, dealing shoes, dice cups, dice sticks, layouts, paddles, roulette balls
and other supplies and items used in connection with gaming operations; and
9.1.7.4 stones, wood, steel and other materials used or
to be used in the building, construction, repair, renovation, refurbishment or
otherwise with respect to improvements or ships, boats, barges or vessels.
9.1.8 Any and all "fixtures" as such term is defined in
Section 9313 of the UCC, including without limitation, machinery, equipment or
appliances for generating, storing or distributing air, water, heat electricity,
light fuel or refrigeration, for ventilating or
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sanitary purposes, elevators, safes, laundry, kitchen and athletic equipment,
trade fixtures, and telephone, television and other communications equipment
(the "Fixtures");
9.1.9 Any and all "documents" as such term is defined in
Section 9105(f) of the UCC (the "Documents");
9.1.10 Any and all "general intangibles" as such term is
defined in Section 9106 of the UCC (together with any property listed under
Section 9.1.4 relating thereto, the "General Intangibles"), including, without
limitation and in any event, rights to the following: payment of money,
Trademark Collateral (as defined in the Trademark Security Agreement), Copyright
Collateral (as defined in the Copyright Security Agreement), patents, patent
licenses, and Contracts (as defined in Section 9.1.16 hereof), licenses
(including all Casino Licenses) and franchises (except, in the case of licenses
and franchises if, and for so long as, the agreement in respect of such license
or franchise prohibits by its terms any assignment or grant of a security
interest therein without the consent of the other party thereto, would not give
any other party to such franchise or license the right to terminate its
obligations thereunder), limited and general partnership interests and joint
venture interests, federal income tax refunds, trade names, distributions on
certificated securities (as defined in Section 8102(1)(a) of the UCC, and
uncertificated securities (as defined in Section 8102(1)(b) of the UCC, computer
programs and other computer software, inventions, designs, trade secrets,
goodwill, proprietary rights, customer lists, Player Tracking Systems, supplier
contracts, sale orders, correspondence, advertising materials, payments due in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of any property, reversion, any interests in pension and
profit-sharing plans and reversionary, beneficial and residual interests in
trusts, credits with and other claims against any Person, together with any
collateral for any of the foregoing and the rights under any security agreement
granting a security interest in such collateral.
9.1.11 The Designated Account established and maintained
pursuant to Section 2.9 of the Loan Agreement ("Designated Account").
9.1.12 Any and all (i) shares of capital stock of any
Subsidiary (as defined in Section 1.1 of the Loan Agreement) of Trustor, from
time to time owned by Trustor or options or rights to acquire any such shares or
interests now or hereafter owned by Trustor, (ii) Distributions (as defined
below) on Pledged Shares (as defined in the Guarantor Stock Pledge Agreement),
owned by Trustor or in which Trustor has an interest ("Pledged Securities") (as
constituted immediately prior to such Distribution) constituting securities,
whether debt or equity securities or otherwise, (iii) other or additional stock,
notes, securities or property paid or distributed in respect of Pledged
Securities (as constituted immediately prior to such payment or distribution) by
way of stock-split, spin-off, splitup, reclassification, combination of shares
or similar rearrangement and (iv) other or additional stock, notes, securities
or property (including cash) that may be paid in respect of Pledged Securities
(as constituted immediately prior to such payment) by reason of any
consolidation, merger, exchange of stock, conveyance of assets, liquidation,
bankruptcy or similar corporate reorganization or other disposition of Pledged
Securities ("Pledged Securities").
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9.1.13 Any and all dividends, distributions, payments of
interest and principal and other amounts (whether consisting of cash,
securities, personalty or other property) from time to time received, receivable
or otherwise distributed in respect of or in exchange or substitution for any of
the Pledged Securities ("Distributions");
9.1.14 Any and all "instruments" as such term is defined in
Section 9105(1)(i) of the UCC ("Instruments");
9.1.15 [Intentionally Omitted].
9.1.16 Any and all contracts between Trustor and one or more
additional parties ("Contracts");
9.1.17 Any and all interest rate or currency protection or
hedging arrangements, including without limitation, caps, collars, floors,
forwards and any other similar or dissimilar interest rate or currency exchange
agreements or other interest rate or currency hedging arrangements ("Hedging
Agreements");
9.1.18 Any and all motor vehicles, tractors, trailers and
other like property, if title thereto is governed by a certificate of title
ownership ("Motor Vehicles");
9.1.19 Any and all books, records, computer software, computer
printouts, customer lists, blueprints, technical specifications, manuals, and
similar items which relate to any Personalty or Fixtures other than such items
obtained under license or franchise agreements that prohibit assignment or
disclosure of such items ("Books and Records");
9.1.20 Any and all accessions, appurtenances, components,
repairs, repair parts, spare parts, renewals, improvements, replacements,
substitutions and additions to, of or with respect to any of the foregoing;
9.1.21 Any and all rights, remedies, powers and privileges of
Trustor with respect to any of the foregoing; and
9.1.22 Any and all proceeds and products of any of the
foregoing, whether now held and existing or hereafter acquired or arising,
including all rents, issues, income and profits of or from any of the foregoing
(collectively, the "Proceeds "). "Proceeds" shall include (i) whatever is now or
hereafter received by Trustor upon the sale, exchange, collection, other
disposition or operation of any item of Personalty, whether such proceeds
constitute accounts, general intangibles, instruments, securities, documents,
letters of credit, chattel paper, deposit accounts, money, goods or other
personal property, (ii) any amounts now or hereafter payable under any insurance
policy by reason of any loss of or damage to any Personalty or the business of
Trustor, (iii) all rights to payment and payments for hotel room occupancy (and
related reservations) and the sale of services or products in connection
therewith, (iv) the right to further transfer, including by pledge, mortgage,
license, assignment or sale, any of the foregoing,
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and (v) any items that are now or hereafter acquired by Trustor with any of the
foregoing; provided, however, that "Proceeds" shall not include Excluded Assets.
Section 9.2 Remedies, etc. This Deed of Trust constitutes a security
agreement with respect to the Personalty, in which Beneficiary is granted a
security interest hereunder, and Beneficiary shall have all of the rights and
remedies of a secured party under the UCC and the other Loan Documents as well
as all other rights and remedies available at law or in equity. Upon the
occurrence and during the continuance of any Event of Default hereunder,
Beneficiary shall have (i) the right to cause any of the Personalty which is
personal property to be sold at any one or more public or private sales as
permitted by Applicable Laws and apply the proceed thereof to the Secured
Obligations, (ii) the right to collect and apply to the Secured Obligations any
Personalty which is cash, notes receivable, other rights to payment or Chattel
Paper, and (iii) all other rights and remedies, whether at law, in equity, or by
statute as are available to secured creditors under Applicable Laws. Any such
disposition may be conducted by an employee or agent of Beneficiary or Trustee.
To the maximum extent permitted by Applicable Law, any Person, including either
or both of Trustor and Beneficiary, shall be eligible to purchase any part or
all of such Personalty at any such disposition. Beneficiary shall give Trustor
at least 10 days prior written notice of the time and place of any public sale
or other disposition of such Personalty or of the time of or after which any
private sale or any other intended disposition is to be made, and if such notice
is sent to Trustor in the manner provided for the mailing of notices herein, it
is hereby deemed such notice shall be and is commercially reasonable notice to
Trustor.
Section 9.3 Expenses. Reasonable expenses actually incurred of retaking,
holding, preparing for sale, selling or the like shall be borne by Trustor and
shall include Beneficiary's and Trustee's reasonable attorneys fees, charges and
disbursements (including, without limitation, any and all costs of appeal).
Section 9.4 Fixture Filing.
9.4.1 This Deed of Trust shall be effective as a Financing
Statement filed as a fixture filing from the date of the recording hereof in
accordance with NRS 104.9402. In connection therewith, the addresses of Trustor
as debtor ("Debtor") and Beneficiary as secured party ("Secured Party") are set
forth on Schedule 12.8. The address of Beneficiary, as the Secured Party, is
also the address from which information concerning the security interest may be
obtained by any interested party.
9.4.1.1 The property subject to this fixture filing is
described in Sections 9.1.7 and 9.1.8.
9.4.1.2 Portions of the property subject to this fixture
filing as identified in Section 9.4.1.1 above are or are to become fixtures
related to the real estate described on EXHIBIT "A" to this Deed of Trust.
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9.4.1.3 Secured Party is: Foothill Capital Corporation,
a California corporation.
9.4.1.4 Debtor is: Fitzgeralds Reno, Inc., a Nevada
corporation.
9.4.1.5 The record owner or lessee of the Property is:
Fitzgeralds Reno, Inc., a Nevada corporation.
9.4.2 In the event Trustor shall fail, beyond any applicable
notice and grace periods, to make any payment or perform any covenant related to
any security interest in favor of any Person other than Beneficiary, Beneficiary
may, at its option, within 15 days after notice to Trustor or if Beneficiary's
immediate action is reasonably necessary to protect the lien hereof or its
security for the Secured Obligations, at any time without prior notice to
Trustor, pay the amount secured by such security interest, and the amount so
paid shall be (i) secured by this Deed of Trust and shall be a lien on the
Property enjoying the same priorities vis-a-vis the estates and interests
encumbered hereby as this Deed of Trust, (ii) added to the amount of the Secured
Obligations, and (iii) payable within 30 days after receipt of written demand
with interest at the Default Rate from the time of such payment; or Beneficiary
shall have the privilege of acquiring by assignment from the holder of such
security interest any and all contract rights, accounts receivable, chattel
paper, negotiable or non-negotiable instruments and other evidence of Trustor's
indebtedness secured by such fixtures, and, upon acquiring such interest by
assignment, shall have the right to enforce the security interest as assignee
thereof, in accordance with the terms and provisions of the UCC, as amended or
supplemented, and in accordance with other Applicable Laws.
ARTICLE 10.
ASSIGNMENT OF RENTS
Section 10.1 Assignment of Rents. Subject to Section 10.2 and to
Applicable Gaming Laws, as of the execution of this Deed of Trust, Trustor
hereby absolutely and unconditionally assigns and transfers to Beneficiary all
of the Rents, whether now due, past due or to become due, and hereby gives to
and confers upon Beneficiary the right, power and authority to collect such
Rents and apply the same to the Secured Obligations secured hereby. Trustor
irrevocably appoints Beneficiary, as its true and lawful attorney, at the option
of Beneficiary at any time while an Event of Default exists, to demand, receive
and enforce payment to give receipts, releases and satisfactions, and to sue,
either in the name of Trustor or in the name of Beneficiary, for all such Rents
and apply the same to the Secured Obligations secured hereby. It is hereby
recognized that the power of attorney herein granted is coupled with an interest
and shall not be revocable. It is understood and agreed that neither the
foregoing assignment of Rents to Beneficiary nor the exercise by Beneficiary or
any of its rights or remedies under this Deed of Trust shall be deemed to make
Beneficiary a "mortgagee-in-possession" or otherwise responsible or liable in
any manner with respect to the Property or the use, occupancy, enjoyment or
operation of all or any portion thereof, unless and until Beneficiary, in person
or by its own agent assumes actual possession thereof, nor shall
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appointment of a Receiver for the Property by any court at the request of
Beneficiary or by agreement with Trustor or the entering into possession of the
Property or any part thereof by such Receiver be deemed to make Beneficiary a
"mortgagee-in-possession" or otherwise responsible or liable in any manner with
respect to the Property or the use, occupancy, enjoyment or operation of all or
any portion thereof.
Section 10.2 Collection of Rents. Notwithstanding anything to the
contrary contained herein, so long as no Event of Default with respect to the
Loan Agreement shall occur and be continuing, Trustor shall have a license,
revocable upon the occurrence and during the continuance of an Event of Default
to collect all Rents from the Property and to retain, use and enjoy the same and
to otherwise exercise all rights with respect thereto, subject to the terms
hereof. Upon the occurrence and during the continuance of an Event of Default
the license hereinabove granted to Trustor shall, without the requirement of the
giving of notice or taking of any action by any party, be revoked, and
Beneficiary shall have the complete right and authority to exercise and enforce
any and all of its rights and remedies provided herein or by Applicable Laws.
ARTICLE 11.
ENVIRONMENTAL MATTERS
Section 11.1 Representations and Warranties. In the ordinary course of
business, Trustor conducts a periodic review of the effect of Environmental Laws
on its business, operations and properties in the course of which it identifies
and evaluates associated costs and liabilities (including, without limitation,
any capital or operating expenditures required for cleanup, closure of
properties or compliance with Environmental Laws or any Permit any related
constraints on operating activities and any potential liabilities to third
parties). On the basis of such review, Trustor has reasonably concluded that
such associated costs and liabilities could not reasonably be expected, singly
or in the aggregate, to cause a Material Adverse Change (as defined in Loan
Agreement).
11.1.1 Trustor (i) has obtained all Permits that are required
with respect to the operation of its business, property and assets under the
Environmental Laws and is in compliance with all terms and conditions of such
required Permits, and (ii) is in compliance with all Environmental Laws
(including, without limitation, compliance with standards, schedules and
timetables therein);
11.1.2 No portion of the Trust Estate is listed or proposed
for listing on the National Priorities List or the Comprehensive Environmental
Response, Compensation, and Liability Information System, both promulgated under
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA"), or on any other state or local list established
pursuant to any Environmental Law, and Trustor has not received any notification
of potential or actual liability or request for information under CERCLA or any
comparable state or local law;
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11.1.3 No underground storage tank or other underground
storage receptacle, or related piping, is located on the Land in violation of
any Environmental Law;
11.1.4 There have been no releases (any past or present
releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, disposing or dumping, on-site or, to the
knowledge of the Trustor after due inquiry, off-site) of Hazardous Materials by
Trustor or any predecessor in interest or any person or entity whose liability
for any release of Hazardous Materials, Trustor has retained or assumed either
contractually or by operation of law at, on, under, from or into any facility or
real property owned, operated, leased, managed or controlled by any such person;
11.1.5 Neither Trustor nor any person or entity whose
liability Trustor has retained or assumed either contractually or by operation
of law has any liability, absolute or contingent under any Environmental Law,
and there is no proceeding pending or threatened against any of them under any
Environmental Law; and
11.1.6 There are no events, activities, practices, incidents
or actions or conditions, circumstances or plans that may interfere with or
prevent compliance by Trustor with any Environmental Law, or that may give rise
to any liability under any Environmental Laws.
11.1.7 The above representations and warranties contained in
this Section 11.1 shall survive the termination, release and/or reconveyance of
this Deed of Trust and the discharge of Trustor's other obligations hereunder.
Section 11.2 Environmental Covenants. Trustor shall at all times comply
with the following requirements:
11.2.1 Trustor shall not cause or permit any material amount
of Hazardous Material to be brought upon, treated, kept, stored, disposed of,
discharged, released, produced, manufactured, generated, refined or used upon,
within or, beneath the Property or any portion thereof by Trustor, its agents,
employees, contractors, or invitees, or any other Person, except in compliance
with all Environmental Requirements and only in the course of such Person's
legitimate business operations at the Property (which shall not include any
business primarily for treatment, storage, disposal, discharge, release,
production, manufacture, generation, refinement or use of Hazardous Materials).
11.2.2 Trustor shall not cause or permit the existence or the
commission by Trustor, its agents, employees, contractors or invitees, or by any
other Person of a material violation of any Environmental Requirements upon,
within or beneath the Property or any portion thereof.
11.2.3 Trustor shall not dispose of, discharge or release or
cause or permit the disposal, discharge or release of any material amount of
Hazardous Materials from the Property into any Public Waters in material
violation of any Environmental Requirements.
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11.2.4 Trustor shall not create or suffer to exist with
respect to the Property or permit any of its agents to create or suffer to exist
any environmental lien, security interest or other charge or encumbrance of any
kind (other than a Permitted Lien), including, without limitation, any lien
imposed pursuant to Section 107(f) of the Superfund Amendments and
Reauthorization Act of 1986 (42 U.S.C. Section 9607(l)) or any similar state
statute.
11.2.5 Trustor shall, at its sole cost and expense, promptly
take any and all actions required by any federal, state or local governmental
agency or political subdivision or reasonably necessary (as hereinafter
provided) to mitigate Environmental Damages, which requirements or necessity
arise from the presence upon, about or beneath the Property, of a material
amount of Hazardous Material or a material violation of Environmental
Requirements or the disposal, discharge or release of a material amount of
Hazardous Materials from the Property into the Public Waters. Such actions shall
include, but not be limited to, the investigation of the environmental condition
of the Property, the preparation of any feasibility studies, reports or remedial
plans, and the performance of any cleanup, remediation, containment, operation,
maintenance, monitoring or restoration work, whether on or off of the Property
(provided that Trustor shall be obligated to take actions off of the Property
only if Trustor shall have the legal right to do so and shall be expressly
required to do so by Environmental Requirements). Trustor shall take all actions
as are reasonably necessary to restore the Property or the Public Waters to
substantiality the condition existing prior to the introduction of Hazardous
Material by Trustor upon, about or beneath the Property, notwithstanding any
lesser standard of remediation allowable under Applicable Laws or governmental
policies, but recognizing the economic impracticability of remediating to a
level where Hazardous Materials are no longer detectable. Trustor shall proceed
continuously and diligently with such investigatory and remedial actions,
provided that in all cases such actions shall be in accordance with Applicable
Laws. Any such actions shall be performed in a good, safe and workmanlike manner
and shall minimize any impact on the business conducted at the Property. Trustor
shall pay all costs in connection with such investigatory and remedial
activities, including, but not limited to, all power and utility costs, and any
and all taxes or fees that may be applicable to such activities. Trustor shall
promptly provide to Beneficiary copies of testing results and reports that are
generated in connection with the above activities. Promptly upon completion of
such investigation and remediation, Trustor shall permanently seal or cap all
monitoring wells and test holes to industrial standards in compliance with
Applicable Laws and regulations, remove all associated equipment, and restore
the Property to the extent reasonably possible, which shall include, without
limitation, the repair of any surface damage, including paving, caused by such
investigation or remediation hereunder.
11.2.6 If Trustor shall become aware of or receive notice or
other communication concerning any actual, alleged, suspected or threatened
violation of Environmental Requirements, or liability of Trustor for
Environmental Damages in connection with the Property or past or present
activities of any Person thereon, including, but not limited to, notice or other
communication concerning any actual or threatened investigation, inquiry,
lawsuit, claim, citation, directive, summons, proceedings, complaint, notice,
order, writ or
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injunction, relating to same, then Trustor shall deliver to Beneficiary, within
15 days of the receipt of such notice or communication by Trustor, a written
description of said violation, liability, or actual or threatened event or
condition, together with copies of any documents evidencing same. Receipt of
such notice shall not be deemed to create any obligation on the part of
Beneficiary to defend or otherwise respond to any such notification.
11.2.7 Trustor agrees to indemnify, reimburse, defend,
exonerate, pay and hold harmless Beneficiary, its successors and assigns, and
its directors, officers, shareholders, employees, agents, contractors,
subcontractors, experts, licensees, affiliates, lessees, trustees, and invitees
(collectively, the "Indemnitees") from and against any and all Environmental
Damages arising from the discharge, disposal or release of Hazardous Materials
from the Property into the Public Waters or from the presence of Hazardous
Materials upon, about or beneath the Property or migrating to or from the
Property, or arising in any manner whatsoever out of the violation of any
Environmental Requirements pertaining to the Property and the activities
thereon, whether foreseeable or unforeseeable, and regardless of when such
Environmental Damages occurred, except to the extent directly caused by conduct
(other than inaction) on the part of such Indemnitee with respect to the
Property or any such Indemnitee's grossly negligent or willful inaction or other
conduct. The indemnity obligations of Trustor contained in this Section 11.2.7
shall survive the termination, release and/or reconveyance of this Deed of Trust
and the discharge of Trustor's other obligations hereunder.
11.2.8 Except for the last sentence of Section 4.5, and except
for Sections 4.6, 4.7, 4.15 and 8.5, the other covenants of this Deed of Trust
shall not apply to the subject matter of this Article 11.
11.2.9 In accordance with, and subject to limitations of, NRS
40.508 and NRS 40.509, Beneficiary may seek a judgment that Trustor has breached
its covenants, representations and/or warranties with respect to the
environmental matters contained in Sections 11.2.1 through 11.2.9, inclusive, of
this Deed of Trust (the "Environmental Provisions"), and may commence and
maintain an action or actions in any court of competent jurisdiction for
enforcement of the Environmental Provisions and/or recovery of any and all
costs, damages, expenses, fees, penalties, fines, judgments, indemnification
payments to third parties, and other out of pocket costs or expenses (including,
without limitation, court costs, reasonable consultants' fees and reasonable
attorney's fees whether incurred in litigation or not and whether before or
after judgment), incurred or advanced by Beneficiary pursuant to the
Environmental Provisions (collectively, the "Environmental Costs"). Trustor
acknowledges and agrees that notwithstanding any term or provision contained in
this Deed of Trust or in the other Loan Documents, Environmental Costs shall be
exceptions to any nonrecourse or exculpatory provisions, if any, and Trustor
shall be fully and personally liable for Environmental Costs. Such liability
shall not be limited to the original principal amount of the obligations secured
by this Deed of Trust. Trustor's obligations hereunder shall survive any
foreclosure, deed in lieu of foreclosure, release, reconveyance or any other
transaction with respect to the Property or this
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Deed of Trust. For the purposes of any action brought under this subsection
11.2.9, Trustor hereby waives the defense of any applicable statute of
limitations.
ARTICLE 12.
MISCELLANEOUS
Section 12.1 Beneficiary's Expenses, including Attorney's Fees.
Regardless of the occurrence of a Default or Event of Default, Trustor agrees to
pay to Beneficiary any and all advances, charges, costs and expenses, including
the reasonable fees and expenses of counsel and any experts or agents, that
Beneficiary may reasonable incur in connection with (i) the administration of
this Deed of Trust, including any amendment thereto or any workout or
restructuring, (ii) the creation, perfection or continuation of the lien of this
Deed of Trust or protection of its priority or the Trust Estate, including the
discharging of any prior or junior lien or adverse claim against the Trust
Estate or any part thereof that is not permitted hereby or by the Loan
Agreement, (iii) the custody, preservation or sale of, collection from, or other
realization upon, any of the Trust Estate, (iv) the exercise or enforcement of
any of the rights, powers or remedies of Beneficiary under this Deed of Trust or
under Applicable Laws (including attorneys fees and expenses incurred by
Beneficiary in connection with the operation, maintenance or foreclosure of the
lien of this Deed of Trust) or any bankruptcy proceeding or (v) the failure by
Trustor to perform or observe any of the provisions hereof. All such amounts and
all other amounts payable hereunder shall be payable on demand, together with
interest at the Default Rate.
Section 12.2 Indemnity
Trustor hereby agrees to indemnify and hold harmless the Indemnitees
against (A) any and all transfer taxes, documentary taxes, assessments or
charges made by any governmental authority by reason of the execution and
delivery of this Deed of Trust and the other Loan Documents, and (B) any and all
claims, actions, liabilities, costs and expenses of any kind or nature
whatsoever (including fees and disbursements of counsel) that may be imposed on,
incurred by, or asserted against any of them, in any way relating to or arising
out of this Deed of Trust or any action taken or omitted by them hereunder,
except to the extent that they resulted from the gross negligence or willful
misconduct of any such Indemnitee.
Section 12.3 Waivers; Modifications in Writing. No amendment of any
provision of this Deed of Trust (including a waiver thereof or consent relating
thereto) shall be effective unless the same shall be in writing and signed by
Beneficiary and Trustor. Any waiver or consent relating to any provision of this
Deed of Trust shall be effective only in the specific instance and for the
specific purpose for which given. No notice to or demand on Trustor in any case
shall entitle Trustor to any other or further notice or demand in similar
circumstances, except as otherwise provided herein or as required by law.
Section 12.4 Cumulative Remedies; Failure or Delay. The rights and
remedies provided for under this Deed of Trust are cumulative and are not
exclusive of any rights and remedies that may be available to Beneficiary under
Applicable Laws, the other Loan Documents or otherwise. No failure or delay on
the part of Beneficiary in the exercise of any
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power, right or remedy under this Deed of Trust shall impair such power, right
or remedy or shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or remedy preclude other or further exercise
of such or any other power, right or remedy.
12.4.1 Successors and Assigns. This Agreement shall be binding
upon and, subject to the next sentence, inure to the benefit of Trustor and
Beneficiary and their respective successors and assigns. Trustor shall not
assign. or transfer any of its rights or obligations hereunder without the prior
written consent of Beneficiary. The benefits of this Deed of Trust shall pass
automatically with any assignment of the Secured Obligations (or any portion
thereof), to the extent of such assignment.
Section 12.5 Independence of Covenants. All covenants under this Deed of
Trust shall each be given independent effect so that, if a particular action or
condition is not permitted by any such covenant the fact that it would be
permitted by another covenant or by an exception thereto shall not avoid the
occurrence of a Default or an Event of Default if such action is taken or
condition exists. All rights, remedies and powers in this Deed of Trust may be
exercised only to the extent that the exercise thereof does not violate any
provision of the Applicable Gaming Laws, and all the provisions of this Deed of
Trust are intended to be subject to all mandatory provisions of the Applicable
Gaming Laws which may be controlling.
Section 12.6 Change of Law. In the event of the passage, after the date
of this Deed of Trust of any law changing in any way the laws now in force for
the taxation of mortgages, deeds of trust or debts secured by mortgage or deed
of trust (other than laws imposing taxes on income), or the manner of the
collection of any such taxes, so as to affect adversely the rights of
Beneficiary under this Deed of Trust then an Event of Default shall be deemed to
have occurred under Section 6.1 of the Loan Agreement; provided, however, that
no Event of Default shall be deemed to have occurred (i) if Trustor, within
thirty (30) days after the passage of such law, shall assume the payment of any
tax or other charge so imposed upon Beneficiary for the period remaining until
discharge in full of the Secured Obligations; provided, however, that such
assumption is permitted by Applicable Laws, (ii) if the adverse effect upon
Beneficiary of such tax or other charge is not material, or (iii) if and so long
as Trustor, at its expense, shall contest the amount or validity or application
of any such tax or other charge by appropriate legal proceedings promptly
initiated and conducted in good faith and with due diligence; provided that (A)
neither the Property nor any substantial part thereof will be in danger of being
sold, forfeited, terminated, canceled, or lost as a result of such contest and
(B) except in the case of a tax or charge junior. to the lien of this Deed of
Trust, Trustor shall have posted such bond or furnished such other security as
may be required by law to release such tax or charge.
Section 12.7 No Waiver. No waiver by Beneficiary of any Default or
breach by Trustor hereunder shall be implied from any omission by Beneficiary to
take action on account of such Default if such Default persists or is repeated,
no express waiver shall affect any Default other than the Default in the waiver,
and such waiver shall be operative only for the time and to the extent therein
stated. Waivers of any covenant, term or condition contained herein shall not be
construed as a waiver of any subsequent breach of the same covenant term or
condition. The
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consent or approval by Beneficiary to or of any act by Trustor requiring further
consent or approval shall not be deemed to waive or render unnecessary the
consent or approval to or of any subsequent similar act.
Section 12.8 Notices. All notices and other communications under this
Deed of Trust shall be in writing and shall be personally delivered or sent by
prepaid courier, by overnight, registered or certified mail (postage prepaid) or
by prepaid telex, telecopy or telegram, and shall be deemed given when received
by the intended recipient thereof Unless otherwise specified in a notice given
in accordance with the foregoing provisions of this Section 12.8., notices and
other communications shall be given to the parties hereto at their respective
addresses (or to their respective telex or telecopier numbers) indicated in
Schedule 12.8 hereto.
Section 12.9 References to Foreclosure. References hereto to
"foreclosure" and related phrases shall be deemed references to the appropriate
procedure in connection with Trustee's private power of sale, any judicial
foreclosure proceeding, and any deed given in lieu of any such Trustee's sale or
judicial foreclosure.
Section 12.10 Joinder of Foreclosure Should Beneficiary hold any other
or additional security for the payment and performance of any Secured
Obligation, its sale or foreclosure, upon any default in such payment or
performance, in the sole discretion of Beneficiary, may be prior to, subsequent
to, or joined or otherwise contemporaneous with any sale or foreclosure
hereunder. Except as otherwise provided in the Loan Agreement, in addition to
the rights herein specifically conferred, Beneficiary, at any time and from time
to time, may exercise any right or remedy now or hereafter given by law to
beneficiaries under deeds of trust generally, or to the holders of any
obligations of the kind hereby secured.
Section 12.11 Rights and Secured Obligations of Beneficiary and Trustee.
At any time or from time to time, without liability therefor and without notice,
and without releasing or otherwise affecting the liability of any Person for
payment of any Secured Obligations, Beneficiary at its sole discretion and only
in writing may subordinate the liens or either of them, or charge hereof to the
extent not prohibited by the Loan Agreement. Beneficiary and Trustee shall,
however, promptly upon Trustor's request from time to time, join in the
following actions (including the execution and delivery of documents) as Trustor
determines are reasonably necessary for the development, use and operation of
the Trust Estate: (i) the making of any map or plat of the Property, (ii) the
granting, creating, amending and modifying of any customary easements,
covenants, conditions and restrictions with respect to the Property and (iii)
the application for and prosecution of any development building, use and similar
permits and land use and utility approvals and installations regarding the
Property; provided, however, that Beneficiary and Trustee shall not be required
to join in or take any such action (a) while an Event of Default exists, (b) to
the extent such action would impair the liens of this Deed of Trust or the first
priority thereof or (c) to the extent prohibited by the Loan Agreement. Any such
request shall be accompanied by an Officers Certificate (as defined in the Loan
Agreement). Upon written request of Beneficiary and surrender of this Deed of
Trust to Trustee for cancellation, and
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upon payment to Trustee of its reasonable fees and expenses actually incurred,
Trustee shall cancel and reconvey this Deed of Trust.
Section 12.12 Copies. Trustor will promptly give to Beneficiary copies
of all notices of material violations relating to the Property that Trustor
receives from any governmental authority.
Section 12.13 Subordination. At the option of Beneficiary, this Deed of
Trust shall become subject and subordinate in whole or in part (but not with
respect to priority of entitlement to any insurance proceeds, damages, awards,
or compensation resulting from damage to the Property or condemnation or
exercise of power of eminent domain), to any and all contracts of sale and/or
any and all leases of all or any part of the Property upon the execution by
Beneficiary and recording thereof in the official records of Washoe County,
Nevada of a unilateral declaration to that effect. Beneficiary may require the
issuance of such title insurance endorsements to the Title Policy, in connection
with any such subordination as Beneficiary, in its judgment, shall determine are
appropriate, and Trustor shall be obligated to pay any cost or expense incurred
in connection with the issuance thereof
Section 12.14 Personally Security Instruments. Trustor covenants and
agrees that if Beneficiary at any time holds additional security for any Secured
Obligations secured hereby, it may enforce the terms thereof or otherwise
realize upon the same, at its option, either before or concurrently herewith or
after a sale is made hereunder, and may apply the proceeds upon the Secured
Obligations without affecting the status or of waiving any right TO exhaust all
or any other security, including the security hereunder, and without waiving any
breach or Default or any right or power whether exercised hereunder or contained
herein or in any such other security.
Section 12.15 Suits to Protect Property. Trustor covenants and agrees to
appear in and defend any action or proceeding the consequence of which, if
successful, would be that the liens, or either of them, of this Deed of Trust
would not satisfy the requirements as to extent, perfection or priority set
forth in the Loan Agreement, and to pay all reasonable costs and expenses
actually incurred by Trustee and Beneficiary, including cost of evidence of
title and attorneys fees in a reasonable sum, in any such action or proceeding
in which Beneficiary and/or Trustee may appear or be made a party.
Section 12.16 Trustor Waiver of Rights. Trustor waives the benefit of
all laws now existing or that hereafter may be enacted providing for (i) any
appraisement before sale of any portion of the Trust Estate, and (ii) the
benefit of all laws that may be hereafter enacted in any way extending the time
for the enforcement of the Secured Obligations or creating or extending a period
of redemption from any sale made in collecting said debt. To the full extent
Trustor may do so, Trustor agrees that Trustor will not at any time insist upon,
plead, claim or take the benefit or advantage of any law now or hereafter in
force providing for any appraisement, valuation, stay, extension or redemption,
and Trustor, for Trustor, Trustor's heirs, devisees, representatives, successors
and assigns, and for any and all Persons ever claiming any interest in the Trust
Estate, to the extent permitted by law, hereby waives and releases all rights of
redemption, valuation,
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<PAGE> 52
appraisement, stay of execution, and marshaling in the event of foreclosure of
the liens hereby created. If any law referred to in this Section 12.16 and now
in force, of which Trustor, Trustor's heirs, devisees, representatives,
successors and assigns or other Person might take advantage despite this Section
12.16, shall hereafter be repealed or cease to be in force, such law shall not
thereafter be deemed to preclude the application of this Section 12.16. To the
extent permitted by Applicable Laws, Trustor expressly waives and relinquishes
any and 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.
Section 12.17 Charges for Statements. Trustor agrees to pay
Beneficiary's customary charge, to the maximum amount permitted by Applicable
Laws, for any statement regarding the Secured Obligations requested by Trustor
or in its behalf.
Section 12.18 Complete Agreement. This Deed of Trust, together with the
exhibits and schedules hereto, and the other Loan Documents, is intended by the
parties as a final expression of their agreement regarding the subject matter
hereof and is intended as a complete and exclusive statement of the terms and
conditions of such agreement.
Section 12.19 Payments Set Aside Notwithstanding anything to the
contrary herein contained, this Deed of Trust the Secured Obligations and the
lien and security interest of this Deed of Trust shall continue to be effective
or be reinstated, as the case may be, if at any time any payment or any part
thereof, of any or all of the Secured Obligations is rescinded, invalidated,
declared to be fraudulent or preferential or otherwise required to be restored
or returned by Beneficiary in connection with any bankruptcy, reorganization or
similar proceeding involving Trustor, any other party liable with respect to the
Secured Obligations or otherwise, if the proceeds of the Trust Estate are
required to be returned by Beneficiary under any such circumstances; or if
Beneficiary reasonably elects to return any such payment or proceeds or any part
thereof in its discretion, all as though such payment had not been made or such
proceeds not been received. Without limiting the generality of the foregoing, if
prior to any such rescission, invalidation, declaration, restoration or return,
this Deed of Trust shall have been terminated, released and/or reconveyed and
the lien and security interest or any of the Trust Estate shall have been
released or terminated in connection with such termination, release and/or
reconveyance, this Deed of Trust and the lien and security interest and such
portion of the Trust Estate shall be reinstated in full force and effect and
such prior termination, release and/or reconveyance shall not diminish,
discharge or otherwise affect the obligations of Trustor in respect of the
amount of the affected payment or application of proceeds, the lien, the
security interest or such portion of the Trust Estate.
Section 12.20 Substitution. Beneficiary may at any time, without giving
notice to Trustor or the original or successor Trustee, and without regard to
the willingness or inability of any original or successor Trustee to execute
this trust, appoint another Person or succession of Persons to act as Trustee,
and such appointee in the execution of this trust shall have all the powers
vested-in and obligations imposed upon Trustee. Should Beneficiary be a
corporation or unincorporated association, then any officer thereof may make
such appointment.
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<PAGE> 53
Section 12.21 Choice of Forum.
12.21.1 Subject to Section 12.21.2 and Section 12.21.3, all
actions or proceedings arising in connection with this Deed of Trust shall be
tried and litigated in state or Federal courts located in the County of Washoe,
State of Nevada, unless such actions or proceedings are required to be brought
in another court to obtain subject matter jurisdiction over the matter in
controversy. Trustor waives any right it may have to assert the doctrine of
forum non conveniens, to assert that it is not subject to the jurisdiction of
such courts or to object to venue to the extent any proceeding is brought in
accordance with this Section 12.21.1.
12.21.2 Nothing contained in this Section shall preclude
Beneficiary from bringing any action or proceeding arising out of or relating to
this Deed of Trust in any court not referred to in Section 12.21.1. Service of
process, sufficient for personal jurisdiction in any action against Trustor, may
be made by certified mail, return receipt requested, to its address indicated in
Section 12.8 hereof.
12.21.3 Notwithstanding Section 12.21.1 hereof, in the sole
and absolute discretion of beneficiary, all actions or proceedings relating to
the Collateral referred to in Article 9 hereof, other than Fixtures, shall be
tried and litigated in any California state court sitting in the County of Los
Angeles, State of California or any federal court sitting in the County of Los
Angeles, State of California. Trustor hereby irrevocably submits to the
jurisdiction of such courts to the extent any proceeding is brought in
accordance with this Section 12.21.3. Trustor irrevocably waives, to the fullest
extent it may effectively do so under Applicable Law, trial by jury and any
objection that it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding brought in any such court and any claim that any
such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. Trustor irrevocably consents, to the fullest extent it may
effectively do so under Applicable Law, to the service of process of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to Trustor at its said
address, such service to become effective 30 days after such mailing, Nothing
shall affect the right of Beneficiary to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed against
Trustor in any other jurisdiction.
Section 12.22 Regulatory Matters. Whenever in this Deed of Trust a right
is given to Beneficiary, which right is affected by Applicable Gaming Laws or
the enforcement of which is subject to Applicable Gaming Laws, the enforcement
of any such right shall be subject to Applicable Gaming Laws and approval, if so
required, of the applicable Gaming Authorities. Without limiting the generality
of the foregoing, Beneficiary acknowledges that (a) Beneficiary is subject to
being called forward by the Gaming Authority of the State of Nevada, in their
discretion, for licensing or a finding of suitability as a lender to a gaming
licensee, and (b) to the extent the prior approval of the Gaming Authority of
the State of Nevada is required pursuant to applicable law for the exercise,
operation and effectiveness of any remedy hereunder or under
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<PAGE> 54
any other Loan Document, or the taking of any action that may be taken by
Beneficiary or under any other Loan Document, such remedy or action shall be
subject to such prior approval of the Gaming Authority of the State of Nevada.
Section 12.23 Guarantor Waivers. If and to the extent that Trustor (for
the purposes of this Section 12.23, "Guarantor") would be deemed or construed to
be a guarantor or surety under applicable law with respect to its obligations
hereunder, Guarantor hereby agrees as follows:
12.23.1 Guarantor expressly agrees that until each and every
term, covenant and condition of this Deed of Trust is fully performed, Guarantor
shall not be released by any act or event which, except for this provision of
this Deed of Trust might be deemed a legal or equitable discharge or exoneration
of a surety, or because of any waiver, extension, modification, forbearance or
delay or other act or omission of Beneficiary or its failure to proceed promptly
or otherwise as against Fitzgeralds or any other Guarantor, as the case may be
(individually and collectively, in its or their capacity as the entity or
entities the obligations of which are guaranteed hereunder by Guarantor, the
"Principal") or Guarantor, or because of any action taken or omitted or
circumstance which might vary the risk or affect the rights or remedies of
Guarantor as against the Principal, or because of any further dealings between
the Principal and Beneficiary, whether relating to this Deed of Trust or
otherwise. Guarantor hereby expressly waives and surrenders any defense to
Guarantor's liability under this Deed of Trust based upon any of the foregoing
acts, omissions, things, agreements, waivers or any of them. It is the purpose
and intent of this Deed of Trust that the obligations of Guarantor under it
shall be absolute and unconditional under any and all circumstances, subject to
and in accordance with the terms and conditions of this Deed of Trust.
12.23.2 Without in any way limiting the provisions of Section
12.23.1, to the extent permitted under NRS Section 40.495, Guarantor waives the
applicable provisions of NRS Section 40.430 and further Guarantor waives:
12.23.2.1 all statutes of limitations as a defense to
any action or proceeding brought against Guarantor by Beneficiary, to the
fullest extent permitted by law;
12.23.2.2 any right it may have to require Beneficiary
to proceed against the Principal or pursue any other remedy in Beneficiary's
power to pursue, it being acknowledged and agreed that the obligations of
Guarantor hereunder are independent of the obligations of the Principal
hereunder, and Beneficiary shall not be required to make any demand upon,
exercise any right to declare a default by, or proceed against, the Principal
prior to proceeding against Guarantor to the full extent of Guarantor's
obligations hereunder;
12.23.2.3 any defense based on any legal disability of
the Principal and any discharge, release or limitation of the liability of the
Principal to Beneficiary, whether consensual or arising by operation of law or
any bankruptcy, reorganization, receivership,
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<PAGE> 55
insolvency, or debtor relief proceeding, or from any other cause, or any claim
that Guarantor's obligations exceed or are more burdensome than those of the
Principal;
12.23.2.4 all presentments, demands for performance,
notices of nonperformance, protests, notices of protest, notices of dishonor,
notices of acceptance of this Deed of Trust and of the existence, creation, or
incurring of new or additional indebtedness, and demands and notices of every
kind;
12.23.2.5 any defense based on or arising out of any
defense that the Principal may have to the payment or performance of any
obligation set forth in this Deed of Trust; and
12.23.2.6 until all obligations under this Deed of Trust
have been paid and performed in full, all rights of subrogation and all rights
to enforce any remedy that Guarantor may have against the Principal, all
regardless of whether Guarantor may have made any payments to Beneficiary.
12.23.3 Guarantor assumes full responsibility for keeping
informed of the financial condition and business operations of the Principal and
all other circumstances affecting the Principal's ability to pay for and perform
its obligations, and agrees that Beneficiary shall have no duty to disclose to
Guarantor any information which Beneficiary may receive about the Principal's
financial condition, business operations, or any other circumstances bearing on
its ability to perform.
12.23.4 Notwithstanding anything to the contrary provided
elsewhere herein, in no event shall Guarantor have any liability under this Deed
of Trust beyond its interest in the Property, and in no event shall Guarantor's
obligations hereunder be enforced against any property of Guarantor other than
its interest in the Property.
Section 12.24 Waiver of Trial by Jury. Trustor and Beneficiary waive the
right to a trial by jury in any action under this Deed of Trust or any other
Loan Document or any other action arising out of the transactions contemplated
hereby or thereby, regardless of which party initiates such action or actions.
[Signature page to follow.]
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IN WITNESS WHEREOF, Trustor has caused this Deed of Trust to be executed
as of the day and year first above written.
Trustor:
Fitzgeralds Reno, Inc.,
a Nevada corporation
By: Michael E. McPherson
--------------------------------------
Name: Michael E. McPherson
------------------------------------
Title: Senior Vice President/CEO
-----------------------------------
S-1
<PAGE> 57
STATE OF CALIFORNIA )
) ss.
COUNTY OF LOS ANGELES )
This instrument was acknowledged before me on October ___, 1998, by
Michael E. McPherson, as Senior Vice President/CFO, of Fitzgeralds Reno, Inc., a
Nevada corporation.
/s/ KIERSTEN POLK
---------------------------------
Notary Public
My Commission Expires: June 14, 2000
[SEAL]
<PAGE> 58
SCHEDULE 12.8
ADDRESSES
TRUSTOR:
Fitzgeralds Reno, Inc.
301 Fremont Street
Las Vegas, Nevada 89101
Attention: Chief Financial Officer
Telecopier: (702) 382-5562
BENEFICIARY:
Foothill Capital Corporation
11111 Santa Monica Boulevard
Suite 1500
Los Angeles, California 90025-3333
Attention: Business Finance Division Manager
Telecopier: (310) 478-9788
TRUSTEE:
Lawyers Title Insurance Corporation
3636 North Central Avenue, Suite 350
Phoenix, Arizona 85012
Attention: Ms. Mary Garcia
Telecopier: (602) 263-0433
<PAGE> 59
EXHIBIT "A"
LEGAL DESCRIPTION
OWNED LAND
(WASHOE COUNTY)
All that certain real property situate in Washoe County, Nevada, described as
follows:
PARCEL 1:
Lots 16, 17, 18, 19, 20, 21, 22 and the South 77 feet 4 1/2 inches of Lots 23
and 24, in Block O of ORIGINAL TOWN, NOW CITY OF RENO, according to the map
thereof, filed in the office of the County Recorder of Washoe County, State of
Nevada, on June 27, 1871.
PARCEL 3:
Lot 13 in Block O fronting 25 feet on Commercial Row and running back 100 feet
to the alley on the East side of Sierra Street, as shown on the official map of
Reno; also the West 7 feet and 10 inches of Lot 14 in Block O, Official Map of
Reno, the whole constituting a lot - 32 feet and 10 inches wide, front and rear
100 feet deep, and situate on the Southeast corner of Commercial Row and Sierra
Street.
PARCEL 4:
BEGINNING at a point where the Southerly right of way line of the Central
Pacific Railway Company intersects the Westerly line of Chestnut Street, said
point being 200 feet Southerly and at right angles from the center line of the
originally located main track of said Central Pacific Railway Company; thence
Northerly along the Westerly line of Chestnut Street, produced Northerly 62
feet, more or less, to an intersection with the North line of the Southwest 1/4
of said Section 11, Township 19 North, Range 19 East, M.D.B.&M.; thence West
along said North line 161.799 feet to a point that is distant 100 feet Southerly
measured at right angles from said center line of main track; thence in a
Westerly direction parallel to and distant 100 feet Southerly from the center
line of said track a distance of 12.609 feet; thence in a Southerly direction
parallel to the first mentioned course a distance of 100 feet to a point in said
Southerly right of way line; thence in an Easterly direction along said right of
way line a distance of 169.882 feet to the point of beginning.
Ex. A-Pg. 1
<PAGE> 60
EXHIBIT "A"
LEGAL DESCRIPTION
OWNED LAND
(WASHOE COUNTY)
(continued)
PARCEL 5:
That certain triangular shaped parcel of land situate in the Southeast corner of
the Northwest 1/4 of Section 11, Township 19 North, Range 19 East, M.D.B.&M.,
bounded on the North by the Southerly line of the 100 foot right of way of the
Central Pacific Railway Company, on the South by the South line of the Northwest
1/4 of said Section 11, and on the East by the West line of Chestnut Street,
said parcel of land having a frontage of 50 feet, more or less, on Chestnut
Street, and extending Westerly along the Southerly line of said right of way to
its intersection with the South line of said Northwest 1/4 of said Section 11.
PARCEL 6:
Parcels 2, 3 and 4 of Parcel Map No. 2690, for EL DORADO HOTEL ASSOCIATES and
FITZGERALDS RENO, INC., filed in the office of the County Recorder of Washoe
County, State of Nevada, on March 18, 1993, as File No. 1656128, Official
Records.
* * * * *
Ex. A-Pg. 2
<PAGE> 61
EXHIBIT "B-1"
LEASE AGREEMENT
(WASHOE COUNTY)
That certain Sublease dated December 31, 1986 between Meta K.
Fitzgerald, as the owner of the sublessor's interest and Fitzgeralds Reno, Inc.,
a Nevada corporation, as the owner of the sublessee's interest in and to the
real property described in EXHIBIT "B-2" to the Deed of Trust to which this
EXHIBIT "B-1" is attached as disclosed by that certain Memorandum of Lease dated
December 29, 1997, recorded on ___________, 1998 in the office of the County
Recorder of Washoe County, Nevada, as document number _________, official
records.
* * * * *
Ex. B-1-Pg. 1
<PAGE> 62
EXHIBIT "B-2"
DESCRIPTION OF LEASED LAND
(WASHOE COUNTY)
All that certain real property situate in Washoe County, Nevada, described as
follows:
PARCEL 2:
The North 22 feet 7 1/2 inches of Lots 23 and 24, in Block O of ORIGINAL TOWN
NOW CITY OF RENO, according to the map thereof, filed in the office of the
County Recorder of Washoe County, State of Nevada, on June 27, 1871.
* * * * *
Ex. B-1-Pg. 2
<PAGE> 1
EXHIBIT 10.12
DEED OF TRUST, SECURITY AGREEMENT AND
FIXTURE FILING WITH ASSIGNMENT OF RENTS
101 MAIN STREET LIMITED LIABILITY COMPANY, a Colorado limited
liability company,
as Trustor
THE PUBLIC TRUSTEE OF THE COUNTY OF GILPIN, COLORADO
as Trustee
FOOTHILL CAPITAL CORPORATION,
as Beneficiary
Dated as of October 29, 1998
<PAGE> 2
DEED OF TRUST, SECURITY AGREEMENT AND
FIXTURE FILING WITH ASSIGNMENT OF RENTS
THIS DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING WITH
ASSIGNMENT OF RENTS (this "Deed of Trust") is made as of the 29th day of
October, 1998, by 101 Main Street Limited Liability Company, a Colorado limited
liability company ("Trustor"), whose principal place of business is located at
101 Main Street, Black Hawk, Colorado 80422, in favor of The Public Trustee of
the County of Gilpin, Colorado ("Trustee"), for the benefit of Foothill Capital
Corporation, a California corporation ("Beneficiary"), whose principal place of
business is located at 11111 Santa Monica Boulevard, Suite 1500, Los Angeles,
California 90025-3333.
THE MAXIMUM AMOUNT OF PRINCIPAL TO BE SECURED HEREBY IS $15,000,000.00 OF EACH
OF THE "SUBSIDIARY GUARANTEE OBLIGATIONS" (as hereinafter defined), PROVIDED
THAT IN NO EVENT SHALL THE AGGREGATE PRINCIPAL BALANCE SECURED HEREBY, EXCLUSIVE
OF INTEREST, FEES AND EXPENSES, FOR THE BENEFIT OF THE HOLDERS EXCEED
$15,000,000.00.
R E C I T A L S:
A. Pursuant to that certain Loan and Security Agreement dated as of
October 29, 1998 (as supplemented and otherwise amended from time to time, the
"Loan Agreement"), by and between Fitzgeralds Gaming Corporation ("Fitzgeralds")
and Beneficiary, Beneficiary agreed to loan to Fitzgeralds up to the aggregate
principal amount of $15,000,000.00. Unless the context other requires, all
capitalized terms used and not otherwise defined herein shall have the meanings
ascribed thereto in the Loan Agreement.
B. Pursuant to a Guarantee required pursuant to Section 3 of the Loan
Agreement (as amended from time to time, the "Subsidiary Guarantee"), the
Trustor, among others, has guaranteed the obligations of Fitzgeralds under the
Loan Agreement and the other Loan Documents to which Fitzgeralds is a party.
C. Pursuant to the Loan Agreement, the Subsidiary Guarantee of Trustor
is required to be secured by, among other things, this Deed of Trust.
D. The parties acknowledge that certain provisions of this Deed of Trust
may be subject to the laws, rules and regulations of the Gaming Authority of the
State of Colorado ("Applicable Gaming Laws").
1
<PAGE> 3
W I T N E S S E T H:
IN CONSIDERATION OF THE FOREGOING PREMISES AND FOR OTHER GOOD AND
VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY
ACKNOWLEDGED, TRUSTOR DOES HEREBY IRREVOCABLY GRANT, BARGAIN, SELL, TRANSFER,
CONVEY AND ASSIGN to Trustee, its successors and assigns, IN TRUST, WITH POWER
OF SALE, for the benefit and security of Beneficiary, as agent and
representative for the equal and ratable benefit of the Holders, the following
(but excluding in each and every case all Excluded Assets as defined below),
whether now owned or hereafter acquired.
GRANTING CLAUSE ONE
[Land]
All of Trustor's right, title and interest in the real property, located
in the County of Gilpin, State of Colorado, described in Exhibit A attached
hereto and by this reference incorporated herein (the "Land"), together with all
and singular the tenements, hereditament, rights, reversions, remainders,
development rights, privileges, benefits, easements (in gross or appurtenant),
rights-of-way, gores or strips of land, streets, ways, alleys, passages, sewer
rights, water courses, water rights and powers, and all appurtenances whatsoever
and claims or demands of Trustor at law or in equity, in any way belonging,
benefitting, relating or appertaining to the Land, the airspace over the Land,
the "Improvements" (as hereinafter defined), or both, or which hereinafter shall
in any way belong, relate or be appurtenant thereto.
GRANTING CLAUSE TWO
[Improvements]
TOGETHER WITH, any and all structures, buildings, facilities and
improvements of every nature whatsoever now or hereafter erected on the Land,
including, but not limited to, the "Fixtures" (as hereinafter defined)
(collectively, the "Improvements") (the Land and Improvements are referred to
collectively as the "Property").
For purposes of this Deed of Trust, Fixtures shall be deemed to include,
to the full extent allowed by law, fixtures and all other equipment and
machinery now or at any time hereafter owned by Trustor and located or included
in or on or appurtenant to the Property and used in connection therewith and
which are or become so related to the real property encumbered hereby that an
interest arises in them under real estate law which may include, but is not
limited to all docks, piers, barges, vessels, machinery, equipment (including,
without limitation, pipes, furnaces, conveyors, drums, fire sprinklers and alarm
systems, and air conditioning, heating, refrigerating, electronic monitoring,
stoves, ovens, ranges, dishwashers, disposals, food storage, food processing
(including restaurant fixtures, trash and garbage removal and maintenance
equipment), office equipment, all built-in tables, chairs, mantels, screens,
plumbing, bathtubs, sinks, basins, faucets, laundry equipment, planters, desks,
sofas, shelves, lockers and cabinets, laundry equipment, all safes, furnishings,
appliances (including, without limitation, food
2
<PAGE> 4
warming and holding equipment, iceboxes, refrigerators, fans, heaters, water
heaters and incinerators), rugs, carpets and other floor coverings, draperies
and drapery rods and brackets, awnings, window shades, venetian blinds,
curtains, lamps, chandeliers and other lighting fixtures.
GRANTING CLAUSE THREE
[Rents, etc.]
TOGETHER WITH, all rents, income, security or similar deposits,
including without limitation, receipts, issues, royalties, earnings, products or
proceeds, profits, maintenance, license and concession fees and other revenues
to which Trustor may now or hereafter be entitled, including, without
limitation, all rights to payment for hotel room occupancy by hotel guests,
which includes any payment or monies received or to be received in whole or in
part, whether actual or deemed to be, for the sale of services or products in
connection therewith and/or in connection with such occupancy, advance
registration fees by hotel guests, tour or junket proceeds and deposits for
conventions and/or party reservations (collectively the "Rents"), subject to the
revocable license hereinafter given to Trustor to collect and apply such Rents.
GRANTING CLAUSE FOUR
[Leases, Including Deposits and Advance Rentals]
TOGETHER WITH, (a) all estate, right, title and interest of Trustor in,
to and under any and all leases, subleases, lettings, licenses, concessions,
operating agreements, management agreement, franchise agreements and all other
agreements affecting or covering the Property or any portion thereof now or
hereafter existing or entered into, together with all amendments, extensions and
renewals of any of the foregoing, (b) all right, title, claim, estate and
interest of Trustor thereunder, including, without limitation, all claims of the
lessor thereunder, letters of credit, guarantees, or security deposits, advance
rentals, and any and all deposits or payments of similar nature and (c) the
right to enforce against any tenants thereunder and otherwise any and all
remedies under any of the foregoing, including Trustor's right to evict from
possession any tenant thereunder or to remain, apply, use, draw upon, pursue,
enforce or realize upon any guaranty thereof, to terminate, modify, or amend any
such agreement; to obtain possession of, use, or occupy, any of the real or
personal property subject to any such agreement, and to enforce or exercise,
whether at law or in equity or by any other means, all provisions of any such
agreement and all obligations of the tenants thereunder based upon (i) any
breach by such tenant thereunder (including any claim that Trustor may have by
reason of a termination, rejection, or disaffirmance of such agreement pursuant
to any Bankruptcy Law), and (ii) the use and occupancy of the premises demised,
whether or not pursuant to the applicable agreement (including any claim for use
and occupancy arising under landlord-tenant law of the State of Colorado or any
Bankruptcy Law).
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GRANTING CLAUSE FIVE
[Options to Purchase, etc.]
TOGETHER WITH, all right, title and interest of Trustor in and to all
options and other rights to purchase or lease the Property or any portion
thereof or interest therein, if any, and any greater estate in the Property
owned or hereafter acquired by Trustor.
GRANTING CLAUSE SIX
[Personalty]
TOGETHER WITH, all right, title and interest of Trustor in and to all
Tangible Property and Intangible Property except, with respect to Gaming
Licenses, as prohibited by Applicable Gaming Laws), now or at any time hereafter
located on or appurtenant to the Property and used or useful in connection with
the ownership, management or operation of the Property, including, without
limitation, the Personalty.
GRANTING CLAUSE SEVEN
[Condemnation Awards, etc.)
TOGETHER WITH, all the estate, interest, right, title, other claim or
demand, which Trustor now has or may hereafter acquire in any and all awards,
payments or other consideration made for the taking by eminent domain, or by any
proceeding or purchase in lieu thereof, of the whole or any part of the
Property, including, without limitation, any awards, payments or other
consideration resulting from a change of grade of streets and for severance
damages.
GRANTING CLAUSE EIGHT
[Insurance Proceeds]
TOGETHER WITH, all the estate, interest, right, title and other claim or
demand which Trustor now has or may hereafter acquire with respect to the
proceeds of insurance in effect with respect to all or any part of the Property,
together with all interest thereon and the right to collect and receive the
same.
GRANTING CLAUSE NINE
[Claims for Damages, etc.]
TOGETHER WITH, all the estate, interest, right, title and other claim or
demand which Trustor now has or may hereafter acquire against anyone with
respect to any damage to all or any part of the Property, including, without
limitation, damage arising from any defect in or with respect to the design or
construction of all or any part of the Improvements and damage resulting
therefrom.
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GRANTING CLAUSE TEN
[Deposits, Advance Payments and Refunds of Insurance, Utilities, etc.]
TOGETHER WITH, all deposits or other security or advance payments
including rental payments made by or on behalf of Trustor to others, and all
refunds made by others to Trustor, with respect to (i) insurance policies
relating to all or any part of the Property, (ii) utility service for all or any
part of the Property, (iii) cleaning, maintenance, repair, or similar services
for all or any part of the Property, (iv) refuse removal or sewer service for
all or any part of the Property, (v) rental of equipment, if any, used in the
operation, maintenance or repair by or on behalf of Trustor of all or any part
of the Property and (vi) parking or similar services or rights afforded to all
or any part of the Property.
GRANTING CLAUSE ELEVEN
[Water Rights, etc.]
TOGETHER WITH, all water rights, water stock, well rights, well permits,
shares in ditch companies, water permits and other rights to the use of water
that are now or that may be hereinafter used in connection with the said
Property, or any part thereof, or any improvements or appurtenances thereto.
GRANTING CLAUSE TWELVE
[Minerals, etc.]
TOGETHER WITH, all oil and gas and other mineral rights, if any, in or
pertaining to the Land and all royalty, leasehold and other rights of Trustor
pertaining thereto.
GRANTING CLAUSE THIRTEEN
[Accessions, etc.]
TOGETHER WITH, all extensions, improvements, betterments, renewals,
substitutes for and replacements of, and all additions, accessions, and
appurtenances to, any of the foregoing that Trustor may subsequently acquire,
and all conversions of any of the foregoing. Trustor agrees that all property
hereafter acquired by Trustor and required by the Loan Agreement, this Deed of
Trust or any other Loan Document to be subject to the Lien and/or security
interests created by this Deed of Trust shall forthwith upon the acquisition
thereof by Trustor be subject to the Lien and security interests of this Deed of
Trust as if such property were now owned by Trustor and were specifically
described in this Deed of Trust and granted hereby or pursuant hereto, and the
Beneficiary is hereby authorized to receive any and all such property as and for
additional security for the Subsidiary Guarantee Obligations.
The entire estate, property and interest hereby conveyed to
Trustee may hereafter be referred to as the "Trust Estate."
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<PAGE> 7
FOR THE PURPOSE OF SECURING
A. the due and punctual payment and performance of any and all present
and future obligations and liabilities of Trustor of every type or description
to Beneficiary, arising under or in connection with the Subsidiary Guarantee,
whether for principal of, or premium, if any, or interest referenced in the Loan
Agreement or in the Subsidiary Guarantee, expenses, indemnities or other amounts
(including attorneys' fees and expenses) (collectively, the "Subsidiary
Guarantee Obligations"); and
B. the due and punctual payment and performance of any and all present
and future obligations and liabilities of Trustor of every type or description
to Beneficiary, arising under or in connection with this Deed of Trust or any
other Loan Document, including for reimbursement off amounts permitted to be
advanced or expended by Beneficiary (i) to satisfy amounts required to be paid
by Trustor under this Deed of Trust or any other Loan Document, together with
interest thereon to the extent provided, or (ii) to protect the Trust Estate,
together with interest thereon to the extent provided; and
C. all future advances pursuant to the Loan Agreement or any other of
the Loan Documents.
in each case whether due or not due, direct or indirect, joint and/or several,,
absolute or contingent, voluntary or involuntary, liquidated or unliquidated,
determined or undetermined, now or hereafter existing, renewed or restructured,
whether or not from time to time decreased or extinguished and later increased,
created in incurred, whether or not arising after the commencement of a
proceeding under the Bankruptcy Code (including post-petition interest) and
whether or not allowed or allowable as a claim in any such proceeding (all
obligations and liabilities described herein, including, without limitation, the
Subsidiary Guarantee Obligations, are collectively referred to herein as the
"Secured Obligations").
TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR
HEREBYCOVENANTS AND AGREES AS FOLLOWS:
ARTICLE 1.
DEFINITIONS AND RELATED MATTERS
Section 1.1 Certain Defined Terms. As used herein, the following terms
shall have the following meanings:
"Accounts" has the meaning set forth in Section 9.1.2.
"Applicable Laws" has the meaning set forth in Section 3.7.
"Beneficiary" has the meaning set forth in the Preamble.
"Chattel Paper" has the meaning set forth in Section 9.1.1.
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<PAGE> 8
"Documents" has the meaning set forth in Section 9.1.9.
"Environmental Damages" means all claims, judgments, damages, losses,
penalties, fines, liabilities (including strict liability), encumbrances, liens,
costs and expenses of investigation and defense of any claim, whether or not
such is ultimately defeated, and of any settlement or judgment, of whatever kind
or nature, contingent or otherwise, matured or unmatured, foreseeable or
unforeseeable, including, without limitation, reasonable attorneys' fees,
charges and disbursements *(including, without limitation, costs of appeal), and
consultants' fees, any of which are actually incurred at any time as a result of
the existence or alleged existence of Hazardous Materials upon, about or beneath
the Property or migrating or threatening to migrate to or from the Property, or
other existence or alleged existence of a violation of Environmental
Requirements pertaining to the Property regardless of whether the existence of
such Hazardous Materials or the violation of Environmental Requirements arose
prior to the present ownership or operation of the Property, and including,
without limitation:
(i) damages for personal injury, or injury to property or natural
resources occurring upon or off of the Property, foreseeable or unforeseeable,
including, without limitation, lost profits, consequential damages, the cost of
demolition and rebuilding of any improvements on real property, interest and
penalties including, but not limited to, claims brought by or on behalf of
employees of Trustor, with respect to which Trustor waives, for the benefit of
Beneficiary only, any immunity to which it may be entitled under any industrial
or workers' compensation laws.
(ii) reasonable fees actually incurred for the services of
attorneys, consultants, contractors, experts, laboratories and all other costs
incurred in connection with the investigation or remediation of such Hazardous
Materials or violation of Environmental Requirements including, but not limited
to, the preparation of any feasibility studies or reports or the performance of
any cleanup, remedial, removal, abatement, containment, closure, restoration or
monitoring work required by any federal, state or local governmental agency or
political subdivision, or reasonably necessary to make full economic use of the
Property or any other property or otherwise expended in connection with such
conditions, and including, without limitation, any reasonable attorneys' fees,
charges and disbursements (including, without limitation, costs of appeal)
actually incurred in enforcing this Deed of Trust or collecting any sums due
hereunder; and
(iii) liability to any Person to indemnify such Person for actual
costs incurred in good faith in connection with the items referenced in
subparagraphs (i) and (ii) hereof.
"Environmental Requirements" means the common law and all applicable
present and future statutes, regulations, rules, ordinances, codes, licenses,
permits, orders, approvals, plans, authorizations, concessions, franchises and
similar items, of all governmental agencies, departments, commissions, boards,
bureaus or instrumentalities of the United States, states and political
subdivisions thereof and all applicable judicial and administrative and
regulatory decrees, injunctions, judgments and orders relating to the
environment, including, without limitation:
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<PAGE> 9
(i) all requirements, including, but not limited to, those relating or
pertaining to (A) reporting, licensing, permitting, investigation and
remediation of emissions, discharges, releases or threatened releases of
Hazardous Materials or other chemical substances, pollutants, contaminants or
hazardous or toxic substances, materials or wastes whether solid, liquid or
gaseous in nature, into the environment (including, without limitation, ambient
air, surface water, groundwater or land surface or subsurface strata); (B) the
manufacture, processing, distribution, use, generation, treatment, storage,
disposal, transport or handling of chemical substances, materials or wastes,
whether solid, liquid or gaseous in nature, including without limitation,
Hazardous Materials or (C) underground storage tanks and related piping, and
emissions, discharges, releases or threatened releases of Hazardous Materials or
other chemical substances, pollutants, contaminants or hazardous or toxic
substances, materials or wastes whether solid, liquid or gaseous in nature
therefrom, and
(ii) all other requirements pertaining to the protection of the health
and safety of employees or the public with respect to Hazardous Materials.
"Equipment" has the meaning set forth in Section 9.1.7.
"Excluded Assets" has the meaning set forth in the Loan Agreement.
"Fixtures" has the meaning set forth in Section 9.1.7.
"Gaming Licenses" has the meaning set forth in the Loan Agreement.
"General Intangibles" has the meaning set forth in Section 9.1.10.
"Guarantor Security Agreement" has the meaning set forth in the Loan
Agreement.
"Hazardous Materials" any chemical, material or substance:
(i) the presence of which requires investigation or remediation
under any federal, state or local law, statute, code, regulation, ordinance,
order, action or policy, or
(ii) which is or becomes defined as or included in the definition of
"hazardous substances," "hazardous wastes," "hazardous materials," "extremely
hazardous waste," "restricted hazardous waste" or "toxic substances" or words of
similar import under any applicable local, state or federal law or under
regulations adopted or publications promulgated pursuant thereto, including, but
not limited to, any such laws or regulations promulgated by Governmental
Authorities of the State of Colorado, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601 et
seq. the Hazardous Materials Transportation Act, as amended, 49 U.S.C. Section
1801, et seq. the Resource Conservation and Recovery Act, as amended 42 U.S.C.
Section 6901, et seq. the Federal Water Pollution Control Act, as amended, 33
U.S.C. Section 1351, et seq., or
(iii) which is toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic, or otherwise hazardous and is or becomes
regulated by any governmental authority, agency, department, commission, board,
agency or instrumentality of
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<PAGE> 10
the United States, any state of the United States, or any political subdivision
thereof ("governmental Authority"), or
(iv) the presence of which on the Property causes or threatens to
pose a hazard to the Property or to the health or safety of Persons on or about
the Property, or
(v) without limitation, which contains gasoline, crude oil, diesel
fuel or other petroleum hydrocarbons in violation of applicable Environmental
Requirements; or
(vi) without limitation, which contains "PCBs" (as hereinafter
defined) or asbestos or urea formaldehyde foam insulation or radon gas.
"Impositions" Any and all (i) real estate and personal property taxes
and other taxes and assessments, water and sewer rates and charges levied or
assessed upon or with respect to the Property, and any and all other
governmental charges (including any penalties and other charges imposed by any
Gaming Authority) and any interest or costs or penalties with respect thereto,
in each case whether general, special, ordinary or extraordinary, foreseen or
unforeseen, of any kind and nature whatsoever that at any time prior to or after
the execution hereof may be assessed, levied, imposed, or become a lien upon the
Property or the Rents, but excluding taxes on Trustor's income or operating
revenues, (ii) charges for any easement or agreement maintained for the benefit
of the Property and (iii) other charges, expenses, payments or assessments of
any nature, if any, which are or may be assessed, levied, imposed or become a
lien upon the Property or the Tents, including mechanics and other Liens
permitted by the Loan Agreement.
"Impound Account" the account that Trustor may be required to maintain
pursuant to Section 4.6.2 of this Deed of Trust for the deposit of amounts
required to pay Impositions and insurance premiums.
"Improvements" has the meaning set forth in Granting Clause Two.
"Indemnitees" has the meaning set forth in Section 11.2.7.
"Intangible Property" Any and all intangible personal property,
including, without limitation, (a) the rights to use all names and all
derivations thereof now or hereafter used by Trustor in connection with the Land
or the Improvements, including, without limitation the name "Fitzgeralds Black
Hawk" and any variations thereof, together with the goodwill associated
therewith, and all names, logos, and designs used by Trustor, or in connection
with the Land or the Improvements or in which Trustor has rights, with the
exclusive right to use such names, logos and designs wherever they are now or
hereafter used in connection with the Land or the Improvements, and any and all
other trade names, trademarks or service marks, whether or not registered, now
or hereafter used in the operation of the Land or the Improvements, including,
without limitation, any interest as a licencee or franchisee, and, in each case,
together with the goodwill associated therewith, (b) maps, plans,
specifications, surveys, studies, tests, reports, data and drawings relating to
the development of the Land or the Improvements and the construction of the
Improvements, including, without limitation, all marketing plans, feasibility
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<PAGE> 11
studies, soils tests, design contracts and all contracts and agreements of
Trustor relating thereto and all architectural, structural, mechanical and
engineering plans and specifications, studies, data and drawings prepared for or
relating to the development of the Land or the Property or the construction,
renovation or restoration of any of the Improvements or the extraction of
minerals, sand, gravel or other valuable substances from the Land, (c) any and
all books, records, customer lists (including lists or information derived from
or related to the player tracking system described within the definition of
"Tangible Property"), concession agreements, supply or service contracts,
licences, permits, governmental approvals (to the extent such licenses, permits
and approvals may be pledged under applicable law), signs, goodwill, casino and
hotel credit and charge records, supplier lists, checking accounts, safe deposit
boxes (excluding the contents of such deposit boxes owned by Persons other than
Trustor and its Subsidiaries), cash, instruments, Chattel Papers, documents,
unearned premiums, deposits, refunds, including but not limited to income tax
refunds, prepaid expenses, rebates, tax and insurance escrow and impound
accounts, if any, actions and rights in action, and all other claims, and all
other contract rights and general intangibles resulting from or used in
connection with the operation of the Trust Estate and in which Trustor now or
hereafter has rights, (d) all of Trustor's documents, instruments, contract
rights, and general intangibles including, without limitation, all insurance
policies, permits, licenses, franchises and agreements required for the use,
occupancy or operation of the Land, or any of the Improvements (to the extent
such licenses, permits and approvals are not prohibited from being pledged under
applicable law), (e) general intangibles, vacation license resort agreements or
other time share license or right to use agreements with respect to the Land,
the Improvements and/or the business being conducted thereon, including, without
limitation, all rents, issues, profits, income and maintenance fees resulting
therefrom: whether any of the foregoing is now owned or hereafter acquired and
(f) any and all 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) now or
hereafter obtained by Trustor from any Governmental Author by having or claiming
jurisdiction over the Land, the Tangible Property, the Property or any other
element of the Trust Estate or providing access thereto, or the operation of any
business on, at, or from the Land, including, without limitation, any Gaming
Licenses.
"Inventory" has the meaning set forth in Section 9.1.6.
"Land" has the meaning set forth in Granting Clause One.
"Leases" Any and all leases, subleases, lettings, licenses, concessions,
operating agreements, management agreements and all other agreements affecting
or covering the Property or any portion thereof now or hereafter existing or
entered into, together with all amendments, extensions and renewals of any of
the foregoing.
"Loan Documents" has the meaning set forth in the Loan Agreement.
"PCBs" means polychlorinated biphenyles.
"Personalty" means the Intangible Property and the Tangible Property.
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"Proceeds" has the meaning set forth in Section 9.1.22.
"Property" has the meaning set forth in Granting Clause Two.
"Public Waters" means any river, lake, stream, sea, ocean, gulf, bay or
other public body of water.
"Receiver" means any trustee, receiver, custodian, fiscal agent,
liquidator or similar officer.
"Rents" has the meaning set forth in Granting Clause Three.
"Subsidiary Guarantee Obligations" has the meaning set forth
hereinabove.
"Tangible Property" Any and all tangible personal property, including,
without limitation, all goods, equipment, supplies, building and other materials
of every nature whatsoever and all other tangible personal property constituting
a part or portion or the Property and/or used in the operation of any hotel,
casino, restaurant, store, parking facility, special events arena, theme park,
and any other commercial operations on the Property, including but not limited
to Inventory, communication systems, visual and electronic surveillance systems
and transportation systems and not constituting a part of the real property
subject to the real property lien of this Deed of Trust and including all
property and materials stored on all or any portion of the Property in which
Trustor has an interest and all tools, utensils, food and beverage, liquor,
uniforms, linens, housekeeping and maintenance supplies, vehicles, fuel,
advertising and promotional material, blueprints, surveys, plans and other
documents relating to the Land or the Improvements, and all construction
materials and all fixtures, including, but not limited to, all gaming equipment
and devices which are used in connection with the operation of the Property and
those items of Fixtures which are purchased or leased by Trustor, machinery and
any other item of personal property in which Trustor now or hereafter owns or
acquires an interest or right, and which are used or useful in the construction,
operation, use and occupancy of the Property, to the extent permitted by the
applicable contact or applicable law, all financial equipment, computer
equipment, player tracking systems (including all computer hardware operating
software programs and all right, title and interest in and to any applicable
license therefore), calculators, adding machines, video game and slot machines,
and any other electronic equipment of every nature used or located on any part
of the Property, and all present and future right, title and interest of Trustor
in and to any casino operator's agreement, license agreement or sublease
agreement used in connection with the Property.
"Title Policy" means the title insurance policy or policies in favor of
Beneficiary insuring the Lien of this Deed of Trust.
"Trademarks" means all trademarks, servicemarks and trade names, all
registrations and applications to register such trademarks, servicemarks and
trade names and all renewals thereof, and the goodwill of the business
associated with or relating to such trademarks, servicemarks and trade names,
including without limitation any and all licenses and rights granted to Trustor
to use any trademark, servicemark or trade name owned by any other Person.
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"Trust Estate" has the meaning set forth hereinabove.
"UCC" means the Uniform Commercial Code (as amended from time to time,
of the State of California.
Section 1.2 Related Matters.
1.2.1 Terms Used in the UCC. Unless the context clearly otherwise
requires, all lower-case terms used in Section 9 of this Deed of Trust and not
otherwise defined herein that are used or defined in Article 9 (or any
equivalent subpart) of the UCC have the same meanings herein.
1.2.2 Construction. Unless the context of this Deed of Trust clearly
requires otherwise, references to the plural include the singular, the singular
includes the plural, the part includes the whole, and "including" is not
limiting. The words "hereof," "herein," "hereby," "hereunder" and similar terms
in this Deed of Trust refer to this Deed of Trust as a whole (including the
Preamble, the Recitals and all Schedules and Exhibits, but subject to Section
1.2.5) and not to any particular provision of this Deed of Trust. Article,
section, subsection, exhibit, recital, preamble and schedule references in this
Deed of Trust are to this Deed of Trust unless otherwise specified. References
in this Deed of Trust to any agreement, other document or law "as amended" or
"as may be amended from time to time," or to amendments of any document or law,
shall include any amendments, supplements, replacements, renewals or other
modifications.
1.2.3 Determinations. Any determination or calculation contemplated
by this Deed of Trust that is made by Beneficiary shall be final and conclusive
and binding upon the Trustor and Fitzgeralds, in the absence of manifest error.
References in this Deed of Trust to "determination" by Beneficiary include good
faith estimates (in the case of quantitative determinations) and good faith
beliefs (in the case of quantitative determinations). All references herein to
"discretion" of Beneficiary (or terms of similar import) shall mean "absolute
and sole discretion". All consents and other actions of Beneficiary contemplated
by this Deed of Trust may be given, taken, withheld or not taken at
Beneficiary's discretion (whether or not so expressed), except as otherwise
expressly provided herein. No approval or consent of Beneficiary shall be
effective unless the express written approval or consent of Beneficiary is
received by Trustor.
1.2.4 Governing Law. This Deed of Trust shall be governed by, and
construed in accordance with, the laws (other than the rules regarding conflicts
of laws) of the State of California, except the provisions hereof relating to
the creation, perfection, an enforcement of the lien and security interest in
that portion of the Trust Estate which is fixtures shall be governed by the laws
of the State of Colorado.
1.2.5 Headings. The Article and Section headings used in this Deed
of Trust are for convenience of reference only and shall not affect the
construction hereof.
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1.2.6 Severability. If any provision of this Deed of Trust or any Lien
or other right hereunder shall be held to be invalid, illegal or unenforceable
under Applicable Law in any jurisdiction, such provision, Lien or other right
shall be ineffective only to the extent of such invalidity, illegality or
unenforceability, ,which shall not affect any other provisions herein or any
other Lien or right granted hereby or the validity, legality or enforceability
of such provision, Lien or right in any other jurisdiction.
1.2.7 Exhibits and Schedules. All of the appendices, exhibits and
schedules attached to this Deed of Trust shall be deemed incorporated herein by
reference.
ARTICLE 2.
RESERVED]
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES
Trustor hereby represents and warrants to Beneficiary and Trustee that:
Section 3.1 Corporate Existence. Trustor (a) is a limited liability
company duly incorporated, validly existing and in good standing under the laws
of the jurisdiction in which it is incorporated, and (b) has the corporate power
and authority to own its property and assets and to transact the business in
which it is engaged or presently proposes to engage, and (c) is duly qualified
and is authorized to do business and is in good standing as a foreign
corporation in every jurisdiction in which it owns or leases real property or in
which the nature of its business requires it to be so qualified.
Section 3.2 Authorization; Approvals. The execution, delivery and
performance by Trustor of this Deed of Trust are within Trustor's corporate
powers and authority, have been duly authorized by all necessary corporate
action, and do not contravene (a) Trustor's charter or by-laws or (b) any law or
any contractual restriction binding on or affecting Trustor or the Property. All
authorizations or approvals or other actions by, or notice to or filing with, a
Governmental Authority required for the due execution, delivery and performance
by Trustor of this Deed of Trust have been duly obtained and are in full force
and effect.
Section 3.3 Enforceability. This Deed of Trust has been duly executed
and delivered by Trustor and is the legal, valid and binding obligation of
Trustor, enforceable against Trustor in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium, reorganization or other similar
laws affecting creditors' rights generally and general principles of equity.
Section 3.4 Validity and Perfection of Security Interests. The liens and
security interests in the Trust Estate created in accordance with the terms
hereof constitute valid security interests, and, (a) upon recordation of this
Deed of Trust in the appropriate office in Gilpin County, Colorado, (b) upon the
filing of financing statements naming Trustor as "Debtor" and
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Beneficiary as "Secured Party" and describing the Trust Estate in the State UCC
Filings Office and in the real estate records of Gilpin County, Colorado, (c)
upon the delivery of any instruments and Chattel Paper which are included in the
Trust Estate to Beneficiary, (d) to the extent subject to U.S. federal law and
not Article 9 of the UCC, upon recordation of the security interests granted in
Patents, Trademarks and Copyrights in the U.S. Patent and Trademark Office and
the U.S. Copyright Office, along with the registration of all U.S. Copyrights in
the U.S. Copyright Office and, to the extent governed by foreign law, the taking
of all steps necessary under applicable foreign law to perfect or record the
security interest in all foreign Intellectual Property Collateral applications
and registrations and (e) to the extent ownership of Collateral is represented
by a certificate, a notation or, the certificate of the Lien granted hereby, the
security interests granted to Beneficiary hereunder will constitute perfected
security interests therein superior and prior to all Liens, rights or claims of
all other Persons other than Permitted Liens.
Section 3.5 Title to and Right to Use Assets. Trustor has good and
marketable fee simple title in the Land and is the legal and beneficial owner of
the remainder of the Trust Estate (and as to the Trust Estate whether now
existing or hereafter acquired, Trustor will continue to won each item thereof),
free and clear of all Liens except Permitted Liens. Trustor has the right to
hold, occupy and enjoy its interest in the Trust Estate subject to the terms of
the Gaming Licenses and subject to the Permitted Liens, and has valid right,
full power and legal authority, subject to Applicable Gaming Laws, to mortgage
and pledge the same as provided herein, and Trustor shall defend the Trust
Estate against all claims and demands of all Persons at any time claiming the
same or any interest therein adverse to Beneficiary (except for Permitted Liens)
and Beneficiary may, subject to Applicable Gaming Laws, at all times peaceably
and quietly enter upon, hold, occupy and enjoy the entire Trust Estate in
accordance with the terms hereof.
Section 3.6 Non-Contravention. Neither the execution, delivery or
performance of this Deed of Trust by the Trustor nor the consummation of the
transactions herein contemplated nor the fulfillment of the terms hereof (i)
violate the terms of or constitute a default under any agreement, indenture,
mortgage, deed of trust, equipment lease, instrument or other document to which
the Trustor is a party or by which it or any of its property or assets is bound
or to which it may be subject, (ii) conflict with any law, order, rule or
regulation applicable to the Trustor of any court or any government, regulatory
body or administrative agency or other governmental body having jurisdiction
over the Trustor or the Trust Estate, or (iii) result in or require the creation
or imposition of (or the obligation to create or impose) any Lien (other than
the Lien contemplated hereby or by any other Loan Document), upon or with
respect to any of the property or assets now owned or hereafter acquired by
Trustor.
Section 3.7 Contracts. Each material contract which is part of the Trust
Estate (each, a "Contract") (i) is the genuine, legal, valid and binding
obligation of Trustor, (ii) is enforceable against Trustor in accordance with
its terms, (iii) is in full force and effect and is, to Trustor's knowledge, not
subject to any setoffs, defenses, overdue taxes, counterclaims or other claims,
nor have any of the foregoing been asserted or alleged as to any Contract, and
(iv) is, in all material respects, in compliance with all applicable laws,
whether federal, state, local or foreign ("Applicable Laws"). Neither Trustor
nor, to the best knowledge of Trustor, any other
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party to any Contract is in default in the performance or observance of any of
the terms thereof. No party to any Contract is the United States government or
any instrumentality thereof.
Section 3.8 Leases. Trustor has delivered to Beneficiary true, correct
and complete copies of all Leases, including all amendments thereof and
modifications thereto. Each Lease (i) is the genuine, legal, valid and binding
obligation of Trustor, (ii) is enforceable against Trustor and, to the best of
Trustor's knowledge, the other party thereto, in accordance with its terms,
(iii) is in full force and effect and is not subject to any setoffs, defenses,
taxes, counterclaims or other claims, nor have any of the foregoing been
asserted or alleged as to any Lease, and (iv) is in compliance with all
applicable laws, whether federal, state, local or foreign.
Section 3.9 No Other Property. The Trust Estate constitutes all of the
property (whether owned, leased or otherwise) currently used by Trustor in
connection with the operation of the Fitzgeralds Black Hawk Casino other than
Excluded Assets.
Section 3.10 Compliance with Laws. To the best knowledge of Trustor,
except as otherwise disclosed in writing to Beneficiary, the Trust Estate and
the proposed and actual use thereof comply in all material respects with all
Applicable Laws, and there is no proceeding pending or, to the best knowledge of
Trustor, threatened before any court, quasi-judicial body, Governmental
Authority or administrative agency relating to the validity of the Loan
Documents or the proposed or actual use of the Trust Estate.
Section 3.11 Property Use; Mechanics' Liens. The Property is not used
principally or primarily for agricultural or grazing purposes. All costs for
labor and material for the removal, construction and renovation of the
Improvements (including, without limitation, any additions and alterations
thereto) have been paid in full or will be paid in accordance with Section 4.15.
Section 3.12 Condemnation. There are no pending or, to the best
knowledge of Trustor, threatened condemnation or eminent domain proceedings
against the Trust Estate or any part thereof.
Section 3.13 Litigation. Except as disclosed in writing to Beneficiary
on the date hereof, there are no pending or, to the best knowledge of Trustor,
threatened, actions, claims, proceedings, investigations, suits or proceedings
before any court, governmental agency or arbitrator.
Section 3.14 Construction of Improvements. All Improvements have been
and will be constructed in all material respects in accordance with Applicable
Laws and all requirements of Governmental Authorities and governmental
approvals. To the best knowledge of Trustor, the Improvements are free from
latent and patent defects, and do not require any material repairs,
reconstruction or replacement on the date hereof (except for any material
repairs, reconstruction or replacement that do not have a material adverse
effect on the value of the Improvements and do not materially and adversely
affect Trustor's use and operation of the Improvements).
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ARTICLE 4.
AFFIRMATIVE COVENANTS
Trustor hereby covenants to and agrees with Beneficiary as follows:
Section 4.1 Secured Obligations of Trustor. Trustor will perform,
observe and comply with its Secured Obligations arising under this Deed of Trust
and shall continue to be liable for the performance of its Secured Obligations
arising under this Deed of Trust until discharged in full, notwithstanding any
actions of partial foreclosure that may be brought hereunder to recover any
amount or amounts expended by Beneficiary on behalf of Trustor in order to cure
any of Trustor's defaults or to satisfy any of Trustor's obligations or
covenants under any agreement relating to the Trust Estate and to which Trustor
is a party or by which the Trust Estate is bound.
Section 4.2 Compliance with Law; Maintenance of Approvals. Except as
expressly permitted by the Loan Agreement, Trustor shall (i) comply with all
requirements of law applicable to the ownership, operation, use and occupancy of
all or any portion of the Trust Estate, whether or not such compliance requires
work or remedial measures that are ordinary or extraordinary, foreseen or
unforseen, or structural or nonstructural, and (ii) maintain in full force and
effect all authorizations, approvals or other actions, including, without
limitation, Gaming Licenses and liquor licenses and permits, which are necessary
or desirable for the performance of Trustor's obligations pursuant to this Deed
of Trust or for the business conducted by Trustor on the Property.
Section 4.3 Other Reports. Trustor shall provide from time to time such
additional information regarding Trustor or the Trust Estate as are required
under the Loan Agreement or as Beneficiary may reasonably request.
Section 4.4 Insurance. Trustor, at its sole cost and expense, will
provide, maintain and keep in force the insurance required by Section 6.10 of
the Loan Agreement ("Insurance Policies").
Section 4.5 Waste and Repair. Except as expressly permitted by the Loan
Agreement, Trustor shall at all times cause the Trust Estate to be maintained in
normal working order and condition (reasonable wear and tear excepted). Trustor
shall not suffer any waste of the Property or do or permit to be done thereon
anything not otherwise permitted in the Indenture that may in any way impair the
security of this Deed of Trust. Trustor shall not abandon the Property nor leave
the Property unprotected or deserted.
Section 4.6 Impositions; Impounds; Taxes; Capital Costs.
4.6.1 Impositions Affecting the Property. Trustor shall pay when due
all Impositions (or currently payable installments thereof) that are or that may
become alien on the Property or are assessed against the Property or the Rents;
provided, however, that Trustor may, at its expense, contest the amount or
validity or application of any such Impositions by
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appropriate legal proceedings promptly initiated and conducted in good faith and
with due diligence; provided that (i) neither the Property nor any substantial
part thereof will be in danger of being sold, forfeited, terminated, canceled,
or lost as a result of such contest, and (ii) except in the case of a Lien
junior to the Lien of this Deed of Trust, Trustor shall have posted such bond or
furnished such other security as may be required by law to release such Lien.
4.6.2 Impounds; Impound Account. Upon the occurrence and during the
continuance of an Event of Default and at the request of Beneficiary, Trustor
will pay to Beneficiary monthly an amount equal to one-twelfth (1/12th) of the
annual cost (or such greater amount as may be reasonably necessary for
Beneficiary to have on hand sufficient funds to pay the next installment prior
to delinquency) of Impositions on the Property (but only those Impositions
defined in clause (i) of the definition of "Impositions"), together with an
amount equal to the estimated next hazard and other required insurance premiums
in order to accumulate with Beneficiary sufficient funds to pay such Impositions
and premiums at least 30 days prior to their respective due dates. Such funds
shall be held by Beneficiary on a commingled basis and shall not bear interest.
Said accumulated funds shall be paid and applied by Beneficiary with respect to
such Impositions and insurance premiums as and when due.
Section 4.7 Further Assurances. Trustor shall, at its own expense,
perform such acts as may be necessary, or that Beneficiary may request at any
time, to execute, acknowledge and deliver all such additional papers and
instruments (including, without limitation, a declaration of no setoff) and all
such further assurances of title and will do or cause to be done all further
acts and things as may be proper or reasonably necessary to carry out the
purpose hereof and to subject to the Lines hereof any property intended by the
terms hereof to be covered thereby and any renewals, additions, substitutions,
replacements or betterments thereto.
Section 4.8 Reimbursement; Waiver of Offsets.
4.8.1 In the event any tax, stamp tax, assessment, water rate, sewer
rate, insurance premium, repair, rent charge, debt, claim, inspection,
Imposition or lien having priority over the lien of this Deed of Trust, or in
the event any other amount required to be paid by Trustor hereunder shall remain
unpaid and Trustor is not contesting such amount pursuant to the terms hereof or
the Loan Agreement, Beneficiary shall have the right to pay such amount and
shall have the right to declare immediately due and payable any such amount so
paid. Any amount so paid by Beneficiary shall bear interest at the default
interest rate specified in the Loan Agreement ("Default Rate") from the date of
payment by Beneficiary, shall constitute an additional Secured Obligation
secured hereby, prior to any right, title or interest in or claim upon the Trust
Estate attaching or accruing subsequent to the Lien of this Deed of Trust, shall
be secured by this Deed of Trust and shall be payable by Trustor to Beneficiary
within thirty (30) days after receipt by Trustor of written demand.
4.8.2 Except as otherwise provided herein, in the Loan Agreement or
in the other Loan Documents, all sums payable by Trustor hereunder or under the
other Security Documents shall be paid without notice, demand, counterclaim,
setoff, deduction or defense and without abatement, suspension, deferment,
diminution or reduction, and the obligations and liabilities of Trustor
hereunder shall in no way be released, discharged or otherwise affected by
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reason of (i) any damage to or destruction of or any condemnation or similar
taking of the Trust Estate or any part thereof, (ii) any restriction or
prevention of or interference with any use of the Trust Estate or any part
thereof, (iii) any title defect or encumbrance or any eviction from the Property
or the Improvements or any part thereof by title paramount or otherwise, (iv)
any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceeding relating to Beneficiary, or
any action taken with respect to this Deed of Trust by any trustee or receiver
of Beneficiary, or by any court, in any such proceeding, (v) any claim which
Trustor has or might have against Beneficiary, (vi) any default or failure on
the part of Beneficiary to perform or comply with any of the terms hereof or of
any other agreement with Trustor or (vii) any other occurrence whatsoever,
whether similar or dissimilar to the foregoing, whether or not Trustor shall
have notice or knowledge of any of the foregoing. Trustor waives all rights now
or hereafter conferred by statute or otherwise to any abatement, suspension,
deferment, diminution or reduction of any sum secured hereby and payable by
Trustor.
Section 4.9 Litigation. Trustor will, promptly upon obtaining actual
knowledge thereof, give notice in writing to Beneficiary of any litigation
commenced that is likely to have a material adverse effect on the Property or
the Liens created hereby other than unlawful detainer proceedings brought by
Trustor.
Section 4.10 Certain Reports. Trustor, promptly and in any event within
fifteen days after actual receipt by Trustor thereof, will deliver to
Beneficiary a copy of any written notice or citation concerning any actual,
alleged or suspected violation of Environmental Requirements or liability of
Trustor for Environmental Damages in connection with the Property or past or
present activities of any Person thereon.
Section 4.11 Tax Receipts. Subject to the provisions of Section 4.5
hereof, Trustor shall provided to Beneficiary, within 30 days after demand made
therefor, bills (which shall be receipted from and after the date receipted
bills are obtainable) showing the payment to the extent then due of all taxes,
assessments (including those payable in periodic installments), water rates,
sewer rates, and/or any other Imposition that have become a lien (other than an
inchoate lien) upon the Trust Estate.
Section 4.12 FIRPTA Affidavit. Trustor hereby represents and warrants to
Beneficiary under penalty of perjury:
4.12.1.1 Trustor's U.S. Taxpayer Identification Number is
84-1423521,
4.12.1.2 Trustor's business address is set forth in the preamble
hereto, and
4.12.1.3 Trustor is not a "foreign person" within the meaning of
Sections 1445 and 7701 of the Code (i.e., Trustor is not a nonresident alien,
foreign corporation, foreign partnership, foreign trust or foreign estate as
those terms are defined in the Code and regulations promulgated thereunder).
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Trustor agrees to indemnify, defend, protect and hold Beneficiary and
Beneficiary's agents harmless of, from and against any and all loss, liability,
costs, damages, claims or causes of action including reasonable attorneys' fees,
costs and expenses which may be actually incurred by Beneficiary or
Beneficiary's agents by reason of any failure of any representation or warranty
made by Trustor in this Section 4.12 to be true and correct in all respects,
including, but not limited to, any liability for failure to withhold any amount
required under Code Section 1445 in the event of foreclosure or other transfer
of the Property.
Section 4.13 Preservation of Contractual Rights. Except as otherwise
expressly permitted by the Loan Agreement, Trustor shall, prior to delinquency,
default or forfeiture, perform all obligations and satisfy all material
conditions required on its part to be satisfied to preserve its rights and
privileges under any contract, lease, license, permit or other authorization (a)
under which it holds any Tangible Property, or (b) which constitutes part of the
Intangible Property.
Section 4.14 Tax Service Contract. At any time after the occurrence of
an Event of Default (whether or not such Event of Default is cured), at the
request of Beneficiary and at Trustor's and/or its permitted successor's sole
expense, Beneficiary shall be furnished a tax service contract in form
satisfactory to Beneficiary issued by a tax reporting agency satisfactory to
Beneficiary, which contract shall remain in force until indefeasible discharge
in full of the Secured Obligations.
Section 4.15 Liens. Trustor shall pay and promptly discharge, at
Trustor's cost and expense, all Liens upon the Trust Estate, or any part thereof
or interest therein other than the Permitted Liens. Trustor shall have the right
to contest in good faith the validity of any such Lien, provided Trustor shall
first post such bond or furnish such other security as may be required by law to
release such Lien, and provided further that Trustor shall thereafter diligently
proceed to cause such Lien to be removed and discharged. If Trustor shall fail
to discharge any such Lien, 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 by depositing in court a bond for the amount claimed or otherwise
giving security for such Lien, or in such manner as is or may be prescribed by
law. Any amount so paid by Beneficiary shall bear interest at the Default Rate
from the date of payment by Beneficiary, shall constitute an additional Secured
Obligation secured hereby, prior to any right, title or interest in or claim
upon the Trust Estate attaching or accruing subsequent to the Lien of this Deed
of Trust, shall be secured by this Deed of Trust and shall be payable by Trustor
to Beneficiary upon demand.
Section 4.16 Inspection. Trustor shall permit Beneficiary, upon 24
hours' prior notice, to enter upon and inspect, during normal business hours,
the Property, and the construction and operation thereof, for such purposes
reasonably deemed necessary by Beneficiary, it being agreed by Trustor that
Beneficiary's good faith belief of the existence of a past or present release or
threatened release of any Hazardous Material into, unto, beneath or from the
Property shall be conclusively deemed reasonable; provided, however, that no
such prior notice shall be necessary and such inspection may occur at any time
(i) Beneficiary
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reasonably believes that an emergency exists or is imminent or (ii) the giving
or delivery of such notice is prohibited or stayed by Applicable Laws.
ARTICLE 5.
[RESERVED]
ARTICLE 6.
NEGATIVE COVENANTS
Trustor hereby covenants to and agrees with Beneficiary as follows:
Section 6.1 Restrictive Uses. Trustor covenants not to suffer any Liens
against the Trust Estate (other than Permitted Liens).
Section 6.2 Transferability. Trustor shall not make any Asset Sale
unless the proceeds of such Asset Sale are applied as permitted or required by
the Loan Agreement.
Section 6.3 No Cooperative or Condominium. Trustor shall not operate or
permit the Property to be operated as a cooperative or condominium building or
buildings in which the tenants or occupants participate in the ownership,
control or management of the Property or any part thereof, as tenant
stockholders or otherwise.
ARTICLE 7.
CASUALTIES AND CONDEMNATION
Section 7.1 Casualties.
7.1.1 Trustor will notify Beneficiary in writing promptly after loss
or damage caused by fire, wind or other casualty to the Property ("Casualty").
7.1.2 Any and all proceeds from Insurance Policies payable to
Beneficiary under the Loan Agreement shall be treated in accordance with Section
6.10 of the Loan Agreement and shall be released to Trustor or applied to the
discharge of the Secured Obligations as set forth in the Loan Agreement.
Section 7.2 Condemnation. Immediately upon obtaining knowledge of the
institution of any proceedings for the condemnation of the Property or any
portion thereof, or any other proceedings arising out of injury or damage to the
Property, or any portion thereof, Trustor will notify the Beneficiary of the
pendency of such proceedings and the time and place of all settings, hearings,
trials or other proceedings relating thereto. The Beneficiary may participate in
any such proceedings, at Trustor's expense, and Trustor shall from time to time
deliver to the Beneficiary all instruments required by it to permit such
participation. Trustor shall, at its expense, diligently prosecute any such
proceedings and shall consult with the Beneficiary, its attorneys and experts,
and cooperate with them in the carrying on or defense of any such
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proceedings. All proceeds of condemnation awards or proceeds of sale in lieu of
condemnation with respect to the Property and all judgments, decrees and awards
for injury or damage to the Property shall be applied as set forth in Section
6.10 of the Loan Agreement. To the extent permitted by applicable law, Trustor
hereby specifically, unconditionally and irrevocably waives all rights of a
property owner granted under applicable law which provide for allocation of
condemnation proceeds between a property owner and a lienholder.
ARTICLE 8.
REMEDIES OF BENEFICIARY
Section 8.1 Event of Default. Subject to any applicable cure period
provided for in the Loan Agreement or in this Deed of Trust, or if no cure
period has been specified, then thirty (30) days after Beneficiary has provided
written notice to Trustor with respect thereto (any such cure periods to run
concurrently and not consecutively), any of the following shall be deemed to be
an "Event of Default" hereunder:
8.1.1 The occurrence of one or more "Events of Default" (as defined
in the Loan Agreement) shall constitute an Event of Default under this Deed of
Trust.
8.1.2 Failure of Trustor to perform any of the terms, covenants and
conditions in this Deed of Trust or any of the other Loan Documents.
8.1.3 Any statement, representation or warranty given by Trustor to
Trustee or Beneficiary in any of the Loan Documents, in connection with the Loan
Agreement or in any other document provided by Trustor, including this Deed of
Trust, is found to be materially false or misleading.
8.1.4 A material default under, or the institution of foreclosure or
other proceedings to enforce, any Lien or Permitted Lien of any kind upon the
Property or any portion thereof.
8.1.5 Any transfer of the Property or any portion thereof in
violation of Section 6.2 hereof.
Section 8.2 Remedies. At any time after an Event of Default, subject to
any restrictions contained in any Intercreditor Agreement, Beneficiary may:
8.2.1 In person, by agent, or by a receiver, and without regard to
the adequacy of security, the solvency of Trustor or any other matter, (i) enter
upon and take possession of the Property, or any part thereof, in its own name
or in the name of one or more designees, (ii) inspect the Property for the
purpose of determining the existence, location, nature and magnitude of any past
or present release of Hazardous Materials into, onto, beneath or from the
Property, (iii) negotiate with Governmental Authorities with respect to
compliance with Environmental Requirements and remedial measures, (iv) take any
action necessary to ensure compliance with Environmental Requirements,
including, but not limited to, spending Rents in
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connection with any cleanup, remediation or other response action with respect
to Hazardous Materials or (v) sue for or otherwise collect the Rents, issues and
profits therefor and apply the same, less costs and expenses of operation and
collection, including reasonable attorneys' fees actually incurred, to the
Secured Obligations, all in such order as Beneficiary may determine. The
entering upon and taking possession of said Property, the collection of such
Rents, issues and profits and the application thereof as aforesaid shall not
cure or waive any default or notice of default hereunder or invalidate any act
done pursuant to such notice, or deprive Beneficiary of the benefits of any
indemnity set forth herein.
8.2.2 Commence an action or request that Trustee initiate
proceedings to foreclose this Deed of Trust in the manner provided by Applicable
Laws for the foreclosure of mortgages or deeds of trust of real property.
8.2.3 Seek a judgment that Trustor has breached its covenants,
representations and/or warranties set forth in this Deed of Trust, or any other
Loan Document regarding Environmental Requirements and/or Hazardous Materials,
by commencing, maintaining and concluding, and enforcing a judgment arising from
an action for breach of contract, without regard to whether Beneficiary has
commenced foreclosure of this Deed of Trust, and to seek injunctive or other
appropriate equitable relief and or the recovery of any and all Environmental
Damages, it being conclusively presumed between Trustor and Beneficiary that any
reasonable costs advanced or expenses actually incurred by Beneficiary relating
to the cleanup, remediation or other response action with respect to the
Property were made or incurred by Beneficiary in good faith.
8.2.4 Deliver to Trustee a written declaration of default and demand
for sale, and a written notice of default and election to cause the Property to
be sold, which notice Trustee or Beneficiary shall cause to be duly filed for
record.
8.2.5 If the Secured Obligation becomes or are declared immediately
due and payable pursuant to Section 9 of the Loan Agreement and Trustor fails to
make such payments as and when due, then Beneficiary may waive its Liens against
any parcel of the Property or all or any portion of the Fixtures or Personalty
attached to the Property, to the extent such property is determined to be
environmentally impaired, and to exercise any and all rights of an unsecured
creditor against Trustor and all of Trustor's assets for the recovery of any
deficiency, including, but not limited to, seeking an attachment order. TRUSTOR
ACKNOWLEDGES AND AGREES THAT NOTWITHSTANDING ANYTHING TO THE CONTRARY, EXPRESS
OR IMPLIED, IN THIS DEED OF TRUST OR IN ANY OF THE OTHER LOAN DOCUMENTS
(INCLUDING, WITHOUT LIMITATION, ANY NONRECOURSE OR EXCULPATORY LANGUAGE, IF
ANY), TRUSTOR SHALL BE PERSONALLY LIABLE FOR ANY RECOVERY DESCRIBED IN THIS
PARAGRAPH 8.2.5 AND SUCH LIABILITY SHALL NOT BE LIMITED TO THE AMOUNT REFERENCED
IN THE LOAN AGREEMENT.
8.2.6 With respect to any Personalty, proceed as to both the real
and personal property in accordance with Beneficiary's rights and remedies in
respect of the
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Property, or proceed to sell said Personalty separately and without regard to
the Property, in accordance with Beneficiary's rights and remedies, and/or
8.2.7 Pursue any and all other remedies it may have, at law or in
equity, or under any other document or instrument, except as otherwise provided
in the Loan Agreement.
Section 8.3 Power of Sale. Should Beneficiary elect to foreclose by
exercise of the power of sale herein contained, Beneficiary shall notify Trustee
and shall deposit with Trustee this Deed of Trust and such receipts and evidence
of expenditures made and secured hereby as Trustee may require.
8.3.1 Upon receipt of such notice from Beneficiary, Trustee shall
cause to be recorded, published and delivered to Trustor notices of default and
sale to be given in accordance with the provisions of Applicable Laws. Trustee
shall, without demand on Trustor, after lapse of such time as may then be
required by Applicable Laws and after recordation of such notice of default and
after notice of sale having been given as required by law, sell the Trust Estate
at the time and place of sale fixed by it in said notice of sale, either as a
whole, or in separate lots or parcels or items as Trustee shall deem expedient
or as Beneficiary may request, and in such order as it may determine, at public
auction to the highest bidder for cash in lawful money of the United States
payable at the time of sale. After the expiration of the required redemption
periods, Trustee shall deliver to such purchaser or purchasers thereof its good
and sufficient deed or deeds conveying the property so sold, but without any
covenant or warranty, express or implied. The recitals in such deed of any
matters or facts shall be conclusive proof of the truthfulness thereof. Any
Person, including, without limitation, Trustor or Beneficiary, may purchase at
such sale and Trustor hereby covenants to warrant and defend the title of such
purchaser or purchasers against the claims of all Persons claiming by, through
or under Trustor. If allowed by law, Beneficiary, if it is the purchaser, may
apply the amount of the Secured Obligations then due and payable toward payment
of the purchase price. Trustor hereby waives its right, if any, to require that
the Property be sold as separate tracts or units in the event of foreclosure.
8.3.2 Trustee, upon such sale and after expiration of the applicable
redemption periods, to the extent permitted by Applicable Laws, shall make
(without any covenant or warranty, express or implied), execute and, after due
payment made, deliver to purchaser or purchasers, or his or their heirs or
assigns, a deed or deeds, or other record or records of interest, as the case
may be, in and to the Property so sold that shall convey to the purchaser all
the title and interest of Trustor in the Property (or the portion thereof sold),
and after deducting all costs, fees and expenses of Trustee and of this Deed of
Trust, including costs of evidence of title in connection with sale, shall apply
the proceeds of sale to payment of (i) all sums expended under the terms hereof,
not then repaid, with accrued interest at the Default Rate and (ii) all other
sums then secured hereby and the remainder, if any, to the Person or Persons
legally entitled thereto.
8.3.3 Trustee may postpone sale of all or any portion of the Trust
Estate by public announcement at such time and place of sale, or as otherwise
permitted by Applicable
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Laws, and from time to time thereafter may postpone such sale by public
announcement at the time fixed by the preceding postponement or subsequently
noticed sale, and without further notice make such sale at the time fixed by the
last postponement, or may, in its discretion, give a new notice of sale.
Beneficiary may rescind any notice of default at any time before Trustee's sale
by executing a notice of rescission or withdrawal of sale and causing the
recording of same. The recordation of such notice of rescission or withdrawal of
sale shall constitute a cancellation of any prior declaration of default and
demand for sale. The exercise by Beneficiary of the right of rescission shall
not constitute a waiver of any default then existing or subsequently occurring,
or impair the right of Beneficiary to execute other declarations of default and
demand for sale, or notices of default and of election to cause the Property to
be sold nor otherwise affect the Loan Documents or this Deed of Trust, or any of
the rights, obligations or remedies of Beneficiary or Trustee hereunder.
Section 8.4 Proof of Default. In the event of a sale of the Property, or
any part thereof, and the execution of a deed or deeds therefor, the recital
therein of default, and of recording notice of breach and election of sale, and
of the elapsing of the required time (if any) between the foregoing recording
and the following notice, and of the giving of notice of sale, and of a demand
by Beneficiary, or its successors or assigns, that such sale should be made, to
the extent permitted by Applicable Laws, shall be conclusive proof of such
default, recording, election, elapsing of time, and of the due giving of such
notice, and that the sale was regularly and validly made on due and proper
demand by Beneficiary, its successors or assigns, and any such deed or deeds
with such recitals therein shall be effectual and conclusive against Trustor,
its successors and assigns, and all other Persons, and the receipt for the
purchase money recited or contained in any deed or Certificate of Purchase
executed to the purchaser as aforesaid shall be sufficient discharge to such
purchaser from all obligations to see to the proper application of the purchase
money.
Section 8.5 Protection of Security. If an Event of Default shall have
occurred and be continuing, then upon at least fifteen (15) days prior written
notice to Trustor and without releasing Trustor from any obligations or defaults
hereunder, Beneficiary or Trustee shall have the right, but not the obligation,
to (i) make payment or otherwise perform such obligations of Trustor upon which
such Event of Default is based in such manner and to such extent as either may
reasonably deem necessary to protect the security hereof, Beneficiary and
Trustee being authorized to enter upon the Property for such purpose, (ii)
appear in and defend any action or proceeding purporting to affect, in any
manner whatsoever, the Secured Obligations, the security hereof or the rights or
powers of Beneficiary or Trustee, (iii) pay, purchase or compromise any
encumbrance, charge or lien (other than Permitted Liens), (iv) advance any and
all costs and expenses reasonably necessary to cure or pay Environmental Damages
or otherwise to comply with Environmental Requirements, and (v) in exercising
any such powers, pay necessary expenses, employ counsel and pay attorneys' fees.
Trustor hereby agrees to repay within thirty (30) days after receipt of written
demand all reasonable sums actually expended by Trustee or Beneficiary pursuant
to this Section 8.5 with interest at the Default Rate from the date of
expenditure by Beneficiary, and such sums, with interest, shall be secured
hereby.
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Section 8.6 Receiver. If an Event of Default shall have occurred and be
continuing, Beneficiary, as a matter of strict right and without regard to the
then value of the Property, shall have the right to apply, ex parte or
otherwise, to any court having jurisdiction to appoint a Receiver or Receivers
of the Property. Any such Receiver or Receivers shall have all the powers and
duties of receivers under Applicable Laws in like or similar cases and all the
powers and duties of Beneficiary in case of entry as provided in this Deed of
Trust, and shall continue as such and exercise all such powers until the date of
confirmation of sale, unless such receivership is sooner terminated.
Section 8.7 Curing of Defaults.
8.7.1 If Trustor shall at any time fail to perform or comply with
any of the terms, covenants and conditions required on Trustor's part to be
performed and complied with under this Deed of Trust or any other Loan Document
relating to the Trust Estate (after the lapse of any cure period provided
therein), then Beneficiary shall have the right, but not the obligation, without
waiving or releasing any of the Secured Obligations, to:
8.7.1.1 make any payments thereunder payable by Trustor and take
out, pay for and maintain any of the insurance policies provided for therein;
and/or
8.7.1.2 after the expiration of any applicable grace period and
subject to Trustor's rights to contest certain obligations specifically granted
hereby, perform any such other acts thereunder on the part of Trustor to be
performed and enter upon the Property and incur reasonable attorneys' fees and
expenses for such purpose.
8.7.2 The making by Beneficiary of such payment out of Beneficiary's
own funds shall not, however, be deemed to cure such default by Trustor, and the
same shall not be so cured unless and until Trustor shall have reimbursed
Beneficiary within the applicable cure period for such payment including
interest at the Default Rate from the date of such expenditure. All sums so paid
and all reasonable costs and expenses actually incurred and paid by Beneficiary
in connection with the performance of any such act, together with interest on
unpaid balances thereof at the Default Rate from the respective dates of
Beneficiary's making of each such payment, shall be secured by the lien of this
Deed of Trust, prior to any right, title or interest in or claim upon the
Property attaching or accruing subsequent to the lien of this Deed of Trust, and
shall be payable by Trustor to Beneficiary within thirty (30) days after receipt
of written demand.
Section 8.8 Remedies Cumulative. All remedies of Beneficiary provided
for herein are cumulative and shall be in addition to any and all other rights
and remedies provided in the other Loan Documents or provided by Applicable Law,
including any banker's lien and right of offset. The exercise of any right or
remedy by Beneficiary hereunder shall not in any way constitute a cure or waiver
of default hereunder or under the Loan Documents, or invalidate any act done
pursuant to any notice of default, or prejudice Beneficiary in the exercise of
any of its rights hereunder or under the Loan Documents unless, in the exercise
of said rights, all Secured Obligations are fully discharged.
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ARTICLE 9.
SECURITY AGREEMENT AND FIXTURE FILING
Section 9.1 Grant of Security Interest. To secure the payment and
performance of the Secured Obligations as and when due, Trustor (as debtor)
hereby grants, conveys, pledges, assigns and transfers to Beneficiary (as
secured party), security interests (collectively, the "Security Interest") in
all right, title, claim, estate and interest in and to all Personalty and
Fixtures, whether now owned and existing or hereafter acquired or arising, and
wherever located, including, without limitation, the following but expressly
excluding in each case any Excluded Assets.
9.1.1 Any and all "chattel paper" as such term is defined in Section
9.105(b) of the UCC (the "Chattel Paper");
9.1.2 Any and all "accounts" as such term is defined in Section
9.106 of the UCC (the "Accounts");
9.1.3 Any and all rights to payment for goods sold or leased or
services rendered, whether or not earned by performance and all rights in
respect of the account debtor, including without limitation all such rights
constituting or evidenced by any Account, Chattel Paper or Instrument, together
with (a) any collateral assigned, hypothecated or held to secure any of the
foregoing and the rights under any security agreement granting a security
interest in such collateral, (b) all goods, the sale of which gave rise to any
of the foregoing, including, without limitation, all rights in any returned or
repossessed goods and unpaid seller's rights, (c) all guarantees, endorsements
and indemnifications on, or of, any of the foregoing and (d) all powers of
attorney for the execution of any evidence of indebtedness or security or other
writing in connection therewith. Any and all negotiable instruments, promissory
notes, acceptances, drafts, checks, certificates or deposit and other writings
that evidence a right to the payment of money by any other Person
("Receivables");
9.1.4 Any and all (a) original copies of all documents, instruments
or other writings evidencing the Receivables, (b) books, correspondence, credit
or other files, records, ledger sheets or cards, invoices, and other papers
relating to Receivables, including without limitation all tapes, cards, computer
tapes, computer discs, computer runs, record keeping systems and other papers
and documents relating to the Receivables, whether in the possession or under
the control of any Trustor or any computer bureau or agent from time to time
acting for any Trustor or otherwise and (c) credit information, reports and
memoranda relating thereto (the items in clauses (a) - (c) of this Section
9.1.4) being hereinafter referred to as "Receivables Records").
9.1.5 Any and all rights to payment:
9.1.5.1 to the extent not included in Accounts, Receivables or
Chattel Paper, receivable from any credit card company (such as Visa,
MasterCard, American
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Express and Diner's Club), whether arising out of or relating to the sale of
lodging, goods and services by Trustor or otherwise; and
9.1.5.2 of money not listed above and any and all rights, titles,
interests, securities, Liens and guaranties evidencing, securing, guaranteeing
payment of or in any way relating to any Receivables.
9.1.6 "Inventory" as such term is defined in Section 9109(4) of the UCC,
including without limitation and in any event, all goods (whether such goods are
in the possession of Trustor or a lessee, bailee or other Person for sale,
lease, storage, transit, processing, use or otherwise and whether consisting or
whole goods, spare parts, components, supplies, materials or consigned or
returned or repossessed goods) which are held for sale or lease or are to be
furnished (or which have been furnished) under any contract of service or which
are raw materials or work in progress or materials used or consumed in any
Trustor's business ("Inventory").
9.1.7 Any and all "equipment" as such term is defined in Section 9109(2)
of the UCC ("Equipment"), including, without limitation:
9.1.7.1 machinery, machine tools, manufacturing equipment, data
processing equipment, computers, office equipment, furniture, appliances,
rolling stock, motors, pumps, controls, tools, parts, works of art, furnishings
and trade fixtures, all athletic equipment and supplies and all molds, dies,
drawings, blueprints, reports, catalogs and computers programs related to any of
the above;
9.1.7.2 ships, boats, barges and vessels (whether under construction
or completed) and any and all masts, bowsprits, boilers, engines, sails,
fittings, anchors, cables, chains, riggings, tackle, apparel, capstans, outfits,
gears, appliances, fittings and spare and replacement parts and other
appurtenances, accessories and additions, improvements and replacements thereto,
whether on board or not on board, in or to any ship, boat, barge or vessel;
9.1.7.3 slot machines, electronic gaming devices and related
equipment, crap tables, blackjack tables, roulette tables, baccarat tables, keno
apparatus, cards, dice, gaming chips and plaques, tokens, chip racks, dealing
shoes, dice cups, dice sticks, layouts, paddles, roulette balls and other
supplies and items used in connection with gaming operations; and
9.1.7.4 stones, wood, steel and other materials used or to be used
in the building, construction, repair, renovation, refurbishment or otherwise
with respect to improvements or ships, boats, barges or vessels.
9.1.8 Any and all "fixtures" as such term is defined in Section 9313 of
the UCC, including without limitation, machinery, equipment or appliances for
generating, storing or distributing air, water, heat, electricity, light, fuel
or refrigeration, for ventilating or sanitary
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purposes, elevators, safes, laundry, kitchen and athletic equipment, trade
fixtures, and telephone, television and other communications equipment (the
"Fixtures").
9.1.9 Any and all "documents" as such term is defined in Section
9105(f) of the UCC (the "Documents").
9.1.10 Any and all "general intangibles" as such term is defined in
Section 9106 of the UCC (together with any property listed under Section 9.14
relating thereto, the "General Intangibles"), including, without limitation and
in any event, rights to the following payment of money, Trademark Collateral (as
defined in the Trademark Security Agreement, Copyright Collateral (as defined in
the Copyright Security Agreement) patents, contracts, licenses and franchises
(except, in the case of licenses and franchises if, and for so long as, the
agreement in respect of such license or franchise prohibits by its terms any
assignment or grant of a security interest therein without the consent of the
other party thereto, unless the violation of such prohibition would not give any
other party to such franchise or license the right to terminate its obligations
thereunder), limited and general partnership interests and joint venture
interests, federal income tax refunds, trade names, distributions on
certificated securities (as defined in Section 8102(1)(a) of the UCC, and
uncertificated securities (as defined in Section 8102(1)(b) of the UCC),
computer programs and other computer software, inventions, designs, trade
secrets, goodwill, proprietary rights, customer lists, player tracking systems,
supplier contracts, sale orders, correspondence, advertising materials, payments
due in connection with any requisition, confiscation, condemnation, seizure or
forfeiture of any property, reversionary interests in pension and profit-sharing
plans and reversionary, beneficial and residual interests in trusts, credits
with and other claims against any Person, together with any collateral for any
of the foregoing and the rights under any security agreement granting a security
interest in such collateral.
9.1.11 The Designated Account established and maintained pursuant to
Section 2.9 of the Loan Agreement.
9.1.12 Any and all (i) shares of capital stock of any Subsidiary,
from time to time owned by Trustor or options or rights to acquire any such
shares or interests now or hereafter owned by Trustor ("Pledged Securities"),
(ii) Distributions (as defined below) on Pledged Securities (as constituted
immediately prior to such Distribution) constituting securities (whether debt or
equity securities or otherwise) , (iii) other or additional stock, notes,
securities or property paid or distributed in respect of Pledged Securities (as
constituted immediately prior to such payment or distribution) by way of
stock-split, spin-off, split-up, reclassification, combination of shares or
similar rearrangement and (iv) other or additional stock, notes, securities or
property (including cash) that may be paid in respect of Pledged Securities (as
constituted immediately prior to such payment) by reason of any consolidation,
merger, exchange of stock, conveyance of assets, liquidation, bankruptcy or
similar corporate reorganization or other disposition of Pledged Securities.
9.1.13 Any and all dividends, distributions, payments of interest
and principal and other amounts (whether consisting of cash, securities,
personalty or other property)
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from time to time received, receivable or otherwise distributed in respect of or
in exchange or substitution for any of the Pledged Securities ("Distributions").
9.1.14 Any and all "instruments" as such term is defined in Section
9105(1)(i) of the UCC ("Instruments").
9.1.15 [Intentionally Omitted].
9.1.16 Any and all contracts between Trustor and one or more
additional parties ("Contracts").
9.1.17 Any and all interest rate or currency protection or hedging
arrangements, including, without limitation, caps, collars, floors, forwards and
any other similar or dissimilar interest rate or currency exchange agreements or
other interest rate or currency hedging arrangements ("Hedging Agreements").
9.1.18 Any and all motor vehicles, tractors, trailers and other like
property, if title thereto is governed by a certificate of title ownership
("Motor Vehicles").
9.1.19 Any and all books, records, computer software, computer
printouts, customer lists, blueprints, technical specifications, manuals, and
similar items which relate to any Personalty or Fixtures other than such items
obtained under license or franchise agreements that prohibit assignment or
disclosure of such items ("Books and Records").
9.1.20 Any and all accessions, appurtenances, components, repairs,
repair parts, spare parts, renewals, improvements, replacements, substitutions
and additions to, of or with respect to any of the foregoing.
9.1.21 Any and all rights, remedies, powers and privileges of
Trustor with respect to any of the foregoing, and
9.1.22 Any and all proceeds and products of any of the foregoing,
whether now held and existing or hereafter acquired or arising, including all
rents, issues, income and profits of or from any of the foregoing (collectively,
the "Proceeds"). "Proceeds" shall include (i) whatever is now or hereafter
received by Trustor upon the sale, exchange, collection, other disposition or
operations of any item of Personalty, whether such proceeds constitute accounts,
general intangibles, instruments, securities, documents, letters of credit,
chattel paper, deposit accounts, money, goods or other personal property, (ii)
any amounts now or hereafter payable under any insurance policy by reason of any
loss of or damage to any Personalty or the business of Trustor, (iii) all rights
to payment and payments for hotel room occupancy (and related reservations) and
the sale of services or products in connection therewith, (iv) the right to
further transfer, including by pledge, mortgage, license, assignment or sale,
any of the foregoing, and (v) any items that are now or hereafter acquired by
Trustor with any of the foregoing; provided, however, that "Proceeds" shall not
include Excluded Assets.
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Section 9.2 Remedies, etc. This Deed constitutes a security agreement
with respect to the Personalty, in which Beneficiary is granted a security
interest hereunder, and Beneficiary shall have all of the rights and remedies of
a secured party under the UCC and the other Loan Documents as well as all other
rights and remedies available at law or in equity. Upon the occurrence and
during the continuance of any Event of Default hereunder. Beneficiary shall have
(i) the right to cause any of the Personalty which is personal property to be
sold at any one or more public or private sales as permitted by Applicable Laws
and apply the proceed thereof to the Secured Obligations, (ii) the right to
collect and apply to the Secured Obligations and Personalty which is cash, Notes
Receivable, other rights to payment or Chattel Paper, and (iii) all other rights
and remedies, whether at law, in equity, or by statute as are available to
secured creditors under Applicable Laws. Any such disposition may be conducted
by an employee or agent of Beneficiary or Trustee. To the maximum extent
permitted by Applicable Law, any Person, including either or both of Trustor and
Beneficiary, shall be eligible to purchase any part or all of such Personalty at
any such disposition. Beneficiary shall give Trustor at least 10 days' prior
written notice of the time and place of any public sale or other disposition of
such Personalty or of the time of or after which any private sale or any other
intended disposition is to be made, and if such notice is sent to Trustor in the
manner provided for the mailing of notices herein, it is hereby deemed such
notice shall be and is commercially reasonable notice to Trustor.
Section 9.3 Expenses. Reasonable expenses actually incurred of retaking,
holding, preparing for sale, selling or the like shall be borne by Trustor and
shall include Beneficiary's and Trustee's reasonable attorneys' fees, charges
and disbursements (including, without limitation, any and all costs of appeal).
Section 9.4 Fixture Filing.
9.4.1 This Deed of Trust shall be effective as a Financing Statement
filed as a fixture filing from the date of the recording hereof in accordance
with the Uniform Commercial Code. In connection therewith, the addresses of
Trustor as debtor ("Debtor") and Beneficiary as secured party ("Secured Party")
are set forth on Schedule 12.8. The address of Beneficiary, as the Secured
Party, is also the address from which information concerning the security
interest may be obtained by any interested party.
9.4.1.1 The property subject to this fixture filing is described in
Sections 9.1.7 and 9.1.8.
9.4.1.2 Portions of the property subject to this fixture filing as
identified in Section 9.4.1.1. above are or are to become fixtures related to
the real estate described on Exhibit A to this Deed of Trust.
9.4.1.3 Secured party is Foothill Capital Corporation, a California
corporation.
9.4.1.4 Debtor is 101 Main Street Limited Liability Company, a
Colorado limited liability company.
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9.4.1.5 The record owner or lessee of the Property is 101 Main
Street Limited Liability Company, a Colorado limited liability company.
9.4.2 In the event Trustor shall fail, beyond any applicable notice
and grace periods, to make any payment or perform any covenant related to any
security interest in favor of any Person other than Beneficiary, Beneficiary
may, at its option, within 15 days after notice to Trustor or if Beneficiary's
immediate action is reasonably necessary to protect the lien hereof or its
security for the Secured Obligations, at any time without prior notice to
Trustor, pay the amount secured by such security interest, and the amount so
paid shall be (i) secured by this Deed of Trust and shall be a lien on the
Property enjoying the same priorities vis-a-vis the estates and interests
encumbered hereby as this Deed of Trust, (ii) added to the amount of the Secured
Obligations, and (iii) payable within 30 days after receipt of written demand
with interest at the Default Rate from the time of such payment, or Beneficiary
shall have the privilege of acquiring by assignment from the holder of such
security interest any and all contract rights, accounts receivable, chattel
paper, negotiable or non-negotiable instruments and other evidence of Trustor's
indebtedness secured by such fixtures, and, upon acquiring such interest by
assignment, shall have the right to enforce the security interest as assignee
thereof, in accordance with the terms and provisions of the UCC, as amended or
supplemented, and in accordance with other Applicable Laws.
ARTICLE 10.
ASSIGNMENT OF RENTS
Section 10.1 Assignment of Rents. Subject to Section 10.2, and to
Applicable Gaming Laws, Trustor hereby absolutely and unconditionally assigns
and transfer to Beneficiary all of the Rents, whether now due, past due or to
become due, and hereby gives to and confers upon Beneficiary the right, power
and authority to collect such Rents and apply the same to the Secured
Obligations secured hereby. Trustor irrevocably appoints Beneficiary its true
and lawful attorney, at the option of Beneficiary at any time while an Event of
Default exists, to demand, receive and enforce payment, to give receipts,
releases and satisfactions, and to sue, either in the name of Trustor or in the
name of Beneficiary, for all such Rents and apply the same to the Secured
Obligations secured hereby. It is understood and agreed that neither the
foregoing assignment of Rents to Beneficiary nor the exercise by Beneficiary or
any of its rights or remedies under this Deed of Trust shall be deemed to make
Beneficiary a "mortgagee-in-possession" or otherwise responsible or liable in
any manner with respect to the Property or the use, occupancy, enjoyment or
operation of all or any portion thereof, unless and until Beneficiary, in person
or by its own agent, assumes actual possession thereof, unless and until
Beneficiary, in person or by its own agent, assumes actual possession thereof,
nor shall appointment of a Receiver for the Property by any court at the request
of Beneficiary or by agreement with Trustor or the entering into possession of
the Property or any part thereof such Receiver be deemed to make Beneficiary a
"mortgagee-in-possession" or otherwise responsible or liable in any manner with
respect to the Property or the use, occupancy, enjoyment or operation of all or
any portion thereof.
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Section 10.2 Collection of Rents. Notwithstanding anything to the
contrary contained herein, so long as no Event of Default with respect to the
Notes shall occur and be continuing, Trustor shall have a license, revocable
upon the occurrence and during the continuance of an Event of Default, to
collect all Rents from the Property and to retain, use and enjoy the same and to
otherwise exercise all rights with respect thereto, subject to the terms hereof.
Upon the occurrence and during the continuance of an event of Default, the
license hereinabove granted to Trustor shall, without the requirement of the
giving of notice or taking of any action by any party, be revoked, and
beneficiary shall have the complete right and authority to exercise and enforce
any and all of its rights and remedies provided herein or by Applicable Laws.
ARTICLE 11.
ENVIRONMENTAL MATTERS
Section 11.1 Representations and Warranties. In the ordinary course of
business, Trustor conducts a periodic review of the effect of Environmental Laws
on its business, operations and properties in the course of which it identifies
and evaluates associated costs and liabilities (including, without limitation,
any capital or operating expenditures required for cleanup, closure of
properties or compliance with Environmental Laws or any Permit, any related
constraints on operating activities and any potential liabilities to third
parties). On the basis of such review, Trustor has reasonably concluded that
such associated costs and liabilities could not reasonably be expected, singly
or in the aggregate, to have a material adverse effect on its business,
operations or properties. Trustor further hereby represents and warrants as of
the date hereof as follows.
11.1.1 Trustor (i) has obtained all Permits that are required with
respect to the operation of its business, property and assets under the
Environmental Laws and is in compliance with all terms and conditions of such
required Permits, and (ii) is in compliance with all Environmental Laws
(including, without limitation, compliance with standards, schedules and
timetables therein).
11.1.2 No portion of the Trust Estate is listed or proposed for
listing on the National Priorities List or the Comprehensive Environmental
Response. Compensation, and Liability Information System, both promulgated under
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA"), or on any other state or local list established
pursuant to any Environmental Law, and Trustor has not received any notification
of potential or actual liability or request for information under CERCLA or any
comparable state or local law.
11.1.3 No underground storage tank or other underground storage
receptacle, or related piping, is located on the Land in violation of any
Environmental Law.
11.1.4 There have been no releases (i.e. any past or present
releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, disposing or dumping, on-site or to the knowledge
of the Trustor after due inquiry, off-site) of Hazardous Materials by trustor or
any predecessor in interest or any person or entity
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whose liability for any release of Hazardous Materials, Trustor has retained or
assumed either contractually or by operation of law at, on, under, from or into
any facility or real property owned, operated, leased, managed or controlled by
any such person.
11.1.5 Neither Trustor nor any person or entity whose liability
Trustor has retained or assumed either contractually or by operation of law has
any liability, absolute or contingent, under any Environmental Law, and there is
no proceeding pending or intended against any of them under any Environmental
Law, and
11.1.6 There are no events, activities, practices, incidents,
actions, conditions, circumstances or plans that may interfere with or prevent
compliance by Trustor with any Environmental Law, or that may give rise to any
liability under any Environmental Laws.
11.1.7 The above representations and warranties contained in this
Section 11.1 shall survive the termination, release and/or reconveyance of this
Deed of Trust and the discharge of Trustor's other obligations hereunder.
Section 11.2 Environmental Covenants. Trustor shall at all times comply
with the following requirements:
11.2.1 Trustor shall not cause or permit any material amount of
Hazardous Material to be brought upon, treated, kept, stored, disposed of,
discharged, released, produced, manufactured, generated, refined or used upon,
within or beneath the Property or any portion thereof by Trustor, its agents,
employees, contractors, or invitees, or any other Person, except in compliance
with all Environmental Requirements and only in the course of such Person's
legitimate business operations at the Property (which shall not include any
business primarily for treatment, storage, disposal, discharge, release,
production, manufacture, generation, refinement or use of Hazardous Materials).
11.2.2 Trustor shall not cause or permit the existence of the
commission by Trustor, its agents, employees, contractors or invitees, or by any
other Person of a material violation of any environmental Requirements upon,
within or beneath the Property or any portion thereof.
11.2.3 Trustor shall not dispose of, discharge or release or cause
or permit the disposal, discharge or release of any material amount of Hazardous
Materials from the Property into any Public Waters in material violation of any
Environmental Requirements.
11.2.4 Trustor shall not create or suffer to exist with respect to
the Property or permit any of its agents to create or suffer to exist any
environmental lien, security interest or other charge or encumbrance of any kind
(other than a Permitted Lien), including, without limitation, any lien imposed
pursuant to Section 107(f) of the Superfund Amendments and Reauthorization Act
of 1986 (42 U.S. C. Section 9607(1)) or any similar state statute.
11.2.5 Trustor shall, at its sole cost and expense, promptly take
any and all actions required by any federal, state or local governmental agency
or political subdivision or
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reasonably necessary (as hereinafter provided) to mitigate Environmental
Damages, which requirements or necessity arise from the presence upon about or
beneath the Property of a material amount of Hazardous Material or a material
violation of Environmental Requirements or the disposal, discharge or release of
a material amount of Hazardous Materials from the Property into the Public
Waters. Such actions shall include, but not be limited to, the investigation of
the environmental condition of the Property, the preparation of any feasibility
studies, reports or remedial plans, and the performance of any cleanup,
remediation, containment, operation, maintenance monitoring or restoration work,
whether on or off of the Property (provided that Trustor shall be obligated to
take actions off of the Property only if Trustor shall have the legal right to
do so and shall be expressly required to do so by Environmental Requirements).
Trustor shall take all actions as are reasonably necessary to restore the
Property or the Public Waters to substantially the condition existing prior to
the introduction of Hazardous Material by Trustor upon, about or beneath the
Property, notwithstanding any lesser standard of remediation allowable under
Applicable Laws or governmental policies, but recognizing the economic
impracticability of remediating to a level where Hazardous Materials are no
longer detectable. Trustor shall proceed continuously and diligently with such
investigatory and remedial actions, provided that in all cases such actions
shall be in accordance with Applicable Laws. Any such actions shall be performed
in a good, safe and workmanlike manner and shall minimize any impact on the
business conducted at the Property. Trustor shall pay all costs in connection
with such investigatory and remedial activities, including, but not limited to
all power and utility costs, and any and all taxes or fees that may be
applicable to such activities. Trustor shall promptly provide to Beneficiary
copies of testing results and reports that are generated in connection with the
above activities. Promptly upon completion of such investigation and
remediation, Trustor shall permanently seal or cap all monitoring wells and test
holes to industrial standards in compliance with Applicable Laws and
regulations, remove all associated equipment, and restore the Property to the
extent reasonably possible, which shall include, without limitation, the repair
of any surface damage, including paving caused by such investigation or
remediation hereunder.
11.2.6 If Trustor shall become aware of or receive notice or other
communication concerning any actual, alleged, suspected or threatened violation
of Environmental Requirements, or liability of Trustor for Environmental Damages
in connection with the Property or past or present activities of any Person
thereon, including, but not limited to, notice or other communication concerning
any actual or threatened investigation, inquiry, lawsuit, claim, citation,
directive, summons, proceedings, complaint, notice, order, writ or injunction,
relating to same, then Trustor shall deliver to Beneficiary, within 15 days of
the receipt of such notice or communication by Trustor, a written description of
said violation, liability, or actual or threatened event or condition, together
with copies of any documents evidencing same. Receipt of such notice shall not
be deemed to create any obligation on the part of Beneficiary to defend or
otherwise respond to any such notification.
11.2.7 Trustor agrees to indemnify, reimburse, defend, exonerate,
pay and hold harmless Beneficiary, its successors and assigns, the Holders, and
their respective directors, officers, shareholders, employees, agents,
contractors, subcontractors, experts, licensees, affiliates, lessees, trustees,
and invitees (collectively, the "Indemnitees") from and against any
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and all Environmental Damages arising from the discharge, disposal or release of
Hazardous Materials from the Property into the Public Waters or from the
presence of Hazardous Materials upon, about or beneath the Property or migrating
to or from the Property, or arising in any manner whatsoever out of the
violation of any Environmental Requirements pertaining to the Property and the
activities thereon, whether foreseeable or unforeseeable, and regardless of when
such Environmental Damages occurred, except to the extent directly caused by
conduct (other than inaction) on the part of such Indemnitee with respect to the
Property or any such Indemnitee's grossly negligent or willful inaction or other
conduct. The indemnity obligations of Trustor contained in this Section 11.2.7
shall survive the termination , release and/or reconveyance of this Deed of
Trust and the discharge of Trustor's other obligations hereunder.
11.2.8 Except for the last sentence of Section 4.5, and except for
Sections 4.6, 4.7 and 8.5, the other covenants of this Deed of Trust shall not
apply to the subject matter of this Article 11.
ARTICLE 12.
MISCELLANEOUS
Section 12.1 Beneficiary's Expenses, Including Attorney's Fees.
Regardless of the occurrence of a Default or Event of Default, Trustor agrees to
pay to Beneficiary any and all advances, charges, costs and expenses, including
the reasonable fees and expenses of counsel and any experts or agents, that
Beneficiary may reasonably incur in connection with (i) the administration of
this Deed of Trust, including any amendment thereto or any workout or
restructuring, (ii) the creation, perfection or continuation of the Lien of this
Deed of Trust or protection of its priority or the Trust Estate, including the
discharging of any prior or junior Lien or adverse claim against the Trust
Estate or any part thereof that is not permitted hereby or by the Loan
Agreement, (iii) the custody, preservation or sale of, collection from, or other
realization upon, any of the Trust Estate, (iv) the exercise or enforcement of
any of the rights, powers or remedies of Beneficiary under this Deed of Trust or
under Applicable Laws (including attorneys' fees and expenses incurred by
Beneficiary in connection with the operation, maintenance or foreclosure of the
Lien of this Deed of Trust) or any bankruptcy proceeding or (v) the failure by
Trustor to perform or observe any of the provisions hereof. All such amounts and
all other amounts payable hereunder shall be payable on demand, together with
interest at the Default Rate.
Section 12.2 Indemnity. Trustor hereby agrees to indemnify and hold
harmless the Indemnitees against (A) any and all transfer taxes, documentary
taxes, assessments or charges made by an Governmental Authority by reason of the
execution and delivery of this Deed of Trust and the other Loan Documents, and
(B) any and all claims, actions, liabilities, costs and expenses of any kind or
nature whatsoever (including fees and disbursements of counsel) that may be
imposed on, incurred by, or asserted against any of them, in any way relating to
or arising out of this Deed of Trust or any action taken or omitted by them
hereunder, except to the extend that they resulted from the gross negligence or
willful misconduct of any such Indemnitee.
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Section 12.3 Waivers; Modifications in Writing. No amendment of any
provision of this Deed of Trust (including a waiver thereof or consent relating
thereto) shall be effective unless the same shall be in writing and signed by
Beneficiary an Trustor. Any waiver or consent relating to any provision of this
Deed of Trust shall be effective only in the specific instance and for the
specific purpose for which given. No notice to or demand on Trustor in any case
shall entitle Trustor to any other or further notice or demand in similar
circumstances, except as otherwise provided herein or as required by law.
Section 12.4 Cumulative Remedies; Failure or Delay. The rights and
remedies provided for under this Deed of Trust are cumulative and are not
exclusive or any rights and remedies that may be available to Beneficiary under
Applicable Laws, the other Loan Documents or otherwise. No failure or delay on
the part of Beneficiary in the exercise of any power, right or remedy under this
Deed of Trust shall impair such power, right or remedy or shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or remedy preclude other or further exercise of such or any other power,
right or remedy.
12.4.1 Successors and Assigns. This Agreement shall be binding upon
and, subject to the next sentence, inure to the benefit of Trustor and
beneficiary and their respective successors and assigns. Trustor shall not
assign or transfer any of its rights or obligations hereunder without the prior
written consent of Beneficiary. The benefits of this Deed of Trust shall pass
automatically with any assignment of the Secured Obligations for any portion
thereof), to the extent of such assignment.
Section 12.5 Independence of Covenants. All covenants under this Deed of
Trust shall each be given independent effect so that, if a particular action or
condition is not permitted by any such covenant, the fact that it would be
permitted by another covenant or by an exception thereto shall not avoid the
occurrence of a Default or an Event of Default if such action is taken or
condition exists.
Section 12.6 Change of Law. In the event of the passage, after the date
of this Deed of Trust, of any law changing in any way the laws now in force for
the taxation of mortgages, deeds of trust, or debts secured by mortgage or deed
of trust (other than laws imposing taxes on income), or the manner of the
collection of any such taxes, so as to affect adversely the rights of
Beneficiary under this Deed of Trust, then an Event of Default shall be deemed
to have occurred under the Loan Agreement, provided however that no Event of
Default shall be deemed to have occurred (i) if Trustor, within thirty (30) days
after the passage of such law, shall assume the payment of any tax or other
charge so imposed upon Beneficiary for the period remaining until discharge in
full of the Secured Obligations, provided however that such assumption is
permitted by Applicable Laws, (ii) if the adverse effect upon Beneficiary of
such tax or other charge is not material, or (iii) if and so long as Trustor, at
its expense, shall contest the amount or validity or application of any such tax
or other charge by appropriate legal proceedings promptly initiated and
conducted in good faith and with due diligence, provided that (A) neither the
Property nor any substantial part thereof will be in danger of being sold,
forfeited, terminated, canceled, or lost as a result of such contest and (B)
except in the case of a tax or charge junior to the Lien of this Deed of Trust,
Trustor shall have posted such bond or furnished such other security as may be
required by law to release such tax or charge.
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<PAGE> 38
Section 12.7 No Waiver. No waiver by Beneficiary of any Default or
breach by Trustor hereunder shall be implied from any omission by Beneficiary to
take action on account of such Default if such Default persists or is repeated,
no express waiver shall affect any Default other than the Default in the waiver,
and such waiver shall be operative only for the time and to the extent therein
stated. Waivers of any covenant, term or condition contained herein shall not be
construed as a waiver of any subsequent breach of the same covenant, term or
condition. The consent or approval by Beneficiary to or of any act by Trustor
requiring further consent or approval shall not be deemed to waive or render
unnecessary the consent or approval to or of any subsequent similar act.
Section 12.8 Notices. All notices and other communications under this
Deed of Trust shall be in writing and shall be personally delivered or sent by
prepared courier, by overnight, registered or certified mail (postage prepaid)
or by prepaid telex, telecopy or telegram, and shall be deemed given when
received by the intended recipient thereof. Unless otherwise specified in a
notice given in accordance with the foregoing provisions of this Section 12.8,
notices and other communications shall be given to the parties hereto at their
respective addresses (or to their respective telex or telecopier numbers)
indicated in Section 12 of the Loan Agreement.
Section 12.9 References to Foreclosure. References hereto to
"foreclosure" and related phrases shall be deemed references to the appropriate
procedure in connection with Trustee's private power of sale, any judicial
foreclosure proceeding, and any deed given in lieu of any such Trustee's sale or
judicial foreclosure.
Section 12.10 Joinder of Foreclosure. Should Beneficiary hold any other
or additional security for the payment and performance of any Secured
Obligation, its sale or foreclosure, upon any default in such payment or
performance, in the sole discretion of Beneficiary, may be prior to, subsequent
to, or joined or otherwise contemporaneous with any sale or foreclosure
hereunder. Except as otherwise provided in the Loan Agreement, in addition to
the rights herein specifically conferred, Beneficiary, at any time and from time
to time, may exercise any right or remedy now or hereafter given by law to
beneficiaries under deeds of trust generally, or to the holders of any
obligations of the kind hereby secured.
Section 12.11 Rights and Secured Obligations of Beneficiary and Trustee.
At any time or from time to time, without liability therefor and without notice,
and without releasing or otherwise affecting the liability of any Person for
payment of any Secured Obligations, Beneficiary at its sole discretion and only
in writing may subordinate the Liens or either of them, or charge hereof to the
extent not prohibited by the Loan Agreement. Beneficiary and Trustee shall,
however, promptly upon Trustor's request from time to time, join in the
following actions (including the execution and delivery of documents) as trustor
determines are reasonably necessary for the development, use and operation of
the Trust Estate; (i) the making of any map or plat of the Property; (ii) the
granting, creating, amending and modifying of any customary easements,
covenants, conditions and restrictions with respect to the Property and (iii)
the application for and prosecution of any development, building, use and
similar permits and land use and utility approvals and installations regarding
the Property; provided however that Beneficiary and Trustee shall not be
required to join in or take any such action (a) while an Event of Default
exists, (b) to the extent prohibited by the Loan Agreement or by Applicable
Laws.
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<PAGE> 39
Any such request shall be accompanied by an Officers' Certificate (as defined in
the Loan Agreement). Upon written request of Beneficiary and surrender of this
Deed of Trust to Trustee for cancellation, and upon payment to Trustee of its
reasonable fees and expenses actually incurred, Trustee shall cancel, release
and reconvey this Deed of Trust.
Section 12.12 Copies. Trustor will promptly give to Beneficiary copies
of all notices of material violations relating to the Property that Trustor
receives from any Governmental Authority.
Section 12.13 Subordination. At the option of Beneficiary, this Deed of
Trust shall become subject and subordinate in whole or in part (but not with
respect to priority of entitlement to any insurance proceeds, damages, awards,
or compensation resulting from damage to the Property or condemnation or
exercise of power of eminent domain), to any and all contracts of sale and/or
any and all leases of all or any part of the Property upon the execution by
Beneficiary and recording thereof in the official records of Gilpin County,
Colorado of a unilateral declaration to the that effect. Beneficiary may require
the issuance of such title insurance endorsements to the Title Policy in
connection with any such subordination as Beneficiary, in its judgment, shall
determine are appropriate, and Trustor shall be obligated to pay any cost or
expense incurred in connection with the issuance thereof.
Section 12.14 Personalty Security Instruments. Trustor covenants and
agrees that if Beneficiary at any time holds additional security for any Secured
Obligations secured hereby, it may enforce the terms thereof or otherwise
realize upon the same, at its option, either before or concurrently herewith or
after a sale is made hereunder, and may apply the proceeds upon the Secured
Obligations without affecting the status or of waving any right to exhaust all
or any other security, including the security hereunder, and without waiving any
breach or Default or any right or power whether exercised hereunder or contained
herein or in any such other security.
Section 12.15 Suits to Protect Property. Trustor covenants and agrees to
appear in and defend any action or proceeding the consequence of which, if
successful, would be that the Liens, or either of them, of this Deed of Trust
would not satisfy the requirements as to extent, perfection or priority set
forth in the Loan Agreement, and to pay all reasonable costs and expenses
actually incurred by Trustee and Beneficiary, including cost of evidence of
title and attorneys' fees in a reasonable sum, in any such action or proceeding
in which Beneficiary and/or Trustee may appear or be made a party.
Section 12.16 Trustor Waiver of Rights. Trustor waives the benefit of
all laws now existing or that hereafter may be enacted providing for (i) any
appraisement before sale of any portion of the Trust Estate, and (ii) the
benefit of all laws that may be hereafter enacted in any way extending the time
for the enforcement of the Secured Obligations or creating or extending a period
of redemption from any sale made in collecting said debt. To the full extent
Trustor may do so, Trustor agrees that Trustor will not at any time insist upon,
plead, claim or take the benefit or advantage of any law now or hereafter in
force providing for any appraisement, valuation, stay, extension or redemption,
and Trustor, for Trustor, Trustor's heirs, devisees, representatives, successors
and assigns, and for any and all Persons ever claiming any interest in the Trust
Estate, to the extent permitted by law, hereby waives and releases all rights of
redemption, valuation,
38
<PAGE> 40
appraisement, stay of execution, and marshaling in the event of foreclosure of
the liens hereby created. If any law referred to in this Section 12.16 and now
in force, of which Trustor, Trustor's heirs, devisees, representatives,
successors and assigns or other Person might take advantage despite this Section
12.16, shall hereafter be repealed or cease to be in force, such law shall not
thereafter be deemed to preclude the application of this Section 12.17. To the
extent permitted by Applicable Laws, Trustor expressly waives and relinquishes
any and all rights and remedies which Trustor may have or be able to assert by
reason of the laws of the State of Colorado pertaining to the rights and
remedies of sureties.
Section 12.17 Charges for Statements. Trustor agrees to pay
Beneficiary's customary charge, to the maximum amount permitted by Applicable
Laws, for any statement regarding the Secured Obligations requested by Trustor
or in its behalf.
Section 12.18 Complete Agreement. This Deed of Trust, together with the
exhibits and schedules hereto, and the other Loan Documents, is intended by the
parties as a final expression of their agreement regarding the subject matter
hereof and is intended as a complete and exclusive statement of the terms and
conditions of such agreement.
Section 12.19 Payments Set Aside. Notwithstanding anything to the
contrary herein contained, this Deed of Trust, the Secured Obligations and the
Lien and Security Interest of this Deed of Trust shall continue to be effective
or be reinstated, as the case may be, if at any time any payment, or any part
thereof, of any or all of the Secured Obligations is rescinded, invalidated,
declared to be fraudulent or preferential or otherwise required to be restored
or returned by Beneficiary in connection with any bankruptcy, reorganization or
similar proceeding involving Trustor, any other party liable with respect to the
Secured Obligations or otherwise, if the proceeds of the Trust Estate are
required to be returned by Beneficiary under any such circumstances, or if
Beneficiary reasonably elects to return any such payment or proceeds or any part
thereof in its discretion, all as though such payment had not been made or such
proceeds not been received. Without limiting the generality of the foregoing, if
prior to any such rescission, invalidation, declaration, restoration or return,
this Deed of Trust shall have been terminated, released and/or reconveyed and
the Lien and Security Interest or any of the Trust Estate shall have been
released or terminated in connection with such termination, release and/or
reconveyance, this Deed of Trust and the Lien and Security Interest and such
portion of the Trust Estate shall be reinstated in full force and effect, and
such prior termination, release and/or reconveyance shall not diminish,
discharge or otherwise affect the obligations of Trustor in respect of the
amount of the affected payment of application of proceeds, the Lien, the
Security Interest or such portion of the Trust Estate.
Section 12.20 Intentionally Deleted.
Section 12.21 Choice of Forum.
12.21.1 Subject to Section 12.21.2 and Section 12.21.3., all actions
or proceedings arising in connection with this Deed of Trust shall be tried and
litigated in state or Federal courts which have jurisdiction over the County of
Gilpin, State of Colorado, unless such actions or proceedings are required to be
brought in another court to obtain subject matter
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jurisdiction over the matter in controversy. TRUSTOR WAIVES ANY RIGHT IT MAY
HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS, TO ASSERT THAT IT IS NOT
SUBJECT TO THE JURISDICTION OF SUCH COURTS OR TO OBJECT TO VENUE TO THE EXTENT
ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 12.21.1.
12.21.2 Nothing contained in this Section shall preclude Beneficiary
from bringing any action or proceeding arising out of or relating to this Deed
of Trust in any court not referred to in Section 12.21.1 SERVICE OF PROCESS,
SUFFICIENT FOR PERSONAL JURISDICTION IN ANY ACTION AGAINST TRUSTOR, MAY BE MADE
BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ITS ADDRESS
INDICATED IN SECTION 12.8 HEREOF.
12.21.3 Notwithstanding Section 12.21.1 hereof, in the sole and
absolute discretion of beneficiary, all actions or proceedings relating to the
Collateral referred to in Article 9 hereof, other than Fixtures, shall be tried
and litigated in any California state court sitting in the County of Los
Angeles, State of California or any federal court sitting in the County of Los
Angeles, State of California. Trustor hereby irrevocably submits to the
jurisdiction of such courts to the extent any proceeding is brought in
accordance with this Section 12.21.3. Trustor irrevocably waives, to the fullest
extent it may effectively do so under the Applicable Law, trial by jury and any
objection that it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding brought in any such court and any claim that any
such suit, action or proceeding brought in any such court has been brought in
inconvenient forum. Trustor irrevocably consents, to the fullest extent it may
effectively do so under Applicable Law, to the service of process of any of the
aforementioned courts in any such action or proceeding by the mailing of service
to become effective 30 days after such mailing. Nothing shall affect the right
of Beneficiary to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against Trustor in any other
jurisdiction.
Section 12.22 Regulatory Matters. Whenever in this Deed of Trust a right
is given to Beneficiary, which right is affected by Applicable Gaming Laws or
the enforcement of which is subject to Applicable Gaming Laws, the enforcement
of any such right shall be subject to Applicable Gaming Laws and approval, if so
required, of the applicable Gaming Authorities.
Section 12.23 Guarantor Waivers. If and to the extent that Trustor (for
the purposes of this Section 12.23, "Guarantor") would be deemed or construed to
be a guarantor or surety under applicable law with respect to its obligations
hereunder, Guarantor hereby agrees as follows:
12.23.1 Guarantor expressly agrees that until each and every terms,
covenant and condition of this Deed of Trust is fully performed, Guarantor shall
not be released by any act or event which, except for this provision of this
Deed of Trust might be deemed a legal or equitable discharge or exoneration of a
surety, or because of any waiver, extension, modification, forbearance or delay
or other act or omission of Beneficiary or its failure to proceed promptly or
otherwise as against Fitzgeralds or any other Guarantor, as the case may be
(individually and collectively, in its or their capacity as the entity or
entities the obligations of
40
<PAGE> 42
which are guaranteed hereunder by Guarantor, the "Principal") or Guarantor, or
because of any action taken or omitted or circumstance which might vary the risk
or affect the rights or remedies of Guarantor as against the Principal, or
because of any further dealings between the Principal and Beneficiary, whether
relating to this Deed of Trust or otherwise. Guarantor hereby expressly waives
and surrenders any defenses. Guarantor's liability under this Deed of Trust
based upon any of the foregoing acts, omissions, things, agreements, waivers or
any of them. It is the purpose and intent of this Deed of Trust that the
obligations of Guarantor under it shall be absolute and unconditional under any
and all circumstances, subject to and in accordance with the terms and
conditions of this Deed of Trust.
12.23.2 Without in any way limited the provisions of Section
12.23.1, Guarantor waives
12.23.2.1 all statutes of limitations as a defense to any action
or proceeding brought against Guarantor by Beneficiary, to the fullest extent
permitted by law.
12.23.2.2 any right it may have to require Beneficiary to
proceed against the Principal or pursue any other remedy in Beneficiary's power
to pursue, it being acknowledged and agreed that the obligations of Guarantor
hereunder independent of the obligations of the Principal hereunder, and
Beneficiary shall not be required to make any demand upon, exercise any right to
declare a default by, or proceed against, the Principal prior to proceeding
against Guarantor to the full extent of Guarantor's obligations hereunder.
12.23.2.3 any defense based on any legal disability of the
Principal and any discharge, release or limitation of the liability of the
Principal to Beneficiary, whether consensual or arising by operation of law or
any bankruptcy, reorganization, receivership, insolvency, or debtor-relief
proceeding, or from any other cause, or any claim that Guarantor's obligations
exceed or are more burdensome than those of the Principal.
12.23.2.4 all presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, notices of
acceptance of this Deed of Trust and of the existence, creation, or incurring of
new or additional indebtedness, and demands and notices of every kind.
12.23.2.5 any defense based on or arising out of any defense
that the Principal may have to the payment or performance of any obligation set
forth in this Deed of Trust, and
12.23.2.6 Until all obligations under this Deed of Trust have
been paid and performed in full, all rights of subrogation and all rights to
enforce any remedy that Guarantor may have against the Principal, all regardless
of whether Guarantor may have made any payments to Beneficiary.
12.23.2.7 Guarantor assumes full responsibility for keeping
informed of the financial condition and business operations of the Principal and
all other circumstances affecting the Principal's ability to pay for and perform
its obligations, and agrees
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that Beneficiary shall have no duty to disclose to Guarantor any information
which Beneficiary may receive about the Principal's financial condition,
business operations, or any other circumstances bearing on its ability to
perform.
12.23.2.8 Notwithstanding anything to the contrary provided
elsewhere herein, in no event shall Guarantor have any liability under this Deed
of Trust beyond its interest in the portion of the Property that is owned by
Guarantor, and in no event shall Guarantor's obligations hereunder be enforced
against any property of Guarantor other than its interest in such portion of the
Property.
Section 12.24 WAIVER OF TRIAL BY JURY. TRUSTOR AND BENEFICIARY WAIVE THE
RIGHT TO A TRIAL BY JURY IN ANY ACTION UNDER THIS DEED OF TRUST OR ANY OTHER
LOAN DOCUMENT OR ANY OTHER ACTION ARISING OUT OF THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY, REGARDLESS OF WHICH PARTY INITIATES SUCH ACTION OR ACTIONS.
[Signature page to follow.]
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<PAGE> 44
IN WITNESS WHEREOF, Trustor has caused this Deed of Trust to be executed
as of the day and year first above written.
101 MAIN STREET LIMITED
LIABILITY COMPANY,
a Colorado limited liability company
By: /s/ MICHAEL E. McPHERSON
--------------------------------
Name: Michael E. McPherson
Title: Senior Vice President/CFO
S-1
<PAGE> 45
STATE OF CALIFORNIA )
)
COUNTY OF LOS ANGELES )
On October 29, 1998, before me, Kiersten Polk, Notary Public, personally
appeared Michael E. McPherson personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person whose name is subscribed to the
within instrument and acknowledged to me that he/she executed the same in
his/her authorized capacity, and that by his/her signature on the instrument the
person, or the entity on behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
My Commission Expires: June 14, 2000
[SEAL] KIERSTEN POLK
Commission #1100940
Notary Public--California /s/ KIERSTEN POLK
Los Angeles County -------------------------
My Comm. Expires Jun 14, 2000 Notary Public
<PAGE> 46
ADDRESSES
Debtor:
101 MAIN STREET LIMITED LIABILITY COMPANY,
a Colorado limited liability company
120 Gregory Street
P.O. Box P
Black Hawk, Colorado 80422
Secured Party:
FOOTHILL CAPITAL CORPORATION,
a California corporation
11111 Santa Monica Boulevard, Suite 1500
Los Angeles, California 90025-3333
Trustee:
The Public Trustee of the County of Gilpin, Colorado
<PAGE> 47
EXHIBIT A
LEGAL DESCRIPTION
See attached
<PAGE> 48
The land referred to in this commitment is described as follows:
THAT PART OF LOTS 4 AND 11, BLOCK 35
LOTS 5, 6, 7, 8, 9, AND 10, BLOCK 35
THAT PART OF LOTS 4, 5 AND 6 AND PART OF LOTS 2 AND 3, BLOCK 36, AND
THAT PART OF LOTS 10, 11 AND 12, BLOCK 34 AND
THAT PART OF LOT 1, BLOCK 36,
CITY OF BLACK HAWK, COUNTY OF GILPIN, STATE OF COLORADO,
MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT THE MOST NORTHERLY CORNER OF LOT 6, BLOCK 35, CITY OF BLACK HAWK,
WHICH POINT IS ESTABLISHED BY THE INTERSECTION OF THE SOUTHEASTERLY LINE OF
GREGORY STREET WITH THE SOUTHWESTERLY LINE OF MAIN STREET AS SAID STREET LINES
WERE ESTABLISHED BY BOUNDARY LINE AGREEMENTS RECORDED IN BOOK 540 AT PAGE 383;
THENCE S47 DEGREES 37'00"E ALONG SAID SOUTHWESTERLY LINE OF MAIN STREET A
DISTANCE OF 199.59 FEET TO THE NORTHEASTERLY CORNER OF TRACT CONVEYED IN SPECIAL
WARRANTY DEED RECORDED IN BOOK 560 AT PAGE 446
THENCE S41 DEGREES 31'30"W ALONG THE SOUTHEASTERLY LINE SAID TRACT A DISTANCE OF
101.67 FEET TO THE MOST SOUTHERLY CORNER SAID TRACT, WHICH POINT IS ON THE LINE
BETWEEN SAID BLOCK 35 AND SAID BLOCK 36;
THENCE S47 DEGREES 37'00"E ALONG THE NORTHERLY LINE SAID BLOCK 36 A DISTANCE OF
61.55 FEET TO AN ANGLE POINT IN THE NORTHERLY LINE OF LOT 5, BLOCK 36;
THENCE S60 DEGREES 00'00"E ALONG THE NORTHERLY LINES OF LOT 5 AND LOT 6, IN SAID
BLOCK 36 A DISTANCE OF 69.05 FEET TO A POINT ON A LINE ESTABLISHED BY BOUNDARY
LINE AGREEMENT RECORDED IN BOOK 603 PAGE 201;
THENCE S30 DEGREES 59'20"W ALONG THE LINE ESTABLISHED BY SAID BOUNDARY LINE
AGREEMENT, A DISTANCE OF 75.38 FEET TO A POINT ON THE NORTH RIGHT OF WAY LINE OF
BABTAIL STREET AS DESCRIBED IN BOOK 586 AT PAGE 113, WHICH POINT IS ON A CURVE
CONCAVE TO THE SOUTH;
THENCE WESTERLY ALONG SAID CURVE, CENTRAL ANGLE = 4 DEGREES 46'06", RADIUS =
142.00 FEET, AND ARC LENGTH OF 11.82 FEET TO A POINT OF TANGENCY, THE CHORD OF
SAID ARC BEARS N56 DEGREES 50'06"W, A DISTANCE OF 11.81 FEET;
THENCE N59 DEGREES 13'09"W ALONG THE SIDE RIGHT OF WAY LINE A DISTANCE OF 178.24
FEET;
THENCE N59 DEGREES 01'26"W ALONG SAID RIGHT OF WAY LINE A DISTANCE OF 44.48 FEET
TO A POINT OF CURVATURE;
THENCE ALONG SAID RIGHT OF WAY LINE AND ALONG THE ARC OF A CURVE TO THE LEFT,
CENTRAL ANGLE = 30 DEGREES 58'34", RADIUS = 140.00 FEET, AN ARC LENGTH OF 75.69
FEET TO A POINT OF TANGENCY, THE CHORD OF SAID ARC BEARS N74 DEGREES 30'43"W A
DISTANCE OF 74.77 FEET;
THENCE CONTINUING ALONG SAID RIGHT OF WAY LINE, N90 DEGREES 00'00"W A DISTANCE
OF 72.88 GEET, MORE OR LESS, TO A POINT ON THE WESTERLY LINE OF LOT 10, BLOCK 34
THENCE N20 DEGREES 00'00"W ALONG SAID WEST LINE A DISTANCE OF 34.92 FEET TO THE
NORTHWEST CORNER OF SAID LOT 10;
THENCE N66 DEGREES 41'00"E ALONG THE NORTH LINE SAID BLOCK 34 A DISTANCE OF
102.69 FEET TO AN ANGLE POINT IN SAID NORTH LINE;
THENCE CONTINUING ALONG SAID NORTH LINE, N74 DEGREES 11'00"E, A DISTANCE OF
66.60 FEET TO A POINT ON THE SOUTHERLY LINE OF LOT 4, BLOCK 35, WHICH POINT IS
THE MOST SOUTHERLY CORNER OF TRACT DESCRIBED IN QUIET TITLE ACTION RECORDED IN
BOOK 551 AT PAGE 1;
THENCE N15 DEGREES 49'00"W ALONG THE WESTERLY LINE SAID TRACT A DISTANCE OF
103.08 FEET TO THE MOST WESTERLY CORNER SAID TRACT, WHICH POINT IS ON THE
SOUTHEASTERLY LINE OF GREGORY STREET AS DEFINED IN BOUNDARY LINE AGREEMENT
DESCRIBED IN BOOK 540 AT PAGE 383;
THENCE N76 DEGREES 11'39"E ALONG SAID SOUTHEASTERLY LINE GREGORY STREET AS
DEFINED IN SAID BOUNDARY LINE AGREEMENT AND AS DESCRIBED IN QUIET TITLE ACTION
RECORDED IN BOOK 551 AT PAGE 1, A DISTANCE OF 83.68 FEET, MORE OR LESS TO THE
POINT OF BEGINNING.
COUNTY OF GILPIN, STATE OF COLORADO.
<PAGE> 1
EXHIBIT 10.13
Prepared By and Upon
Recordation Return To:
McGLINCHEY STAFFORD
643 Magazine Street
New Orleans, LA 70130
Attn: Julia H. Terry
- --------------------------------------------------------------------------------
DEED OF TRUST, SECURITY AGREEMENT AND
FIXTURE FILING WITH FINANCING STATEMENT
AND ASSIGNMENT OF RENTS
FITZGERALDS MISSISSIPPI, Inc.,
as Trustor
COMMONWEALTH LAND TITLE COMPANY
as Trustee
FOOTHILL CAPITAL CORPORATION,
as Beneficiary
Dated as of October 29, 1998
SOME OF THE PERSONAL PROPERTY CONSTITUTING A PORTION OF THE
MORTGAGED PROPERTY IS OR IS TO BE AFFIXED TO THE PROPERTIES
DESCRIBED IN EXHIBIT A HERETO
THIS FINANCING STATEMENT IS A FIXTURE FILING, AND IS TO BE FILED FOR RECORD,
AMONG OTHER PLACES, IN THE REAL ESTATE RECORDS
THIS DEED OF TRUST COVERS AFTER-ACQUIRED PROPERTY
<PAGE> 2
DEED OF TRUST, SECURITY AGREEMENT AND
FIXTURE FILING WITH ASSIGNMENT OF RENTS
THIS DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING WITH
ASSIGNMENT OF RENTS (this "Deed of Trust") is made as of the 29th day of
October, 1998 by Fitzgeralds Mississippi, Inc., a Mississippi corporation
("Trustor"), whose principal place of business is located at 711 Lucky Lane,
Robinsonville, MS 38664, in favor of Commonwealth Land Title Company
("Trustee"), for the benefit of Foothill Capital Corporation, a California
corporation ("Beneficiary"), whose principal place of business is located at
11111 Santa Monica Boulevard, Suite 1500, Los Angeles, California 90025.
THE AMOUNT OF INDEBTEDNESS TO BE SECURED HEREBY IS UP TO $15,000,000.00, HAVING
A MATURITY DATE OF OCTOBER 1, 2018.
R E C I T A L S
A. Fitzgeralds Gaming Corporation ("Fitzgeralds") is indebted to
Beneficiary, as evidenced by that certain Loan and Security Agreement dated as
of October 29, 1998 (as amended from time to time, the "Loan Agreement"), by and
among Fitzgeralds and Beneficiary, whereby Beneficiary agrees to loan
Fitzgeralds (1) revolving advances ("Advances") up to $10,000,000.00; and (2) a
series of term loans in an aggregate amount at any one time outstanding not to
exceed $5,000,000.00 (the "Capital Expenditure Line Commitment") (the Advances
and the Capital Expenditure Line Commitment hereinafter referred to as the
"Loan"). Unless the context other requires, all capitalized terms used and not
otherwise defined herein shall have the meanings ascribed thereto in the Loan
Agreement.
B. On account of Fitzgeralds, Beneficiary has agreed to issue
letters of credit ("Letters of Credit") to secure payment of Fitzgeralds'
obligations under existing letters of credit, as set forth in the Loan
Agreement.
C. Trustor has guaranteed Fitzgeralds' obligations under the Loan
Agreement, the Letters of Credit, and all other instruments, documents and other
agreements now existing or hereafter entered into evidencing, securing,
guaranteeing or otherwise relating to the Advances, the Capital Expenditure Line
Commitment, the Letters of Credit and Fitzgeralds' obligations under the Loan
Agreement ("Fitzgeralds' Obligations") pursuant to that certain guaranty dated
as of October 29, 1998, made by Trustor in favor of Beneficiary (the
"Guaranty").
D. As security for Fitzgeralds' Obligations and the Guaranty,
Trustor shall execute this Deed of Trust.
E. Trustor is the owner of the Land as hereinafter defined.
F. Trustor has agreed to execute this Deed of Trust as security for
Fitzgeralds' Obligations in consideration of Trustor's derived benefits from the
proceeds of the Loan and the Letters of Credit, and as security for the
Guaranty.
<PAGE> 3
G. The parties acknowledge that certain tax provisions of this Deed
of Trust may be subject to the laws, rules and regulations of the Gaming
Authority of the State of Mississippi ("Applicable Gaming Laws").
This Deed of Trust secures a line of credit as defined in Section
89-1-49 of the Mississippi Code Annotated of 1972, as amended, for commercial
purposes to other than a natural person and shall not be extinguished until the
conditions of Section 89-5-73 of the Mississippi Code Annotated of 1972, as
amended, are met.
W I T N E S S E T H:
IN CONSIDERATION OF THE FOREGOING RECITALS AND FOR OTHER GOOD AND
VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY
ACKNOWLEDGED, TRUSTOR DOES HEREBY IRREVOCABLY GRANT, BARGAIN, SELL, TRANSFER,
CONVEY, ASSIGN AND WARRANT to Trustee, its successors and assigns, subject to
the Permitted Liens, IN TRUST, WITH POWER OF SALE, for the benefit and security
of Beneficiary, the following (but excluding in each and every case all Excluded
Assets as defined below), whether now owned or hereafter acquired:
GRANTING CLAUSE ONE
[Land]
All of Trustor's right, title and interest in the real property, located
in the County of Tunica, State of Mississippi, described in Exhibit A attached
hereto and by this reference incorporated herein (the "Land"), together with all
and singular the tenements, hereditaments, rights, reversions, remainders,
development rights, privileges, benefits, easements (in gross or appurtenant),
rights-of-way, gores or strips of land, streets, ways, alleys, passages, sewer
rights, water courses, water rights and powers, and all appurtenances whatsoever
and claims or demands of Trustor at law or in equity, in any way belonging,
benefitting, relating or appertaining to the Land, the airspace over the Land,
the Improvements (as hereinafter defined), or both, or which here shall in any
way belong, relate or be appurtenant thereto.
GRANTING CLAUSE TWO
[Improvements]
TOGETHER WITH, any and all structures, buildings, facilities and
improvements of every nature whatsoever now or hereafter on the Land, including,
but not limited to, the Fixtures (as hereinafter defined) (collectively, the
"Improvements") (the Land and Improvements are referred to collectively as the
"Real Property").
For purposes of this Deed of Trust, "Fixtures" shall be deemed to
include, to the full extent allowed by law, fixtures and all other equipment and
machinery or on or appurtenant to the Real Property and used in connection
therewith and which are or become so related to the
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<PAGE> 4
Real Property encumbered hereby that an interest arises in them under real
estate law which may include, but is not limited to: all docks, piers, barges,
vessels, marinas and other structures to which boats and vessels may be moored,
machinery, equipment (including, without limitation, pipes, furnaces, conveyors,
drums, fire sprinklers and alarm" systems, and air conditioning, heating,
refrigerating, electronic monitoring, stoves, ovens, ranges, dishwashers,
disposals, food storage, food processing (including restaurant fixtures), trash
and garbage removal and maintenance equipment), office equipment all built-in
tables, mantels, screens, plumbing, bathtubs, sinks, basins, faucets, laundry
equipment, planters, desks, sofas, shelves, lockers and cabinets, laundry
equipment, all safes, furnishings, appliances (including, without limitation,
food warming and holding equipment, iceboxes, refrigerators, fans, heaters,
water heaters and incinerators), rugs, carpets and other floor coverings,
draperies and drapery rods and brackets, awnings, window shades, venetian blind,
curtains, lamps, chandeliers and other lighting fixtures.
GRANTING CLAUSE THREE
[Rents, etc.]
TOGETHER WITH, all rents, income, security or similar deposits,
including without limitation, receipts, issues, royalties, earnings, products or
proceeds, profits, maintenance, license and concession fees and other revenues
to which Trustor may now or hereafter be entitled, including, without
limitation, all rights to payment for hotel room occupancy by hotel guests,
which includes any payment or monies received or to be received in whole or in
park whether actual or deemed to be, for the sale of services or products in
connection therewith and/or in connection with such occupancy, advance
registration fees by hotel guests, tour or junket proceeds and deposits for
conventions and/or party reservations (collectively the "Rents"), subject to the
revocable license hereinafter given to Trustor to collect and apply such Rents.
GRANTING CLAUSE FOUR
[Leases, Including Deposits and Advance Rentals]
TOGETHER WITH, (a) all estate, right, title and interest of Trustor in,
to and under any and all leases, subleases, lettings, licenses, concessions,
operating agreements, management agreements, franchise agreements and all other
agreements affecting or covering the Real Property or any portion thereof now or
hereafter existing or entered into, together with all amendments, extensions and
renewals of any of the foregoing; (b) all right, title, claim, estate and
interest of Trustor thereunder, including, without limitation, all claims of the
lessor thereunder, letters of credit, guarantees or security deposits, advance
rentals and any and all deposits or payments of similar nature; and (c) the
right to enforce against any tenants thereunder and otherwise any and all
remedies under any of the foregoing, including Trustor's right to evict from
possession any tenant thereunder or to retain, apply, use, draw upon, pursue,
enforce or realize upon any guaranty thereof; to terminate, modify, or amend any
such agreement; to obtain possession of, use, or occupy, any of the real or
personal property subject to any such agreement; and to enforce or exercise,
whether at law or in equity or by any other means, all provisions of
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<PAGE> 5
any such agreement and all obligations of the tenants thereunder based upon (i)
any breach by such tenant thereunder (including any claim that Trustor may have
by reason of a termination, rejection, or disaffirmance of such agreement
pursuant to any Bankruptcy Law), and (ii) the use and occupancy of the premises
demised, whether or not pursuant to the applicable agreement (including any
claim for use and occupancy arising under landlord-tenant law of the State of
Mississippi or any Bankruptcy Law).
GRANTING CLAUSE FIVE
[Options to Purchase, etc.]
TOGETHER WITH, all right, title and interest of Trustor in and to all
options and other rights to purchase or lease the Real Property or any portion
thereof or interest therein, if any, and any greater estate in the Real Property
owned or hereafter acquired by Trustor.
GRANTING CLAUSE SIX
[Personal Property]
TOGETHER WITH, all right, title and interest of Trustor in and to all
Tangible Property and Intangible Property (except, with respect to Gaming
Licenses, as prohibited by Applicable Gaming Laws) now or at any time hereafter
located on or appurtenant to the Real Property and used or useful in connection
with the ownership, management or operation of the Real Property, including,
without limitation, the Personal Property.
GRANTING CLAUSE SEVEN
[Condemnation Awards, etc.]
TOGETHER WITH, all the estate, interest, right, title, other claim or
demand, which Trustor now has or may hereafter acquire in any and all awards,
payments or other consideration made for the taking by eminent domain, or by
any. proceeding or purchase in lieu thereof, of the whole or any part of the
Real Property, including, without limitation, any awards, payments or other
consideration resulting from a change of grade of streets and for severance
damages.
GRANTING CLAUSE EIGHT
[Insurance Proceeds]
TOGETHER WITH, all the estate, interest, right, title and other claim or
demand which Trustor now has or may hereafter acquire with respect to the
proceeds of insurance in effect with respect to all or any part of the Real
Property and/or Personal Property, together with all interest thereon and the
right to collect and receive the same.
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<PAGE> 6
GRANTING CLAUSE NINE
[Claims for Damages, etc.]
TOGETHER WITH, all the estate, interest, right, title and other claim or
demand which Trustor now has or may hereafter acquire against anyone with
respect to any damage to all or any part of the Real Property, including,
without limitation, damage arising from any defect in or with respect to the
design or construction of all or any part of the Improvements and damage
resulting therefrom.
GRANTING CLAUSE TEN
[Deposits, Advance Payments and Refunds of Insurance, Utilities, etc.]
TOGETHER WITH, all deposits or other security or advance payments
including rental payments made by or on behalf of Trustor to others, and all
refunds made by others to Trustor, with respect to (i) insurance policies
relating to all or any part of the Real Property and/or Personal Property, (ii)
utility service for all or any part of the Real Property, (iii) cleaning,
maintenance, repair, or similar services for all or any part of the Real
Property, (iv) refuse removal or sewer service for all or any part of the Real
Property, (v) rental of equipment, if any, used in the operation, maintenance or
repair by or on behalf of Trustor of all or any part of the Real Property and/or
Personal Property and (vi) parking or similar services or rights afforded to all
or any part of the Real Property.
GRANTING CLAUSE ELEVEN
[Water Rights, etc.]
TOGETHER WITH, all water rights, water stock, water permits and other
rights to the use of water that are now or that may be hereinafter used in
connection with the said Real Property, or any improvements or appurtenances
thereto.
GRANTING CLAUSE TWELVE
[Minerals, etc.]
TOGETHER WITH, all oil and gas and other mineral rights, if any, in or
pertaining to the Land and all royalty, leasehold and other rights of Trustor
pertaining thereto.
GRANTING CLAUSE THIRTEEN
[Accessions, etc.]
TOGETHER WITH, all extensions, improvements, betterments, renewals,
substitutes for and replacements of, and all additions, accessions, and
appurtenances to, any of
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<PAGE> 7
the foregoing that Trustor may subsequently acquire, and all conversions of any
of the foregoing, Trustor agrees that all property hereafter acquired by Trustor
and required by the Indenture, this Deed of Trust or any other Loan Document to
be subject to the lien and/or security interests created by this Deed of Trust
shall forthwith upon the acquisition thereof by Trustor be subject to the lien
and/or security interests of this Deed of Trust as if such property were now
owned by Trustor and were specifically described in this Deed of Trust and
granted hereby or pursuant hereto, and the Beneficiary is hereby authorized to
receive any and all such property as and for additional security for the
Subsidiary Guaranty Obligations.
GRANTING CLAUSE FOURTEEN
[Vessel]
The whole of the following named and described vessel and appurtenances
(the "Vessel") to wit:
<TABLE>
<CAPTION>
OFFICIAL
NAME NUMBER TYPE
---- -------- ----
<S> <C> <C>
FITZGERALDS TUNICA 262757 Barge
</TABLE>
TOGETHER WITH, all of the following now owned or hereafter
acquired by Trustor or in which Trustor has any rights or interest and now or
hereafter located in or on, or attached to, or used or intended to be used or
which are now or may hereafter be appropriated for use on or in connection with
the operation of the Vessel and the business being conducted or which may be
conducted thereon, or in connection with any construction being conducted or
which may be conducted thereon: boilers, engines, machinery, masts, spars,
boats, cables, motors, tools, anchors, chains, booms, cranes, rigs, pumps, pipe,
tanks, tackle, apparel, furniture, fixtures, rigging, supplies, fittings and
gaming machinery, equipment and accessories relating to the Vessel and the
gaming operations now or hereafter conducted thereon, including but not limited
to communication systems, visual and electronic surveillance systems and
transportation systems, tools, utensils, food and beverage, liquor, uniforms,
linens, housekeeping and maintenance supplies, fuel all gaming equipment and
devices, financial equipment, computer equipment, calculators, adding machines,
video game and slot machines, and any other electronic equipment of every nature
used in connection with the operation of Vessel and the business conducted
thereon, all machinery, equipment, engines, appliances and fixtures for
generating or distributing air, water, heat, electricity, light, fuel or
refrigeration, or for ventilating or sanitary purposes, or for the exclusion of
vermin or insects, or for the removal of dust, refuse or garbage, all wall-beds,
wall safes , built-in furniture and installations, shelving, lockers,
partitions, doorstops, vaults, motors, elevators, dumb-waiters, awnings, window
shades, Venetian blinds, light fixtures, fire hoses and brackets and boxes for
the same, fire sprinklers, alarm, surveillance and security systems, drapes,
drapery rods and brackets, mirrors, mantels, screens, linoleum, carpets and
carpeting, plumbing, bathtubs, sinks, basins, pipes, faucets, water closets,
laundry equipment, washers, dryers, ice-boxes and heating units, all kitchen and
restaurant equipment, including but not limited to silverware, dishes, menus,
cooking utensils, stoves, refrigerators,
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<PAGE> 8
ovens, ranges, dishwashers, disposals, water hewn, incinerators, furniture,
fixtures and furnishings, all cocktail lounge supplies, including but not
limited to bars, glassware, bottles and tables used in connection with the
Vessel, all chaise lounges, hot tubs, swimming pool heaters and equipment, and
all other recreational equipment (computerized and otherwise), beauty and barber
equipment and maintenance supplies used in connection with the Vessel, all
specifically designed installations and furnishings, and all furniture,
furnishings and personal property of every nature whatsoever, and all
extensions, additions, accessions, improvements, betterments, renewals,
substitutions, and replacements to any of the foregoing, all of which (to the
fullest extent permitted by law) shall be conclusively deemed appurtenances to
the Vessel, and all other appurtenances to the Vessel appertaining or belonging,
whether now owned or hereafter acquired, whether on board or not at any time of
determination, and all additions, improvements and replacements hereafter made
in or to the Vessel and all proceeds of any of the foregoing, including without
limitation, any claim for compensation, purchase price reimbursement or award
for a requisition pursuant to that certain Vessel Mortgage executed by Trustor
of even date herewith ("Vessel Mortgage") and any charter hire or other
compensation resulting from a requisition pursuant to the Vessel Mortgage.
Trustor and Beneficiary acknowledge that significant structures, improvements,
additions, equipment and other appurtenances may be added to the Vessel after
the execution of this Deed of Trust, and Trustor specifically affirms and agrees
that all such appurtenances to the Vessel shall be subject to this Deed of
Trust.
The entire estate, property and interest hereby conveyed to Trustee may
hereafter be referred to as the "Trust Estate."
FOR THE PURPOSE OF SECURING:
A. the due and punctual payment and performance of any and all
present and future obligations and liabilities of Trustor of every type or
description to Beneficiary, arising under or in connection with the Guaranty,
whether for principal of, or premium, if any, or interest on the Loan or Letters
of Credit, expenses, indemnities or other amounts (including attorneys' fees and
expenses) (collectively, the "Subsidiary Guaranty Obligations"); and
B. all loans, Advances, debts, principal, interest (including any
interest that, but for the provisions of the Bankruptcy Code, would have
accrued), contingent reimbursement obligations under any outstanding Letters of
Credit, premiums (including Early Termination Premiums), liabilities (including
all amounts charged to Borrower's Loan Account pursuant to the Loan Agreement),
obligations, fees, charges, costs, or Beneficiary expenses (including any fees
or expenses that, but for the provisions of the Bankruptcy Code, would have
accrued), lease payments, guaranties, covenants, and duties owing by Fitzgeralds
to Beneficiary of any kind and description (whether pursuant to or evidenced by
the Loan Documents or pursuant to any other agreement between Beneficiary and
Fitzgeralds, and irrespective of whether for the payment of money), whether
direct or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising, and including any debt, liability, or obligation owing
from Fitzgeralds to others that Beneficiary may have obtained by assignment or
otherwise, and further including all interest not paid when due and all
Beneficiary expenses that Fitzgeralds is required to pay or reimburse by the
Loan Documents, by law, or otherwise; and
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<PAGE> 9
C. all future advances pursuant to the Loan Agreement or any other
of the Loan Documents in each case whether due or not due, direct or indirect,
joint and/or several, absolute or contingent, voluntary or involuntary,
liquidated or unliquidated, determined or undetermined, now or hereafter
existing, renewed or restructured, whether or not from time to time decreased or
extinguished and later increased, created or incurred, whether or not arising
after the commencement of a proceeding under the Bankruptcy Code (including
post-petition interest) and whether or not allowed or allowable as a claim in
any such proceeding.
D. All renewals, extensions, modifications and amendments of any of
the aforesaid, whether or not any renewal, extension, modification or amendment
agreement is executed in connection therewith (all obligations and liabilities
described herein, including, without limitation, the Subsidiary Guaranty
Obligations, are collectively referred to herein as the "Secured Obligations").
TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR HEREBY COVENANTS
AND AGREES AS FOLLOWS:
ARTICLE 1.
Section 1.1 Certain Defined Terms.
"Accounts" has the meaning set forth in Section 9.1.2.
"Applicable Gaming Laws" has the meaning set forth in Recital G.
"Applicable Laws" shall have the meaning set forth in Section 3.7.
"Bankruptcy Law" means any laws arising from the United States
Bankruptcy Code, as amended, and any applicable State statute dealing with
bankruptcy.
"Beneficiary" has the meaning set forth in the Preamble.
"Chattel Paper" has the meaning set forth in Section 9.1.1.
"Collateral" has the meaning set forth in Section 9.1.
"Default Rate" has the meaning set forth in Section 4.8.1.
"Documents" has the meaning set forth in Section 9.1.9.
"Environmental Damages" means all claims, judgments, losses, penalties,
fines, liabilities (including strict liability), encumbrances, liens, costs and
expenses of investigation and defense of any claim, whether or not such is
ultimately defeated, and of any settlement or judgment, of whatever kind or
nature, contingent or otherwise, matured or unmatured, foreseeable or
unforeseeable, including, without limitation, reasonable attorneys' fees,
charges and disbursements (including, without limitation, costs of appeal), and
consultants' fees, any of
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<PAGE> 10
which are actually incurred at any time as a result of the existence or alleged
existence of Hazardous Materials upon, about or beneath the Real Property or
migrating or threatening to migrate to or from the Real Property, or the
existence or alleged existence of a violation of Environmental Requirements
pertaining to the Real Property regardless of whether the existence of such
Hazardous Materials or the violation of Environmental Requirements arose prior
to the present ownership or operation of the Real Property, and including,
without limitation:
(i) damages for personal injury, or injury to property or
natural resources occurring upon or off of the Real Property, foreseeable or
unforeseeable, including, without limitation, lost profits, consequential
damages, the cost of demolition and rebuilding of any improvements on real
property, interest and penalties including, but not limited to, claims brought
by or on behalf of employees of Trustor, with respect to which Trustor waives,
for the benefit of Beneficiary only, any immunity to which it may be entitled
under any industrial or workers' compensation laws;
(ii) by any federal, state or local governmental agency or
political subdivision, or reasonably necessary to make full economic use of the
Real Property or any other property or otherwise expended in connection with
such conditions, and including, without limitation, any reasonable attorneys'
fees, charges and disbursements (including, without limitation, costs of appeal)
actually incurred in enforcing this Deed of Trust or collecting any sums due
hereunder, and
(iii) liability to any Person to indemnify such Person for
actual costs incurred in good faith in connection with the items referenced in
subparagraphs (i) and (ii) hereof.
"Environmental Requirements" means applicable present and future
statutes, regulations, rules, ordinances, codes, licenses, permits, orders,
approvals, plans, authorizations, concessions, franchises and similar items, of
all a governmental agencies, departments, commissions, boards, bureaus or
instrumentalities of the United States, states and political subdivisions
thereof and all applicable judicial and administrative and regulatory decrees,
injunctions, judgments and orders relating to the environment, including,
without limitation:
(i) all requirements, including, but not limited to, those
relating or pertaining to (A) reporting, licensing, permitting, investigation
and remediation of emissions, discharges, releases or threatened releases of
Hazardous Materials or other chemical substances, pollutants, contaminants or
hazardous or toxic substances, materials or wastes whether solid, liquid or
gaseous in nature, into the environment (including, without limitation, ambient
air, surface water, groundwater or land surface or subsurface strata), (B) the
manufacture, processing, distribution, use, generation, treatment, storage,
disposal transport or handling of chemical substances, materials or wastes,
whether solid, liquid or gaseous in nature, including without limitation,
Hazardous Materials or (C) underground storage tanks and related piping, and
emissions, discharges, releases or threatened releases of Hazardous Materials or
other chemical substances, pollutants, contaminants or hazardous or toxic
substances, materials or wastes whether solid, liquid or gaseous in nature
therefrom; and
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<PAGE> 11
(ii) all other requirements pertaining to the protection of
the health and safety of employees or the public with respect to Hazardous
Materials.
"Equipment" has the meaning set forth in Section 9.1.7.
"Event of Default" shall have the meaning set forth in Section 8 of the
Loan Agreement.
"Excluded Assets" has the meaning set forth in the Loan Agreement.
"Fixtures" has the meaning set forth in Section 9.1.8.
"Gaming Licenses" means every material license, franchise or other
approval or authorization required to own, lease, operate or otherwise conduct
gaming in any jurisdiction in which Fitzgeralds or any of its subsidiaries
conducts or proposes in good faith to conduct gaming business, including any
applicable liquor licenses.
"Governmental Authority" means any agency, authority, board, bureau,
commission, department, office or instrumentality of any nature whatsoever of
the United States of America or foreign government, any state, province or any
city or other political subdivision, whether nor or hereafter existing, or any
officer or official thereof, including without limitation, the Nevada Gaming
Commission, the Nevada State Gaming Control Board, the Colorado Limited Gaming
Control Commission, the Mississippi Gaming Commission and any other agency with
authority to regulate any gaming operation (or proposed gaming operation) owned,
managed or operated by Fitzgeralds or any of its subsidiaries.
"Guaranty" has the meaning set forth in Recital C.
"General Intangibles" has the meaning set forth in Section 9.1.10.
"Hazardous Materials" any chemical, material or substance:
(i) the presence of which requires investigation or
remediation under any federal, state or local law, statute, code, regulation,
ordinance, order, action or policy; or
(ii) which is or becomes defined as or included in the
definition of "hazardous substances," "pollutants," " contaminants," "hazardous
wastes," "hazardous materials," "extremely hazardous waste," "restricted
hazardous waste" or "toxic substances" or words of similar import under any
applicable local state or federal law or under regulations adopted or
publications promulgated pursuant thereto, including, but not limited to, any
such laws or regulations promulgated by Governmental Authorities of the State of
Mississippi; the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq.; the
Hazardous Materials Transportation Act, as amended, 49 U.S.C. Section 1801, et
seq.; the Resource Conservation and Recovery Act as amended, 42 U.S.C. Section
6901, et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C.
Section 1251, et seq.; the Toxic
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<PAGE> 12
Substances Control Act, 15 U.S.C. Section 2601, et seq.; the Safe Drinking Water
Act, 42 U.S.C. Section 300 (f)-300(j) - 10; or the Clean Air Act, 42 U.S.C.
Section 7401, et seq.; or
(iii) which is toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic, or otherwise hazardous and is
or a becomes regulated by any governmental authority, agency, department,
commission, board, agency or instrumentality of the United States, any state of
the United States, or any political subdivision thereof ("Governmental
Authority"); or
(iv) the presence of which on the Real Property causes or
threatens to pose a hazard to the Real Property or to the health or safety of
Persons on or about the Real Property; or
(v) without limitation, which contains gasoline, crude oil,
diesel fuel or other petroleum hydrocarbons in violation of applicable
Environmental Requirements; or
(vi) without limitation, which contains "PCBs" (as
hereinafter defined) or asbestos or urea formaldehyde foam insulation or radon
gas.
"Impositions" shall mean any and all (i) real estate and personal
property taxes and other taxes and assessments, water and sewer rates and
charges levied or assessed upon or with respect to the Real Property and any and
all other governmental charges (including any penalties and other charges
imposed by any Gaming Authority) and any interest or costs or penalties with
respect thereto, in each case whether general, special ordinary or
extraordinary, foreseen or unforeseen, of any kind and nature whatsoever that at
any time prior to or after the execution hereof may be assessed, levied,
imposed, or become a lien upon the Real Property or the Rents, but excluding
taxes on Trustor's income or operating revenues; (ii) charges for any easement
or agreement mentioned for the benefit of the Real Property and (iii) other
charges, expenses, payments or assessments of any nature, if any, which are or
may be assessed, levied, imposed or become a lien upon the Real Property or the
Rents, including mechanics and other Liens permitted by Section 7.2 of the Loan
Agreement.
"Impound Account" The account that Trustor may be required to maintain
pursuant to Section 4.6.2. of this Deed of Trust for the deposit of amounts
required to pay Impositions and insurance premiums.
"Improvements" has the meaning set forth in Granting Clause Two.
"Indemnities" has the meaning set forth in Section 11.2.7.
"Intangible Property" Any and all intangible personal property,
including, without limitation, (a) the rights to use all names and all
derivations thereof now or hereafter used by Trustor in connection with the
Land, the Vessel or the Improvements, including, without
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<PAGE> 13
limitation, the name "Fitzgeralds Tunica" and any variations thereof, together
with the goodwill associated therewith, and all names, logos, and designs used
by Trustor, or in connection with the Land or the Vessel or the Improvements or
in which Trustor has rights, with the exclusive right to use such names, logos
and designs wherever they are now or hereafter used in connection with the Land
or the Vessel or the Improvements, and any and all other trade names, or service
marks, whether or not registered, now or hereafter used in the operation of the
Land or the Vessel or the Improvements, including, without limitation, any
interest as a licensee or franchise and, in each case, together with the
goodwill associated therewith; (b) maps, plans, specifications, surveys,
studies, tests, reports, data and drawings relating to the development of the
Land, the Vessel or the Improvements and the construction of the Improvements,
including, without limitation. all marketing plans, feasibility studies, soils
tests, design contracts and all contracts and agreements of Trustor relating
thereto and all architectural, structural, mechanical and engineering plans and
specifications, studies, data and drawings prepared for or relating to the
development of the Land, the Vessel or the Real Property or the construction,
renovation or restoration of any of the Improvements or the extraction of
minerals, sand, gravel or other valuable substances from the Land; (c) any and
all books, records, customer lists (including lists or information derived from
or related to the Player Tracking System described within the definition of
"Tangible Property"), concession agreements, supply or service contracts,
licenses, permits, governmental approvals (to the extent such licenses, permits
and approvals may be pledged under applicable law), signs, goodwill casino and
hotel credit and charge records, supplier lists, checking account, safe deposit
boxes (excluding the contents of such deposit boxes owned by Persons other than
Trustor and its Subsidiaries), cash, instruments, Chattel Papers, documents,
unearned premiums, deposits, refunds, including but not limited to income tax
refunds, prepaid expenses, rebates, tax and insurance escrow and impound
accounts, if any, actions and rights in action, and all other claims, and all
other contract rights and general intangibles resulting from or used in
connection with the operation of the Trust Estate or the Vessel and in which
Trustor now or Trustor now or hereafter has rights; (d) all of Trustor's
documents, instruments, contract rights, and general intangibles including,
without limitation, all insurance policies, permits, licenses, franchises and
agreements required for the use, occupancy or operation of the Land, the Vessel
or any of the Improvements (to the extent such licenses, permits and approvals
are not prohibited from being pledged under applicable law); (e) general
intangibles, vacation license resort agreements or other time share license or
right to use agreements with respect to the Land, the Vessel, the Improvements
and/or the business being conducted thereon, including, without limitation, all
rents, issues, profits, income and maintenance fees resulting therefrom; whether
any of the foregoing is now owned or hereafter acquired; (f) any and all
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 contract rights) now or hereafter obtained by
Trustor from any Governmental Authority having or claiming jurisdiction over the
Land, the Vessel, the Tangible Property, the Real Property or any other element
of the Trust Estate or providing access thereto, or the operation of any
business on, at, or from the Land or the Vessel, including, without limitation,
any Gaming Licenses and (g) any and all products and proceeds derived or to be
derived therefrom, including without limitation, any and all present and future
accounts, contract rights, chattel paper, instruments, and documents
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<PAGE> 14
that may be derived from the sale, lease or other disposition of any of the
foregoing, and any rights of Trustor to collect or enforce payment thereof, as
well as enforce any guaranties of the foregoing and security therefor.
"Inventory" has the meaning set forth in Section 9.1.6.
"Land" has the meaning set forth in Granting Clause One.
"Leases" Any and all leases, subleases, lettings, licenses, concessions,
operating agreements, management agreements and all other agreements affecting
or covering the Real Property or any portion thereof now or hereafter existing
or entered into, together with all amendments, extensions and renewals of any of
the foregoing.
"Liens" means any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind, whether or not filed, recorded or otherwise perfected
under applicable law (including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement to
sell or give a security interest in and any filing of or agreement to give any
financing statement under the applicable UCC (or equivalent statutes) of any
jurisdiction).
"Loan Documents" shall mean the Loan Agreement, Guaranty, Letters of
Credit, and any and all other instruments, documents and other agreements now
existing or hereinafter entered into evidencing, curing, guaranteeing or
otherwise relating to the Secured Obligations.
"PCBs" means polychlorinated biphenyls.
"Permitted Liens" shall mean those certain liens and encumbrances set
forth on Exhibit "B" attached hereto.
"Personal Property" means the Intangible Property and the Tangible
Property.
"Proceeds" has the meaning"set forth in Section 9.1.22.
"Public Waters" means any river, lake, stream, sea, ocean, gulf, bay or
other public body of water.
"Real Property" has the meaning set forth in Granting Clause Two.
"Receiver" means any trustee, receiver, custodian, fiscal agent,
liquidator or similar officer.
"Rents" has the meaning set forth in Granting Clause Three.
"Secured Obligations" shall have the meaning set forth hereinabove.
"Subsidiary Guaranty Obligations" has the meaning set forth hereinabove.
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"Tangible Property" any and all tangible personal property, including,
without limitation, all goods, equipment, supplies, building and other materials
of every nature whatsoever and all other tangible personal property constituting
a part or portion of the Real Property and/or used in the operation of any
hotel, casino, restaurant, store, parking facility, special events arena, theme
park, and any other commercial operations on the Real Property or the Vessel,
including but not limited to Inventory, communication systems, visual and
electronic surveillance systems and transportation systems and not constituting
a part of the real property subject to the real property lien of this Deed of
Trust and including all property and materials stored on all or any portion of
the Real Property or the Vessel in which Trustor has an interest and all tools,
utensils, food and beverage, liquor, uniforms, linens, housekeeping and
maintenance supplies, vehicles, fuel advertising and promotional material,
blueprints, surveys, plans and other documents relating to the Land, the
Improvements or the Vessel, and all construction materials and all Fixtures,
including, but not limited to, all gaming equipment and devices which are used
in connection with the operation of the Real Property or the Vessel and those
items of Fixtures which are purchased or leased by Trustor, machinery and any
other item of personal property in which Trustor now or hereafter owns or
acquires an interest or right, and which are used or useful in the construction,
operation, use and occupancy of the Real Property, to the extent permitted by
the applicable contract or applicable law, all financial equipment, computer
equipment, player tracking system (including all computer hardware, operating
software programs and all right, title and interest in and to any applicable
license therefore) (the "Player Tracking System"), calculators, adding machines,
video game and slot machines, and any other electronic equipment of every nature
used or located on any part of the Real Property or the Vessel, and all present
and future right, title and interest of Trustor in and to any casino operator's
license agreement or sublease agreement used in connection with the Real
Property or the Vessel, along with any and all products and proceeds derived or
to be derived therefrom, including without limitation, any and all present and
future accounts, contract rights, chattel paper, instruments, and documents that
may be derived from the sale, lease or other disposition of any of the
foregoing, and any rights of Trustor to collect or enforce payment thereof, as
well as enforce any guaranties of the foregoing and security therefor.
"Title Policy" means the title insurance policy or policies in favor of
Beneficiary insuring the Lien of this Deed of Trust.
"Trust Estate" has the meaning set forth hereinabove.
"UCC" means the Uniform Commercial Code (as amended from time to time)
of the State of California.
Section 1.2 Related Matters.
1.2.1 Terms Used in the UCC. Unless the context clearly otherwise
requires, all lower case terms used in Section 9 of this Deed of Trust and not
otherwise defined herein that are used or defined in Article 9 (or any
equivalent subpart) of the UCC have the same meanings herein.
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1.2.2 Construction. Unless the context of this Deed of Trust clearly
requires otherwise, references to the plural include the singular, the singular
includes the plural, the part includes the whole, and "including" is not
limiting. The words "hereof," "herein," "hereby," "hereunder" and similar terms
in this Deed of Trust refer to this Deed of Trust as a whole including the
Preamble, the Recitals and all Schedules and Exhibits, but subject to Section
1.4 of the Loan Agreement) and not to any particular provision of this Deed of
Trust. Article, section, subsection, exhibit, recital, preamble and schedule
references in this Deed of Trust are to this Deed of Trust unless otherwise
specified. References in this Deed of Trust to any agreement, other document or
law "as amended" or "as may be amended from time to time," or to amendments of
any document or law, shall include any amendments, supplements, replacements,
renewals or other modifications.
1.2.3 Determinations. Any determination or calculation contemplated by
this Deed of Trust that is made by Beneficiary shall be final and conclusive and
binding upon the Trustor and Fitzgeralds, in the absence of manifest error.
References in this Deed of Trust to "determination" by Beneficiary include good
faith estimates (in the case of quantitative determinations) and good faith
beliefs (in the case of qualitative determinations). All references herein to
"discretion" of Beneficiary (or terms of similar import) shall mean "absolute
and sole discretion." All consents and other actions of Beneficiary contemplated
by this Deed of Trust may be given, taken, withheld or not taken, withheld or
not so expressed), except as otherwise expressly provided herein. No approval or
consent of Beneficiary shall be effective unless the express written approval or
consent of Beneficiary is received by Trustor.
1.2.4 Governing Law. This Deed of Trust shall be governed by, and
construed in accordance with, the laws (other than the rules regarding conflicts
of laws) of the State of California, except that the provisions hereof relating
be the creation, perfection and enforcement of the lien and security interest in
that portion of the Trust Estate which is real property or fixtures shall be
governed by the laws of the State of Mississippi.
1.2.5 Headings. The Article and Section beings used int his Deed of
Trust are for convenience of reference only and shall not affect the
construction hereof.
1.2.6 Severability. If any provision of this Deed of Trust or any Lien
or other right hereunder shall be held to be invalid, illegal or unenforceable
under Applicable Law in any jurisdiction, such provision, Lien or other right
shall be in effect only to the extent of such invalidity, illegality or
unenforceability, which shall not affect any other provisions herein or any
other Lien or right granted hereby or the validity, legality or enforceability
of such provision, Lien or right in any other jurisdiction.
1.2.7 Exhibits and Schedules. All of the appendices, exhibits and
schedules attached to this Deed of Trust shall be deemed incorporated herein by
reference.
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ARTICLE 2.
[RESERVED]
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES
Trustor hereby represents and warrants to Beneficiary and Trustee that:
Section 3.1 Corporate Existence. Trustor (a) is a corporation duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated, and (b) has the corporate power and
authority to own its property and assets and to transact the business in which
it is engaged or presently proposes to engage, and (c) is duly qualified and is
authorized to do business and is in good standing as a foreign corporation in
every jurisdiction in which it owns or leases real property or in which the
nature of its business requires it to be so qualified.
Section 3.2 Authorization; Approvals. The execution, delivery and
performance by Trustor of this Deed of Trust are within Trustor's corporate
powers and authority, have been duly authorized by all necessary corporate
action, and do not contravene (a) Trustor's charter or by-laws or (b) any law or
any contractual restriction binding on or affecting Trustor or the Real
Property. All authorizations or approvals or other actions by, or notice to or
filing with, any Governmental Authority required for the due execution, delivery
and performance by Trustor of this Deed of Trust have been duly obtained and are
in full force and effect.
Section 3.3 Enforceability. This Deed of Trust has been duly executed and
delivered by Trustor and is the legal, valid and binding obligation of Trustor,
enforceable against Trustor in accordance with its terms, subject to applicable
bankruptcy, insolvency, moratorium, reorganization or other similar laws
affecting creditors' rights generally and general principles of equity.
Section 3.4 Validity and Perfection of Security Interests. The liens and
security interests in the Trust Estate created in accordance with the terms
hereof constitute valid security interests, and, (a) upon recordation of this
Deed of Trust in the appropriate office in Tunica County, Mississippi, (b) upon
the filing of financing statements naming Trustor as "Debtor" and Beneficiary as
"Secured Party" and describing the Trust Estate in the filing offices of the
Secretaries of State of Mississippi, the Tunica County Clerk of the Chancery
Court, and in the real estate records of Tunica County, Mississippi, (c) upon
the delivery of any instruments and Chattel Paper which are included in the
Trust Estate to Beneficiary, (d) to the extent subject to Federal law and not
Article 9 of the Applicable UCC, upon recordation of the security interests
granted in Patents and Copyrights in the U.S. Patent and Trademark Office and
the U.S. Copyright Office, along with the registration of all U.S. Copyrights in
the US. Copyright Office
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and, to the extent governed by foreign law, the taking of all steps necessary
under applicable foreign law to perfect or record the security interest in all
foreign intellectual property collateral applications and registrations and (e)
to the extent ownership of Collateral is represented by a certificate, a
notation on the certificate of the Lien granted hereby, the security interests
granted to Beneficiary hereunder will constitute perfected security interests
therein superior and prior to all Liens, rights or claims of all other Persons
other than Permitted Liens.
Section 3.5 Title To and Right To Use Assets. Trustor has good and
marketable fee simple title in the Land, and is the legal and beneficial owner
of the remainder of the Trust Estate (and as to the Trust Estate whether now
existing or hereafter acquired, Trustor will continue to own each item thereof),
free and clear of all Liens except Permitted Liens. Trustor has the right to
hold, occupy and enjoy its interest in the Trust Estate subject to the terms of
the Gaming Licenses and subject to the Permitted Liens, and has valid right,
full power and legal authority, subject to Applicable Gaming Laws, to mortgage
and pledge the same as provided herein, and Trustor shall defend the Trust
Estate against all claims and demands of all Persons at any time claiming the
same or any interest therein adverse to Beneficiary (except for Permitted Liens)
and Beneficiary may, subject to Applicable Gaming Laws, at all times peaceably
and quietly enter upon, hold, occupy and enjoy the entire Trust Estate in
accordance with the terms hereof.
Section 3.6 Non-Contravention. Neither the execution, delivery or
performance of this Deed of Trust by the Trustor nor the consummation of the
transactions herein contemplated nor the fulfillment of the terms hereof (i)
violate the terms of or constitute a default under any agreement, indenture,
mortgage, deed of trust, equipment lease, instrument or other document to which
the Trustor is a party or by which it or any of its property or assets is bound
or to which it may be subject, (ii) conflict with any law, order, rule or
regulation applicable to the Trustor of any court or any government, regulatory
body or administrative agency or other governmental body having jurisdiction
over the Trustor or the Trust Estate, or (iii) result in or require the creation
or imposition of (or the obligation to create or impose) any Lien (other than
the Lien contemplated hereby or by any other Loan Document), upon or with
respect to any of the property or assets now owned or hereafter acquired by
Trustor.
Section 3.7 Contracts. Each material contract which is part of the Trust
Estate (each, a "Contract"), (i) is the genuine, legal valid, and binding
obligation of Trustor, (ii) is enforceable against Trustor in accordance with
its terms, (iii) is in full force and effect and is, to Trustor's knowledge, not
subject to any setoffs defenses, overdue taxes, counterclaims or other claims,
nor have any of the foregoing been asserted or alleged as to any Contract, and
(iv) is, in all material respects, in compliance with all applicable laws,
whether federal, state, local or foreign ("Applicable Laws"). Neither Trustor
nor, to the best knowledge of Trustor, any other party to any Contract is in
default in the performance or observance of any of the terms thereof. No party
to any Contract is the United States government or an instrumentality thereof.
Section 3.8 Leases. Trustor has delivered to Beneficiary true, correct and
complete copies of all Leases, including all amendments thereof and
modifications thereto. Each Lease (i) is the genuine, legal, valid and binding
obligation of Trustor, (ii) is enforceable against Trustor and, to the best of
Trustor's knowledge, the other party thereto, in accordance with its
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terms, (iii) is in full force and effect and is not subject to any setoffs,
defenses, taxes, counterclaims or other claims, nor have any of the foregoing
been asserted or alleged as to any Lease, and (iv) is in compliance with all
applicable laws, whether federal, state, local or foreign.
Section 3.9 No Other Real Property. The Trust Estate constitutes all of the
property (whether owned, leased or otherwise) currently used by Trustor in
connection with the operation of the Fitzgeralds Tunica Casino, other than
Excluded Assets.
Section 3.10 Compliance with Laws. To the best knowledge of Trustor, except
as otherwise disclosed in writing to Beneficiary, the Trust Estate and the
proposed and actual use thereof comply in all material respects with all
Applicable Laws, and there is no proceeding pending or, to the best knowledge of
Trustor, threatened before any court, quasi-judicial body, Governmental
Authority or administrative agency relating to the validity of the Loan
Documents or the proposed or actual use of the Trust Estate.
Section 3.11 Real Property Use: Mechanics' Liens. The Real Property is not
used principally or primarily for agricultural or grazing purposes. All costs
for labor and material for the removal, construction and renovation of the
Improvements (including, without limitation, any additions and alterations
thereto) have been paid in full or will be paid in accordance with Section 4.15.
Section 3.12 Condemnation. There are no pending or, to the best knowledge of
Trustor, threatened condemnation or eminent domain proceedings against the Trust
Estate or any part thereof.
Section 3.13 Litigation. Except as disclosed in writing to Beneficiary on
the date hereof, there are no pending or, to the best knowledge of Trustor,
threatened, actions, claims, proceedings, investigations, suits or proceedings
before any court, governmental agency or arbitrator.
Section 3.14 Construction of Improvements. All Improvements have been and
will be constructed in all material respects in accordance with Applicable Laws
and all requirements of Governmental Authorities and governmental approvals. To
the best knowledge of Trustor, the Improvements are free from latent and patent
defects, and do not require any material repairs, reconstruction or replacement
on the date hereof (except for any material repairs, reconstruction or
replacement that do not have a material adverse effect on the value of the
Improvements and do not materially and adversely affect the use and operation of
the Improvements).
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ARTICLE 4.
AFFIRMATIVE COVENANTS
Trustor hereby covenants to and agrees with Beneficiary as follows:
Section 4.1 Secured Obligations of Trustor. Trustor will perform, observe
and comply with its Secured Obligations arising under this Deed of Trust and
shall continue to be liable for the performance of its Secured Obligations
arising under this Deed of Trust until discharged in full, notwithstanding any
actions of partial foreclosure that may be brought hereunder to recover any
amount or amounts expended by Beneficiary on behalf of Trustor in order to cure
any of Trustor's defaults or to satisfy any of Trustor's obligations or
covenants under any agreement relating to the Trust Estate and to which Trustor
is a party or by which the Trust Estate is bound.
Section 4.2 Compliance with Law: Maintenance of Approvals. Except as
expressly permitted by the Indenture, Trustor shall (i) comply with all
requirements of law applicable to the ownership, operation, use and occupancy of
all or any portion of the Trust Estate, whether or not such compliance requires
work or remedial measures that are ordinary or extraordinary, foreseen or
unforeseen, or structural or nonstructural, and (ii) maintain in full force and
effect all authorizations, approvals or other actions, including without
limitation, Gaming Licenses and liquor licenses and permits, which are necessary
or desirable for the performance of Trustor's obligations pursuant to this Deed
of Trust or for the business conducted by Trustor on the Real Property.
Section 4.3 Other Reports. Trustor shall provide from time to time such
additional information regarding Trustor or the Trust Estate as are required
under the Indenture or as Beneficiary may reasonably request.
Section 4.4 Insurance. The Trustor, at its sole cost and expense, shall
provide, maintain and keep in force the insurance required by Section 6.10 of
the Loan Agreement (the "Insurance Policies").
Section 4.5 Waste and Repair. Except as expressly permitted by Section 4.15
of the Indenture, Trustor shall at all times cause the Trust Estate to be
maintained in normal working order and condition (reasonable wear and teat
excepted). Trustor shall not suffer any waste of the Real Property or do or
permit to be done thereon anything that may in any way impair the Real Property
nor impair the security of this Deed of Trust. Trustor shall not abandon the
Real Property nor leave the Real Property unprotected or deserted.
Section 4.6 Impositions: Impounds; Taxes: Capital Costs.
4.6.1 Impositions Affecting the Real Property. Trustor shall
pay when due all Impositions (or currently payable installments thereof) that
are or that may become a lien on the Real Property or are assessed against the
Real Property or the Rents; provided, however,
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that Trustor may, at its expense, contest the amount or validity or application
of any such Impositions by appropriate legal proceedings promptly initiated and
conducted in good faith and with due diligence; provided that (i) neither the
Real Property nor any substantial part thereof will be in danger of being sold,
forfeited, terminated, canceled, or lost as a result of such contest, and (ii)
except in the case of a Lien junior to the Lien of this Deed of Trust, Trustor
shall have posted such bond or furnished such other security as may be required
by law to release such Lien.
4.6.2 Impounds; Impound Account. Upon the occurrence and
during the continuance of an Event of Default and at the request of Beneficiary,
Trustor will pay to Beneficiary monthly an amount equal to one-twelfth (1/12th)
of the annual cost (or such greater amount as may be reasonably necessary for
Beneficiary to have on hand sufficient funds to pay the next installment prior
to delinquency) of Impositions on the Real Property (but only those Impositions
defined in clause (i) of the definition of "Impositions"), together with an
amount equal to the estimated next hazard and other required insurance premiums
in order to accumulate with Beneficiary sufficient funds to pay such Impositions
and premiums at least 30 days prior to their respective due dates. Such funds
shall be held by Beneficiary on a commingled basis and shall not bear interest.
Said accumulated funds shall be paid and applied by Beneficiary with respect to
such Impositions and insurance -premiums as and when due.
Section 4.7 Further Assurances. Trustor shall, at its own expense, perform
such acts as may be necessary, or that Beneficiary may request at any time, to
execute, acknowledge and deliver all such additional papers and instruments
(including, without limitation, a declaration of no setoff) and all such further
assurances of title and will do or cause to be done all further acts and things
as may be proper or reasonably necessary to carry out the purpose hereof and to
subject to the Liens hereof any property intended by the terms hereof to be
covered thereby and any renewals, additions, substitutions, replacements or
betterments thereto.
Section 4.8 Waiver of Offsets.
4.8.1 In the event any tax, stamp tax, assessment water rate,
sewer rate, insurance premium, repair, rent charge, debt, claim, inspection,
Imposition or lien having priority over the Lien of this Deed of Trust, or in
the event any other amount required to be paid by Trustor hereunder shall remain
unpaid and Trustor is not contesting such amount pursuant to the terms hereof or
the Indenture, Beneficiary shall have the right to pay such amount and shall
have the right to declare immediately due and payable any such amount so paid.
Any amount so paid by Beneficiary shall bear interest at the default interest
rate specified in Section 2.6(c) of the Loan Agreement ("Default Rate") from the
date of payment by Beneficiary, shall constitute an additional Secured
Obligation secured hereby, prior to any right, title or interest in or claim
upon the Trust Estate attaching or accruing subsequent to the Lien of this Deed
of Trust shall be secured by this Deed of Trust and shall be payable by Trustor
to Beneficiary within thirty (30) days after receipt by Trustor of written
demand.
4.8.2 Except as otherwise provided herein, in the Indenture or
in the other Loan Documents, all sums payable by Trustor hereunder or under the
other Loan Documents
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shall be paid without notice, demand, counterclaim, setoff, deduction or defense
and without abatement, suspension, deferment, diminution or reduction, and the
obligations and liabilities of Trustor hereunder shall in no way be released,
discharged or otherwise affected by reason of (i) any damage to or destruction
of or any condemnation or similar taking of the Trust Estate or any part
thereof; (ii) any restriction or prevention of or interference with any use of
the Trust Estate or any part thereof; (iii) any title defect or encumbrance or
any eviction from the Real Property or the Improvements or any part thereof by
tide paramount or otherwise; (iv) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other like proceeding
relating to Beneficiary, or any action taken with respect to this Deed of Trust
by any or receiver of Beneficiary, or by any court in any such proceeding; (v)
any claim which Trustor has or might have against Beneficiary;(vi) any default
or failure on the part of Beneficiary to perform or comply with any of the terms
hereof or of any other agreement with Trustor; (vii) any other occurrence
whatsoever, whether similar or dissimilar to the foregoing; whether or not
Trustor shall have notice or knowledge of any of the foregoing. Trustor waives
all rights now or hereafter by statute or otherwise to any abatement,
suspension, deferment, diminution or reduction of any sum secured hereby and
payable by Trustor.
Section 4.9 Litigation. Trustor was promptly upon obtaining actual
knowledge thereof, give notice in writing to Beneficiary of an litigation
commenced that is likely to have a material adverse effect on the Real Property
or the Liens created hereby other than unlawful detainer proceedings brought by
Trustor.
Section 4.10 Certain Reports. Trustor will promptly and in any event within
fifteen days after actual receipt by Trustor thereof, deliver to Beneficiary a
copy of any written notice or citation concerning any actual, alleged or
suspected violation of Environmental Requirements or liability of Trustor for
Environmental Damages in connection with the Real Property or past or present
activities of any Person thereon.
Section 4.11 Tax Receipts. Subject to the provisions of Section 4.5 hereof,
Trustor shall provide to Beneficiary, within 30 days after demand made therefor,
bills (which shall be receipted from and after the date receipted bills are
obtainable) showing the payment to the extent then, due of all taxes,
assessments including those payable in periodic installments), water rates,
sewer rates, and/or any other Imposition that have become a lien (other than an
inchoate lien) upon the Trust Estate.
Section 4.12 FIRPTA Affidavit. Trustor hereby represents and warrants to
Beneficiary under penalty of perjury:
(i) Trustor's U.S. Taxpayer Identification Number is
880299002;
(ii) Trustor's business address is set forth in the preamble
hereto; and
(iii) Trustor is not a "foreign person" within the meaning of
Sections 1445 and 7701 of the Code (i.e., Trustor is not a nonresident alien,
foreign corporation, foreign
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partnership, foreign trust or foreign estate as those terms are defined in the
Code and regulations promulgated thereunder).
Trustor agrees to indemnify, defend, protect and hold Beneficiary and
Beneficiary's agents harmless of, from and against any and all loss, liability,
costs, damages, claims or causes of action including reasonable attorneys' fees,
costs and expenses which may be actually incurred by Beneficiary or
Beneficiary's agents by reason of any failure of any representation or warranty
made by Trustor in this Section 4.12 to be true and correct in all respects,
including, but not limited to, any liability for failure to withhold any amount
required under Code Section 1445 in the event of foreclosure or other transfer
of the Real Property.
Section 4.13 Preservation of Contractual Rights. Except as otherwise
expressly permitted by the Indenture, Trustor shall, prior to delinquency,
default or forfeiture, perform all obligations and satisfy all material
conditions required on its part to be satisfied to preserve its rights and
privileges under any contract, lease, license, permit or other authorization (a)
under which it holds any Tangible Property, or (b) which constitutes part of the
Intangible Property.
Section 4.14 Tax Service Contract. At any time after the occurrence of an
Event of Default (whether or not such Event of Default is cured), at the request
of Beneficiary and at Trustor's and/or its permitted successor's sole expense,
Beneficiary shall be furnished a tax service contract in form satisfactory to
Beneficiary issued by a tax reporting agency satisfactory to Beneficiary which
contract shall remain in force until indefeasible discharge in full of the
Secured Obligations.
Section 4.15 Liens. Trustor shall pay and promptly discharge, at Trustor's
cost and expense, all Liens upon the Trust Estate, or any part thereof or
interest therein other than the Permitted Liens. Trustor shall have the right to
contest in good faith the validity of any such Lien, provided Trustor shall
first post such bond or furnish such other security as may be required by law to
release such Lien, and provided further that Trustor shall thereafter diligently
proceed to cause such Lien to be removed and discharged. If Trustor shall fail
to discharge any such Lien, 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 by depositing in court a bond for the amount claimed or otherwise
giving security for such Lien, or in such manner as is or may be prescribed by
law. Any amount so paid by Beneficiary shall bear interest at the Default Rate
from the date of payment by Beneficiary, shall constitute an additional Secured
Obligation secured hereby, prior to any right, title or interest in or claim
upon the Trust Estate attaching or accruing subsequent to the Lien of this Deed
of Trust, shall be secured by a Deed of Trust and shall be payable by Trustor to
Beneficiary upon demand.
Section 4.16 Inspection. Trustor shall permit Beneficiary, upon 24 hours'
prior notice, to enter upon and inspect, during normal business hours, the Real
Property and the construction and operation thereof for such purposes reasonably
deemed necessary by Beneficiary, it being agreed by Trustor that Beneficiary's
good faith belief of the existence of a past or present release or threatened
release of any Hazardous Material into, onto, beneath or
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from the Real Property shall be conclusively deemed reasonable; provided,
however, that no such prior notice shall be necessary and such inspection may
occur at any time if (l) Beneficiary reasonably believes that an emergency
exists or is imminent or (ii) the giving or delivery of such notice is
prohibited or stayed by Applicable Laws.
ARTICLE 5.
[RESERVED]
ARTICLE 6.
NEGATIVE COVENANTS
Trustor hereby covenants to and agrees with Beneficiary as follows:
Section 6.1 Restrictive Uses. Trustor covenants not to suffer any Liens
against the Trust Estate (other than Permitted Liens).
Section 6.2 Transferability. Trustor shall not suffer or permit any sale,
conveyance, mortgage, pledge, hypothecation, encumbrance, lease, assignment or
other transfer of the Trust Estate or any portion thereof or any interest
therein without in each instance obtaining the prior written consent of
Beneficiary, except as permitted under the Loan Agreement.
Section 6.3 No Cooperative or Condominium. Trustor shall not operate or
permit the Real Property to be operated as a cooperative or condominium building
or buildings in which the tenants or occupants participate in the ownership,
control or management of the Real Property or any part thereof, as tenant
stockholders or otherwise.
Section 6.4 Impairment of Deed of Trust. Trustor shall not suffer waste of
the Real Property or do or suffer any act or thing to be done, or omit to do any
act or thing, if such act or thing, or such forbearance or omission, would
impair the Real Property or the security of this Deed of Trust.
ARTICLE 7.
CASUALTIES AND CONDEMNATION
Section 7.1 Casualties.
7.1.1 Trustor will notify Beneficiary in writing promptly
after loss or damage caused by fire, wind or other casualty to the Real Property
("Casualty").
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7.1.2 Any monies received as payment for any loss under any
insurance policy shall be treated in accordance with Section 6.10 of the Loan
Agreement and shall be released to Trustor or applied as set forth in Section
6.10 of the Loan Agreement.
Section 7.2 Condemnation.
(a) Trustor, immediately upon obtaining knowledge of the
institution of any proceedings for the condemnation of all or substantially all
of the Real Property, will notify Trustee and Beneficiary of the pendency of
such proceedings. Trustee and Beneficiary may participate in any such
proceedings and Trustor from time to time will deliver to Beneficiary all
instruments requested by Beneficiary to permit such participation; provided,
however, that Trustor shall have the sole right to participate in and settle any
and all such proceedings unless an Event of Default then exists. In any such
condemnation proceedings Beneficiary may be represented by counsel selected by
Beneficiary at the sole cost and expense of Trustor; provided, however, that
Trustor shall have the sole right to participate in and settle any and all such
proceedings unless an Event of Default then exists. Trustor shall cause the net
proceeds of any award or compensation or payment in lieu of settlement thereof,
to be applied as set forth in Section 6.10 of the Loan Agreement. To the extent
permitted by applicable law, Trustor hereby specifically, unconditionally and
irrevocably waives all rights of a property owner granted under applicable law,
including __________, which provide for allocation of condemnation proceeds
between a property owner and a lienholder.
ARTICLE 8.
REMEDIES OF BENEFICIARY
Section 8.1 Event or Default. Subject to any applicable cure period provided
for in the Indenture or in this Deed of Trust, or if no cure period has been
specified then 30 days after Beneficiary has provided written notice to Trustor
with respect thereto (any such cure periods to run concurrently and not
consecutively), any of the following shall be deemed to be an "Event of Default"
hereunder:
8.1.1 The occurrence of one or more "Events of Default" (as
defined in Section 8.0 of the Loan Agreement shall constitute an Event of
Default under this Deed of Trust.
8.1.2 Failure of Trustor to perform any of the terms,
covenants and conditions in this Deed of Trust or any of the other Loan
Documents.
8.1.3 Any statement, representation or warranty given by
Trustor to Trustee or Beneficiary in any of the Loan Documents, in connection
with the Loan Agreement or in any other document provided by Trustor, including
this Deed of Trust, is found to be materially false or misleading.
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8.1.4 A material default under, or the institution of
foreclosure or other proceedings to enforce, any Lien or Permitted Lien of any
kind upon the Real Property or any portion thereof.
8.1.5 Any transfer of the Real Property or any portion thereof
in violation of Section 6.2. hereof.
8.1.6 The occurrence of one or more "Event of Default" as
defined in the Vessel Mortgage shall constitute an Event of Default under this
Deed of Trust.
Section 8.2 Remedies. Beneficiary shall be and hereby is authorized and
empowered, for and in the name and on behalf of Trustor, and shall be and hereby
is irrevocably made, constituted and appointed Trustor's true and lawful
attorney in fact, coupled with an interest and with full power of substitution,
delegation and revocation, to do the following at any time after an Event of
Default.
8.2.1 In person, by agent, or by a receiver, and without
regard to the adequacy of security, the solvency of Trustor or any other matter,
(i) enter upon and take possession of the property, or any part thereof, in its
own name or in the name of Trustee, (ii) inspect the Real Property for the
purpose of determining the existence, location, nature and magnitude of any past
or present release of Hazardous Materials into, onto, beneath or from the Real
Property, (iii) negotiate with Governmental Authorities with respect to
compliance with Environmental Requirements, including, but not limited to,
spending Rents in connection with any cleanup, remediation or other response
action with respect to Hazardous Materials or (v) sue for or otherwise collect
the Rents, issues and profits thereof and apply the same, less costs and
expenses of operation and collection, including reasonable attorneys' fees
actually incurred, to the Secured Obligations, all in such order as Beneficiary
may determine. The entering upon and taking possession of said Real Property,
the collection of such Rents, issues and profits and the application thereof as
aforesaid shall not cure or waive any default or notice of default hereunder or
invalidate any act done pursuant to such notice, or deprive Beneficiary of the
benefits of any indemnity set forth herein;
8.2.2 Commence an action to foreclose this Deed of Trust in
the manner provided by Applicable Laws for the foreclosure of mortgages or deeds
of trust of real property;
8.2.3 Seek a judgment that Trustor has breached its covenants,
representations and/or warranties set forth in this Deed of Trust, or any other
Loan Document regarding Environmental Requirements and/or Hazardous Materials,
by commencing, maintaining and concluding, and enforcing a judgment arising
from, an action for breach of contract, without regard to whether Beneficiary
has commenced an action to foreclose this Deed of Trust, and to seek injunctive
or other appropriate equitable relief and/or the recovery of any and all
Environmental Damages, it being conclusively presumed between Trustor and
Beneficiary that any reasonable costs advanced or expenses actually incurred by
Beneficiary relating to the cleanup, remediation or other response action with
respect to the Real Property were made or incurred by Beneficiary in good faith.
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8.2.4 Intentionally Deleted.
8.2.5 Declare the Secured Obligations to become immediately
due and payable pursuant to Section 9.1 of the Loan Agreement. If the
Beneficiary so declares and Trustor fails to make such payment as and when due,
then Beneficiary may waive its Liens against any parcel of the Real Property or
all or any portion of the Fixtures or Personal Property attached to the Real
Property, to the extent such property is determined to be environmentally
impaired, and to exercise any and all rights of an unsecured creditor against
Trustor and all of Trustor's assets for the recovery of any deficiency,
including, but not limited to, seeking an attachment order. TRUSTOR ACKNOWLEDGES
AND AGREES THAT NOTWITHSTANDING ANYTHING TO THE CONTRARY, EXPRESS OR IMPLIED, IN
THIS DEED OF TRUST OR IN ANY OF THE OTHER LOAN DOCUMENTS (INCLUDING, WITHOUT
LIMITATION, ANY NONRECOURSE OR EXCULPATORY LANGUAGE, IF ANY), TRUSTOR SHALL BE
PERSONALLY LIABLE FOR ANY RECOVERY DESCRIBED IN THIS PARAGRAPH 8.2.5. AND SUCH
LIABILITY SHALL NOT BE LIMITED TO THE AMOUNT OF THE INDEBTEDNESS CURRENTLY
OUTSTANDING UNDER THE LOAN AGREEMENT.
8.2.6 With respect to any Personal Property, proceed as to
both the real and personal property in accordance with Beneficiary's rights and
remedies in respect of the Real Property, or proceed to sell said Personal
Property separately and without regard to the Real Property in accordance with
Beneficiary's rights and remedies; and/or
8.2.7 Pursue any and all other remedies it may have, at law or
in equity, or under any other document or instrument, except as otherwise
provided in the Loan Agreement.
Section 8.3 Power of Sale. If Trustor or Fitzgeralds shall be in default as
provided in Section 8.1 hereof, then, in that event, the entire Secured
Obligations, together with all interest accrued thereon, shall, at the option of
Beneficiary, be and become at once due and payable without notice to Trustor,
and Trustee shall, at request of Beneficiary, sell the Real Property conveyed,
or a sufficiency thereof, to satisfy the Secured Obligations at public outcry to
the highest bidder for cash or cash equivalent sale of the Real Property shall
be advertised for three (3) consecutive weeks preceding the sale in a newspaper
published in the county where the Real Property is situated, or if none is so
published, then in some newspaper having a general circulation therein, and by
posting a notice for the same time at the courthouse of the same county. The
notice and advertisement shall disclose the names of the original Trustor in
this Deed of Trust. Trustor waives the provisions of Section 89-1-55 of the
Mississippi Code of 1972, as amended, insofar as this section restricts the
right of Trustee to offer at sale more than 160 acres at a time, and Trustee may
offer the property herein conveyed as a whole, regardless of how it is
described. If the Real Property is situated in two (2) or more counties, or in
two (2) judicial districts of the same county, Trustee shall have full power to
select in which county or judicial district the sale of the Real Property is to
be made, newspaper advertisement to be published and notice of sale to be
posted, and Trustee's selection shall be binding upon Trustor and Beneficiary.
Should Beneficiary be a corporation or an unincorporated association, then any
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officer thereof may declare Trustor or Fitzgeralds to be in default as provided
in Section 8.1 hereof and request Trustee to sell the Real Property. Beneficiary
shall have the same right to purchase the Real Property at the foreclosure sale
as would a purchaser who is not a party to this Deed of Trust. The Trustor
hereby irrevocably and unconditionally waives and releases: (i) all benefits
that might accrue to the Trustor by virtue of any present or future law
exempting the Real Property from attachment, levy or sale or execution or
providing for any appraisement, valuation, stay of execution, exemption from
civil process, redemption or extension of time for payment; (ii) all notices of
any Event of Default or of the Trustee's exercise of any right, remedy or
recourse provided for hereunder or under any of the other Loan Documents; and
(iii) any right to a marshaling of assets or a sale in inverse order of
alienation.
Section 8.4 Proof of Default. Thevent of a sale of the Real Property, or any
part thereof, and the execution of a deed or deeds therefor, the recital therein
of default, and of recording notice of breach and election of sale, and of the
elapsing of the required time (if any) between the foregoing recording and the
following notice, and of the giving of notice of sale, and of a demand by
Beneficiary, or its successors or assigns, that such sale should be made, to the
extent permitted by Applicable Laws, shall be conclusive proof of such default,
recording, election, elapsing of time, and of the due giving of such notice, and
that the sale was regularly and validly made on due and proper demand by
Beneficiary, its successors or assigns; and any such deed or deeds with such
recitals therein shall be effectual and conclusive against Trustor, its
successors and assigns, and all other Persons; and the receipt for the purchase
money recited or contained in any deed executed to the purchaser as aforesaid
shall be sufficient discharge to such purchaser from all obligations to see to
the proper application of the purchase money.
Section 8.5 Protection of Security. If an Event of Default shall have
occurred and be continuing, then upon at least 15 days prior written notice to
Trustor and without releasing Trustor from any obligations or defaults
hereunder, Beneficiary or Trustee shall have the right, but not the obligation,
to: (i) make payment or otherwise perform such obligations of Trustor upon which
such Event of Default is based in such manner and to such extent as either may
reasonably deem necessary to protect the security hereof, Beneficiary and
Trustee being authorized to enter upon the Real Property for such purpose; (ii)
appear in and defend any action or proceeding purporting to affect, in any
manner whatsoever, the Secured Obligations, the security hereof or the rights or
powers of Beneficiary or (iii) pay, purchase or compromise any encumbrance,
charge or lien (other than Permitted Liens); (iv) advance any and all costs and
expenses reasonably necessary to cure or pay Environmental Damages or otherwise
to comply with Environmental Requirements; and (v) in exercising any such
powers, pay necessary expenses, employ counsel and pay attorneys' fees. Trustor
hereby agrees to repay within (30) days after receipt of written demand all
reasonable sums actually expended by Trustee or Beneficiary pursuant to this
Section 8.5. with interest at the Default Rate from the date of expenditure by
Beneficiary, and such sums, with interest shall be secured hereby.
Section 8.6 Receiver. If an Event of Default shall have occurred and be
continuing, Beneficiary, as a matter of strict right and without regard to the
then value of the Real Property, shall have the right to apply to any court
having jurisdiction to appoint a Receiver or Receivers of the Real Property. Any
such Receiver or Receivers shall have all the powers and duties of
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receivers under Applicable Laws in like or similar cases and all the powers and
duties of Beneficiary in case of entry as provided in this Deed of Trust, and
shall continue as such and exercise all such Powers until the date of
confirmation of sale, unless such receivership is sooner terminated.
Section 8.7 Curing of Defaults.
8.7.1 If Trustor shall at any time fail to perform or comply
with any of the terms, covenants and conditions required on Trustor's part to be
performed and complied with under this deed of Trust or any other Loan Document
relating to the Trust Estate (after the lapse of any cure period provided
therein), then Beneficiary shall have the right, but not the obligation, without
waiving or releasing any of the Secured Obligations, to:
8.7.1.1 make any payments thereunder payable by Trustor
and take out, pay for and maintain any of the insurance policies provided for
therein, and/or
8.7.1.2 after the expiration of any applicable grace
period and subject to Trustor's rights to contest certain obligations
specifically granted hereby, perform any such other acts thereunder on the part
of Trustor to be performed and enter upon the Real Property and incur reasonable
attorneys' fees and expenses for such purpose.
8.7.2 The making by Beneficiary of such payment out of
Beneficiary's own funds shall not, however, be deemed to cure such default by
Trustor, and the same shall not be so cured unless and until Trustor shall have
reimbursed Beneficiary within the applicable cure period for such payment
including interest at the Default Rate from the date of such expenditure. All
sums so paid and all reasonable costs and expenses actually incurred and paid by
Beneficiary in connection with the performance of any such act, together with
interest on unpaid balances thereof at the Default Rate from the respective
dates of Beneficiary's making of each such payment, shall be secured by the lien
of this Deed of Trust, prior to any right, title or, interest in or claim upon
the Real Property attaching or accruing subsequent to the lien of this Deed of
Trust and shall be payable by Trustor to Beneficiary within thirty (30) days
after receipt of written demand.
Section 8.8 Remedies Cumulative. All remedies of Beneficiary and all other
rights and provided for herein are cumulative and shall be in addition to any
remedies provided in the other Loan Documents or provided by Applicable Law,
including any banker's lien and right of offset. The exercise of any right or
remedy by Beneficiary hereunder shall not in any way constitute a cure or waiver
of default hereunder or under the Loan Documents, or invalidate any act done
pursuant to any notice of default, or prejudice Beneficiary in the exercise of
said rights, all Secured Obligations are fully discharged.
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ARTICLE 9.
SECURITY AGREEMENT AND FIXTURE FILING
Section 9.1 Grant of Security Interest. To secure the payment and
performance of the Secured Obligations as and when due, Trustor (as debtor)
hereby grants, conveys, pledges, assigns and transfers to Beneficiary (as
secured party), as agent and representative for the equal and ratable benefit of
Trustee and the Holders, security interests (collectively, the "Security
Interest") in, all right, title, claim, estate and interest in and to all
Personal Property and Fixtures, whether now owned and existing or hereafter
acquired or arising, and wherever located, including, without limitation, the
following but excluding in each case any "Excluded Assets" (the "Collateral"):
9.1.1 Any and all "chattel paper" as such term is defined in
Section 9105(b) of the UCC (the "Chattel Paper");
9.1.2 Any and all "accounts" as such term is defined in
Section 9106 of the UCC (the "Accounts");
9.1.3 Any and all rights to payment for goods sold or leased
or services rendered, whether or not earned by performance and all rights in
respect of the Account Debtor, including without limitation all such rights
constituting or evidenced by any Account, Chattel Paper or Instrument together
with (a) any collateral assigned, hypothecated or held to secure any of the
foregoing and the rights under any security agreement granting a security
interest in such collateral, (b) all goods, the sale of which gave rise to any
of the foregoing, including, without limitation, all rights in any returned or
repossessed goods and unpaid seller's rights, (c) all guarantees, endorsements
and indemnifications on, or of, any of the foregoing and (d) all powers of
attorney for the execution of any evidence of indebtedness or security or other
writing in connection therewith Any and all negotiable instruments, promissory
notes, acceptances, drafts, checks, certificates of deposit and other writings
that evidence a right to the payment of money by any other Person
("Receivables").
9.1.4 Any and (a) all original copies of all documents,
instruments or other writings evidencing the Receivables, (b) all books,
correspondence, credit or other files, records, ledger sheets or cards,
invoices, and other papers relating to Receivables, including without limitation
all tapes, cards, computer tapes, computer discs, computer runs, record keeping
systems and other papers and documents relating to the Receivables, whether in
the possession or under the control of any Trustor or any computer bureau or
agent for any Trustor or otherwise and (c) all credit information, agent from
time to time acting for any Trustor or otherwise and (c) all credit reports and
memoranda relating thereto ("Receivables Records");
9.1.5 Any and all rights to payment:
9.1.5.1 to the extent not included in Accounts,
Receivables or Chattel paper, receivable from any credit card company (such as
Visa, MasterCard, Chattel Paper,
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American Express and Diner's Club), whether arising out of or relating to the
sale of lodging, goods and services by Trustor or otherwise; and
9.1.5.2 of money not listed above and any and all
rights, titles, interests, securities, Liens and guaranties evidencing,
securing, guaranteeing payment of or in any way relating to any Receivables;
9.1.6 "Inventory" as such is defined in Section 9-109(4) of the
UCC, including without limitation and in any event, all goods (whether such
goods are in the possession of Trustor or a lessee, bailee or other Person for
sale, lease, storage, transit, processing, use or otherwise and whether
consisting of whole goods, spare parts, components, supplies, materials or
consigned or returned or repossessed goods) which are held for sale or lease or
are to be furnished (or which have been furnished) under any contract of service
or which are raw materials or work in progress or materials used or consumed in
any Trustee's business ("Inventory");
9.1.7 Any and all equipment "equipment" as such term is
defined in Section 9-109(2) of the UCC, including, without limitation
("Equipment");
9.1.7.1 machinery, machine tools, manufacturing
equipment, data processing equipment, computers, office equipment, furniture,
appliances, rolling stock, motors, pumps, controls, tools, parts, works of art,
furnishings and trade fixtures, all athletic equipment and supplies and all
molds, dies, drawings, blueprints, reports, catalogs and computer programs
related to any Of the above.
9.1.7.2 ships, boats, barges and vessels (whether under
construction or completed) and any and all masts, bowsprit, boilers, engines,
sails. fittings, anchors, cables, chains, riggings, tackle, apparel, capstans,
outfits, gears, appliances, fittings and spare and replacement parts and other
appurtenances, accessories and additions, improvements and replacements thereto,
whether onboard or not on board, in or to any ship, boat, barge or vessel,
9.1.7.3 slot machines, electronic gaming devices and
related equipment, crap tables, blackjack tables, roulette tables, baccarat
tables, keno apparatus, cards, dice, gaming chips and plaques, tokens, chip
racks. dealing shoes, dice cups, dice, sticks, layouts, paddles, roulette balls
and other supplies and items used in connection with gaming operations, and
9.1.7.4 stones, wood, steel and other materials used or
to be used in the building, construction, repair, renovation, refurbishment or
otherwise with respect to improvements or ships, boats, barges or vessels.
9.1.8 Any and all "fixtures" as such term is defined in
Section 9-313 of the UCC, including without limitation, machinery, equipment or
appliances for generating, storing or distributing air, water, heat,
electricity, light, fuel or refrigeration, for ventilating or
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sanitary purposes, elevators, safes, laundry, kitchen and athletic equipment,
trade fixtures, and telephone, television and other communications equipment
(the "Fixtures");
9.1.9 Any and all "documents" as such term is defined in
Section 9-105(f) of the UCC (the "Documents");
9.1.10 Any and all "general intangibles" as such term is
defined in Section 9-106 of the UCC (together with any property listed under
Section 9.1.4. relating thereto, the "General Intangibles"), including, without
limitation and in any event, rights to the following: payment of money, and
Copyright Collateral (as defined in the Copyright Security Agreement), Trademark
Collateral (as defined in the Trademark Security Agreement), patents, and
Contracts (as defined in Section 9.1.16 hereof), licenses and franchises
(except, in the case of licenses and franchises if, and for so long as, the
agreement in respect of such license or franchise prohibits by its terms any
assignment or grant of a security interest therein without the consent of the
other party thereto, unless the violation of such prohibition would not give any
other party to such franchise or license the right to terminate its obligations
thereunder), limited and general partnership interests and joint venture
interests federal income tax refunds, trade names, distributions on certificated
securities (as defined in Section 8-102(l)(b) of the UCC), computer programs and
other computer software, inventions, designs, trade secrets, goodwill,
proprietary rights, customer lists, Player Tracking Systems, supplier contracts,
sale orders, correspondence, advertising materials, payments due in connection
with any requisition, confiscation, condemnation, seizure or forfeiture of any
property, reversionary interests in pension and profit-sharing plans and
reversionary, beneficial and residual interests in trusts, credits with and
other claims against any Person, together with any collateral for any of the
foregoing and the rights under any security agreement granting a security
interest in such collateral.
9.1.11 The Designated Account established and maintained
pursuant to Section 2.9 of the Loan Agreement.
9.1.12 Any and all (i) shares of capital stock of any
Subsidiary, from time to time owned by Trustor or options or rights to acquire
any such shares or interests now or hereafter owned by Trustor, (ii)
Distributions (as defined below) on Pledged Securities (as constituted
immediately prior to such Distribution) constituting securities (whether debt or
equity securities or otherwise), (iii) other or additional stock, notes,
securities or property paid or distributed in respect of Pledged, Securities (as
constituted immediately prior to such payment or distribution) by way of
stock-split, spin-off, split-up, reclassification, combination of shares or
similar rearrangement, and (iv) other or additional stock, notes, securities or
property, (including cash) that may be paid in respect of Pledged Securities (as
constituted immediately prior to such payment) by reason of any consolidation,
merger, exchange of stock, conveyance of assets, liquidation, bankruptcy or
similar corporate reorganization or other disposition of Pledged Securities
("Pledged Securities").
9.1.13 Any and all dividends, distributions, payments of
interest and principal and other amounts (whether consisting of cash,
securities, personalty or other property)
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from time to time received, receivable or otherwise distributed in respect of or
in exchange or substitution for any of the Pledged Securities ("Distributions").
9.1.14 Any and all "instruments" as such term is defined in
Section 9-105(l)(i) of the UCC ("Instruments").
9.1.15 [Intentionally Omitted]
9.1.16 Any and all contracts between Trustor and one or more
additional parties ("Contracts").
9.1.17 Any and all interest rate or currency protection or
hedging arrangements, including, without limitation, floors, forwards and any
other similar or dissimilar interest rate or currency exchange agreements or
other interest rate currency hedging arrangements ("Hedging Agreements").
9.1.18 Any and all motor vehicles, tractors, trailers and other
like property, if title thereto is governed by a certificate of title ownership
("Motor Vehicles").
9.1.19 Any and all books, records, computer software, computer
printouts, customer lists, blueprints, technical specifications, manuals, and
similar items which relate to any Personal Property or Fixtures other than such
items obtained under license or franchise agreements that prohibit assignment or
disclosure of such items ("Books and Records");
9.1.20 Any and all accessions, appurtenances, components,
repairs, repair parts, spare parts, renewals, improvements, replacements,
substitutions and additions to, of or with respect to any of the foregoing;
9.1.21 Any and all rights, remedies, powers and privileges of
Trustor with respect to any of the foregoing; and
9.1.22 Any and all proceeds and products of any of the
foregoing, whether now held and existing or hereafter acquired or arising,
including all rents, issues, income and profits of or from any of the foregoing
(collectively, the "Proceeds"). "Proceeds" shall include (i) whatever is now or
hereafter received by Trustor upon the sale, exchange, collection, other
disposition or operation of any item of Personal Property, whether such proceeds
constitute accounts, general intangibles, instruments, securities, documents,
letters of credit, chattel paper, deposit accounts, money, goods or other
personal property, (ii) any amounts now or h payable under any insurance policy
by reason of any loss of or damage to any Personal Property or the business of
Trustor, (iii) all rights to payment and payments for hotel room occupancy (and
related reservations) and the sale of services or products in connection
therewith, (iv) the right to further transfer, including by pledge, mortgage,
license, assignment or sale, any of the foregoing, and (v) any items that are
now or hereafter acquired by Trustor with any of the foregoing; provided,
however, that "Proceeds" shall not include Excluded Assets.
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Section 9.2 Remedies, etc. This Deed of Trust constitutes a security
agreement with respect to the Personal Property, in which Beneficiary is granted
a security interest hereunder, and Beneficiary shall have all of the rights and
remedies of a secured party under the UCC and the other Loan Documents as well
as all other rights and remedies available at law or in equity. Upon the
occurrence and during the continuance of any Event of Default hereunder,
Beneficiary shall have the right (a) to proceed as to both the Real and Personal
Property covered by this Deed of Trust in accordance with the Beneficiary's
rights and remedies in respect of said Real Property, in which event (i) the
provisions of the UCC otherwise applicable to sale of the Collateral shall not
apply, and (ii) the sale of the Collateral in conjunction with and as one parcel
with said Real Property (or any portion thereof) shall be deemed to be a
commercially reasonable manner of sale; or (b) to proceed as to the Collateral
separately from the Land and Improvements, in which event the requirement of
reasonable notice shall be met by mailing notice of the sale, postage prepaid,
to the Trustor or any other person entitled thereto at least ten (10) days
before the time of the sale or other disposition of any of the Collateral.
Section 9.3 Expenses. Reasonable expenses actually incurred of retaking,
holding, preparing for sale, selling or the like shall be borne by Trustor and
shall include Beneficiary's and Trustee's reasonable attorneys' fees, charges
and disbursements (including, without limitation, any and all costs of appeal).
Section 9.4 Fixture Filing.
9.4.1 This Deed of Trust shall be effective as a Financing
Statement filed as a fixture filing from the date of the recording hereof in
accordance with the Uniform Commercial Code. In connection therewith, the
addresses of Trustor as debtor ("Debtor") and Beneficiary as secured party
("Secured Party"") are set forth on Schedule 9.4. The address of Beneficiary, as
the Secured Party, is also the address from which information concerning the
security interest may be obtained by any interested party.
9.4.1.1 The property subject to this fixture filing is
described in Sections 9.1.7. and 9.1.9.
9.4.1.2 Portions of the property subject to this fixture
filing as identified in Section 9.4.1.1. above are or are to become f related to
the real estate described on Exhibit A to this Deed of Trust.
9.4.1.3 Secured Party is: Foothill Capital Corporation.
9.4.1.4 Debtor is: Fitzgeralds Mississippi, Inc., a
Mississippi corporation
9.4.1.5 The record owner or lessee of the Real Property
is: Fitzgeralds Mississippi, Inc., a Mississippi corporation.
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9.4.2 In the event Trustor shall fail beyond any applicable
notice and grace periods, to make any payment or perform any covenant related to
any security interest in favor of any Person other than Beneficiary, Beneficiary
may, at its option, within 15 days after notice to Trustor or if Beneficiary's
immediate action is reasonably necessary to protect the lien hereof or its
security for the Secured Obligations, at any time without prior notice to
Trustor, pay the amount secured by such security interest, and the amount so
paid shall be (i) secured by this Deed of Trust and shall be a lien on the Real
Property enjoying the same priorities vis-a-vis the estates and interests
encumbered hereby as this Deed of Trust, (ii) added to the amount of the Secured
Obligations, and (iii) payable within 30 days after receipt of written demand
with interest at the Default Rate from the time of such payment; or Beneficiary
shall have the privilege of acquiring by assignment from the holder of such
security interest any and all contract rights, accounts receivable, chattel
paper, negotiable or non-negotiable instruments and other evidence of Trustor's
indebtedness secured by such fixtures, and, upon acquiring such interest by
assignment, shall have the right to enforce the security interest as assignee
thereof, in accordance with the terms and provisions of the UCC, as amended or
supplemented, and in accordance with other Applicable Laws.
ARTICLE 10.
ASSIGNMENT OF RENTS
Section 10.1 Assignment of Rents. Subject to Section 10.2, and to Applicable
Gaming Laws, Trustor hereby absolutely and unconditionally assigns and transfers
to Beneficiary all of the Rents, whether now due, past due or to become due, and
hereby gives to and confers upon Beneficiary the right, power and authority to
collect such Rents and apply the same to the Secured Obligations secured hereby.
Trustor irrevocably appoints Beneficiary its true and lawful attorney, at the
option of Beneficiary at any time while an Event of Default exists, to demand,
receive and enforce payment, to give receipts, releases and satisfactions, and
to sue, either in the name of Trustor or in the name of Beneficiary, for all
such Rents and apply the same to the Secured Obligations secured hereby. It is
understood and agreed that neither the foregoing assignment of Rents to
Beneficiary nor the exercise by Beneficiary or any of its rights or remedies
under this Deed of Trust shall be deemed to make Beneficiary a
"mortgagee-in-possession" or otherwise responsible or liable in any manner with
respect to the Real Property or the use, occupancy, enjoyment or operation of
all or any portion thereof, unless and until Beneficiary, in person or by its
own agent, assumes actual possession thereof, nor shall appointment of a
Receiver for the property by any court at the request of Beneficiary or by
agreement with Trustor or the entering into possession of the property or any
part thereof by such Receiver be deemed to make Beneficiary a
"mortgagee-in-possession" or otherwise responsible or liable in any manner with
respect to the Real Property or the use, occupancy, enjoyment or operation of
all or any portion thereof.
Section 10.2 Collection of Rents. Notwithstanding anything to the contrary
contained herein, so long as no Event of Default with respect to the Secured
Obligations shall occur and be continuing, Trustor shall have a license,
revocable upon the occurrence and during the continuance of an Event of Default,
to collect all Rents from the property and to retain, use
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and enjoy the same and to otherwise exercise all rights with respect thereto,
subject to the terms hereof. Upon the occurrence and during the continuance of
an Event of Default, the license hereinabove granted to Trustor shall, without
the requirement of the giving of notice or taking or any action by any party, be
revoked, and Beneficiary shall have the complete right and authority to exercise
and enforce any and all of its rights and remedies provided herein or by
Applicable Laws.
ARTICLE 11.
ENVIRONMENTAL MATTERS
Section 11.1 Representations and Warranties.
11.1.1 Trustor (i) has obtained all permits that are required
with respect to the operation of its business, property and assets under the
Environmental Requirements and is in compliance with all terms and conditions of
such required permits, and (ii) is in compliance with all Environmental
Requirements (including, without limitation, compliance with standards,
schedules and timetables therein);
11.1.2 No portion of the Trust Estate is listed or proposed for
listing on the National Priorities List or the Comprehensive Environmental
Response, Compensation, and Liability Information System, both promulgated under
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA"), or on any other state or local list established
pursuant to any Environmental Requirement, and trustor has not received any
notification of potential or actual liability or request for information under
CERCLA or any comparable state or local law;
11.1.3 No underground storage tank or other underground storage
receptacle, or related piping, is located on the Land in violation of any
Environmental Requirement;
11.1.4 There have been no releases (i.e., any past or present
releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, disposing or dumping, on-site or, to the
knowledge of the Trustor after due inquiry, off-site) of Hazardous Materials by
Trustor or any predecessor in interest or any person or entity whose liability
for any release of Hazardous Materials, Trustor has retained or assumed either
contractually or by operations of law at, on, under, from or into any facility
or real property owned, operated, leased, managed or controlled by any such
person;
11.1.5 Neither Trustor nor any person or entity whose liability
Trustor has retained or assumed either contractually or by operation of law has
any liability, absolute or contingent, under any Environmental Law, and there is
no proceeding pending or threatened against any of them under any Environmental
Law; and
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11.1.6 There are no events, activities, practices, incidents or
actions or conditions, circumstances or plans that may interfere with or prevent
compliance by Trustor with any environmental law, or that may give rise to any
liability under any Environmental Laws;
11.1.7 the above representations and warranties contained in
this Section 11.1 shall survive the termination, release and/or reconveyance of
this Deed of Trust and discharge of Trustor's other obligations hereunder.
Section 11.2 Environmental Covenants. Trustor shall at all times comply with
the following requirements:
11.2.1 Trustor shall not cause or permit any material amount of
Hazardous Material to be brought upon, treated, kept, stored, disposed of,
discharged, released, produced, manufactured, generated, refined or used upon,
within or beneath the Real Property or any portion thereof by Trustor, its
agents, employees, contractors, or invitees, or any other person, except in
compliance with all Environmental Requirements and only in the course of such
person's legitimate business operations at the property (which shall not include
any business primarily for treatment, storage, disposal, discharge, release,
production, manufacture, generation, refinement or use of Hazardous Materials).
11.2.2 Trustor shall not cause or permit the existence or the
commission by Trustor, its agents, employee, contractors or invitees, or by any
other person of a material violation of any Environmental Requirements upon,
within or beneath the Real Property or any portion thereof.
11.2.3 Trustor shall not dispose of, discharge or release or
cause or permit the disposal, discharge or release of any material amount of
Hazardous Materials from the Real Property into any Public Waters in material
violation of any Environmental Requirements.
11.2.4 Trustor shall not create or suffer to exist with respect
to the Real Property or permit any of its agents to create or suffer to exist
any environmental lien, security interest or other charge or encumbrance of any
kind (other than a Permitted Lien), including, without limitation, any lien
imposed pursuant to Section 107(f) of the Superfund Amendment and
Reauthorization Act of 1986 (42 U.S.C. Section 9607(1)) or any similar state
statute.
11.2.5 Trustor shall, at its sole cost and expense, promptly
take any and all actions required by any federal, state or local governmental
agency or political subdivision or reasonably necessary (as hereinafter
provided) to mitigate Environmental Damages, which requirements or necessity
arise from the presence upon, about or beneath the Real Property, of a material
amount of Hazardous Material or a material violation of Environmental
Requirements or the disposal, discharge or release of a material amount of
Hazardous Materials from the Real Property into the Public Waters. Such actions
shall include, but not be limited to, the investigation of the environmental
condition of the Real Property, the preparation of any feasibility studies,
reports or remedial plans, and the performance of any cleanup, remediation,
containment, operation, maintenance, monitoring or restoration work, whether on
or off of the
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Real Property (provided that Trustor shall be obligated to take actions off of
the property only if Trustor shall have the legal right to do so and shall be
expressly required to do so by Environmental Requirements). Trustor shall take
all actions as are reasonably necessary to restore the Real Property or the
Public Waters to substantiality the condition existing prior to the introduction
of hazardous Material by Trustor upon, about or beneath the property,
notwithstanding any lesser standard of remediation allowable under Applicable
Laws or governmental policies, but recognizing the economic impracticability of
remediating to a level where Hazardous Materials are no longer detactable.
Trustor shall proceed continuously and diligently with such investigatory and
remedial actions, provided that in all cases such actions shall be in accordance
with Applicable Laws. any such actions shall be performed in a good, safe and
workmanlike manner and shall minimize any impact on the business conducted at
the Real Property. Trustor shall pay all costs in connection with such
investigatory and remedial activities, including, but not limited to, all power
and utility costs, and any and all taxes or fees that may be applicable to such
activities. Trustor shall promptly provided to Beneficiary copies of testing
results and reports that are generated in connection with the above activities.
Promptly upon completion of such investigation and remediation, Trustor shall
permanently seal or cap all monitoring wells and test holes to industrial
standards in compliance with Applicable Laws and regulations, remove all
associated equipment, and restore the Real Property to the extent reasonably
possible, which shall include, without limitation, the repair of any surface
damage, including paving, caused by such investigations or remediation
hereunder.
11.2.6 If Trustor shall become aware of or receive notice or
other communication concerning any actual, alleged, suspected or threatened
violation of Environmental Requirements, liability of Trustor for Environmental
Damages in connection with the Real Property or past or present activities or
any person thereon, including, but not limited to, notice or other communication
concerning any actual or threatened investigation, inquiry, lawsuit, claim,
citation, directive, summons, proceedings, complaint, notice, order, write or
injunction, relating to same, then Trustor shall deliver to Beneficiary, within
15 days of the receipt of such notice or communication by Trustor, a written
description of said violation, liability, or actual or threatened event or
condition, together with copies of any documents evidencing same. Receipt of
such notice shall not be deemed to create any obligation on the part of
Beneficiary to defend or otherwise respond to any such notification.
11.2.7 Trustor agrees to indemnify, reimburse, defend,
exonerate, pay and hold harmless Beneficiary, its successors and assigns, the
Holders, and their respective directors, officers, shareholders, employees,
agents, contractors, subcontractors, experts, licensees, affiliates, lessees,
trustees, and invitees (collectively, the "Indemnitees") from and against any
and all environmental Damages arising from the discharge, disposal or release of
Hazardous Materials from the property into the Public Waters or from the
presence of Hazardous Materials upon, about or beneath the Real Property or
migrating to or from the Real Property, or arising in any manner whatsoever out
of the violation of any Environmental Requirements pertaining to the property
and the activities thereof, whether foreseeable or unforeseeable, and regardless
of when such Environmental Damages occurred, except to the extent directly
caused by conduct (other than inaction) on the part of such Indemnitee with
respect to the Real Property or any such
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Indemnitee's grossly negligent or willful inaction or other conduct. The
indemnity obligations of Trustor contained in this Section 11.2.7 shall survive
the termination, release and/or reconveyance of this Deed of Trust and the
discharge of Trustor's other obligations hereunder.
11.2.8 Except for the first sentence of Section 6.4, and except
for Sections 4.6, 4.7, 4.15 and 8.5, the other covenants of this Deed of Trust
shall not apply to the subject matter of this Article 11.
ARTICLE 12.
MISCELLANEOUS
Section 12.1 Beneficiary's Expenses, Including Attorneys' Fees. Regardless
of the occurrence of a Default or Event of Default, Trustor agrees to pay to
Beneficiary any and all advances, charges, costs and expenses, including the
reasonable fees and expenses of counsel and any experts or agents, that
Beneficiary may reasonably incur in connection with (i) the administration of
this Deed of Trust, including any amendment thereto or any workout or
restructuring, (ii) the creation, perfection or continuation of the Lien of this
Deed of Trust or protection of its priority or the Trust Estate, including the
discharging of any prior or junior Lien or adverse claim against the Trust
Estate or any part thereof that is not permitted hereby or by the Indenture,
(iii) the custody, preservation or sale of, collection from, or other
realization upon, any of the Trust Estate, (iv) the exercise or enforcement of
any of the rights, powers or remedies of Beneficiary under this Deed of Trust or
under Applicable Laws (including attorneys' fees and expenses incurred by
Beneficiary in connection with the operation, maintenance or foreclosure of the
Lien of this Deed of Trust) or any bankruptcy proceeding of (v) the failure by
Trustor to perform or observe any of the provisions hereof. All such amounts and
all other amounts payable hereunder shall be payable on demand, together with
interest at the Default Rate.
Section 12.2 Indemnity. Trustor hereby agrees to indemnify and hold harmless
the Indemnitees against (A) any and all transfer taxes, documentary taxes,
assessments or charges made by any Governmental Authority by reason of the
execution and delivery of this Deed of Trust and the other Loan Documents, and
(B) any and all claims, actions, liabilities, costs and expenses of any kind or
nature whatsoever (including fees and disbursements of counsel) that may be
imposed on, incurred by, or asserted against any of them, in any way relating to
or arising out of this Deed of Trust or any action taken or omitted by them
hereunder, except to the extent that they resulted from the gross negligence or
willful misconduct of any such Indemnitee.
Section 12.3 Waivers' Modifications in Writing. No amendment of any
provision of this Deed of Trust (including a waiver thereof or consent relating
thereto) shall be effective unless the same shall be in writing and signed by
Beneficiary and Trustor. Any waiver or consent relating to any provision of this
Deed of Trust shall be effective only in the specific instance and for the
specific purpose for which given. No notice to or demand on Trustor in any case
shall entitle Trustor to any other or further notice or demand in similar
circumstances, except as otherwise provided herein or as required by law.
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Section 12.4 Cumulative Remedies; Failure or Delay. The rights and remedies
provided for under t his Deed of Trust are cumulative and are not exclusive of
any rights and remedies that may be available to Beneficiary under Applicable
Laws, the other Loan Documents or otherwise. No failure or delay on the part of
Beneficiary in the exercise of any power, right or remedy under this Deed of
Trust shall impair such power, right or remedy or shall operate as a waiver
thereof, no shall any single or partial exercise of any such power, right or
remedy preclude other or further exercise of such or any other power, right or
remedy.
12.4.1 Successors and Assigns. This Agreement shall be binding
upon and, subject to the next sentence, inure to the benefit of Trustor and
Beneficiary and their respective successors and assigns. Trustor shall not
assign or transfer any of its rights or obligations hereunder without the prior
written consent of Beneficiary. The benefits of this Deed of Trust shall pass
automatically with any assignment of the Secured Obligations (or any portion
thereof), to the extent of such assignment.
Section 12.5 Independence of Covenants. All covenants under this Deed of
Trust shall each be given independent effect so that, if a particular action or
condition is not permitted by any such covenant, the fact that it would be
permitted by another covenant or by an exception thereto shall not avoid the
occurrence of a Default or an Event of Default if such action is taken or
condition exists.
Section 12.6 Change of Law. In the event of the passage, after the date of
this Deed of Trust, of any law changing in any way the laws now in force for the
taxation of mortgages, deeds of trust or debts secured by mortgage or deed of
trust (other than laws imposing taxes on income), or the manner of the
collection of any such taxes, so as to affect adversely the rights of
Beneficiary under this Deed of Trust, then an Event of Default shall be deemed
to have under Section 6.1 of the Indenture; provided, however, that no Event of
Default shall be deemed to have occurred (i) if Trustor, within (30) days after
the passage of such law, shall assume the payment of any tax or other charge so
imposed upon Beneficiary for the period remaining until discharge in full of the
Secured Obligations; provided, however, that such assumption is permitted by
Applicable Laws, (ii) if the adverse effect upon Beneficiary of such tax or
other charge is not material, or (iii) if and so long as Trustor, at its
expense, shall contest the amount or validity or application of any such tax or
other charge by appropriate legal proceedings promptly initiated and conducted
in good faith and with due diligence; provided that (A) neither the Real
Property nor any substantial part thereof will be in danger of being sold,
forfeited, terminated, canceled, or lost as a result of such contest and (B)
except in the case of a tax or charge junior to the Lien of this Deed of Trust,
Trustor shall have posted such bond or furnished such other security as may be
required by law to release such tax or charge.
Section 12.7 No Waiver. No waiver by Beneficiary of any Default or breach by
Trustor hereunder shall be implied from any omission by Beneficiary to take
action on account of such Default if such Default persists or is repeated, no
express waiver shall affect any Default other than the Default in the waiver,
and such waiver shall be operative only for the time and to the extent therein
stated. Waivers of any covenant, term or condition contained herein shall not be
construed as a waiver of any subsequent breach of the same covenant, term or
condition. The
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consent or approval by Beneficiary to or of any act by Trustor requiring further
consent or approval shall not be deemed to waive or render unnecessary the
consent or approval to or of any subsequent similar act.
Section 12.8 Notices. All notices and other communications under this Deed
of Trust shall be in writing and shall be personally delivered or sent by
prepaid courier, by overnight, registered or certified mail (postage prepaid) or
by prepaid telex, telecopy or telegram, and shall be deemed given when received
by the intended recipient thereof. Unless otherwise specified in a notice given
in accordance with the foregoing provisions of this Section 12.8., notices and
other communications shall be given to the parties hereto at their respective
addresses (or to their respective telex or telecopier numbers) indicated in
Section 11.2 of the Indenture or, in the case of the Trustee, Schedule 12.8.
Section 12.9 References to Foreclosure. References hereto to "foreclosure"
and related phrases shall be deemed references to the appropriate procedure in
connection with Trustee's private power of sale, any judicial foreclosure,
proceeding, and any deed given in lieu of any such Trustees sale or judicial
foreclosure.
Section 12.10 Joinder of Foreclosure. Should Beneficiary hold any other or
additional security for the payment and performance of any Secured Obligation,
its sale or foreclosure, upon any default in such payment or performance, in the
sole discretion of Beneficiary, may be prior to, subsequent to, or joined or
otherwise contemporaneous with any sale or foreclosure hereunder. Except as
otherwise provided in the Indenture, in addition to the rights herein
specifically conferred, Beneficiary, at any time and from time to time, may
exercise any right or remedy now or hereafter given by law to beneficiaries
under deeds of trust generally, or to the holders of any obligations of the kind
hereby secured.
Section 12.11 Rights and Secured Obligations of Beneficiary and Trustee. At
any time or from time to time, without liability therefor and without notice,
and without releasing or otherwise affecting the liability of any Person for
payment of any Secured Obligations, Beneficiary at its sole discretion and only
in writing may subordinate the Liens or either of them, or charge hereof to the
extent not prohibited by the Indenture. Beneficiary and Trustee shall however,
promptly upon Trustor's request from time to time, join in the following actions
(including the execution and delivery of documents) as Trustor determines are
reasonably necessary for the development, use and operation of the Trust Estate:
(i) the making of any map or plat of the Real Property, (ii) the granting,
creating, amending and modifying of any customary easements, covenants,
conditions and restrictions with respect to the Real Property and (iii) the
application for and prosecution of any development building, use and similar
permits and land use and utility approvals and installations regarding the Real
Property; provided, however, that Beneficiary and Trustee shall not be required
to join in or take any such action (a) while an Event of Default exists, (b) to
the went such action would impair the Liens of this Deed of Trust or the first
priority thereof or (c) to the extent prohibited by the Indenture. Any such
request shall be accompanied by an Officer's Certificate (as defined in the
Indenture). Upon written request of Beneficiary and surrender of this Deed of
Trust to Trustee for
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cancellation, and upon payment to Trustee of its reasonable fees and expenses
actually incurred, Trustee shall cancel and reconvey this Deed of Trust.
Section 12.12 Copies. Trustor will promptly give to Beneficiary copies of
all notices of material violations relating to the Real Property that Trustor
receives from any Governmental Authority.
Section 12.13 Subordination. At the option of Beneficiary, this Deed of
Trust shall become subject and subordinate in whole or in part (but not with
respect to priority of entitlement to any insurance proceeds, damages, awards,
or compensation resulting from damage to the Real Property or condemnation or
exercise of power of eminent domain), to any and all contracts of sale and/or
any and all leases of all or any part of the Real Property upon the execution by
Beneficiary and recording thereon in the official records Real Property upon the
execution by Beneficiary and recording thereof in the official records of Tunica
County, Mississippi of a unilateral declaration to that effect. Beneficiary may
require the issuance of such title insurance endorsements to the Title Policy in
connection with any such subordination as Beneficiary, in its judgment, shall
determine am appropriate, and Trustor shall be obligated to pay any cost or
expense incurred in connection with the issuance thereof.
Section 12.14 Personal Property Security Instruments. Trustor covenants and
agrees that if Beneficiary at any time holds additional security for any Secured
Obligations secured hereby, it may enforce the terms thereof or otherwise
realize upon the same, at its option, either before or concurrently herewith or
after a sale is made hereunder, and may apply the proceeds upon the Secured
Obligations without affecting the status or of waiving any right to exhaust all
or any other security, including the security hereunder, and without waiving any
breach or Default or any right or power whether exercised hereunder or contained
herein or in any such other security.
Section 12.15 Suits to Protect Real Property. Trustor covenants and agrees
to appear in and defend any action or proceeding the consequence of which, if
successful, would be that the Liens, or either of them, of this Deed of Trust
would not satisfy the requirements as to extent, perfection or priority set
forth in the Indenture; and to pay all reasonable costs and expenses actually
incurred by Trustee and Beneficiary, including cost of evidence of title and
attorneys' fees in a reasonable sum, in an such action or proceeding in which
Beneficiary and/or Trustee may appear or be made a party.
Section 12.16 Trustor Waiver or Rights. Trustor waives the benefit of all
laws now existing or that hereafter may be enacted providing for (i) any
appraisement before sale of any portion of the Trust Estate, and (ii) the
benefit of all laws that may be hereafter enacted in any way extending the time
for the enforcement of the Secured Obligations or creating or extending a period
of redemption from any sale made in collecting said debt. To the full extent
Trustor may do so, Trustor agrees that Trust or will not at any time insist
upon, plead, claim or take the benefit or advantage of any law now or hereafter
in force providing for any appraisement,
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valuation stay, extension or redemption, and Trustor, for Trustor, Trustor's
heirs, devise, representatives, successors and assign, and for any and all
Persons ever claiming any interest in the Trust Estate, to the extent permitted
by law, hereby waives and releases all rights of redemption, valuation,
appraisement, stay of execution, and marshaling in the event of foreclosure of
the liens hereby created. If any law referred to in this Section 12.16. and now
in force, of which Trustor, Trustor's heirs, devisees, representatives,
successors and assigns or other Person might take advantage despite this Section
12.16., shall hereafter be repealed or cease to be in force, such law shall not
thereafter be deemed to preclude the application of this Section 12.17. To the
extent permitted by Applicable Laws, Trustor expressly waives and relinquishes
any and all rights and remedies which Trustor may have or be able to assert by
reason of the laws of the State of Mississippi pertaining to the rights and
remedies of sureties.
Section 12.17 Charges for Statements. Trustor agrees to pay Beneficiary's
customary charge, to the maximum amount permitted by Applicable Laws, for any
statement regarding the Secured Obligations requested by Trustor or in its
behalf.
Section 12.18 Complete Agreement. This Deed of Trust together with the
exhibits and schedules hereto, and the other Loan Documents, is intended by the
parties as a final expression of their agreement regarding the subject matter
hereof and is intended as a complete and exclusive statement of the terms and
conditions of such agreement.
Section 12.19 Payments Set Aside. Notwithstanding anything to the contrary
herein contained, this Deed of Trust, the Secured Obligations and the Lien and
Security Interest of this Deed of Trust shall continue to be effective or be
reinstated, as the case may be, if at any time any payment, or any part thereof,
of any or all of the Secured Obligations is rescinded, invalidated, declared to
be fraudulent or preferential or otherwise required to be restored or returned
by Beneficiary in connection with any bankruptcy, reorganization or similar
proceeding involving Trustor, any other party liable with respect to the Secured
Obligations of otherwise, if the proceeds of the Trust Estate are required to be
returned by Beneficiary under any such circumstances, or if Beneficiary
reasonably elects to return any such payment or proceeds or any part thereof in
its discretion, all as though such payment had not been made or such proceeds
not been received. Without limiting the generality of the foregoing, if prior to
any such rescission, invalidation, declaration, restoration or return, this Deed
of Trust shall have been terminated, released and/or reconveyed and the Lien and
Security Interest or any of the Trust Estate shall have been released or
terminated in connection with such termination, release and/or reconveyance,
this Deed of Trust and the Lien and Security Interest and such portion of the
Trust Estate shall be reinstated in full force and effect, and such prior
termination, release and/or reconveyance shall not diminish, discharge or
otherwise affect the obligations of Trustor in respect of the amount of the
affected payment or application of proceeds, the Lien, the Security Interest or
such portion of the Trust Estate.
Section 12.20 Substitution. Beneficiary may at any time, without giving
notice to Trustor or the original or successor Trustee, and without regard to
the willingness or inability of any original or successor Trustee to execute
this trust, appoint another Person or succession of Persons to act as Trustee,
and such appointee in the execution of this trust shall have all the
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powers vested in and obligations imposed upon Trustee. Should Beneficiary be a
corporation or unincorporated association, then any officer thereof may make
such appointment
Section 12.21 Choice of Forum.
12.21.1 Subject to Section 12.21.2. and Section 12.21.3, all
actions or proceedings arising in connection with this Deed of Trust shall be
tried and litigated in state or Federal courts located in the County of Tunica,
State of Mississippi, unless such actions or proceedings are required to be
brought in another court to obtain subject matter jurisdiction over the matter
in controversy TRUSTOR WAIVES ANY RIGHT IT MAY HAVE THE DOCTRINE OF FORUM NON
CONVENIENS, TO ASSERT THAT IT IS NOT SUBJECT TO THE JURISDICTION OF SUCH COURTS
OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH
THIS SECTION 12.21.1.
12.21.2 Nothing contained in this Section shall preclude
Beneficiary from bringing any action or proceeding arising out of or relating to
this Deed of Trust in any court not referred to in Section 12.21.1. SERVICE OF
PROCESS, SUFFICIENT FOR PERSONAL JURISDICTION IN ANY ACTION AGAINST TRUSTOR, MAY
BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ITS
ADDRESS INDICATED IN SECTION 12.8 HEREOF.
12.21.3 Notwithstanding Section 12.21.1 hereof, in the sole and
absolute discretion of beneficiary, all actions or proceedings relating to the
Collateral referred to in Article 9 hereof, other than Fixtures, shall be tried
and litigated in any California state court sitting in the County of Los
Angeles, State of California or any federal court sitting in the County of Los
Angeles, State of California. Trustor hereby irrevocably submits to the
jurisdiction of such courts to the extent any proceeding is brought in
accordance with this Section 12.21.3. Trustor irrevocably waives, to the fullest
extent it may effectively do so under Applicable Law, trial by jury and any
objection that it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. Trustor irrevocably consents, to the fullest extent that it
may effectively do so under Applicable Law, to the service of process of any of
the aforementioned courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to Trustor at
its said address, such service to become effective 30 days after such mailing.
Nothing shall affect the right of Beneficiary to serve process in any other
manner permitted by law or to commence legal proceedings or otherwise proceed
against Trustor in any other jurisdiction.
Section 12.22 Regulatory Matters. Whenever in this Deed of Trust a right is
given to Beneficiary, which right is affected by Applicable Gaming Laws or the
enforcement of which is subject to Applicable Gaming Laws, the enforcement of
any such right shall be subject to Applicable Gaming Laws and approval, if so
required, of the applicable Gaming Authorities.
Section 12.23 Guarantor Waivers. If and to the extent that Trustor (for the
purposes of this Section 12.23, "Guarantor") would be denied or construed to be
a guarantor or surety
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under applicable law with respect to its obligations hereunder, Guarantor hereby
agrees as follows:
12.23.1 Guarantor expressly agrees that until each and every
term, covenant and condition of this Deed of Trust is fully performed, Guarantor
shall not be released by any act or event which, except for this provision of
this Deed of Trust might be deemed a legal or equitable discharge or exoneration
of a surety, or because of any waiver, extension, modification, forbearance or
delay or other act or omission of Beneficiary or its failure to proceed promptly
or otherwise as against Fitzgeralds or any other Guarantor, as the case may be
(individually and collectively, in its or their capacity as the entity or
entities the obligations of which are guaranteed hereunder by Guarantor, the
"Principal") or Guarantor, or because of any action taken or omitted or
circumstance which might vary the risk or affect the rights or remedies of
Guarantor as against the Principal, or because of any further dealings between
the Principal and Beneficiary, whether relating to this Deed of Trust or
otherwise. Guarantor hereby expressly waives and surrenders any defense to
Guarantor's liability under this Deed of Trust based upon any of the foregoing
acts, omissions, things, agreements, waivers or any of them. It is the purpose
and intent of this Deed of Trust that the obligations of Guarantor under it
shall be absolute and unconditional under any and all circumstances, subject to
and in accordance with the terms and conditions of this Deed of Trust.
12.23.2 Without in anyway limiting the provisions of Section
12.23.1., Guarantor waives:
12.23.2.1 all statutes of limitations as a defense to
any action or proceeding brought against Guarantor by Beneficiary, to the
fullest extent permitted by law.
12.23.2.2 any right it may have to require Beneficiary
to proceed against the Principal or pursue any other remedy in Beneficiary's
power to pursue, it being acknowledged and agreed that the obligations of
Guarantor hereunder are independent of the obligations of the Principal
hereunder, and Beneficiary shall not be required to make any demand upon,
exercise any right to declare a default by, or proceed against, the Principal
prior to proceeding against Guarantor to the full extent of Guarantor's
obligations hereunder,
12.23.2.3 any defense based on any legal disability of
the Principal and any discharge, release or limitation of the liability of the
Principal to Beneficiary, whether consensual or arising by operation of law or
any bankruptcy, reorganization, receivership, insolvency, or debtor-relief
proceeding, or from any other cause, or any claim that Guarantor's obligations
exceed or are more burdensome those of the Principal;
12.23.2.4 all presentments, demands for performance,
notices of nonperformance, protests, notices of protest, notices of dishonor,
notices of acceptance of indebtedness, and demands and notices of every kind;
44
<PAGE> 46
12.23.2.5 any defense based on or "arising out of any
defense that the Principal may have to the payment or performance of any
obligation set forth in this Deed of Trust and
12.23.2.6 until all obligations under this Deed of Trust
have been paid and performed in full, all rights of subrogation and all rights
to enforce any remedy that Guarantor may have against the Principal, all
regardless of whether Guarantor may have made any payments to Beneficiary.
12.23.3 Guarantor assumes full responsibility for keeping
informed of the financial condition and business operations of the Principal and
all other circumstances affecting the Principal's ability to pay for and perform
its obligations, and agrees that Beneficiary shall have no duty to disclose to
Guarantor any information which Beneficiary may receive about the Principal"s
financial condition, business operations, or any other circumstances bearing on
its ability to perform.
12.23.4 Notwithstanding anything to the contrary provided
elsewhere herein, in no event shall Guarantor have any liability under this Deed
of Trust beyond its interest in the portion of the Real Property that is owned
by Guarantor, and in no event shall Guarantor's obligations hereunder be
enforced against any property of Guarantor other than its interest in such
portion of the Real Property.
Section 12.24 WAIVER OF TRIAL BY JURY. TRUSTOR AND BENEFICIARY WAIVE THE
RIGHT TO A TRIAL BY RAY IN ANY ACTION UNDER THIS DEED OF TRUST OR ANY OTHER LOAN
DOCUMENT OR ANY OTHER ACTION ARISING OUT OF THE TRANSACTIONS CONTEMPLATED HEREBY
OR THEREBY, REGARDLESS OF WHICH PARTY INITIATES SUCH ACTION OR ACTIONS.
[Remainder of page left intentionally blank.]
45
<PAGE> 47
IN WITNESS WHEREOF, Trustor has caused this Deed of Trust to be executed
on the day and year set forth below, to be effective as of the day and year
first above written.
FITZGERALDS MISSISSIPPI, INC.,
a Mississippi corporation
By: /s/ MICHAEL E. MCPHERSON
-------------------------------------
Name: Michael E. McPherson
-----------------------------------
Title: Senior Vice President/CFO
----------------------------------
Date: October 29, 1998
-----------------------------------
S-1
<PAGE> 48
ACKNOWLEDGMENT
STATE OF CALIFORNIA )
) SS.
COUNTY OF LOS ANGELES )
Personally appeared before me, the undersigned authority in and for the
said County and State, within my jurisdiction, the within named Michael E.
McPherson, who acknowledged that he is Senior Vice President/CFO of Fitzgeralds
Mississippi, Inc., a Mississippi corporation, and that for and on behalf of the
said corporation, and as its act and deed, he executed the above and foregoing
instrument, after first having been duly authorized by said corporation so to
do.
/s/ KIERSTEN POLK
------------------------------------
NOTARY PUBLIC
[NOTARY SEAL]
My Commission Expires: June 14, 2000
<PAGE> 49
SCHEDULE 9.8.
ADDRESSES
Debtor:
Fitzgeralds Mississippi, Inc.
711 Lucky Lane
Robinsonville, MS 38664
Secured Party:
Foothill Capital Corporation
11111 Santa Monica Boulevard, Suite 1500
Los Angeles, California 90025
Trustee:
Commonwealth Land Title Company
1700 Market Street
Philadelphia, PA 19103
<PAGE> 50
EXHIBIT A
LEGAL DESCRIPTION OF LAND
See attached
<PAGE> 51
THE LAND REFERRED TO IN THIS POLICY IS SITUATED IN THE COUNTY OF TUNICA, STATE
OF MISSISSIPPI, AND DESCRIBED AS FOLLOWS:
TRACT 1
A TRACT OF LAND SITUATED IN SECTION 9 AND 10, TOWNSHIP 3 SOUTH, RANGE 11 WEST,
TUNICA COUNTY, MISSISSIPPI AND MORE PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING FROM A RAILROAD SPIKE SET IN COMMERCE ROAD, SAID RAILROAD SPIKE
REPRESENTS THE SOUTHEAST CORNER OF SECTION 15, TOWNSHIP 3 SOUTH, RANGE 11 WEST,
TUNICA COUNTY, MISSISSIPPI; THENCE
NORTH 90 DEGREES, 00 MINUTES, 00 SECONDS WEST FOR 4203.48 FEET TO A POINT;
THENCE
NORTH 0 DEGREES, 00 MINUTES, 00 SECONDS EAST FOR 7728.13 FEET TO THE "POINT OF
BEGINNING" OF TRACT 1 HEREIN DESCRIBED; THENCE
SOUTH 74 DEGREES, 23 MINUTES, 00 SECONDS WEST FOR 4642.00 FEET TO A POINT ON THE
EXISTING SLOPE OF THE MISSISSIPPI RIVER COMMERCE TRENCHFILL REVETMENT PROJECT
(SAID SLOPE BEING ON THE SOUTHERN OR EASTERN SIDE OF THE MISSISSIPPI RIVER);
THENCE
NORTH 59 DEGREES, 14 MINUTES, 00 SECONDS EAST ALONG THE SAID EXISTING SLOPE FOR
2549.00 FEET TO A POINT; THENCE
NORTH 55 DEGREES, 32 MINUTES, 00 SECONDS EAST ALONG AND CONTINUING ALONG THE
SAID EXISTING SLOPE FOR 1751.00 FEET TO A POINT; THENCE
NORTH 53 DEGREES, 49 MINUTES, 00 SECONDS EAST AND CONTINUING ALONG THE SAID
EXISTING SLOPE FOR 1049.03 FEET TO A POINT; THENCE
SOUTH 45 DEGREES, 17 MINUTES, 48 SECONDS EAST FOR 2112.63 FEET TO A FOUND
CONCRETE MONUMENT REPRESENTING THE CENTER OF SECTION 10, TOWNSHIP 3 SOUTH,
RANGE 11 WEST, TUNICA COUNTY, MISSISSIPPI, THENCE
NORTH 89 DEGREES, 42 MINUTES, 12 SECONDS EAST FOR 122.36 FEET TO A POINT; THENCE
SOUTH 50 DEGREES, 18 MINUTES, 00 SECONDS WEST FOR 360.83 FEET TO A POINT; THENCE
SOUTH 54 DEGREES, 09 MINUTES, 00 SECONDS WEST FOR 693.00 FEET TO A POINT; THENCE
<PAGE> 52
POLICY NO: F89-024254
EXHIBIT "A"
LEGAL DESCRIPTION
THE LAND REFERRED TO IN THIS POLICY IS SITUATED IN THE COUNTY OF TUNICA, STATE
OF MISSISSIPPI, AND DESCRIBED AS FOLLOWS:
TRACT 1
A TRACT OF LAND SITUATED IN SECTION 9 AND 10, TOWNSHIP 3 SOUTH RANGE 11 WEST,
TUNICA COUNTY, MISSISSIPPI AND MORE PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING FROM A RAILROAD SPIKE SET IN COMMERCE ROAD, SAID RAILROAD SPIKE
REPRESENTS THE SOUTHEAST CORNER OF SECTION 15, TOWNSHIP 3 SOUTH, RANGE 11 WEST,
TUNICA COUNTY, MISSISSIPPI; THENCE
NORTH 90 DEGREES, 00 MINUTES, 00 SECONDS, WEST FOR 4203.48 FEET TO A POINT;
THENCE
NORTH 0 DEGREES, 00 MINUTES, 00 SECONDS EAST FOR 7728.13 FEET TO THE "POINT OF
BEGINNING" OF TRACT 1 HEREIN DESCRIBED; THENCE
SOUTH 74 DEGREES, 23 MINUTES, 00 SECONDS WEST FOR 4642.00 FEET TO A POINT ON
THE EXISTING SLOPE OF THE MISSISSIPPI RIVER COMMERCE TRENCHFILL REVETMENT
PROJECT (SAID SLOPE BEING ON THE SOUTHERN OF EASTERN SIDE OF THE MISSISSIPPI
RIVER); THENCE
NORTH 59 DEGREES, 14 MINUTES, 00 SECONDS EAST ALONG THE SAID EXISTING SLOPE FOR
2549.00 FEET TO A POINT; THENCE
NORTH 55 DEGREES, 32 MINUTES, 00 SECONDS EAST ALONG AND CONTINUING ALONG THE
SAID EXISTING SLOPE FOR 1751.00 FEET TO A POINT; THENCE
NORTH 53 DEGREES, 49 MINUTES, 00 SECONDS EAST AND CONTINUING ALONG THE SAID
EXISTING SLOPE FOR 1049.03 FEET TO A POINT; THENCE
NORTH 45 DEGREES, 17 MINUTES, 48 SECONDS EAST FOR 2112.63 FEET TO A FOUND
CONCRETE MONUMENT REPRESENTING THE CENTER OF SECTION 10, TOWNSHIP 3 SOUTH,
RANGE 11 WEST, TUNICA COUNTY, MISSISSIPPI, THENCE
NORTH 89 DEGREES, 42 MINUTES, 12 SECONDS EAST FOR 122.36 FEET TO A POINT; THENCE
SOUTH 50 DEGREES, 18 MINUTES, 00 SECONDS WEST FOR 360.83 FEET TO A POINT; THENCE
SOUTH 54 DEGREES, 09 MINUTES, 00 SECONDS WEST FOR 693.00 FEET TO A POINT; THENCE
<PAGE> 53
ESCROW-NO: 98-01-2724 DTL POLICY NO: 89-024254
SOUTH 69 DEGREES, 05 MINUTES, 00 SECONDS WEST FOR 335.00 FEET TO A POINT; THENCE
NORTH 67 DEGREES, 14 MINUTES, 00 SECONDS WEST FOR 214.00 FEET TO A POINT; THENCE
NORTH 29 DEGREES, 55 MINUTES, 00 SECONDS WEST FOR 570.00 FEET TO THE SAID "POINT
OF BEGINNING",
BEARINGS IN THE ABOVE DESCRIPTION HAVE AN ORIGIN OF TRUE NORTH BASED ON
COMPUTATIONS FROM CELESTIAL OBSERVATIONS.
TRACT 2
A TRACT OF LAND SITUATED IN THE SOUTHEAST 1/4 OF THE SOUTHEAST 1/4, THE
NORTHEAST 1/4 OF THE SOUTHEAST 1/4, THE NORTHWEST 1/4 OF THE SOUTHEAST 1/4 AND
THE NORTHEAST 1/4 OF THE SOUTHEAST 1/4, ALL IN SECTION 10, TOWNSHIP 3 SOUTH,
RANGE 11 WEST, TUNICA COUNTY, MISSISSIPPI AND MORE PARTICULARLY DESCRIBED AS
FOLLOWS:
COMMENCING FROM AN IRON BAR IN THE PRESENT YAZOO-MISSISSIPPI DELTA LEVEE
COMMISSION BASELINE AT MILE POST 22/23, ALSO REFERRED TO AS STATION 21/53+03
AND SAID IRON BAR BEING FURTHER DESCRIBED AS BEING LOCATED 2959.97 FEET SOUTH
OF AND 369.80 FEET WEST OF A CONCRETE MONUMENT REPRESENTING THE NORTHEAST
CORNER OF SECTION 10, TOWNSHIP 3 SOUTH, RANGE 11 WEST, TUNICA COUNTY,
MISSISSIPPI; THENCE SOUTH 23 DEGREES, 08 MINUTES, 34 SECONDS WEST FOR 948.29
FEET TO A POINT ON THE SOUTHERN LINE OF THE YAZOO-MISSISSIPPI DELTA LEVEE
COMMISSION BOUNDARY AND THE "POINT OF BEGINNING" OF THE TRACT 2 HEREIN
DESCRIBED; THENCE
SOUTH 50 DEGREES, 44 MINUTES, 06 SECONDS WEST FOR 269.86 FEET TO A POINT; THENCE
NORTH 57 DEGREES, 04 MINUTES, 05 SECONDS WEST FOR 661.24 FEET TO A POINT; THENCE
NORTH 71 DEGREES, 16 MINUTES, 09 SECONDS WEST FOR 354.34 FEET TO A POINT; THENCE
NORTH 77 DEGREES, 33 MINUTES, 19 SECONDS WEST FOR 336.25 FEET TO A POINT; THENCE
SOUTH 65 DEGREES, 43 MINUTES, 51 SECONDS WEST FOR 287.55 FEET TO A POINT; THENCE
<PAGE> 54
ESCROW NO: 98-01-2724 DTL POLICY NO: 89-024254
NORTH 48 DEGREES, 24 MINUTES, 20 SECONDS WEST FOR 276.87 FEET TO A POINT; THENCE
NORTH 41 DEGREES, 07 MINUTES, 03 SECONDS WEST FOR 177.12 FEET TO A POINT; THENCE
NORTH 27 DEGREES, 20 MINUTES, 55 SECONDS WEST FOR 140.25 FEET TO A POINT ON THE
NORTHERN LINE OF THE YAZOO-MISSISSIPPI DELTA LEVEE COMMISSION BOUNDARY; THENCE
NORTH 54 DEGREES, 09 MINUTES, 00 SECONDS EAST ALONG SAID NORTHERN LINE FOR
22.30 FEET TO A POINT; THENCE
NORTH 50 DEGREES, 18 MINUTES, 00 SECONDS EAST AND CONTINUING ALONG SAID
NORTHERN LINE FOR 149.65 FEET TO A POINT; THENCE
SOUTH 32 DEGREES, 18 MINUTES, 13 SECONDS EAST FOR 206.93 FEET TO A POINT; THENCE
SOUTH 41 DEGREES, 36 MINUTES, 46 SECONDS EAST FOR 147.74 FEET TO A POINT; THENCE
SOUTH 65 DEGREES, 34 MINUTES, 33 SECONDS EAST FOR 385.74 FEET TO A POINT; THENCE
SOUTH 82 DEGREES, 34 MINUTES, 59 SECONDS EAST FOR 203.65 FEET TO A POINT; THENCE
SOUTH 82 DEGREES, 39 MINUTES, 27 SECONDS EAST FOR 250.65 FEET TO A POINT; THENCE
SOUTH 88 DEGREES, 25 MINUTES, 20 SECONDS EAST FOR 136.39 FEET TO A POINT; THENCE
SOUTH 79 DEGREES, 38 MINUTES, 22 SECONDS EAST FOR 163.38 FEET TO A POINT; THENCE
SOUTH 63 DEGREES, 57 MINUTES, 04 SECONDS EAST FOR 199.25 FEET TO A POINT; THENCE
SOUTH 47 DEGREES, 30 MINUTES, 27 SECONDS EAST FOR 621.41 FEET TO THE SAID
"POINT OF BEGINNING",
BEARINGS IN THE ABOVE DESCRIPTION HAVE AN ORIGIN OF TRUE NORTH BASED ON
COMPUTATIONS FROM CELESTIAL OBSERVATIONS.
<PAGE> 55
ESCROW NO: 98-01-2724 DTL POLICY NO: 89-024254
TRACT 3
A TRACT OF LAND SITUATED IN SECTION 10, TOWNSHIP 3 SOUTH, RANGE 11 WEST,
TUNICA COUNTY, MISSISSIPPI AND MORE PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING FROM AND IRON PIN REPRESENTING THE SOUTHEAST CORNER OF SECTION 10,
TOWNSHIP 3 SOUTH, RANGE 11 WEST, TUNICA COUNTY, MISSISSIPPI; THENCE NORTH 0
DEGREES; 14 MINUTES, 36 SECONDS WEST ALONG THE EAST LINE OF SAID SECTION 10 FOR
158.42 FEET TO THE "POINT OF BEGINNING" OF THE TRACT HEREIN DESCRIBED, THENCE
NORTH 0 DEGREES, 14 MINUTES, 36 SECONDS WEST AND CONTINUING ALONG THE SAID EAST
LINE OF SECTION 10 FOR 845.14 FEET TO A POINT, THENCE
SOUTH 72 DEGREES, 54 MINUTES, 40 SECONDS WEST FOR 226.34 FEET TO A POINT; THENCE
NORTH 51 DEGREES, 57 MINUTES, 56 SECONDS WEST FOR 272.93 FEET TO A POINT; THENCE
NORTH 44 DEGREES, 31 MINUTES, 48 SECONDS WEST FOR 476.17 FEET TO THE SOUTHERN
MOST BOUNDARY (ALSO REFERRED TO AS THE LANDSIDE BOUNDARY) OF THE
YAZOO-MISSISSIPPI DELTA LEVEE COMMISSION PROPERTY; THENCE
SOUTH 50 DEGREES, 44 MINUTES, 06 SECONDS WEST ALONG THE SAID SOUTHERN BOUNDARY
OF THE YAZOO-MISSISSIPPI DELTA LEVEE COMMISSION PROPERTY FOR 249.77 FEET TO A
POINT; THENCE
SOUTH 57 DEGREES, 57 MINUTES, 16 SECONDS EAST FOR 500.07 FEET TO A POINT; THENCE
SOUTH 44 DEGREES, 02 MINUTES, 26 SECONDS EAST FOR 431.02 FEET TO A POINT; THENCE
SOUTH 29 DEGREES, 52 MINUTES, 28 SECONDS EAST FOR 145.98 FEET TO A POINT; THENCE
SOUTH 21 DEGREES, 16 MINUTES, 14 SECONDS EAST FOR 457.57 FEET TO THE SAID
"POINT OF BEGINNING",
BEARINGS IN THE ABOVE DESCRIPTION HAVE AN ORIGIN OF TRUE NORTH BASED ON
COMPUTATIONS FROM CELESTIAL OBSERVATIONS.
<PAGE> 56
ESCROW NO: 98-01-2724 DTL POLICY NO: 89-024254
TRACT 4
A TRACT OF LAND SITUATED IN THE SOUTHWEST 1/4 OF SECTION 11, TOWNSHIP 3 SOUTH,
RANGE 11 WEST, TUNICA COUNTY, MISSISSIPPI AND MORE PARTICULARLY DESCRIBED AS
FOLLOWS:
COMMENCING FROM A POINT REPRESENTING THE SOUTHWEST CORNER OF SECTION 11,
TOWNSHIP 3, SOUTH, RANGE 11 WEST, TUNICA COUNTY, MISSISSIPPI, THENCE NORTH 0
DEGREES, 14 MINUTES, 36 SECONDS WEST ALONG A LINE REPRESENTING THE WESTERN LINE
OF SAID SECTION 14 FOR 150.00 FEET TO THE "POINT OF BEGINNING" OF THE TRACT
HEREIN DESCRIBED; THENCE
NORTH 0 DEGREES, 14 MINUTES, 36 SECONDS WEST ALONG A LINE REPRESENTING THE
WEST LINE OF SAID SECTION 11 FOR 945.00 FEET TO A POINT; THENCE
NORTH 89 DEGREES, 39 MINUTES, 36 SECONDS EAST FOR 20.00 FEET TO A POINT; THENCE
SOUTH 0 DEGREES, 14 MINUTES, 36 SECONDS EAST FOR 945.00 FEET TO A POINT; THENCE
SOUTH 89 DEGREES, 39 MINUTES, 36 SECONDS WEST FOR 20.00 FEET TO THE SAID "POINT
OF BEGINNING",
BEARINGS IN THE ABOVE DESCRIPTION HAVE AN ORIGIN OF TRUE NORTH BASED ON
COMPUTATIONS FROM CELESTIAL OBSERVATIONS.
<PAGE> 57
ESCROW NO: 98-01-2724 DTL POLICY NO: 89-024254
TRACT 5
A TRACT OF LAND SITUATED IN SECTION 11, TOWNSHIP 3 SOUTH, RANGE 11 WEST, TUNICA
COUNTY, MISSISSIPPI AND MORE PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING FROM AN IRON PIN REPRESENTING THE SOUTHWEST CORNER OF SECTION 11,
TOWNSHIP 3 SOUTH, RANGE 11 WEST, TUNICA COUNTY, MISSISSIPPI; NORTH 89 DEGREES,
39 MINUTES, 36 SECONDS EAST FOR 20.00 FEET TO THE SAID "POINT OF BEGINNING" OF
THE TRACT HEREIN DESCRIBED; THENCE
NORTH 89 DEGREES, 39 MINUTES, 36 SECONDS EAST FOR 120.01 FEET TO A POINT; THENCE
NORTH 0 DEGREES, 14 MINUTES, 36 SECONDS WEST FOR 1124.29 FEET TO A POINT; THENCE
NORTH 11 DEGREES, 45 MINUTES, 30 SECONDS EAST FOR 100.77 FEET TO A POINT; THENCE
NORTH 1 DEGREES, 05 MINUTES, 48 SECONDS EAST FOR 600.56 FEET TO A POINT; THENCE
NORTH 7 DEGREES, 37 MINUTES, 18 SECONDS EAST FOR 401.94 FEET TO A POINT ON THE
SOUTHERN BOUNDARY OF THE YAZOO-MISSISSIPPI DELTA LEVEE COMMISSION PROPERTY;
THENCE
NORTH 83 DEGREES, 08 MINUTES, 40 SECONDS WEST ALONG THE SAID SOUTHERN
BOUNDARY FOR 36.02 FEET TO A POINT; THENCE
SOUTH 50 DEGREES, 23 MINUTES, 00 SECONDS WEST AND CONTINUING ALONG THE SAID
SOUTHERN BOUNDARY FOR 225.43 FEET TO A POINT; THENCE
SOUTH 0 DEGREES, 14 MINUTES, 36 SECONDS EAST FOR 2083.06 FEET TO THE SAID
"POINT OF BEGINNING",
BEARINGS IN THE ABOVE DESCRIPTION HAVE AN ORIGIN OF TRUE NORTH BASED ON
COMPUTATIONS FROM CELESTIAL OBSERVATIONS.
<PAGE> 58
EXHIBIT B
PERMITTED LIENS
See attached
<PAGE> 59
Indexing Instructions:
NE 1/4, NW 1/4, SE 1/4, SW 1/4 of Section 9; NE 1/4, NW 1/4, SE 1/4, SW 1/4 of
Section 10; SW 1/4 of Section 11; of Township 3 South, Range 11 West, Tunica
County, Mississippi.
<PAGE> 1
EXHIBIT 10.14
[Tunica]
FIRST PREFERRED VESSEL MORTGAGE
ON THE WHOLE OF THE FITZGERALDS TUNICA
(U.S.C.G. Official Number 262757)
Maximum Principal Amount of $15,000,000
FITZGERALD MISSISSIPPI, INC., A MISSISSIPPI CORPORATION,
having an address of
711 Lucky Lane
Robinsonville, Mississippi 38664
Owner and Mortgagor
In Favor of
FOOTHILL CAPITAL CORPORATION, A CALIFORNIA CORPORATION
having an address of
11111 Santa Monica Boulevard
Suite 1500
Los Angeles, CA 90025-3333
Mortgagee
Dated as of October 29, 1998
Discharge amount: $15,000,000 (or such lesser amount of principal
as shall have been advanced and remain outstanding) Together With Interest,
Expenses, Attorneys' Fees and Costs and Performance of Mortgage Covenants
<PAGE> 2
FIRST PREFERRED VESSEL MORTGAGE
THIS FIRST PREFERRED VESSEL MORTGAGE (as same may be amended,
replaced or supplemented from time to time hereafter, this "Mortgage") dated as
of October 29, 1998, is granted by:
FITZGERALDS MISSISSIPPI, INC.
711 Lucky Lane
Robinsville, MS 38664
a corporation organized and existing under and by virtue of the laws of the
State of Mississippi ("Mortgagor") in favor of Foothill Capital Corporation
("Mortgagee") whose address is 11111 Santa Monica Boulevard, Suite 1500, Los
Angeles, CA 90025-3333, as lender under that certain Loan and Security
Agreement, dated as of October 29, 1998 (as same may be amended or supplemented
from time to time hereafter, the "Loan Agreement"), by and among Fitzgeralds
Gaming Corporation, a Nevada corporation (the "Company"), and Mortgagee.
WHEREAS:
A. Mortgagor is the sole owner of the whole of the vessel
identified and described in the Granting Clause of this Mortgage.
B. Pursuant to the terms and conditions of the Loan Agreement,
Foothill has agreed to provide financing to Company in the aggregate stated
maximum principal amount of $15,000,000.
C. Mortgagor is a wholly-owned subsidiary of the Company and has
executed and delivered a continuing guaranty in favor of Mortgagee (as same may
be amended, replaced or supplemented from time to time hereafter, "Mortgagor's
Guaranty"), pursuant to which Mortgagor has guaranteed payment by the Company
of the indebtedness evidenced by the Loan Agreement and performance by the
Company of the obligations of the Company under the Loan Agreement.
D. Mortgagor has entered into that certain Deed of Trust, Security
Agreement And Fixture Filing With Assignment of Rents of even date herewith (as
same may be amended, replaced or supplemented from time to time hereafter, the
"Deed of Trust"), recorded in Tunica County, Mississippi covering certain fee
estates, improvements and other real and personal property owned by Mortgagor,
which Deed of Trust secures payment and performance of the Guaranteed
Obligations, as defined in the Mortgagor's Guaranty.
2
<PAGE> 3
E. In order to further secure the due and punctual payment and
performance of all of the Guaranteed Obligations, Mortgagor has agreed to
execute and deliver this Mortgage as follows:
WITNESSETH:
IN CONSIDERATION OF THE FOREGOING PREMISES AND FOR OTHER GOOD AND
VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY
ACKNOWLEDGED, MORTGAGOR DOES HEREBY IRREVOCABLY GRANT, BARGAIN, SELL, TRANSFER,
MORTGAGE, CONVEY AND ASSIGN UNTO AND IN FAVOR OF MORTGAGEE, its successors and
assigns, the following (but excluding in each and every case all Excluded
Assets, as defined in the Deed of Trust), whether now owned or hereafter
acquired:
GRANTING CLAUSE ONE
Vessel
The whole of the following and described vessel and appurtenances (the
"Vessel") to wit:
NAME OFFICIAL NUMBER TYPE
---- --------------- ----
FITZGERALDS TUNICA 262757 Barge
TOGETHER WITH, all of the following now owned or hereafter acquired by
Mortgagor or in which Mortgagor has any rights or interest and now or hereafter
located in or on, or attached to, or used or intended to be used or which are
now or may hereafter be appropriated for use on or in connection with the
operation of the Vessel and the business being conducted or which may be
conducted thereon, or in connection with any construction being conducted or
which may be conducted thereon: boilers, engines, machinery, masts, span,
boats, cables, motors, tools, anchors, chains, booms, cranes, rigs, pumps,
pipe, tanks, tackle, apparel, furniture, fixtures, rigging, supplies, fittings
and gaming machinery, equipment and accessories relating to the Vessel and the
gaming operations now or hereafter conducted thereon, including but not limited
to communication systems, visual and electronic surveillance systems and
transportation systems, tools, utensils, food and beverage, liquor, uniforms,
linens, housekeeping and maintenance supplies, fuel, all gaming equipment and
devices, financial equipment, computer equipment, calculators, adding machines,
video game and slot machines, and any other electronic equipment of every
nature used in
3
<PAGE> 4
connection with the operation of the Vessel and the business conducted thereon,
all machinery, equipment, engines, appliances and fixtures for generating or
distributing air, water, heat, electricity, light, fuel or refrigeration, or
for ventilating or sanitary purposes, or for the exclusion of vermin or
insects, or for the removal of dust, refuse or garbage, all wall-beds,
wallsafes, built-in furniture and installations, shelving, lockers, partitions,
doorstops, vaults, motors, elevators, dumbwaiters, awnings, window shades,
Venetian blinds, light fixtures, fire hoses and brackets and boxes for the
same, fire sprinklers, alarm, surveillance and security systems, drapes,
drapery rods and brackets, mirrors, mantels, screens, linoleum, carpets and
carpeting, plumbing, bathtubs, sinks, basins, pipes, faucets, water closets,
laundry equipment, washers, dryers, ice-boxes and heating units, all kitchen
and restaurant equipment, including but not limited to silverware, dishes,
menus, cooking utensils, stoves, refrigerators, ovens, ranges, dishwashers,
disposals, water heaters, incinerators, furniture, fixtures and furnishings,
all cocktail lounge supplies, including but not limited to bars, glassware,
bottles and tables used in connection with the Vessel, all chaise lounges, hot
tubs, swimming pool heaters and equipment, and all other recreational equipment
(computerized and otherwise), beauty and barber equipment, and maintenance
supplies used in connection with the Vessel, all specifically designed
installations and furnishings, and all furniture, furnishings, and personal
property of every nature whatsoever; and all extensions, additions, accessions,
improvements, betterments, renewals, substitutions, and replacements to any of
the foregoing, all of which (to the fullest extent permitted by law) shall be
conclusively deemed appurtenances to the Vessel, and all other appurtenances to
the Vessel appertaining or belonging, whether now owned or hereafter acquired,
whether on board or not at any time of determination, and all additions,
improvements and replacements hereafter made in or to the Vessel and all
proceeds of any of the foregoing, including without limitation, any claim for
compensation, purchase price reimbursement or award for a requisition pursuant
to Section 3.13 hereof and any charter hire or other compensation resulting
from a requisition pursuant to Section 3.14 hereof. Mortgagor and Mortgagee
acknowledge that significant structures, improvements, additions, equipment and
other appurtenances may be added to the Vessel after the execution of this
Mortgage, and Mortgagor specifically affirms and agrees that all such
appurtenances to the Vessel shall be subject to this Mortgage.
TOGETHER WITH, all extensions, improvements, betterments, renewals,
substitutes for and replacements of, and all additions, accretions, and
appurtenances to, any of the foregoing that Mortgagor may subsequently acquire,
and all conversions of any of the foregoing; Mortgagor agrees that all property
hereafter acquired by Mortgagor and required by the Loan Agreement, this
Mortgage or any other Loan Document to be subject to the Lien and/or security
interests created by this Mortgage shall forthwith upon the acquisition thereof
by Mortgagor be subject to the
4
<PAGE> 5
Lien and security interests of this Mortgage as if such property were now owned
by Mortgagor and were specifically described in this Mortgage and granted
hereby or pursuant hereto, and the Mortgagee is hereby authorized to receive
any and all such property as and for additional security for the Guarantied
Obligations.
TO HAVE AND HOLD the same unto Mortgagee, its successors and assigns,
forever upon the terms herein set forth to secure payment of the Guarantied
Obligations, including the performance and observance of and compliance with
the covenants, terms and conditions herein contained.
PROVIDED, only, and the condition of these presents is such, that if the
Guarantied Obligations shall be Indefeasibly paid and performed in full, then,
these presents and the rights hereunder shall cease, terminate and be void in
the manner provided in Section 5.6 hereof.
AND NOW, THE PARTIES HEREBY FURTHER AGREE, COVENANT AND DECLARE that the
Vessel is to be held subject to the following covenants, conditions,
provisions, terms and uses:
ARTICLE 1
DEFINITIONS AND RULES OF CONSTRUCTION
For all purposes of this Mortgage, unless the context otherwise requires:
1.1 Certain Definitions. Capitalized terms used herein and not otherwise
defined herein but defined in the Loan Agreement or the Deed of Trust shall
have the definitions provided in the Loan Agreement or the Deed of Trust, as
the case may be.
1.2 Rules of Construction. Unless the context otherwise requires:
1.2.1 A term has the meaning assigned to it;
1.2.2 "or" is not exclusive;
1.2.3 Words in the singular include the plural, and in the plural
include the singular;
1.2.4 All references herein to particular articles or sections,
unless otherwise provided, are references to articles or sections of this
Mortgage.
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1.2.5 The headings herein are solely for convenience of reference
and shall not constitute a part of this Mortgage nor shall they affect its
meaning, construction or effect.
ARTICLE 2
GENERAL MORTGAGE PROVISIONS
For purposes of this Mortgage and in order to comply with Title 46,
Section 31321(b)(3) of the United States Code, the parties to this Mortgage
hereby declare that the indebtedness which is now or will in the future be owed
under the Loan Agreement, the Mortgagor's Guaranty and the other Guarantied
Obligations in an aggregate principal amount of up to FIFTEEN MILLION DOLLARS
($15,000,000), as the total of all possible advances that may be made under the
Loan Documents, together with interest, attorneys' fees and costs of performance
of the Guarantied Obligations and the covenants of this Mortgage, the
Mortgagor's Guaranty, the Deed of Trust and the other Loan Documents. The
discharge amount is the same as such total amount, together with interest,
expenses, attorneys' fees and costs and performance of the Guarantied
Obligations and the covenants of this Mortgage, the Mortgagor's Guaranty, the
Deed of Trust and the other Loan Documents.
ARTICLE 3
REPRESENTATIONS, WARRANTIES AND COVENANTS OF MORTGAGOR
Mortgagor represents, warrants, covenants and agrees with Mortgagee as
follows:
3.1 Corporate Status of Mortgagor. Mortgagor is a corporation organized
and existing under and by virtue of the laws of the State of Mississippi and is
and will remain a citizen of the United States of America within the meaning of
Title 46, Section 802, of the United States Code, entitled to own and document
the Vessel to engage in the trade in which the Vessel is operating under the
laws of the United States of America.
3.2 Outstanding Liens. Mortgagor lawfully owns and is lawfully possessed
of the Vessel free and clear of all Liens, except the Permitted Liens under the
Loan Agreement; and Mortgagor will and does hereby warrant and defend the title
and possession thereto and to every part thereof for the benefit of Mortgagee
against the claims and demands of all persons whomsoever subject to the
Permitted Loans and other matters permitted under the Loan Agreement.
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3.3 Compliance with Law. Mortgagor will comply with and satisfy all
applicable formalities and provisions of the laws and regulations of the United
States of America in order to perfect, establish and maintain this Mortgage, any
supplement or amendment hereto and any assignment hereof by Mortgagee as a
first priority mortgage upon the Vessel and upon all additions, improvements
and replacements made in or to the same subject only to the Permitted Liens.
Mortgagor shall furnish to Mortgagee, from time to time, such proofs as
Mortgagee may reasonably request with respect to Mortgagor's compliance with
the foregoing covenant. Mortgagor shall promptly pay and discharge all United
States Coast Guard fees and expenses in connection with the recordation of this
Mortgage, any supplement or amendment thereto and any assignment thereof by
Mortgagee. In the event that any provisions hereof shall be deemed invalidated
in whole or in part by reason of any present or future law or any decision of
any court, Mortgagor will execute such other and further assurances and
documents as in the reasonable opinion of Mortgagee may be required to more
effectually subject the Vessel to the payment and performance of the Guarantied
Obligations.
In addition, Mortgagor covenants that at all times it will comply
with all applicable formalities and provisions of the laws and regulations of
the State of Mississippi, including but not limited to the Mississippi Gaming
Laws, including the Mississippi Gaming Control Act and the regulations
promulgated thereunder.
3.4 Operation of Vessel. Mortgagor will not cause or permit the
Vessel to be operated in any manner contrary to law and Mortgagor will not
engage in any unlawful trade or violate any law or expose the Vessel to penalty
or forfeiture, and will not do, or suffer or permit to be done, anything which
can or may injuriously affect the registration or flag of the Vessel under the
laws and regulations of the United States of America. Mortgagor will not allow
the Vessel to leave the continental United States nor permit the Vessel to
operate outside the navigation limits of the insurance required pursuant to
Section 3.12 of this Mortgage. Mortgagor will keep the Vessel duly documented
as a Vessel of the United States of America, entitled to engage in the coast
wide trade. Mortgagor will not operate the Vessel in any manner other than as a
stationary casino.
3.5 Payment of Taxes, Etc. Subject to the provisions of the Loan
Agreement, Mortgagor will pay or cause to be paid prior to delinquency, all
taxes, assessments, governmental levies, fines and penalties lawfully imposed
on Mortgagor or on the Vessel.
3.6 Notice of Mortgage. Mortgagor will place, and at all times will
retain, properly certified copies of this Mortgage and a notice of this
Mortgage with the Certificate of Documentation of the Vessel on board the
Vessel. In addition, Mortgagor
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shall display a notice reading as follows, printed in plain type of such size
that each paragraph of reading matter shall cover a space not less than six (6)
inches wide by nine (9) inches high, and framed under glass, shall be placed
and kept prominently displayed on the Vessel:
NOTICE OF MORTGAGE
This Vessel is owned by Fitzgeralds Mississippi, Inc., a Mississippi
corporation, and is covered by a First Preferred Vessel Mortgage in favor of
Foothill Capital Corporation, a California corporation, and a First Preferred
Vessel Mortgage in favor of The Bank of New York, a New York banking
association, as mortgagees, to secure payment of indebtedness. Under the terms
of said Mortgages, no owner, operator, charterer, cargo owner, subcharterer or
the master of this vessel, or any other person or persons has the right, power,
or authority to create, incur or permit to exist on this Vessel any lien
whatsoever other than liens for crew's wages and salvage and certain other
liens permitted by Mortgagee.
3.7 Release from Arrest. If a complaint be filed against the Vessel,
or if the Vessel is otherwise attached, arrested, levied upon or taken into
custody by virtue of any legal proceeding in any court, Mortgagor will promptly
notify Mortgagee thereof by telephone facsimile, confirmed by letter, and
within fifteen (15) days will cause the Vessel to be released by posting
security and will promptly notify Mortgagee thereof in the manner aforesaid.
3.8 Care of the Vessel. On the date hereof and at all times
thereafter, the Vessel is, and shall be, tight, staunch and strong and well and
sufficiently tackled, appareled, furnished and equipped and in all respects
seaworthy. Except as otherwise expressly permitted by the Loan Agreement,
Mortgagor shall preserve and maintain the Vessel in good condition, repair and
working order (reasonable wear and tear excepted) and supplied with all
necessary equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof. At the request of
Mortgagee, Mortgagor shall certify monthly that all wages and other claims
whatsoever which might give rise to a Lien upon the Vessel were promptly and
duty paid.
3.9 Access to Vessel. Mortgagor at all reasonable times will afford
Mortgagee or its authorized representatives full and complete access to the
Vessel for the purpose of inspecting the same and Mortgagor's papers and
records with respect thereto.
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3.10 Documentation of Vessel. Mortgagor will keep the Vessel duly
documented in the name of Mortgagor as a vessel of the United States of
America, under the flag of the United States of America, entitled to engage in
the operations conducted by Mortgagor and eligible for the trade in which the
Vessel is operating.
3.11 Sale, Charter or Mortgage of Vessel.
3.11.1 Prohibitions. Except as otherwise expressly permitted
by the Loan Agreement, Mortgagor covenants that all times prior to the
indefeasible payment in full of the Guaranteed Obligations, Mortgagor shall
neither make nor suffer to exist, nor enter into any agreement for: any sale,
charter, assignment, exchange, mortgage, transfer, Lien, hypothecation or
encumbrance of all or any part of the Vessel. As used herein, "transfer"
includes the actual transfer or other disposition, whether voluntary or
involuntary, by law, or otherwise, except those transfers specifically
permitted herein, provided, however, that "transfer" shall not include the
granting of utility or other beneficial easements with respect to the Vessel
which are granted by Mortgagor and are reasonably necessary to the construction
or operation of the Property, as defined in the Deed of Trust.
3.11.1 Other Liens. Except for (a) the Lien created under and
governed by this Mortgage and (b) the Lien (the "Indenture Vessel Mortgage
Lien") created by that certain First Preferred Vessel Mortgage, dated as of
December 30, 1997 (the "Indenture Vessel Mortgage"), between Mortgagor and The
Bank of New York, a New York banking association, and recorded in the National
Vessel Documentation Center at Book 98-23, Page 467, Mortgagor may not grant a
Lien on the Vessel or any portion thereof. The Lien created under and governed
by this Mortgage shall, in accordance with the Intercreditor Agreement and
notwithstanding the date of filing, rank senior and prior to the Indenture
Vessel Mortgage Lien.
3.12 Insurance. Mortgagor shall, at its sole expense, obtain,
deliver to and assign and maintain for the benefit of Mortgagee, during the
term of this Mortgage, insurance policies insuring the Vessel and liability
insurance policies, all in accordance with the requirements of the Loan
Agreement. Mortgagor shall pay promptly when due any premiums on such insurance
policies and on any renewals thereof. All such policies and renewals thereof
shall contain a noncontributory standard mortgagee or beneficiary endorsement
(Form 438 BFU or its equivalent) making losses payable to Mortgagee as its
interest may appear. In the case of any loss or damage to the Vessel covered by
insurance, Mortgagor shall give immediate notice to Mortgage thereof and all
insurance monies, awards or other payments shall be included in Net Proceeds
and shall be applied in the same manner and in accordance with terms and
conditions contained in the Loan Agreement, Mortgagor shall not, without the
prior written permission of
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Mortgagee to be given in Mortgagee's sole and absolute discretion, do any act,
or voluntarily suffer or permit any act to be done, whereby any insurance
required by this Section 3.12 shall or may be suspended, impaired or defeated,
or suffer or permit the Vessel to engage in any voyage, to carry any cargo, or
engage in any other activity not permitted under the policies of insurance then
in effect without procuring insurance covering the Vessel in all respects for
such voyage or the carriage of such voyage.
3.13 Requisition of Title to Vessel. In the event that the title or
ownership of the Vessel shall be requisitioned, purchased or taken by the
United States of America or any government of any state of the United States or
any other country or any department, agency or representative thereof, pursuant
to any present or future law, proclamation, decree, order or otherwise, the
lien of this Mortgage shall be deemed to attach to the claim for compensation,
and the compensation, purchase price, reimbursement or award for such
requisition, purchase or other taking of such title or ownership shall be
included in Net Proceeds and shall be payable to Mortgagee, who shall be
entitled to receive the same and hold and apply such compensation, purchase
price, reimbursement or award in the same manner and in accordance with terms
and conditions contained in the Loan Agreement. In the event of any such
requisition, purchase or taking, Mortgagor shall promptly execute and deliver
to Mortgagee such documents, if any, as in the opinion of counsel for Mortgagee
may be necessary or useful to facilitate or expedite the collection by
Mortgagee of such compensation, purchase price, reimbursement or award.
3.14 Requisition of Vessel but Not Title. In the event that the United
States of America or any government of any other country or any department,
agency or representative thereof shall not take the title or ownership of the
Vessel but shall requisition, charter, or in any manner take over the use of
the Vessel pursuant to any present or future law, proclamation, decree, order
or otherwise, all charter hire and compensation resulting therefrom and any sum
payable by reason of the loss of or injury to or depreciation of the Vessel
resulting from such requisitioning, chartering or taking of the use of the
Vessel shall be included in Rents and shall be the property of Mortgagor,
subject to the Assignment of Rents contained in the Deed of Trust.
3.15 Execution of Additional Documents. Mortgagor agrees to execute all
additional documents, instruments, UCC Financing Statements and other
agreements that Mortgagee may reasonably deem necessary and appropriate, in
form and substance satisfactory to Mortgagee, to keep this Mortgage in effect,
to better reflect the true intent of this Mortgage, and to consummate fully all
of the transactions contemplated hereby and by the Deed of Trust, the Loan
Agreement, the Mortgagor's Guaranty and the other Loan Documents.
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ARTICLE 4
EVENTS OF DEFAULT AND REMEDIES
4.1 Events of Default. Subject to any applicable cure period
provided for in the Loan Agreement or in this Mortgage, or if no cure period
has been specified then 30 days after Mortgagee has provided written notice to
Mortgagor with respect thereto (any such cure periods to run concurrently and
not consecutively), any of the following shall be deemed to be an Event of
Default hereunder:
4.1.1 The occurrence of one or more "Events of Default" (as
defined in the Loan Agreement) shall constitute an "Event of Default" under
this Mortgage.
4.1.2 The occurrence of one or more "Events of Default" (as
defined in the Deed of Trust) shall constitute an "Event of Default" under this
Mortgage.
4.1.3 Failure to perform any of the terms, covenants and
conditions in this Mortgage or any of the other Loan Documents.
4.1.4 Any statement, representation or warranty given by
Mortgagor to Mortgagee in any of the Loan Documents, in connection with the
Loan Agreement or in any other document provided by Mortgagor, including this
Mortgage, is found to be materially false or misleading.
4.1.5 A default under, or the institution of foreclosure or
other proceedings to enforce, any Lien or Permitted Lien of any kind upon the
Property or any portion thereof.
4.1.6 Any transfer of the Property or any portion thereof
without the prior consent of Mortgagee as provided in Section 3.11 hereof.
4.2 Remedies. In each and every Event of Default, Mortgagee shall
have the right to:
4.2.1 Accelerate the maturity date(s) of any or all of the
Guarantied Obligations (except that such acceleration shall be automatic if the
Event of Default is caused by any of the events described in Sections 8.5 and
8.6 of the Loan Agreement), declare the outstanding principal amount under the
Loan Documents and the interest accrued thereon, and all other Guarantied
Obligations, to be due and payable
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immediately, and upon such declaration such principal and interest and other
Guarantied Obligations shall immediately become due and payable without demand,
presentment, notice or other requirements of any kind (all of which Mortgagor
waives).
4.2.2 Exercise all the rights and remedies in foreclosure and
otherwise given to Mortgagee by the laws and regulations of the United States
of America or of the country wherein the Vessel shall then be found or of any
country wherein the Vessel may thereafter be found or of any other applicable
jurisdiction.
4.2.3 Bring suit at law, in equity or in admiralty, as it may be
advised, to recover judgment for any and all amounts secured hereby and collect
the same from Mortgagor and/or out of any and all property of Mortgagor covered
by this Mortgage.
4.2.4 Take the Vessel without legal process wherever the same may be,
and Mortgagor or other person in possession, forthwith upon demand of Mortgagee
shall surrender to Mortgagee possession of the Vessel and Mortgagee may,
without being responsible for loss or damage, hold, lay up, lease, charter,
operate or otherwise use the Vessel for such time and upon such terms as it may
deem to be for its best advantage, accounting only for the net profits, if any,
arising from such use of the Vessel and charging upon all receipts from the use
of the Vessel or from the sale thereof by court proceedings or pursuant to the
provisions set forth in 4.3 below, all costs, expenses, charges, damages or
losses by reason of such use; and if at any time Mortgagee shall avail itself
of the right herein given it to take the Vessel, Mortgagee shall have the right
to dock the Vessel for a reasonable time at any dock, pier, or other premises
of Mortgagor or leased by Mortgagor without charge, or to dock it at any other
place at the cost and expense of Mortgagor.
4.2.5 Without being responsible for loss or damage, sell the Vessel at
any place and at such time as Mortgagee may specify and in such manner as
Mortgagee may deem advisable free from any claim by Mortgagor in admiralty, in
equity, at law or by statute, after First giving notice of the time and place
of sale with a general description of the Vessel in the following manner:
(a) By publishing such notice three times a week for two consecutive
weeks, with the last date of publication not more than 20 nor less than five
days immediately preceding the sale, in a daily newspaper of general
circulation published in Tunica, Mississippi and in the Journal of Commerce;
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(b) If the place of sale should not be Tunica, Mississippi,
then also by publication of a similar notice in a daily newspaper, if any,
published at the place of sale; and
(c) By mailing a similar notice to Mortgagor on the day of
first publication.
4.2.5.1 Mortgagor may, for any cause it deems expedient
postpone the sale of all or any portion of the Vessel until it shall be
completed and, in every case, notice of postponement shall be given by public
announcement thereof at the time and place last appointed for the sale and from
time to time thereafter Mortgagor may postpone such sale by public announcement
at the time fixed by the preceding postponement.
4.2.5.2 Any such sale may be conducted without bringing
the Vessel to be sold to the place designated for such We and in such manner as
Mortgagee may deem to be for its best advantage.
4.2.6 Mortgagor hereby consents to the appointment of a
consent keeper or substitute custodian by Mortgagee with the costs thereof to
be a cost of the sale to be paid from the proceeds of the sale or by Mortgagor.
4.3 Sale of Vessel by Mortgagee. Any sale of the Vessel made by
Mortgagee in pursuance of this Mortgage, whether under the power of sale hereby
granted or any judicial proceedings, shall operate to divest all right, title
and interest of any nature whatsoever of Mortgagor therein and thereto, and
shall bar Mortgagor, its successors and assigns, and all persons claiming by,
through or under them. At any such sale Mortgagee may bid for and purchase the
Vessel and upon compliance with the terms of sale may hold, retain and dispose
of the Vessel without further accountability therefor.
4.4 Mortgagee to Sign for Mortgagor. For purposes of any sale of
the Vessel made by Mortgagee in pursuance of this Mortgage, whether under the
power of sale hereby granted or any judicial proceedings, Mortgagee is hereby
appointed attorney-in-fact of Mortgagor to execute and deliver to any purchaser
aforesaid and is hereby vested with full power and authority to make, in the
name and on behalf of Mortgagor, a good conveyance of the title to the Vessel.
With respect to the foregoing power of attorney and each and every other power
of attorney granted elsewhere herein (including without limitation Section 4.5
hereof) or in the other Loan Documents, Mortgagee, by its acceptance hereof,
acknowledges and understands that the Gaming Authorities may require that
Mortgagee or any other person granted a right to act for or
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on behalf of the Company, Mortgagor or any other Guarantor obtain Gaming
Approvals before, during or after the exercise thereof.
4.5 Mortgagee to Collect Hire, Etc. Mortgagee is hereby appointed
attorney-in-fact of Mortgagor upon the happening of and during, but only
during, the continuance of any Event of Default, in the name of Mortgagor (a)
to demand, collect, receive, compromise and sue for, so far as may be permitted
by law, all Rents of the Vessel and all amounts due from underwriters under any
insurance thereon as payment of losses or as return premiums or otherwise, and
all other sums, due or to become due at the time of the happening of and during,
but only during, the continuance of any Event of Default in respect of the
Vessel, or in respect of any insurance thereof from any person whomsoever, and
(b) to make, give and execute in the name of Mortgagor acquittance, receipts,
releases, or other discharges for the same, whether under seal or otherwise, and
(c) to endorse and accept in the name of Mortgagor all checks, notes, drafts,
warrants, agreements and all other instruments with respect to the foregoing.
The rights of Mortgagee provided in this Section 4.5 are in addition to all
other rights of Mortgagee provided in this Mortgage and in the other Loan
Documents (including, without limitation, Section 3.12 of this Mortgage) and the
provisions of this Section 4.5 shall not be construed to limit any of such other
rights.
4.6 Right to a Receiver. If any legal proceedings shall be taken to
enforce any right under this Mortgage, Mortgagee shall be entitled as a matter
of right to the appointment of a receiver of the Vessel and the Rents due or to
become due and arising from the operation thereof.
4.7 Suits to Protect the Vessel. Mortgagee shall have the power and
authority to institute and maintain any suits and proceedings as Mortgagee, in
its sole and absolute discretion, may deem expedient (a) to prevent any
impairment of the Vessel by any acts which may be unlawful or in violation of
the terms of this Mortgage or any of the other Loan Documents, or (b) to
restrain the enforcement of or compliance with any legislation or other
Applicable Laws that may be unconstitutional or otherwise invalid or if the
enforcement of or compliance with such enactment, rule or order would impair
the security hereunder or be prejudicial to the interest of Mortgagee.
Mortgagee shall give notice to Mortgagor promptly following institution of any
such suit or proceeding.
4.8 Costs of Mortgagee. Mortgagee shall be entitled to recover
judgment against Mortgagor for the amount of Mortgagee's reasonable costs and
expenses of enforcement of the terms and provisions of this Mortgage, including
reasonable attorneys' fees and costs and any necessary advances, expenses and
liabilities
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made or incurred by Mortgagee in exercising its rights and remedies hereunder,
after the occurrence of and during, but only during, the continuance of an
Event of Default.
4.9 Right of Mortgagee. Each and every power and remedy herein
given to Mortgagee shall be cumulative and shall be in addition to every other
power and remedy herein given or given in the Deed of Trust or the other Loan
Documents or now or hereafter existing at law, in equity, in admiralty or by
statute, and each and every power and remedy whether herein given or otherwise
existing may be exercised from time to time and as often and in such order as
may be deemed expedient by Mortgagee, and the exercise or the beginning of the
exercise of any power to remedy shall not be construed to be a waiver of the
right to exercise at the same time or thereafter any other power or remedy. No
delay or omission by Mortgagee in the exercise of any right or power or in the
pursuance of any remedy accruing upon any Event of Default shall impair any
such right, power or remedy or to be construed to be a waiver of any Event of
Default or be construed to be any acquiescence therein; nor shall the
acceptance by Mortgagee of any security or of any payment of or on account of
any of the Guarantied Obligations after any Event of Default or of any payment
on account of any past Event of Default be construed to be a waiver of any
right to take advantage of any future Event of Default or of any past Event of
Default not completely cured thereby.
4.10 Restoration of Position. If Mortgagee shall have proceeded to
enforce any right or remedy under this Mortgage by Foreclosure, entry or
otherwise and such proceedings shall have been discontinued or abandoned for
any reason, then, and in every such case Mortgagor and Mortgagee shall be
restored to their former positions and rights hereunder, and all rights, powers
and remedies of Mortgagee shall continue as if no such proceedings had occurred
or had been taken.
4.11 Proceeds of Sale. The proceeds of any sale of the Vessel and
the net earnings from the hire or from any operation or use of the Vessel by
Mortgagee under any of the powers herein specified and any and all other money
received by Mortgagee pursuant to or under the terms of this Mortgage or in any
proceedings hereunder, the application of which has not elsewhere been
specifically provided, shall be applied as follows:
4.11.1 To the payment of all reasonable expenses and charges,
including the expenses of any sale, and expenses of any retaking, attorneys'
fees, court costs, keepers' fees, necessary repairs and any other expenses or
advances made or incurred by Mortgagee in the protection of its rights or the
pursuance of its remedies hereunder; then
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4.11.2 To the payment in full of any amounts then due and unpaid
under the Guarantied Obligations; then
4.11.3 To Mortgagor or to whomsoever may be then entitled thereto.
4.12 Gaming Approvals. By its acceptance hereof, Mortgagee acknowledges
that Mortgagor's right to grant a Lien on, and Mortgagee's right to enforce a
Lien on and foreclose on, sell, possess and/or exercise any other rights or
remedies pursuant to the terms hereof with respect to certain gaming equipment
or other property used in the gaming business of Mortgagor and included in the
Vessel and Gaming Approvals and any liquor and liquor licenses and permits
included in the Vessel may be limited, proscribed or prohibited under Gaming Law
or applicable liquor laws and regulations of the State of Mississippi or other
Government Authorities and that Mortgagor and Mortgagee are subject to Gaming
Law and such other laws and regulations with respect to such assignment,
granting, enforcement, foreclosure, sale and/or possession.
ARTICLE 5
MISCELLANEOUS PROVISIONS
5.1 Addresses for Notices, Etc. Any notices or other communications to
Mortgagor or Mortgagee required or permitted hereunder shall be in writing, and
shall be sufficiently given if made by hand delivery, by telex, by telecopier or
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
Mortgagee: Foothill Capital Corporation,
a California corporation
11111 Santa Monica Boulevard, Suite 1500
Los Angeles, California 90025-3333
Attention: Business Finance Division Manager
Fax No.: 310.478.9788
Mortgagor: FITZGERALDS MISSISSIPPI, INC.
a Mississippi corporation
711 Lucky Lane
Robinsonville, Mississippi 38664
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with a copy to: FITZGERALD GAMING CORPORATION
301 Fremont Street
Las Vegas, Nevada 89101
Mortgagor or Mortgagee by notice to each other may designate additional or
different addresses as shall be furnished in writing by such party. Any notice
or communication to Mortgagor or Mortgagee shall be deemed to have been given
or made as of the date so delivered, if personally delivered; when answered
back, if telexed; when receipt is acknowledged, if telecopied; and five
Business Days after mailing if sent by registered or certified mail, postage
prepaid (except that a notice of change of address shall not be deemed to have
been given until actually received by the addressee).
5.2 Mortgagee's Expenses, Including Attorney's Fees. Regardless of the
occurrence of a Default or Event of Default, Mortgagor agrees to pay to
Mortgagee any and all advances, charges, costs and expenses, including
reasonable fees and expenses of counsel and any experts or agents, that
Mortgagee may reasonably incur in connection with (i) the administration of
this Mortgage, including any amendment thereto or any workout or restructuring,
(ii) the creation, perfection, or continuation of the Lien created by this
Mortgage in the Vessel or the protection of its first priority in the Vessel,
including the discharging of any prior or junior lien or adverse claim against
the Vessel or any part thereof that is not permitted hereby or by the Loan
Agreement, (iii) the custody, preservation or sale of, collection from, or
other realization upon, any part of the Vessel, (iv) the exercise or
enforcement of any of the rights, powers, or remedies of Mortgagee under this
Mortgage or under any Applicable Laws (including attorneys' fees and expenses
actually incurred by Mortgagee in the maintenance or foreclosure of the Lien of
this Mortgage) or bankruptcy proceeding, (v) Mortgage's due inscription and
recordation in the National Vessel Documentation Center, (vi) the failure by
Mortgagor to perform or observe any of the provisions hereof or (vii) any
payments or advances made by Mortgagee in order to prevent or protect the
Vessel from harm or damage. All such amounts and all other amounts payable
hereunder shall be payable upon demand, together with, if paid after the due
date, interest at the Default Rate.
5.3 Counterparts. This Mortgage may be executed in any number of
counterparts and all such counterparts executed and delivered each as an
original shall constitute but one and the same instrument.
5.4 Interest of Mortgagee. The interest of Mortgagor in the Vessel and
the interest mortgaged by this Mortgage is 100% absolute and sole ownership.
5.5 Survivorship of Covenants. All of the covenants, promises,
stipulations and agreements of Mortgagor contained herein shall bind Mortgagor
and its
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successors and assigns and shall inure to the benefit of Mortgagee and its
successors and assigns.
5.6 Amendments. This Mortgage may not be modified, supplemented or
amended in any respect, or any waiver given in regard to any of the provisions
hereof, except with the written consent of Mortgagee.
5.7 Discharge of Lien. When the Guaranteed Obligations have been
indefeasibly paid and satisfied in full, Mortgagee shall, at Mortgagor's
expense, execute and deliver to Mortgagor such documents as Mortgagor shall
reasonably request to evidence the surrender and discharge of the lien hereof
upon the Vessel.
5.8 Incorporation into Mortgage. The Whereas Clauses and the Granting
Clause of this Mortgage are incorporated in and are made a part of this
Mortgage.
5.9 GOVERNING LAW. THIS MORTGAGE SHALL BE GOVERNED BY AND CONSTRUED
ACCORDING TO THE LAWS OF THE STATE OF CALIFORNIA EXCEPT (1) TO THE EXTENT THAT
THE PROVISIONS OF CHAPTER 313 OF TITLE 46 OF THE UNITED STATES CODE AND THE
GENERAL MARITIME LAW OF THE UNITED STATES ARE APPLICABLE, AND (2) THE
PROVISIONS FOR THE CREATION, PERFECTION AND ENFORCEMENT OF THE LIEN AND
SECURITY INTEREST CREATED PURSUANT TO THIS MORTGAGE SHALL BE GOVERNED BY THE
LAWS OF THE STATE OF MISSISSIPPI.
5.10 Conflict. In the event that the provisions of this Mortgage shall
conflict with or be inconsistent with the provisions of the Loan Agreement, the
terms and provisions of the Loan Agreement shall control and govern the
obligations, rights and responsibilities of the parties hereto. This Mortgage
is a Loan Document.
18
<PAGE> 19
IN WITNESS WHEREOF, Mortgagor has executed this Mortgage as of the day and year
first above written.
FITZGERALDS MISSISSIPPI, INC., a
Mississippi corporation
By /s/ MICHAEL E. MCPHERSON
-------------------------------
Name: Michael E. McPherson
Title: Senior Vice President, Chief
Financial Officer, Treasurer, and
Secretary
19
<PAGE> 20
STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
On October 29, 1998, before me, Kiersten Polk, Notary Public,
personally appeared Michael E. McPherson, 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.
[LOGO]
/s/ KIERSTEN POLK
-----------------------------
Signature
[SEAL]
20
<PAGE> 1
EXHIBIT 10.15
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT (this "Agreement"), dated as of
October 29, 1998, is made among the Obligors (as defined below), and FOOTHILL
CAPITAL CORPORATION, a California corporation ("Foothill").
WHEREAS, Borrower and Foothill are parties to that certain Loan
and Security Agreement dated as of even date herewith (as amended, modified,
renewed, extended, or replaced from time to time, the "Loan Agreement"),
pursuant to which Foothill has agreed to make certain financial accommodations
to Borrower;
WHEREAS, each Obligor has made or may make certain loans or
advances from time to time to one or more other Obligors;
WHEREAS, each Obligor has agreed to the subordination of such
indebtedness of such other Obligors to such Obligor, upon the terms and subject
to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises,
covenants, conditions, representations, and warranties set forth herein and for
other good and valuable consideration, the parties hereto agree as follows:
SECTION 1 Definitions; Interpretation.
(a) Terms Defined in Loan Agreement. All capitalized terms used
in this Agreement and not otherwise defined herein shall have the meanings
assigned to them in the Loan Agreement.
(b) Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"Borrower" means Fitzgeralds Gaming Corporation, a Nevada
corporation.
"Dollars" means and refers to United States of America dollars or
such coin or currency of the United States of America as at the time of payment
shall be legal tender for the payment of public and private debts in the United
States of America.
"Guarantors" means, individually and collectively, Fitzgeralds
South, Inc., a Nevada corporation, Fitzgeralds Reno, Inc., a Nevada corporation,
Fitzgeralds Incorporated, a Nevada corporation, Fitzgeralds Mississippi, Inc., a
Mississippi corporation, Fitzgeralds Las Vegas, Inc., a Nevada
corporation,Fitzgeralds Black Hawk, Inc., a Nevada corporation, Fitzgeralds
Fremont Experience, a Nevada corporation,
<PAGE> 2
Fitzgeralds Black Hawk II, Inc., a Colorado corporation, and 101 Main Street
Limited Liability Company, a Colorado limited liability company.
"Insolvency Event" has the meaning set forth in Section 3.
"Obligors" means, individually and collectively, Borrower and
Guarantors.
"Senior Debt" means the Obligations and other indebtedness and
liabilities of the Obligors to Foothill under or in connection with the Loan
Agreement and the other Loan Documents, including all unpaid principal of the
Loans, all interest accrued thereon, all fees due under the Loan Agreement and
the other Loan Documents, and all other amounts payable by the Obligors to
Foothill thereunder or in connection therewith, whether now existing or
hereafter arising, and whether due or to become due, absolute or contingent,
liquidated or unliquidated, determined or undetermined.
"Subordinated Debt" means, with respect to each Obligor, all
indebtedness, liabilities, and other obligations of each other Obligor owing to
such Obligor in respect of any and all loans or advances made by such Obligor to
such other Obligor whether now existing or hereafter arising, and whether due or
to become due, absolute or contingent, liquidated or unliquidated, determined or
undetermined, including all fees and all other amounts payable by such other
Obligor to such Obligor under or in connection with any documents or instruments
related thereto.
"Subordinated Debt Payment" means any payment or distribution by
or on behalf of the Obligors, directly or indirectly, of assets of the Obligors
of any kind or character, whether in cash, property, or securities, including on
account of the purchase, redemption, or other acquisition of Subordinated Debt,
as a result of any collection, sale, or other disposition of collateral, or by
setoff, exchange, or in any other manner, for or on account of the Subordinated
Debt.
(c) Interpretation. Unless the context of this Agreement clearly
requires otherwise, references to the plural include the singular, references to
the singular include the plural, the term "including" is not limiting, and the
term "or" has, except where otherwise indicated, the inclusive meaning
represented by the phrase "and/or." The words "hereof," "herein," "hereby,"
"hereunder," and similar terms in this Agreement refer to this Agreement as a
whole and not to any particular provision of this Agreement. Section,
subsection, clause, schedule, and exhibit references are to this Agreement
unless otherwise specified. References to agreements and other contractual
instruments shall be deemed to include all subsequent amendments and other
modifications thereto. References to statutes or regulations are to be construed
as including all statutory and regulatory provisions consolidating, amending, or
replacing the statute or regulation referred to. The captions and headings are
for convenience of reference only and shall not affect the construction of this
Agreement.
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<PAGE> 3
SECTION 2 Subordination to Payment of Senior Debt. As to each
Obligor, all payments on account of the Subordinated Debt shall be subject,
subordinate, and junior, in right of payment and exercise of remedies, to the
extent and in the manner set forth herein, to the prior payment, in full, in
cash or cash equivalents of the Senior Debt.
SECTION 3 Subordination Upon Any Distribution of Assets of the
Obligors. As to each Obligor, in the event of any payment or distribution of
assets of any other Obligor of any kind or character, whether in cash, property,
or securities, upon the dissolution, winding up, or total or partial liquidation
or reorganization, readjustment, arrangement, or similar proceeding relating to
such other Obligor or its property, whether voluntary or involuntary, or in
bankruptcy, insolvency, receivership, arrangement, or similar proceedings or
upon an assignment for the benefit of creditors, or upon any other marshaling or
composition of the assets and liabilities of such other Obligor, or otherwise
(such events, collectively, the "Insolvency Events"): (i) all amounts owing on
account of the Senior Debt shall first be paid, in full, in cash, or payment
provided for in cash or in cash equivalents, before any Subordinated Debt
Payment is made; and (ii) to the extent permitted by applicable law, any
Subordinated Debt Payment to which such Obligor would be entitled except for the
provisions hereof, shall be paid or delivered by the trustee in bankruptcy,
receiver, assignee for the benefit of creditors, or other liquidating agent
making such payment or distribution directly to Foothill for application to the
payment of the Senior Debt in accordance with clause (i), after giving effect to
any concurrent payment or distribution or provision therefor to Foothill in
respect of such Senior Debt.
SECTION 4 Payments on Subordinated Debt.
(a) Permitted Payments. So long as no Event of Default has
occurred and is continuing, each Obligor may make, and each other Obligor shall
be entitled to accept and receive, payments on account of the Subordinated Debt
in the ordinary course of business.
(b) No Payment Upon Senior Debt Defaults. Upon the occurrence of
any Event of Default, and until such Event of Default is cured or waived, each
Obligor shall not make, and each other Obligor shall not accept or receive, any
Subordinated Debt Payment.
SECTION 5 Subordination of Remedies. As long as any Senior Debt
shall remain outstanding and unpaid, following the occurrence of any Event of
Default and until such Event of Default is cured or waived, each Obligor shall
not, without the prior written consent of Foothill:
(a) accelerate, make demand, or otherwise make due and payable
prior to the original due date thereof any Subordinated Debt or bring suit or
institute any other actions or proceedings to enforce its rights or interests in
respect of the obligations of any other Obligor owing to such Obligor;
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<PAGE> 4
(b) exercise any rights under or with respect to guaranties of
the Subordinated Debt, if any;
(c) exercise any rights to set-offs and counterclaims in respect
of any indebtedness, liabilities, or obligations of such Obligor to any other
Obligor against any of the Subordinated Debt; or
(d) commence, or cause to be commenced, or join with any creditor
other than Foothill in commencing, any bankruptcy, insolvency, or receivership
proceeding against any other Obligor.
SECTION 6 Payment Over to Foothill. In the event that,
notwithstanding the provisions of Sections 3, 4, and 5, any Subordinated Debt
Payments shall be received in contravention of such Sections 3, 4, and 5 by any
Obligor before all Senior Debt is paid, in full, in cash or cash equivalents,
such Subordinated Debt Payments shall be held in trust for the benefit of
Foothill and shall be paid over or delivered to Foothill for application to the
payment, in full, in cash or cash equivalents of all Senior Debt remaining
unpaid to the extent necessary to give effect to such Sections 3, 4, and 5,
after giving effect to any concurrent payments or distributions to Foothill in
respect of the Senior Debt.
SECTION 7 Authorization to Foothill. If, while any Subordinated
Debt is outstanding, any Insolvency Event shall occur and be continuing with
respect to any other Obligor or its property: (i) Foothill is hereby irrevocably
authorized and empowered (in the name of each Obligor or otherwise), but shall
have no obligation, to demand, sue for, collect, and receive every payment or
distribution in respect of the Subordinated Debt and give acquittance therefor
and to file claims and proofs of claim and take such other action (including
voting the Subordinated Debt) as it may deem necessary or advisable for the
exercise or enforcement of any of the rights or interests of Foothill; and (ii)
each Obligor shall promptly take such action as Foothill reasonably may request
(A) to collect the Subordinated Debt for the account of Foothill and to file
appropriate claims or proofs of claim in respect of the Subordinated Debt, (B)
to execute and deliver to Foothill such powers of attorney, assignments, and
other instruments as it may request to enable it to enforce any and all claims
with respect to the Subordinated Debt, and (C) to collect and receive any and
all Subordinated Debt Payments.
SECTION 8 Certain Agreements of Each Obligor.
(a) No Benefits. Each Obligor understands that there may be
various agreements between Foothill and the other Obligor evidencing and
governing the Senior Debt, and each Obligor acknowledges and agrees that such
agreements are not intended to confer any benefits on such Obligor and that
Foothill shall have no obligation to such Obligor or any other Person to
exercise any rights, enforce any remedies, or take any actions which may be
available to them under such agreements.
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<PAGE> 5
(b) No Interference. Each Obligor acknowledges that each other
Obligor has granted to Foothill a security interest in all of such other
Obligor's assets, and agrees not to interfere with or in any manner oppose a
disposition of any Collateral by Foothill in accordance with applicable law.
(c) Reliance by Foothill. Each Obligor acknowledges and agrees
that Foothill will have relied upon and will continue to rely upon the
subordination provisions provided for herein and the other provisions hereof in
entering into the Loan Documents and making or issuing the Loans thereunder.
(d) Waivers. Except as provided under the Loan Agreement, each
Obligor waives any and all notice of the incurrence of the Senior Debt or any
part thereof and any right to require marshaling of assets.
(e) Obligations of Each Obligor Not Affected. Each Obligor agrees
that at any time and from time to time, without notice to or the consent of such
Obligor, without incurring responsibility to such Obligor, and without impairing
or releasing the subordination provided for herein or otherwise impairing the
rights of Foothill hereunder: (i) the time for any other Obligor's performance
of or compliance with any of its agreements contained in the Loan Documents may
be extended or such performance or compliance may be waived by Foothill; (ii)
the agreements of any other Obligor with respect to the Loan Documents may from
time to time be modified by such other Obligor and Foothill for the purpose of
adding any requirements thereto or changing in any manner the rights and
obligations of such other Obligor or Foothill thereunder; (iii) the manner,
place, or terms for payment of Senior Debt or any portion thereof may be altered
or the terms for payment extended, or the Senior Debt may be renewed in whole or
in part; (iv) the maturity of the Senior Debt may be accelerated in accordance
with the terms of any present or future agreement by any other Obligor and
Foothill; (v) any Collateral may be sold, exchanged, released, or substituted
and any Lien in favor of Foothill may be terminated, subordinated, or fail to be
perfected or become unperfected; (vi) any Person liable in any manner for Senior
Debt may be discharged, released, or substituted; and (vii) all other rights
against the other Obligors, any other Person, or with respect to any Collateral
may be exercised (or Foothill may waive or refrain from exercising such rights).
(f) Rights of Foothill Not to Be Impaired. No right of Foothill
to enforce the subordination provided for herein or to exercise its other rights
hereunder shall at any time in any way be prejudiced or impaired by any act or
failure to act by any Obligor or Foothill hereunder or under or in connection
with the other Loan Documents or by any noncompliance by such other Obligor with
the terms and provisions and covenants herein or in any other Loan Document,
regardless of any knowledge thereof Foothill may have or otherwise be charged
with.
(g) Financial Condition of the Obligors. Except as provided under
the Loan Agreement, each Obligor shall not have any right to require Foothill to
obtain or
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<PAGE> 6
disclose any information with respect to: (i) the financial condition or
character of any other Obligor or the ability of such other Obligor to pay and
perform Senior Debt; (ii) the Senior Debt; (iii) the Collateral or other
security for any or all of the Senior Debt; (iv) the existence or nonexistence
of any guarantees of, or any other subordination agreements with respect to, all
or any part of the Senior Debt; (v) any action or inaction on the part of
Foothill or any other Person; or (vi) any other matter, fact, or occurrence
whatsoever.
(h) Acquisition of Liens or Guaranties. Each Obligor shall not,
without the prior consent of Foothill, acquire any right or interest in or to
any Collateral not owned by such Obligor or accept any guaranties for the
Subordinated Debt.
SECTION 9 Subrogation.
(a) Subrogation. Until the payment and performance in full of all
Senior Debt, each Obligor shall not have, and shall not directly or indirectly
exercise, any rights that it may acquire by way of subrogation under this
Agreement, by any payment or distribution to Foothill hereunder or otherwise.
Upon the payment and performance in full of all Senior Debt, each Obligor shall
be subrogated to the rights of Foothill to receive payments or distributions
applicable to the Senior Debt until the Subordinated Debt shall be paid in full.
For the purposes of the foregoing subrogation, no payments or distributions by
any Obligor to Foothill of any cash, property, or securities to which any other
Obligor would be entitled except for the provisions of Section 3, 4, or 5 shall,
as among such Obligor, its creditors (other than Foothill), and the other
Obligors, be deemed to be a payment by such Obligor to or on account of the
Senior Debt.
(b) Payments Over to the Obligors. If any payment or distribution
to which any Obligor would otherwise have been entitled but for the provisions
of Section 3, 4, or 5 shall have been applied pursuant to the provisions of
Section 3, 4, or 5 to the payment of all amounts payable under the Senior Debt,
such Obligor shall be entitled to receive from Foothill any payments or
distributions received by Foothill in excess of the amount sufficient to pay in
full all amounts payable under or in respect of the Senior Debt. If any such
excess payment is made to Foothill, Foothill shall promptly remit such excess to
such Obligor and until so remitted shall hold such excess payment for the
benefit of such Obligor.
SECTION 10 Continuing Agreement; Reinstatement.
(a) Continuing Agreement. This Agreement is a continuing
agreement of subordination and shall continue in effect and be binding upon each
Obligor until payment and performance in full of the Senior Debt. The
subordinations, agreements, and priorities set forth herein shall remain in full
force and effect regardless of whether any party hereto in the future seeks to
rescind, amend, terminate, or reform, by litigation or otherwise, its respective
agreements with any other Obligor.
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<PAGE> 7
(b) Reinstatement. This Agreement shall continue to be effective
or shall be reinstated, as the case may be, if, for any reason, any payment of
the Senior Debt by or on behalf of the other Obligor shall be rescinded or must
otherwise be restored by Foothill, whether as a result of an Insolvency Event or
otherwise.
SECTION 11 Transfer of Subordinated Debt. Each Obligor may not
assign or transfer its rights and obligations in respect of the Subordinated
Debt without the prior written consent of Foothill, and any such transferee or
assignee, as a condition to acquiring an interest in the Subordinated Debt shall
agree to be bound hereby, in form satisfactory to Foothill.
SECTION 12 Obligations of the Obligors Not Affected. The
provisions of this Agreement are intended solely for the purpose of defining the
relative rights of each Obligor against the other Obligors, on the one hand, and
of Foothill against such other Obligors, on the other hand. Nothing contained in
this Agreement shall (i) impair, as between each Obligor and each other Obligor,
the obligation of such other Obligor to pay its obligations with respect to the
Subordinated Debt as and when the same shall become due and payable, or (ii)
otherwise affect the relative rights of each Obligor against each other Obligor,
on the one hand, and of the creditors (other Foothill) of such other Obligor
against such other Obligor, on the other hand.
SECTION 13 Endorsement of Obligor Documents; Further Assurances
and Additional Acts.
(a) Endorsement of Obligor Documents. At the request of Foothill,
all documents and instruments evidencing any of the Subordinated Debt, if any,
shall be endorsed with a legend noting that such documents and instruments are
subject to this Agreement, and each Obligor shall promptly deliver to Foothill
evidence of the same.
(b) Further Assurances and Additional Acts. Each Obligor shall
execute, acknowledge, deliver, file, notarize, and register at its own expense
all such further agreements, instruments, certificates, financing statements,
documents, and assurances, and perform such acts as Foothill reasonably shall
deem necessary or appropriate to effectuate the purposes of this Agreement, and
promptly provide Foothill with evidence of the foregoing reasonably satisfactory
in form and substance to Foothill.
SECTION 14 Notices. All notices and other communications provided
for hereunder shall, unless otherwise stated herein, be in writing (including by
facsimile transmission) and shall be mailed, sent, or delivered in accordance
with the notice provisions contained in the Loan Agreement. For the purposes
hereof, the address of each party hereto shall be as set forth in the Loan
Agreement or, as to any such party, such other address as shall be designated by
such party in a written notice to the other parties hereto.
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SECTION 15 No Waiver; Cumulative Remedies. No failure on the part
of Foothill to exercise, and no delay in exercising, any right, remedy, power,
or privilege hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right, remedy, power, or privilege preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power, or privilege. The rights and remedies under this Agreement are cumulative
and not exclusive of any rights, remedies, powers, and privileges that may
otherwise be available to Foothill.
SECTION 16 Costs and Expenses.
(a) Payments by Borrower. Borrower agrees to pay to Foothill on
demand the reasonable out-of-pocket costs and expenses of Foothill, and the
reasonable fees and disbursements of counsel to Foothill, in connection with the
negotiation, preparation, execution, delivery, and administration of this
Agreement, and any amendments, modifications, or waivers of the terms thereof.
(b) Payments by the Obligors. Each of the Obligors jointly and
severally agrees to pay to Foothill on demand all costs and expenses of
Foothill, and the fees and disbursements of counsel, in connection with the
enforcement or attempted enforcement of, and preservation of rights or interests
under, this Agreement, including any losses, costs and expenses sustained by
Foothill as a result of any failure by any Obligor to perform or observe its
obligations contained in this Agreement.
SECTION 17 Survival. All covenants, agreements, representations
and warranties made in this Agreement shall, except to the extent otherwise
provided herein, survive the execution and delivery of this Agreement, and shall
continue in full force and effect so long as any Senior Debt remains unpaid.
Without limiting the generality of the foregoing, the obligations of each
Obligor under Section 16 shall survive the satisfaction of the Senior Debt.
SECTION 18 Benefits of Agreement. This Agreement is entered into
for the sole protection and benefit of the parties hereto and their successors
and assigns, and no other Person shall be a direct or indirect beneficiary of,
or shall have any direct or indirect cause of action or claim in connection
with, this Agreement.
SECTION 19 Binding Effect. This Agreement shall be binding upon,
inure to the benefit of and be enforceable by each Obligor and Foothill and
their respective successors and permitted assigns.
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SECTION 20 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA.
SECTION 21 Submission to Jurisdiction. EACH OBLIGOR HEREBY (i)
SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF CALIFORNIA
AND THE FEDERAL COURTS OF THE UNITED STATES SITTING IN THE COUNTY OF LOS
ANGELES, STATE OF CALIFORNIA, FOR THE PURPOSE OF ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT, (ii) AGREES THAT ALL CLAIMS IN
RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH
COURTS, OR AT THE SOLE OPTION OF FOOTHILL, IN ANY OTHER COURT IN WHICH FOOTHILL
SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER
JURISDICTION OVER THE MATTER IN CONTROVERSY (iii) IRREVOCABLY WAIVES (TO THE
EXTENT PERMITTED BY APPLICABLE LAW) ANY OBJECTION WHICH IT NOW OR HEREAFTER MAY
HAVE TO THE LAYING OF VENUE OF ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY OF
THE FOREGOING COURTS, AND ANY OBJECTION ON THE GROUND THAT ANY SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM AND (iv)
AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER MANNER PERMITTED BY LAW.
SECTION 22 Entire Agreement; Amendments and Waivers.
(a) Entire Agreement. This Agreement constitutes the entire
agreement of each of the Obligors and Foothill with respect to the matters set
forth herein and supersedes any prior agreements, commitments, drafts,
communications, discussions, and understandings, oral or written, with respect
thereto.
(b) Amendments and Waivers. No amendment to any provision of this
Agreement shall in any event be effective unless the same shall be in writing
and signed by each of the Obligors and Foothill; and no waiver of any provision
of this Agreement, or consent to any departure by any Obligor therefrom, shall
in any event be effective unless the same shall be in writing and signed by
Foothill. Any such amendment, waiver, or consent shall be effective only in the
specific instance and for the specific purpose for which given.
SECTION 23 Conflicts. In case of any conflict or inconsistency
between any terms of this Agreement, on the one hand, and any documents or
instruments in respect of the Subordinated Debt, on the other hand, then the
terms of this Agreement shall control.
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SECTION 24 Severability. Whenever possible, each provision of
this Agreement shall be interpreted in such manner as to be effective and valid
under all applicable laws and regulations. If, however, any provision of this
Agreement shall be prohibited by or invalid under any such law or regulation in
any jurisdiction, it shall, as to such jurisdiction, be deemed modified to
conform to the minimum requirements of such law or regulation, or, if for any
reason it is not deemed so modified, it shall be ineffective and invalid only to
the extent of such prohibition or invalidity without affecting the remaining
provisions of this Agreement or the validity or effectiveness of such provision
in any other jurisdiction.
SECTION 25 Interpretation. This Agreement is the result of
negotiations between, and have been reviewed by the respective counsel to, the
Obligors and Foothill and is the product of all parties hereto. Accordingly,
this Agreement shall not be construed against Foothill merely because of
Foothill's involvement in the preparation hereof.
SECTION 26 Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute but one and the same agreement. Delivery
of an executed counterpart of this Agreement by telefacsimile shall be equally
effective as delivery of an executed original counterpart of this Agreement.
Any party delivering an executed counterpart of this Agreement by telefacsimile
also shall deliver an original executed counterpart but the failure to deliver
an original executed counterpart shall not affect the validity, enforceability,
and binding effect of this Agreement. This Agreement shall become effective as
to each Obligor upon the execution and delivery of a counterpart hereof by such
Obligor (whether or not a counterpart hereof shall have been executed and
delivered by any other Obligor).
SECTION 27 Termination of Agreement. Upon payment and performance
in full of the Senior Debt, this Agreement shall terminate and Foothill shall
promptly execute and deliver to each Obligor such documents and instruments as
shall be necessary to evidence such termination; provided, however, that the
obligations of each Obligor under Section 16 shall survive such termination.
[Signature page to follow.]
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IN WITNESS WHEREOF, the undersigned has executed and delivered this
Agreement as of the date first written above.
FITZGERALDS GAMING CORPORATION,
a Nevada corporation
FITZGERALDS SOUTH, INC., a Nevada
corporation
FITZGERALDS MISSISSIPPI, INC., a
Mississippi corporation
FITZGERALDS LAS VEGAS, INC., a Nevada
corporation
FITZGERALDS FREMONT EXPERIENCE
CORPORATION, a Nevada corporation
FITZGERALDS RENO, INC., a Nevada
corporation
FITZGERALDS INCORPORATED, a Nevada
corporation
FITZGERALDS BLACK HAWK, INC., a
Nevada corporation
FITZGERALDS BLACK HAWK II, INC., a
Colorado corporation
101 MAIN STREET LIMITED LIABILITY
COMPANY, a Colorado limited liability
company
By: /s/ MICHAEL E. MCPHERSON
--------------------------------
Name: Michael E. McPherson
Title: Senior Vice President, Chief Financial
Officer, Treasurer, and Secretary of each of
the above-listed companies
FOOTHILL CAPITAL CORPORATION, a
California corporation
By: /s/ BRIAN DUFFY
--------------------------------
Title: Vice President
S-1
