<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): December 30, 1997
FITZGERALDS GAMING CORPORATION
------------------------------------------------------
(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
--------------------------------------------------------------
(Address of principal executive offices) (Zip code)
(Registrant's telephone number, including area code): (702) 388-2400
NA
--------------------------------------------------------------
(Former name or former address, if changed since last report)
Page 1 of 4
Exhibit Index at Page 4
<PAGE> 2
ITEM 5. OTHER EVENTS.
SENIOR SECURED NOTE FINANCING
On December 30, 1997, Fitzgeralds Gaming Corporation (the "Company")
issued $205,000,000 aggregate principal amount of its 12-1/4% Senior Secured
Notes due 2004 (the "Notes"). The Notes were issued under an Indenture, dated as
of December 30, 1997 (the "Indenture"), among the Company, as issuer,
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 Liability Company, as guarantors (the
"Subsidiary Guarantors"), and The Bank of New York, as trustee. The Notes were
unconditionally guaranteed (the "Subsidiary Guarantees"), jointly and severally,
by the Subsidiary Guarantors. The Notes and 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.
The Notes were offered and sold (the "Offering") pursuant to a Purchase
Agreement, dated as of December 19, 1997 (the "Purchase Agreement"), among the
Company, the Subsidiary Guarantors and the initial purchasers named therein (the
"Initial Purchasers"). The Notes were resold by the Initial Purchasers in
transactions not requiring registration under the Securities Act of 1933, as
amended (the "Securities Act") to (i) persons they reasonably believed were
"qualified institutional buyers" (as defined in Rule 144A), (ii) institutional
"accredited investors" (within the meaning of Rule 501(a)(1), (2), (3) or (7) of
the Securities Act) and (iii) outside the United States to certain persons in
reliance on Regulation S promulgated under the Securities Act.
Concurrently with the issuance of the Notes, the Company also entered
into a Registration Rights Agreement, dated as of December 30, 1997 (the
"Registration Rights Agreement"), with the Initial Purchasers, pursuant to which
the Company agreed to file a registration statement with respect to an offer to
exchange the Notes (the "Exchange Offer"). The Registration Rights Agreement
generally provides that the Notes will be exchanged for a new issue of notes of
the Company (the "Exchange Notes") registered under the Securities Act, with
terms substantially identical to those of the Notes (except that the Exchange
Notes generally will not contain terms with respect to restrictions on the
resale or transfer thereof). If the Company fails to satisfy certain
registration obligations, under specific circumstances it will be required to
pay liquidated damages to the holders of the Notes.
Prior to the consummation of the Offering, the Company had solicited and
received waivers under the terms of the indentures and related documents
governing (i) its 13% Senior Secured Notes due 2002 With Contingent Interest
(the "Senior Secured Notes"); (ii) its 13% Priority Secured Notes due 1998 (the
"Priority Notes"); and (iii) the 13% First Mortgage Notes of 101 Main Street
Limited Liability Company, a wholly owned subsidiary of the Company (the "First
Mortgage Notes"). The waivers enabled the Company to redeem each such issue at
the specified redemption price without advance notice.
In addition, with the consent of a majority in interest of the holders
of the Company's Common Stock Purchase Warrants, the Warrant Agreement, dated as
of December 19, 1995 (the "Warrant Agreement"), between the Company and The Bank
of New York (as successor in interest to First Interstate Bank of Nevada, N.A.,
and Wells Fargo Bank, N.A.) was amended to provide that the Final Separation
Date for the Restricted Note Warrants (all as defined in the Warrant Agreement)
would be
-2-
<PAGE> 3
December 31, 1997. As a result of the amendment to the Warrant Agreement, on
December 30, 1997 a total of 703,338 Restricted Note Warrants were redeemed by
the Company in connection with the redemption of the Company's 13% Senior
Secured Notes due 2002 With Contingent Interest.
The net proceeds of the Offering of $195,062,757, together with certain
monies provided by the Company, were used to redeem the Senior Secured Notes,
Priority Notes, First Mortgage Notes and the certain other secured indebtedness
of the Company.
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: January 12, 1998 FITZGERALDS GAMING CORPORATION
(Registrant)
By: /s/ MICHAEL E. McPHERSON
------------------------------------------
Michael E. McPherson
Executive Vice President, Chief Financial
Officer and Secretary
-3-
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
<S> <C>
1 Purchase Agreement
10.1 Indenture
10.2 Registration Rights Agreement
10.3 Security and Pledge Agreement, dated as of December 30, 1997, among
the Company, certain Subsidiaries of the Company and The Bank of New
York, as Collateral Agent
10.4 Deed of Trust, Security Agreement and Fixture Filing with Assignment
of Rents, dated as of December 30, 1997, with regard to Fitzgeralds
Reno, Inc.
10.5 Deed of Trust, Security Agreement and Fixture Filing with Assignment
of Rents, dated as of December 30, 1997, with regard to Fitzgeralds
Las Vegas, Inc.
10.6 Deed of Trust, Security Agreement and Fixture Filing
with Financing Statement and Assignment of Rents, dated
as of December 30, 1997, with regard to Fitzgeralds
Mississippi, Inc.
10.7 Deed of Trust, Security Agreement and Fixture Filing with Assignment
of Rents, dated as of December 30, 1997, with regard to 101 Main
Street Limited Liability Company
10.8 Deed of Trust, Security Agreement and Fixture Filing
with Assignment of Rents, dated December 30, 1997, with
regard to Fitzgeralds Reno, Inc.
10.9 First Preferred Vessel Mortgage on the Whole of the Fitzgeralds
Tunica, dated as of December 30, 1997, with regard to Fitzgeralds
Mississippi Inc.
10.10 Assignment of Rents, Leases and Profits, dated as of
December 30, 1997, with regard to Fitzgeralds
Mississippi, Inc.
10.11 Assignment of Rents, Leases and Profits, dated as of
December 30, 1997, with regard to 101 Main Street
Limited Liability Company
99.1 Forms of Solicitation of Consents with regard to the Senior Secured
Notes, Warrant Agreement, Priority Secured Notes and First Mortgage
Notes.
</TABLE>
-4-
<PAGE> 1
EXHIBIT 1
FITZGERALDS GAMING CORPORATION
$205,000,000 12 1/4% Senior Secured Notes due 2004
PURCHASE AGREEMENT
December 19, 1997
JEFFERIES & COMPANY, INC.
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
c/o JEFFERIES & COMPANY, INC.
11100 Santa Monica Boulevard
10th Floor
Los Angeles, California 90025
Ladies and Gentlemen:
Each of Fitzgeralds Gaming Corporation, a Nevada corporation (the
"ISSUER"), and each other Fitzgeralds Entity (as defined below) hereby agrees
with you as follows:
1. ISSUANCE OF SECURITIES. The Issuer proposes to issue and sell
to Jefferies & Company, Inc. ("JEFFERIES") and Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated (collectively, the "INITIAL
PURCHASERS"), and the Initial Purchasers, acting severally and not jointly,
propose to purchase $205,000,000 aggregate principal amount of the Issuer's
12-1/4% Senior Secured Notes due 2004, Series A (the "SERIES A NOTES"). The
Series A Notes will be issued pursuant to an indenture (the "INDENTURE"), to be
dated as of December 19, 1997, among the Issuer, the guarantors named therein
(the "GUARANTORS") and The Bank of New York, as trustee (the "TRUSTEE"). The
Guarantors will unconditionally guarantee the obligations under the Notes
(defined below) and the Indenture (collectively, the "GUARANTY"). The
obligations under the Notes and the Guaranty will be secured by security
interests in or pledges of (the "SECURITY INTERESTS") certain assets (the
"COLLATERAL") of the Issuer and certain of its subsidiaries (collectively, the
"GRANTORS"), respectively, as set forth in the Offering Circular (defined
below).
<PAGE> 2
The Series A Notes will be offered and sold to the Initial
Purchasers pursuant to an exemption from the registration requirements under the
Securities Act of 1933, as amended (the "ACT"). The Issuer has prepared a
preliminary offering circular, dated December 12, 1997 (the "PRELIMINARY
OFFERING CIRCULAR"), and a final offering circular, dated December 19, 1997 (the
"OFFERING CIRCULAR"), relating to the offer and sale of the Series A Notes (the
"OFFERING").
Upon original issuance thereof, and until such time as the same
is no longer required under the applicable requirements of the Act, the Series A
Notes shall bear the following legend:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT
FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES NOT
TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE
DATE THAT IS TWO YEARS (OR SUCH SHORTER PERIOD THAT MAY HEREAFTER
BE PROVIDED UNDER RULE 144(k) AS PERMITTING RESALES BY
NON-AFFILIATES OF RESTRICTED SECURITIES WITHOUT RESTRICTION)
AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST
DATE ON WHICH FITZGERALDS GAMING CORPORATION (THE "COMPANY") OR
ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR
ANY PREDECESSOR OF SUCH SECURITY) EXCEPT (A) TO THE COMPANY, (B)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER
THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND
SALES TO
2
<PAGE> 3
NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURI TIES ACT THAT IS
PURCHASING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT
OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN
CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES
ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE
OR TRANSFER PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE
FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING
ON THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO
THE TRUSTEE.
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the
representations, warranties and agreements contained herein, and subject to the
terms and conditions hereof, the Issuer shall issue and sell to the Initial
Purchasers (and, in order to induce the Initial Purchasers to purchase the
Notes, the Guarantors shall issue the Guaranty and the Grantors shall grant the
Security Interests), and each of the Initial Purchasers, acting severally and
not jointly, shall purchase from the Issuer, the respective principal amount set
forth opposite such Initial Purchaser's name on Annex A hereto, of $205,000,000
aggregate principal amount of Series A Notes. The purchase price for the Series
A Notes shall be 96.3748% of the principal amount thereof.
3. TERMS OF OFFERING. The Initial Purchasers have advised the
Issuer that the Initial Purchasers will make offers to sell (the "EXEMPT
RESALES") some or all of the Series A Notes purchased by the Initial Purchasers
hereunder on the terms set forth in the Offering Circular, as amended or
supplemented, solely to (i) persons whom the Initial Purchasers reasonably
believe to be "qualified institutional buyers" as defined in Rule 144A under the
Act ("QIBS"), (ii) a limited number of institutional "accredited investors," as
defined in Rule 501(a)(1), (2), (3) or (7) under the Act ("ACCREDITED
INVESTORS"), and (iii) certain persons outside the United States in reliance on
Regulation S ("REGULATION S") under the Act ("REG S INVESTORS," and, together
with QIBs and Accredited Investors, "ELIGIBLE PURCHASERS").
3
<PAGE> 4
Holders of the Series A Notes (including subsequent transferees)
will have the registration rights set forth in the registration rights agreement
(the "REGISTRATION RIGHTS AGREEMENT"), to be executed on and dated as of the
Closing Date (as defined below). Pursuant to the Registration Rights Agreement,
the Issuer and the Guarantors will agree, among other things, to file with the
Securities and Exchange Commission (the "COMMISSION") (i) a registration
statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating
to, among other things, the 12 1/4% Senior Secured Notes due 2004, Series B, of
the Issuer (the "SERIES B NOTES" and, together with the Series A Notes, each
with the Guaranty endorsed thereon, the "NOTES"), identical in all material
respects to the Series A Notes (except that the Series B Notes shall have been
registered pursuant to such registration statement) to be offered in exchange
for the Series A Notes (such offer to exchange being referred to as the
"REGISTERED EXCHANGE OFFER") and/or (ii) under certain circumstances, a shelf
registration statement pursuant to Rule 415 under the Act (the "SHELF
REGISTRATION STATEMENT") relating to the resale by certain holders of the Series
A Notes.
On the Closing Date, the Grantors will enter into certain
security and pledge agreements, mortgages and certain other documents
(collectively, the "SECURITY DOCUMENTS") that will provide for the grant of the
Security Interests in the Collateral to the Trustee, as collateral agent (in
such capacity, the "COLLATERAL AGENT"), for the benefit of the holders of the
Notes. The Security Interests will secure the payment and performance when due
of all of the obligations of the Issuer, the Guarantors and the Grantors under
the Indenture, the Notes, and the Security Documents.
In connection with the offering of the Series A Notes
contemplated hereby, the Issuer is seeking the consent (the "CONSENT
SOLICITATION") to certain amendments to and/or waivers under (the "AMENDMENTS")
the (i) Note Purchase Agreement, dated as of December 30, 1996, among the
Issuer, as issuer, Fitzgeralds South, Inc. ("FSI"), Fitzgeralds Reno, Inc.
("FRI"), Fitzgeralds Incorporated ("FI"), Fitzgeralds Las Vegas, Inc. ("FLVI"),
Fitzgeralds Fremont Experience Corporation ("FFEC"), Fitzgeralds Mississippi,
Inc. ("FMI"), and Fitzgeralds Black Hawk, Inc. ("FBHI"), as subsidiary
guarantors, and the purchasers listed on the signature pages thereto (the "NOTE
PURCHASE AGREEMENT"); (ii) Indenture, dated as of December 19, 1995, among the
Issuer, as issuer, FSI, FRI, FI, FLVI, FFEC, FMI, and FBHI, as subsidiary
guarantors, and The Bank of New York (as successor to Wells Fargo Bank, N.A.),
as trustee (the "1995 INDENTURE"); (iii) Indenture, dated as of August 13, 1997,
among 101 Main Street Limited Liability Company ("101 MAIN"), as issuer,
Fitzgeralds Black Hawk II, Inc. ("FBH-II"), as guarantor, and The Bank of New
York, as trustee (the "1997 INDENTURE," and, together with the 1995 Indenture,
the "OLD INDENTURES"); and (iv) Warrant Agreement, dated as of December 19,
1995, between the Issuer and The Bank of New
4
<PAGE> 5
York, as warrant agent (the "WARRANT AGREEMENT"); each, as more fully described
in the documents and instruments related thereto (the "CONSENT SOLICITATION
DOCUMENTS").
This Agreement, the Indenture, the Guaranty, the Registration
Rights Agreement, the Security Documents, the Notes, the Consent Solicitation
Documents and all other documents or instruments executed by the Issuer or any
of the Subsidiaries (as defined below) in connection with the transactions
contemplated hereby and thereby are referred to herein as the "DOCUMENTS." The
Issuer, the Guarantors and the Grantors are collectively referred to herein as
the "FITZGERALDS ENTITIES." The transactions contemplated by the Documents,
including without limitation, the Consent Solicitation, the Amendments, the
Offering and the use of the proceeds therefrom as described in the Offering
Circular, are collectively referred to herein as the "TRANSACTIONS."
4. DELIVERY AND PAYMENT. Delivery to the Initial Purchasers of
and payment for the Series A Notes shall be made at a Closing (the "CLOSING") to
be held at 10:00 a.m., New York City time, on December 30, 1997 (the "CLOSING
DATE") at the offices of Hughes Hubbard & Reed LLP, One Battery Park Plaza, New
York, New York 10004-1482. The Closing Date and the location of delivery of and
the form of payment for the Series A Notes may be varied by agreement between
the Initial Purchasers and the Issuer.
The Issuer shall deliver to the Initial Purchasers one or more
certificates, representing the Series A Notes (the "GLOBAL SECURITIES"), each in
definitive form, registered in the name of Cede & Co., as nominee of The
Depository Trust Company ("DTC"), or such other names as the Initial Purchasers
may request upon at least one business day's notice to the Issuer, in an amount
corresponding to the aggregate principal amount of the Series A Notes sold
pursuant to Exempt Resales to QIBs, to Accredited Investors and to Reg S
Investors, respectively, in each case against payment by the Initial Purchasers
of the purchase price therefor by immediately available Federal funds bank wire
transfer to such bank account as the Issuer shall designate at least two
business days prior to the Closing. In compensation of delivery of payment by
the Initial Purchasers in same day funds, the Issuer hereby acknowledges that
the Initial Purchasers will deduct from the purchase price an amount equal to
the Initial Purchasers' cost of funds with respect thereto.
The Global Securities in definitive form shall be made available
to the Initial Purchasers for inspection at the New York offices of Hughes
Hubbard & Reed LLP (or such other place as shall be acceptable to the Initial
Purchasers) not later than 9:30 a.m. one business day immediately preceding the
Closing Date.
5
<PAGE> 6
5. AGREEMENTS OF THE FITZGERALDS ENTITIES. Each Fitzgeralds
Entity, jointly and severally, hereby agrees:
(a) To (i) advise the Initial Purchasers promptly after
obtaining knowledge (and, if requested by the Initial Purchasers,
confirm such advice in writing) of (A) the issuance by any state
securities commission of any stop order suspending the qualification or
exemption from qualification of any of the Notes for offer or sale in
any jurisdiction, or the initiation of any proceeding for such purpose
by any state securities commission or other regulatory authority, or (B)
the happening of any event that makes any statement of a material fact
made in the Offering Circular untrue or that requires the making of any
additions to or changes in the Offering Circular in order to make the
statements therein, in the light of the circumstances under which they
are made, not misleading, (ii) use its best efforts to prevent the
issuance of any stop order or order suspending the qualification or
exemption from qualification of any of the Notes under any state
securities or Blue Sky laws, and (iii) if at any time any state
securities commission or other regulatory authority shall issue an order
suspending the qualification or exemption from qualification of any of
the Notes under any such laws, use its best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time.
(b) To (i) furnish the Initial Purchasers, without charge,
as many copies of the Offering Circular, and any amendments or
supplements thereto, as the Initial Purchasers may reasonably request
and (ii) promptly prepare, upon the Initial Purchasers' request, any
amendment or supplement to the Offering Circular that the Initial
Purchasers deem may be reasonably necessary in connection with Exempt
Resales (and the Fitzgeralds Entities hereby consent to the use of the
Preliminary Offering Circular and the Offering Circular, and any
amendments and supplements thereto, by the Initial Purchasers in
connection with Exempt Resales).
(c) Not to amend or supplement the Offering Circular prior
to the Closing Date unless the Initial Purchasers shall previously have
been advised thereof and shall not have objected thereto within one
business day after being furnished a copy thereof.
(d) So long as the Initial Purchasers shall hold any Notes
other than for their own account for investment purposes, (i) if any
event shall occur as a result of which, in the reasonable judgment of
the Issuer or the Initial Purchasers, it becomes necessary or advisable
to amend or supplement the Offering Circular in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, or if it is necessary to amend or supplement
the Offering Circular to comply with Applicable Law (as defined below),
forthwith to prepare an appropriate amendment
6
<PAGE> 7
or supplement to the Offering Circular (in form and substance
satisfactory to the Initial Purchasers) so that (A) as so amended or
supplemented the Offering Circular will not include an untrue statement
of material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading, and (B) the Offering Circular will
comply with Applicable Law, and (ii) if it becomes necessary or
advisable to amend or supplement the Offering Circular so that the
Offering Circular will contain all of the information specified in, and
meet the requirements of, Rule 144A(d)(4) of the Act, forthwith to
prepare an appropriate amendment or supplement to the Offering Circular
(in form and substance satisfactory to the Initial Purchasers) so that
the Offering Circular, as so amended or supplemented, will contain the
information specified in, and meet the requirements of, such Rule.
(e) To cooperate with the Initial Purchasers and the
Initial Purchasers' counsel in connection with the qualification of the
Notes under the securities or Blue Sky laws of such jurisdictions as the
Initial Purchasers may request and continue such qualification in effect
so long as reasonably required for Exempt Resales; provided, that no
Fitzgeralds Entity shall be required in connection therewith to file any
general consent to service of process or to qualify as a foreign
corporation in any jurisdiction where it is not now so qualified or to
subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject.
(f) Whether or not any of the Transactions are consummated
or this Agreement is terminated, to pay (i) all costs, expenses, fees
and taxes incident to and in connection with: (A) the preparation,
printing and distribution of the Preliminary Offering Circular and the
Offering Circular and all amendments and supplements thereto (including,
without limitation, financial statements and exhibits), and all other
agreements, memoranda, correspondence and other documents prepared and
delivered in connection herewith, (B) the printing, processing and
distribution (including, without limitation, word processing and
duplication) costs of the Company with respect to, and delivery of, and
performance under, each of the Documents, (C) the issuance and delivery
of the Notes, including the fees of the Trustee and the cost of its
personnel, (D) the qualification of the Notes for offer and sale under
the securities or Blue Sky laws of the several states (other than the
fees and disbursements of the Initial Purchasers' counsel relating to
such registration or qualification), (E) furnishing such copies of the
Preliminary Offering Circular and the Offering Circular, and all
amendments and supplements thereto, as may reasonably be requested for
use by the Initial Purchasers, and (F) the preparation of the Notes,
(ii) all fees and expenses of the counsel and accountants of the
Fitzgeralds Entities, (iii) all expenses and listing fees in connection
with the application for quotation of the Notes in the National
Association of Securities Dealers, Inc. ("NASD") Automated
7
<PAGE> 8
Quotation System - PORTAL ("PORTAL"), (iv) all fees and expenses
(including fees and expenses of counsel) of the Fitzgeralds Entities in
connection with approval of the Notes by DTC for "book-entry" transfer
and (v) all fees charged by rating agencies in connection with the
rating of the Notes.
(g) To use the proceeds from the sale of the Series A
Notes in the manner described in the Offering Circular under the caption
"Use of Proceeds."
(h) To the extent it may lawfully do so, not to insist
upon, plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay, extension, usury or other law, wherever enacted,
now or at any time hereafter in force, that would prohibit or forgive
the payment of all or any portion of the principal of or interest on the
Notes, or that may affect the covenants or the performance of the
Indenture (and, to the extent it may lawfully do so, each Fitzgeralds
Entity hereby expressly waives all benefit or advantage of any such law,
and covenants that it shall not, by resort to any such law, hinder,
delay or impede the execution of any power granted to the Trustee in the
Indenture or the Collateral Agent in the Security Documents but shall
suffer and permit the execution of every such power as though no such
law had been enacted).
(i) To do and perform all things required to be done and
performed under the Documents prior to and after the Closing Date
(including, without limitation, (1) all things necessary or advisable to
obtain (i) the consent of the Nevada Gaming Authorities (as defined in
the Offering Circular) to the pledge of, and the negative pledge on, the
stock of FRI, FSI and FLVI prior to the Registered Exchange Offer, and
(ii) on the Closing Date, all termination statements, mortgage releases
and other documents necessary to terminate the Liens (as defined in the
Indenture) of record with respect to Indebtedness (as defined in the
Indenture) that is being repaid with the net proceeds of the Offering;
and (2) using its best efforts to obtain the consent from the respective
lessors to the grant of a first priority Lien on the Issuer's and the
Guarantors' interest in the Nevada Ground Leases (as defined in the
Offering Circular) and to the foreclosure by the Collateral Agent
thereon following an Event of Default (as defined in the Indenture) as
promptly as practicable following the Closing Date).
(j) Not to, and to ensure that no affiliate (as defined in
Rule 501(b) of the Act) of any of them will, sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any
"security" (as defined in the Act) that would be integrated with the
sale of the Series A Notes in a manner that would require the
registration under the Act of the sale to the Initial Purchasers or to
the Eligible Purchasers of the Series A Notes.
8
<PAGE> 9
(k) For so long as any of the Notes remain outstanding,
during any period in which the Issuer is not subject to Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), to make available, upon request, to any owner of the Notes in
connection with any sale thereof and any prospective Eligible Initial
Purchasers of such Notes from such owner, the information required by
Rule 144A(d)(4) under the Act.
(l) To comply with the representation letter of the Issuer
to DTC relating to the approval of the Notes by DTC for "book entry"
transfer.
(m) To use its best efforts to effect the inclusion of the
Notes in PORTAL.
(n) For so long as the Notes are outstanding, and whether
or not required to do so by the rules and regulations of the Commission,
(1) to furnish to the Trustee and deliver or cause to be delivered to
the holders of the Notes and the Initial Purchasers (i) all quarterly
and annual financial information that would be required to be contained
in a filing with the Commission on Forms 10-Q and 10-K if the Issuer
were required to file such Forms, including for each a "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" and, with respect to the annual information only, a report
thereon by the Issuer's independent certified public accountants and
(ii) all reports that would be required to be filed with the Commission
on Form 8-K if the Issuer were required to file such reports and (2)
from and after the time the Exchange Offer Registration Statement or the
Shelf Registration Statement (or such other registration statement with
respect to the Notes) is filed with the Commission, to file such
information with the Commission so long as the Commission will accept
such filings.
(o) Except in connection with the Registered Exchange
Offer or the filing of the Shelf Registration Statement, not to, and not
to authorize or permit any person acting on its behalf to, (i)
distribute any offering material in connection with the offer and sale
of the Notes other than the Preliminary Offering Circular and the
Offering Circular and any amendments and supplements to the Offering
Circular prepared in compliance with Section 5(c) hereof, or (ii)
solicit any offer to buy or offer to sell the Notes by means of any form
of general solicitation or general advertising (including, without
limitation, as such terms are used in Regulation D under the Act) or in
any manner involving a public offering within the meaning of Section
4(2) of the Act.
(p) Not to, directly or indirectly, without the prior
consent of Jefferies, which consent shall not be unreasonably withheld,
offer, sell, grant any option to purchase, or otherwise dispose (or
announce any offer, sale, grant of any option to
9
<PAGE> 10
purchase or other disposition) of any debt securities of any of them for
a period of six months after the date of the Offering Circular, except
as contemplated by the Registration Rights Agreement.
(q) For so long as the Initial Purchasers shall hold any
Notes, to notify the Initial Purchasers promptly in writing if any
Fitzgeralds Entity or any of their Affiliates becomes a party in
interest or a disqualified person with respect to any employee benefit
plan. The terms "ERISA," "Affiliates," "party in interest,"
"disqualified person" and "employee benefit plan" shall have the
meanings as set forth in Section 6(aa) hereof.
6. REPRESENTATIONS AND WARRANTIES OF THE FITZGERALDS ENTITIES.
The Fitzgeralds Entities, jointly and severally, represent and warrant to the
Initial Purchasers that:
(a) The Preliminary Offering Circular as of its date did
not, and each of the Offering Circular and the Consent Solicitation
Documents, as of its date does not and as of the Closing Date will not,
and each supplement or amendment thereto as of its date will not,
contain any untrue statement of a material fact or omit to state any
material fact (except, in the case of the Preliminary Offering Circular,
for pricing terms and other financial terms intentionally left blank)
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. No injunction
or order has been issued that either (i) asserts that any of the
Transactions is subject to the registration requirements of the Act or
(ii) would prevent or suspend the issuance or sale of the Notes or the
use of the Preliminary Offering Circular, the Offering Circular, or any
amendment or supplement thereto, in any jurisdiction. Each of the
Preliminary Offering Circular and the Offering Circular, as of their
respective dates contained, and the Offering Circular as amended or
supplemented as of the Closing Date will contain, all the information
specified in, and meet the requirements of, Rule 144A(d)(4) under the
Act. Except as adequately disclosed in the Offering Circular, there are
no related party transactions that would be required to be disclosed in
the Offering Circular if the Offering Circular were a prospectus
included in a registration statement on Form S-1 filed under the Act.
(b) Other than the Issuer's 13% Senior Secured Notes due
2002, there are no securities of any Fitzgeralds Entity registered under
the Exchange Act or listed on a national securities exchange registered
under Section 6 of the Exchange Act or quoted in a United States
automated inter-dealer quotation system. The Series A Notes are eligible
for resale pursuant to Rule 144A.
10
<PAGE> 11
(c) Each of the Issuer and each Subsidiary (defined below)
(i) has been duly organized, is validly existing and is in good standing
under the laws of its jurisdiction of organization, (ii) has all
requisite power and authority to carry on its business and to own, lease
and operate its properties and assets as described in the Offering
Circular and (iii) is duly qualified or licensed to do business and is
in good standing as a foreign corporation authorized to do business in
each jurisdiction in which the nature of such businesses or the
ownership or leasing of such properties requires such qualification,
except where the failure to be so qualified could not reasonably be
expected, singly or in the aggregate, to have a material adverse effect
on (i) the properties, business, prospects, operations, earnings,
assets, liabilities or condition (financial or otherwise) of the Issuer
and the Subsidiaries, taken as a whole, (ii) the ability of any
Fitzgeralds Entity to perform its obligations under any of the Documents
or (iii) the perfection or priority of any Security Interest in any
portion of the Collateral (each, a "MATERIAL ADVERSE EFFECT").
(d) Immediately following the Closing, (i) the only direct
or indirect subsidiaries of the Issuer (collectively, the
"SUBSIDIARIES") will be the entities identified on Schedule 6(d), and
(ii) except as set forth on Schedule 6(d), the Issuer will directly or
indirectly beneficially own 100% of the outstanding shares of capital
stock or other equity interests of each Subsidiary, free and clear of
Liens, except for Liens securing the Notes, and all of such shares of
capital stock or other equity interests will be duly authorized and
validly issued, fully paid and nonassessable and not issued in violation
of, or subject to, any preemptive or similar rights. Except as
adequately disclosed in the Offering Circular, there are no outstanding
(x) securities convertible into or exchangeable for any capital stock of
the Issuer or any of the Subsidiaries, (y) options, warrants or other
rights to purchase or subscribe to capital stock of the Issuer or any of
the Subsidiaries or securities convertible into or exchangeable for
capital stock of the Issuer or any of the Subsidiaries or (z) contracts,
commitments, agreements, understandings, arrangements, calls or claims
of any kind relating to the issuance of any capital stock of the Issuer
or any of the Subsidiaries, any such convertible or exchangeable
securities or any such options, warrants or rights. Except as adequately
disclosed in the Offering Circular, immediately following the Closing,
the Issuer will not directly or indirectly own any capital stock or
other equity interest in any person other than the Subsidiaries.
(e) All of the outstanding shares of capital stock of the
Issuer have been duly authorized and validly issued, are fully paid and
nonassessable, and were not issued in violation of, and are not subject
to, any preemptive or similar rights. The table under the caption
"Capitalization" in the Offering Circular (including the footnotes
thereto) sets forth, as of its date, (i) the capitalization of the
Issuer and its Subsidiaries on a consolidated basis, (ii) the pro forma
capitalization of the Issuer and its Subsidiaries on a
11
<PAGE> 12
consolidated basis after giving effect to the elimination of the assets
and liabilities of Nevada Club, Inc. and (iii) the pro forma as adjusted
capitalization of the Issuer and its Subsidiaries on a consolidated
basis after giving effect to the Transactions. Except as set forth in
such table, immediately following the Closing, neither the Issuer nor
any of the Subsidiaries will have any liabilities, absolute, accrued,
contingent or otherwise other than (w) liabilities that are reflected in
the Financial Statements (defined below), (x) liabilities that are not
reflected in the Financial Statements because such liabilities are not
required to be included therein in accordance with GAAP (defined below)
or (z) liabilities incurred subsequent to September 28, 1997 that could
not, singly or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(f) Except for this Agreement and the Registration Rights
Agreement (and agreements relating to securities to be redeemed at the
Closing), and as adequately disclosed in the Offering Circular, neither
the Issuer nor any of the Subsidiaries has entered into any agreement
(i) to register its securities under the Act or (ii) to purchase or
offer to purchase any securities of the Issuer, any of the Subsidiaries
or any of their respective affiliates.
(g) Each Fitzgeralds Entity has all requisite power and
authority to enter into, deliver and perform its obligations under the
Documents to which it is a party and to consummate the Transactions.
Each of the Documents has been duly and validly authorized by each
Fitzgeralds Entity that is, or will be, a party hereto or thereto, and
this Agreement is, and when executed and delivered on the Closing Date
each other Document will be, a legal, valid and binding obligation of
each Fitzgeralds Entity that is a party hereto or thereto, enforceable
against each such person in accordance with its terms. When executed and
delivered, each Document will conform to the description thereof in the
Offering Circular. Except as adequately disclosed in the Offering
Circular, the Guaranty ranks and will rank on a parity with all senior
Indebtedness of the applicable Guarantor that is outstanding on the date
hereof or that may be incurred hereafter, and senior to all other
Indebtedness of the applicable Guarantor that is outstanding on the date
hereof or that may be incurred hereafter. On the Closing Date, the
Indenture will conform to the requirements of the Trust Indenture Act of
1939, as amended (the "TIA"), applicable to an indenture that is
required to be qualified under the TIA.
(h) The Series A Notes have been duly and validly
authorized by the Issuer for issuance and sale to the Initial Purchasers
pursuant to this Agreement and, when executed and authenticated in
accordance with the terms of the Indenture and delivered to and paid for
by the Initial Purchasers in accordance with the terms hereof, will be
legal, valid and binding obligations of the Issuer, enforceable against
the Issuer in accordance
12
<PAGE> 13
with their terms. The Series B Notes have been duly and validly
authorized by the Issuer and, when executed, authenticated and delivered
in accordance with the terms of the Indenture and the Registration
Rights Agreement, will be legal, valid and binding obligations of the
Issuer, enforceable against the Issuer in accordance with their terms.
Each Guaranty has been duly and validly authorized by the applicable
Guarantor and, when issued in accordance with the terms of the
Indenture, will be a legal, valid and binding obligation of such
Guarantor, enforceable against such Guarantor in accordance with its
terms. Except as adequately disclosed in the Offering Circular, the
Notes rank and will rank on a parity with all senior Indebtedness of the
Issuer that is outstanding on the date hereof or that may be incurred
hereafter, and senior to all other indebtedness of the Issuer that is
outstanding on the date hereof or that may be incurred hereafter.
(i) Neither the Issuer nor any of the Subsidiaries is (i)
in violation of its respective charter or by-laws (collectively,
"CHARTER DOCUMENTS"), (ii) in violation of any federal, state, local or
foreign statute, law (including, without limitation, common law and the
Nevada Gaming Control Act, the Mississippi Gaming Control Act and the
Colorado Limited Gaming Control Act of 1991, in each case including the
rules and regulations promulgated thereunder) or ordinance, or any
judgment, decree, rule, regulation or order (collectively, "APPLICABLE
LAW") of any government, governmental or regulatory agency or body
(including, without limitation, the Nevada Gaming Commission, the Nevada
State Gaming Control Board, the Mississippi Gaming Commission, the
Colorado Limited Gaming Control Commission and the Colorado Department
of Revenue Gaming Division (collectively, "GAMING AUTHORITIES")), court,
arbitrator or self-regulatory organization, domestic or foreign (each, a
"GOVERNMENTAL AUTHORITY"), other than violations that could not
reasonably be expected to, singly or in the aggregate, result in a
Material Adverse Effect, or (iii) in breach of or default under any
bond, debenture, note or other evidence of indebtedness, indenture,
mortgage, deed of trust, lease or any other agreement or instrument to
which any such person is a party or by which any of them or their
respective property is bound (collectively, "APPLICABLE AGREEMENTS"),
other than breaches or defaults that could not reasonably be expected
to, singly or in the aggregate, result in a Material Adverse Effect.
There exists no condition that, with the passage of time or otherwise,
would constitute a violation of such Charter Documents or Applicable
Laws or a breach of or default under any Applicable Agreement or result
in the imposition of any penalty or the acceleration of any
indebtedness, other than breaches, violations, penalties, defaults or
conditions which could not reasonably be expected, singly or in the
aggregate, to have a Material Adverse Effect. All Applicable Agreements
are in full force and effect and are legal, valid and binding
obligations, and no default has occurred or is continuing thereunder,
other than such defaults that could not reasonably be expected to,
singly or in the aggregate, have a Material Adverse Effect.
13
<PAGE> 14
(j) Except as adequately disclosed in the Offering
Circular, neither the execution, delivery or performance of the
Documents nor the consummation of the Transactions shall conflict with,
violate, constitute a breach of or a default (with the passage of time
or otherwise) under, require the consent of any person (other than
consents already obtained) under, result in the imposition of a Lien on
any assets of the Issuer or any of the Subsidiaries (except pursuant to
the Documents), or result in an acceleration of indebtedness pursuant to
(i) the Charter Documents of the Issuer or any of the Subsidiaries,
(ii) any Applicable Agreement, other than such breaches, violations or
defaults that could not, singly or in the aggregate, result in a
Material Adverse Effect or (iii) any Applicable Law. After giving effect
to the Transactions, no Default (as defined in the Indenture) or Event
of Default will exist.
(k) No permit, certificate, authorization, approval,
consent, license or order of, or filing, registration, declaration or
qualification with, any Governmental Authority (collectively, "PERMITS")
and no approval or consent of any other person, is required in
connection with, or as a condition to, the execution, delivery or
performance of any of the Documents or the consummation of any of the
Transactions, other than such Permits (i) as have been made or obtained
on or prior to the Closing Date, (ii) as are not required to be made or
obtained on or prior to the Closing Date that will be made or obtained
when required, or (iii) the failure of which to make or obtain could not
reasonably be expected, singly or in the aggregate, to result in a
Material Adverse Effect.
(l) Except as adequately disclosed in the Offering
Circular, there is no action, claim, suit, demand, hearing, notice of
violation or deficiency, or proceeding (including, without limitation,
an investigation or partial proceeding, such as a deposition), domestic
or foreign (collectively, "PROCEEDINGS"), pending or threatened, that
either (i) seeks to restrain, enjoin, prevent the consummation of, or
otherwise challenge any of the Documents or any of the Transactions, or
(ii) could, singly or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Neither the Issuer nor any of the Subsidiaries
is subject to any judgment, order, decree, rule or regulation of any
Governmental Authority that could, singly or in the aggregate, have a
Material Adverse Effect.
(m) The Issuer, each of the Subsidiaries and each
director, officer, employee and agent of the Issuer or any of its
Subsidiaries (each of the Issuer, each of its Subsidiaries and each such
other person, a "REGULATED PERSON") has, and is in compliance with the
terms and conditions of, all Permits (including, without limitation,
Permits with respect to engaging in gaming operations and the
manufacture of gaming machines)
14
<PAGE> 15
necessary or advisable to own, lease and operate the properties and to
conduct the businesses described in the Offering Circular other than
those the failure of which to have could not reasonably be expected,
singly or in the aggregate, to have a Material Adverse Effect. All such
Permits are valid and in full force and effect. No event has occurred
which allows, or after notice or lapse of time would allow, the
imposition of any material penalty, revocation or termination by the
issuer thereof or which results, or after notice or lapse of time would
result, in any material impairment of the rights of the holder of any
such Permits. Neither the Issuer nor any of the Subsidiaries has any
reason to believe that any issuer is considering limiting, conditioning,
suspending, modifying, revoking or not renewing any such Permit.
(n) To the best knowledge of the Fitzgeralds Entities, (i)
no Governmental Authority is investigating any Regulated Person (other
than normal overseeing reviews of the Gaming Authorities incident to the
gaming activities of the Issuer and the Subsidiaries), and (ii) there is
no basis for any of the Gaming Authorities to deny the renewal of the
current Permits held by any of them.
(o) Immediately following the Closing, the Issuer and the
Subsidiaries (i) will have good and marketable title, free and clear of
all Liens (except for Permitted Liens (as defined in the Indenture)), to
all property and assets described in the Offering Circular as being
owned by them and (ii) will enjoy peaceful and undisturbed possession
under all leases to which any of them is a party as lessee.
(p) The Issuer and the Subsidiaries maintain insurance
(including self-insurance consistent with prior practice as adequately
disclosed in the Offering Circular) covering their properties,
operations, personnel and businesses against such losses and risks as
they reasonably deem adequate in accordance with customary industry
practice. Any such insurance is outstanding and duly in force.
(q) Upon execution and delivery of the Security Documents
and the issuance of the Notes, the Security Documents will create, in
favor of the Collateral Agent, for the benefit of the holders of the
Notes, a valid security interest in the Collateral and the proceeds
thereof and, upon the filings or the recording required by the Security
Documents, the Collateral Agent will have a first priority perfected
security interest in the Collateral, except as adequately disclosed in
the Offering Circular.
(r) All tax returns required to be filed by the Issuer and
the Subsidiaries in any jurisdiction (including foreign jurisdictions)
have been filed and, when filed, all such returns were accurate in all
material respects, and all taxes, assessments, fees and
15
<PAGE> 16
other charges (including, without limitation, withholding taxes,
penalties and interest) due or claimed to be due from such entities have
been paid, other than those being contested in good faith by appropriate
proceedings, or those that are currently payable without penalty or
interest and, in each case, for which an adequate reserve or accrual has
been established on the books and records of the Issuer in accordance
with generally accepted accounting principles of the United States,
consistently applied ("GAAP"). There are no actual or proposed
additional tax assessments for any fiscal period against the Issuer or
any of the Subsidiaries that could, singly or in the aggregate, have a
Material Adverse Effect. The charges, accruals and reserves on the books
of each of the Issuer and the Subsidiaries in respect of any income and
tax liability for any years not finally determined are adequate to meet
any assessments or re-assessments for additional income tax for any
years not finally determined.
(s) The Issuer and the Subsidiaries own, or are licensed
under, and have the right to use, all patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names
(collectively, "INTELLECTUAL PROPERTY") currently used in, or necessary
for the conduct of, their businesses, free and clear of all Liens, other
than Permitted Liens. No claims have been asserted by any person
challenging the use of any such Intellectual Property by the Issuer or
any of the Subsidiaries or questioning the validity or effectiveness of
any license or agreement related thereto, there is no valid basis for
any such claim (other than any claims that could not, singly or in the
aggregate, have a Material Adverse Effect), and the use of such
Intellectual Property by the Issuer and the Subsidiaries will not
infringe on the Intellectual Property rights of any other person.
(t) Each of the Issuer and the Subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) material transactions are executed in accordance with
management's general or specific authorization, (ii) material
transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP, and to maintain asset
accountability, (iii) access to assets is permitted only in accordance
with management's general or specific authorization and (iv) the
recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to
any material differences.
(u) Each of (i) the audited consolidated financial
statements and related notes of (A) the Issuer and (B) 101 Main, in each
case contained in the Offering Circular (the "AUDITED FINANCIAL
STATEMENTS") and (ii) the unaudited consolidated financial
16
<PAGE> 17
statements and related notes of (A) the Issuer and (B) 101 Main, in each
case contained in the Offering Circular (the "INTERIM FINANCIAL
STATEMENTS" and, together with the Audited Financial Statements, the
"FINANCIAL STATEMENTS") present fairly the consolidated financial
position, results of operations and cash flows of the applicable person
(and in the case of the Issuer, its subsidiaries), as of the respective
dates and for the respective periods to which they apply, and have been
prepared in accordance with GAAP and the requirements of Regulation S-X
that would be applicable if the Offering Circular were a prospectus
included in a registration statement on Form S-1 filed under the Act
(the "S-X REQUIREMENTS"). The summary historical financial data included
in the Offering Circular have been prepared on a basis consistent with
that of the Financial Statements and present fairly the consolidated
financial position and results of operations of the Issuer and its
subsidiaries as of the respective dates and for the respective periods
indicated. The pro forma consolidated financial statements and related
notes included in the Offering Circular (w) comply with the S-X
Requirements and all other rules and guidelines of the Commission with
respect to pro forma financial statements, (x) present fairly the pro
forma financial position, results of operations and cash flow of the
Issuer and its subsidiaries as of the dates and for the periods
indicated, after giving effect to the Transactions, (y) have been
prepared on a basis consistent with the Financial Statements, except for
the pro forma adjustments specified therein, and (z) are based on good
faith, reasonable estimates and assumptions of the Issuer. The summary
pro forma financial information included in the Offering Circular have
been derived from such pro forma financial statements and present fairly
the pro forma consolidated financial position and results of operation
of the Issuer and its subsidiaries as of the respective dates and for
the respective periods indicated. All other financial and statistical
data included in the Offering Circular are fairly and accurately
presented. Deloitte & Touche, LLP and Ernst & Young, LLP are independent
public accountants with respect to the Issuer and the Subsidiaries
within the meaning of Regulation S-X under the Act.
(v) Subsequent to the respective dates as of which
information is given in the Offering Circular, except as adequately
disclosed in the Offering Circular, (i) neither the Issuer nor any of
the Subsidiaries has incurred any liabilities, direct or contingent,
that are material, singly or in the aggregate, to any of them, or has
entered into any material transactions not in the ordinary course of
business, (ii) there has not been any decrease in the capital stock or
any increase in long-term indebtedness or any material increase in
short-term indebtedness of any of them, or any payment of or declaration
to pay any dividends or any other distribution with respect to any of
them, and (iii) there has not been any material adverse change in the
properties, business, prospects, operations, earnings, assets,
liabilities or condition (financial or otherwise) of the Issuer and the
Subsidiaries taken as a whole (each of clauses (i), (ii) and (iii), a
"MATERIAL ADVERSE CHANGE"). There
17
<PAGE> 18
is no event that is reasonably likely to occur, which if it were to
occur, could reasonably be expected, singly or in the aggregate, to have
a Material Adverse Effect, except such events that have been adequately
disclosed in the Offering Circular.
(w) Immediately following the Closing, after giving effect
to the Transactions, (i) the present fair salable value of the assets of
each Fitzgeralds Entity will exceed the amount that will be required to
be paid on or in respect of the then existing debts and other
liabilities (including contingent liabilities) of such Person as they
become absolute and matured and (ii) no Fitzgeralds Entity will have
unreasonably small capital to carry out its businesses as conducted or
as proposed to be conducted. Neither the Issuer nor any of the
Subsidiaries intends to, or believes that it will, incur debts beyond
its ability to pay such debts as they mature.
(x) Neither the Issuer nor any of its affiliates has (i)
taken, directly or indirectly, any action designed to cause or to result
in, or that has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of any
security of any of them to facilitate the sale or resale of any of the
Notes, (ii) sold, bid for, purchased, or paid anyone any compensation
for soliciting purchases of, any of the Notes or (iii) except as
disclosed in the Offering Circular, paid or agreed to pay to any person
any compensation for soliciting another to purchase any other securities
of any of them.
(y) Without limiting clause (k) above, no registration
under the Act, and no qualification of the Indenture under the TIA, is
required for the sale of the Series A Notes to the Initial Purchasers as
contemplated hereby or for the Exempt Resales, assuming (i) that the
purchasers in the Exempt Resales are Eligible Purchasers, (ii) the
accuracy of the Initial Purchasers' representations contained herein
regarding the absence of general solicitation in connection with the
sale of the Series A Notes to the Initial Purchasers and in the Exempt
Resales, and (iii) the accuracy of the representations made by each
Accredited Investor who purchases the Series A Notes pursuant to an
Exempt Resale as set forth in the letters of representation in the form
of Annex A to the Offering Circular. No form of general solicitation or
general advertising was used by the Issuer or any of its affiliates or
any of their representatives in connection with the offer and sale of
any of the Series A Notes or in connection with Exempt Resales. No
securities of the same class as any of the Notes have been offered,
issued or sold by the Issuer or any of its affiliates within the
six-month period immediately prior to the date hereof. With respect to
those Series A Notes sold in reliance on Regulation S, (i) none of the
Issuer, its affiliates or any person acting on its or their behalf
(other than the Initial Purchasers, as to whom the Issuer makes no
representation) has engaged or will engage in any directed
18
<PAGE> 19
selling efforts within the meaning of Regulation S and (ii) each of the
Issuer and its affiliates and any person acting on its or their behalf
(other than the Initial Purchasers, as to whom the Issuer makes no
representation) has complied with the offering restrictions requirement
of Regulation S.
(z) Without limiting clause (k) above, no registration
under the Act, or filing under the Exchange Act or the TIA, is required
in connection with the commencement or consummation of the Consent
Solicitation and the Amendments. The Consent Solicitation and the
Amendments will comply with the terms of the Note Purchase Agreement,
the Old Indentures and the Warrant Agreement, as the case may be, and,
upon consummation of the Amendments, the Old Indentures, as amended,
will comply with the TIA.
(aa) No condition exists or event or transaction has
occurred in connection with any employee benefit plan that could result
in the Issuer or any such "Affiliate" incurring any liability, fine or
penalty that could, singly or in the aggregate, have a Material Adverse
Effect. With respect to any employee pension benefit plan that is
subject to Title IV of the Employee Retirement Income Act of 1974, as
amended, or the rules and regulations promulgated thereunder ("ERISA"),
(i) the fair market value of the assets of such employee pension benefit
plan equals or exceeds the present value of the liabilities of such
pension plan (as determined in accordance with the actuarial methods and
assumptions set forth in the latest actuarial report for such employee
pension benefit plan), except where the failure to so equal or exceed
would not, singly or in the aggregate, have a Material Adverse Effect
and (ii) there exists no accumulated funding deficiency which could,
singly or in the aggregate, have a Material Adverse Effect. The terms
"employee benefit plan," "employee pension benefit plan," and "party in
interest" shall have the meanings assigned to such terms in Section 3 of
ERISA. The term "Affiliate" shall have the meaning assigned to such term
in Section 407(d)(7) of ERISA, and the term "disqualified person" shall
have the meaning assigned to such term in section 4975 of the Internal
Revenue Code of 1986, as amended, or the rules, regulations and
published interpretations promulgated thereunder (the "CODE").
(ab) None of the Transactions will violate or result in a
violation of Section 7 of the Exchange Act (including, without
limitation, Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R.
Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of Governors
of the Federal Reserve System). Neither the Issuer nor any of the
Subsidiaries is subject to regulation, or shall become subject to
regulation upon the consummation of the Transactions, under the
Investment Company Act of 1940, as amended, and the rules and
regulations and interpretations promulgated thereunder, the
19
<PAGE> 20
Public Utility Holding Company Act of 1935, as amended, the Federal
Power Act, the Interstate Commerce Act, the Commodity Exchange Act or
any Federal or state statute or regulation limiting its ability to incur
or assume indebtedness for borrowed money.
(ac) Neither the Issuer nor any of the Subsidiaries has
dealt with any broker, finder, commission agent or other such person
(other than the Initial Purchasers) in connection with the Transactions
and neither the Issuer nor any of the Subsidiaries is under any
obligation to pay any broker's fee or commission in connection with such
transactions (other than commissions and fees to the Initial Purchasers
as set forth in the Offering Circular).
(ad) Neither the Issuer nor any Subsidiary is engaged in
any unfair labor practice. Except as adequately disclosed in the
Offering Circular, there is:
(i) no unfair labor practice complaint or other
proceeding pending or, to the knowledge of the Issuer after due
inquiry, threatened against the Issuer or any of the Subsidiaries
before the National Labor Relations Board or any state, local or
foreign labor relations board or any industrial tribunal, and no
grievance or arbitration proceeding arising out of or under any
collective bargaining agreement is so pending or threatened,
(ii) no strike, labor dispute, slowdown or stoppage
pending or, to the knowledge of the Issuer after due inquiry,
threatened against the Issuer or any of the Subsidiaries, and
(iii) no union representation question existing
with respect to the employees of the Issuer or any of the
Subsidiaries, and, to the Issuer's knowledge after due inquiry,
no union organizing activities are taking place,
which, in the case of clause (i), (ii) or (iii), singly or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect.
(ae) In the ordinary course of their businesses, the
Issuer and each of the Subsidiaries conduct periodic reviews of the
effect of Environmental Laws (as defined below) on the business,
operations and properties of the Issuer and each of the Subsidiaries in
the course of which they identify and evaluate 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
20
<PAGE> 21
review, the Issuer and the Subsidiaries have reasonably concluded that
such associated costs and liabilities could not reasonably be expected,
singly or in the aggregate, to have a Material Adverse Effect. Except as
adequately disclosed in the Offering Circular or as otherwise could not
reasonably be expected, singly or in the aggregate, to have a Material
Adverse Effect:
(1) each of the Issuer and the Subsidiaries (i) has
obtained all Permits that are required with respect to the
operation of its business, property and assets under the
Environmental Laws (as defined below) and are 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);
(2) no real property or facility owned, used,
operated, leased, managed or controlled by the Issuer or any of
the Subsidiaries, or any predecessor in interest, 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 neither the
Issuer nor any of the Subsidiaries has received any notification
of potential or actual liability or request for information under
CERCLA or any comparable state or local law;
(3) no underground storage tank or other
underground storage receptacle, or related piping, is located on
a facility or property currently owned, operated, leased, managed
or controlled by the Issuer or any of the Subsidiaries in
violation of any Environmental Law;
(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 Issuer and the
Subsidiaries after due inquiry, off-site) of Hazardous Materials
(as defined below) by the Issuer, any of the Subsidiaries or any
predecessor in interest or any person or entity whose liability
for any release of Hazardous Materials the Issuer or any of the
Subsidiaries 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;
21
<PAGE> 22
(5) neither the Issuer, the Subsidiaries nor any
person or entity whose liability the Issuer or any of the
Subsidiaries 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
(6) there are no events, activities, practices,
incidents, actions, conditions, circumstances or plans that may
interfere with or prevent compliance by the Issuer or any of the
Subsidiaries with any Environmental Law, or that may give rise to
any liability under any Environmental Laws.
"ENVIRONMENTAL LAWS" means all Applicable Laws
relating to pollution or protection of human health and the
environment, including, without limitation, laws relating to (i)
emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals, or industrial, toxic or
hazardous constituents, substances or wastes, including, without
limitation, asbestos or asbestos-containing materials,
polychlorinated biphenyls, petroleum or any constituents relating
to or arising out of any oil production activities, including
crude oil or any fraction thereof, or any petroleum product or
other wastes, chemicals or substances (collectively referred to
as "HAZARDOUS MATERIALS"), into the environment (including,
without limitation, ambient air, surface water, ground water,
land surface or subsurface strata), (ii) the manufacture,
processing, distribution, use, generation, treatment, storage,
disposal, transport or handling of Hazardous Materials and (iii)
underground storage tanks, and related piping, and emissions,
discharges, releases or threatened releases therefrom.
(af) No statement, representation or warranty made by the
Issuer, any of the Subsidiaries, or any other person in any of the
Documents or in any certificate or document required by any of the
Documents to be delivered to the Initial Purchasers was or will be, when
made, inaccurate, untrue or incorrect in any material respect. Each
certificate signed by any officer of the Issuer or any Guarantor and
delivered to the Initial Purchasers or counsel for the Initial
Purchasers in connection with the Transactions shall be deemed to be a
representation and warranty by the Issuer and such Guarantor to each
Initial Purchaser as to the matters covered thereby.
7. REPRESENTATIONS AND WARRANTIES OF THE INITIAL PURCHASERS. Each
of the Initial Purchasers severally represents and warrants with respect to
itself that:
(a) It is a QIB.
22
<PAGE> 23
(b) It, either directly or through its selling agent, (i)
is not acquiring the Series A Notes with a view to any distribution
thereof that would violate the Act or the securities laws of any state
of the United States or any other applicable jurisdiction and (ii) will
be soliciting offers for the Series A Notes only from, and will be
reoffering and reselling the Series A Notes only to (A) persons in the
United States whom it reasonably believes to be QIBs in reliance on the
exemption from the registration requirements of the Act provided by Rule
144A, (B) a limited number of Accredited Investors that execute and
deliver to the Issuer and the Initial Purchasers a letter containing
certain representations and agreements in the form attached as Annex A
to the Offering Circular or (C) certain persons outside the United
States in reliance on Regulation S.
(c) No form of general solicitation or general advertising
in violation of the Securities Act has been or will be used by such
Initial Purchasers or any of its representatives in connection with the
offer and sale of any of the Series A Notes.
(d) In connection with the Exempt Resales, it will solicit
offers to buy the Series A Notes only from, and will offer and sell the
Series A Notes only to, Eligible Purchasers who, in purchasing such
Series A Notes, will be deemed to have represented and agreed (i) if
such Eligible Purchasers are QIBs, that they are purchasing the Series A
Notes for their own accounts or accounts with respect to which they
exercise sole investment discretion and that they or such accounts are
QIBs, (ii) that such Series A Notes will not have been registered under
the Act and may be resold, pledged or otherwise transferred only (A)
inside the United States to a person who the seller reasonably believes
is a QIB in a transaction meeting the requirements of Rule 144A or in
accordance with another exemption from the registration requirements of
the Act, (B) to the Issuer, (C) pursuant to an effective registration
statement, and (D) outside the United States to a foreign person in a
transaction meeting the requirements of Regulation S and, in each case,
in accordance with any applicable securities laws of any state of the
United States or any other applicable jurisdiction, and (iii) that the
holder will, and each subsequent holder is required to, notify any
Initial Purchasers from it of the security evidenced thereby of the
resale restrictions set forth in (ii) above.
(e) It has all requisite power and authority to enter
into, deliver and perform its obligations under this Agreement and the
Registration Rights Agreement. Each of this Agreement and the
Registration Rights Agreement has been duly and validly authorized by
it, and this Agreement is, and when executed and delivered on the
Closing Date the Registration Rights Agreement will be, a legal, valid
and binding obligation of it, enforceable against it in accordance with
its terms.
23
<PAGE> 24
8. INDEMNIFICATION.
(a) Each Fitzgeralds Entity shall, jointly and severally,
without limitation as to time, indemnify and hold harmless each Initial
Purchaser and each person, if any, who controls (within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act) any Initial
Purchaser (any of such persons being hereinafter referred to as a
"controlling person"), and the respective officers, directors, partners,
employees, representatives and agents of any Initial Purchaser and any
such controlling person, from and against any and all losses, claims,
damages, liabilities, costs (including, without limitation, costs of
preparation and reasonable attorneys' fees) and expenses (including,
without limitation, costs and expenses incurred in connection with
investigating, preparing, pursuing or defending against any of the
foregoing) (collectively, "LOSSES"), as incurred, directly or indirectly
caused by, related to, based upon, arising out of or in connection with
(i) any untrue statement or alleged untrue statement of a material fact
contained in the Preliminary Offering Circular or the Offering Circular
(or any amendment or supplement thereto), or any omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading or (ii) any
act, omission, transaction or event contemplated by the Documents;
provided, that no Fitzgeralds Entity shall be liable to the extent that
(1) any Losses under clause (ii) above are found by a court of competent
jurisdiction, in a final non-appealable judgment, to have arisen from
the gross negligence or willful misconduct of such person to be so
indemnified and (2) any Losses under clauses (i) or (ii) above result
from an untrue statement or omission or an alleged untrue statement or
omission made in reliance on and in conformity with the written
information supplied to the Issuer by any Initial Purchaser for use in
the Offering Circular. The parties hereto agree that the only
information supplied by any Initial Purchaser to the Issuer for use in
the Offering Circular is the information relating to such Initial
Purchaser in the last paragraph of text on the cover page thereof and in
the information contained in the third paragraph under the heading "Plan
of Distribution." The Issuer shall notify each of the Initial Purchasers
promptly of the institution, threat or assertion of any Proceeding of
which the Issuer or any Subsidiary is aware in connection with the
matters addressed by this Agreement that involves the Issuer, any of the
Subsidiaries or any person to be so indemnified.
(b) Each Initial Purchaser severally agrees to indemnify
and hold harmless the Issuer, its directors, officers, and each person,
if any, who controls the Issuer (within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act) against any and all Losses, as
incurred, directly arising out of any untrue statements or omissions, or
alleged untrue statements or omissions, made in the Offering Circular in
reliance upon and
24
<PAGE> 25
in conformity with written information furnished to the Company by such
Initial Purchaser expressly for use therein.
(c) If any Proceeding shall be brought or asserted against
any person entitled to indemnification hereunder, such indemnified party
shall give prompt written notice to the indemnifying party; provided,
that the failure to so notify the indemnifying party shall not relieve
such indemnifying party from any obligation or liability except to the
extent (but only to the extent) that it shall be finally determined by a
court of competent jurisdiction (which determination is not subject to
appeal) that the indemnified party has been prejudiced materially by
such failure.
No indemnifying party shall consent to entry of any
judgment in or enter into any settlement of any pending or threatened
Proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not any indemnified party is a party
thereto) unless such judgment or settlement includes, as an
unconditional term thereof, the giving by the claimant or plaintiff to
each indemnified party of a release, in form and substance satisfactory
to the indemnified party, from all Losses that may arise from such
Proceeding or the subject matter thereof (whether or not any indemnified
party is a party thereto and does not contain a statement as to fault,
culpability or failure to act by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8
is unavailable to an indemnified party or is insufficient to hold such
indemnified party harmless for any Losses in respect of which this
Section 8 would otherwise apply by its terms (other than by reason of
exceptions provided in this Section 8), then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such
Losses (i) in such proportion as is appropriate to reflect the relative
benefits received by the Fitzgeralds Entities, on the one hand, and the
Initial Purchasers, on the other hand, from the offering of the Series A
Notes or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above
but also the relative fault of the Fitzgeralds Entities, on the one
hand, and the Initial Purchasers, on the other hand, in connection with
the actions, statements or omissions that resulted in such Losses, as
well as any other relevant equitable considerations. The relative
benefits received by the Fitzgeralds Entities, on the one hand, and the
Initial Purchasers, on the other hand, shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Fitzgeralds Entities, and the total discounts
and commissions received by the Initial Purchasers, bear to the total
price of the Series A Notes to investors, in each case as set
25
<PAGE> 26
forth in the table on the cover page of the Offering Circular. The
relative fault of the Fitzgeralds Entities, on the one hand, and the
Initial Purchasers, on the other hand, shall be determined by reference
to, among other things, whether any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Fitzgeralds Entities, on the
one hand, or the Initial Purchasers, on the other hand, and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or
payable by an indemnified party as a result of any Losses shall be
deemed to include any legal or other fees or expenses incurred by such
party in connection with any Proceeding, to the extent such party would
have been indemnified for such fees or expenses if the indemnification
provided for in this Section 8 was available to such party.
Each party hereto agrees that it would not be just and
equitable if contribution pursuant to this Section 8(d) were determined
by pro rata allocation (even if the Initial Purchasers were treated as
one entity for such purpose) or by any other method of allocation that
does not take account of the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this
Section 8(d), neither of the Initial Purchasers shall be required to
contribute, in the aggregate, any amount in excess of the amount by
which the total discounts and commissions received by such Initial
Purchaser with respect to the Series A Notes purchased by it exceeds the
amount of any damages that such Initial Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) The indemnity and contribution agreements contained in
this Section 8 are in addition to any liability that an indemnifying
party may otherwise have to an indemnified party.
(f) Neither the Company nor any Fitzgeralds Entity will be
liable to any indemnified party under Section 8(a)(i) for any Losses
caused by an untrue statement or omission or alleged untrue statement or
omission that was contained or made in the Preliminary Offering Circular
or the Offering Circular, as the case may be, and was corrected in the
Offering Circular or any amendment or supplement thereto, as the case
may be, if (i) the Offering Circular, or such amendment or supplement
thereto, as the case may be, does not contain any other untrue statement
or omission or alleged untrue statement or omission of a material fact
that was the subject matter of a related proceeding, (ii) such Losses
resulted from an action, claim or suit by any Person who purchased the
26
<PAGE> 27
Series A Notes that are the subject thereof from such indemnified party
and (iii) it is finally judicially determined in a related proceeding
that such indemnified party failed to deliver or provide a copy of the
Offering Circular or such amendment or supplement thereto, as the case
may be, to such Person with or prior to the confirmation of the sale of
such Series A Notes sold to such Person if required by Applicable Law.
9. CONDITIONS.
(a) The respective obligations of each Initial Purchaser
to purchase the Series A Notes under this Agreement are subject to the
satisfaction or waiver of each of the following conditions:
(i) All the representations and warranties of each
Fitzgeralds Entity in each of the Documents to which it is a party shall
be true and correct in all material respects (other than representations
and warranties with a materiality qualifier, which shall be true and
correct as written) at and as of the Closing Date after giving effect to
the Transactions with the same force and effect as if made on and as of
such date. On or prior to the Closing Date, each of the Fitzgeralds
Entities and, to the knowledge of the Issuer after due inquiry, each
other party to the Documents (other than the Initial Purchasers) shall
have performed or complied in all material respects with all of the
agreements and satisfied in all material respects all conditions on
their respective parts to be performed, complied with or satisfied
pursuant to the Documents.
(ii) The Offering Circular shall have been printed
and copies made available to the Initial Purchasers not later than 12:00
noon, New York City time, on the first business day following the date
of this Agreement or at such later date and time as the Initial
Purchasers may approve.
(iii) No injunction, restraining order or order of
any nature by a Governmental Authority shall have been issued as of the
Closing Date that would prevent or interfere with the consummation of
any of the Transactions; and no stop order suspending the qualification
or exemption from qualification of any of the Series A Notes in any
jurisdiction shall have been issued and no Proceeding for that purpose
shall have been commenced or be pending or contemplated.
(iv) No action shall have been taken and no
Applicable Law shall have been enacted, adopted or issued that would, as
of the Closing Date, prevent the consummation of any of the
Transactions. No Proceeding shall be pending or threatened other than
Proceedings that (A) if adversely determined could not, singly or in the
27
<PAGE> 28
aggregate, adversely affect the issuance or marketability of the Series
A Notes and (B) could not reasonably be expected to have a Material
Adverse Effect.
(v) Since the date as of which information is given
in the Offering Circular, there shall not have been any Material Adverse
Change.
(vi) The Notes shall have received a rating of B-
and B3 from Standard & Poor's Corporation and Moody's Investors
Services, Inc., respectively.
(vii) The Initial Purchasers shall have received on
the Closing Date (A) certificates dated the Closing Date, signed by (1)
the Chief Executive Officer and (2) the principal financial or
accounting officer of the Issuer, on behalf of the Issuer, (x)
confirming the matters set forth in paragraphs (i) through (v) of this
Section 9(a) and (y) certifying as to such other matters as the Initial
Purchasers may reasonably request, (B) a certificate, dated the Closing
Date, signed by the Secretary of each Fitzgeralds Entity, certifying
such matters as the Initial Purchasers may reasonably request and (C) a
certificate of solvency, dated the Closing Date, signed by the principal
financial or accounting officer of the Issuer substantially in the form
previously approved by the Initial Purchasers.
(viii) The Initial Purchasers shall have received:
(1) an opinion (in form and substance satisfactory
to the Initial Purchasers and counsel to the Initial Purchasers)
of Hughes Hubbard & Reed LLP, special counsel to the Issuer,
dated the Closing Date, in the form of Exhibit A hereto;
(2) the opinions (in form and substance
satisfactory to the Initial Purchasers and counsel to the Initial
Purchasers), dated the Closing Date, of Schreck Morris; Lohf,
Shaiman & Jacobs, P.C.; Eaton & Cottrell, P.A.; Farris, Mathews,
Gilman, Branan & Hellen, P.L.C.; and Snell & Willmer, in each
case substantially in the form of the relevant opinions in
Exhibit B hereto;
(3) reliance letters from each counsel or special
counsel to any Fitzgeralds Entity (in form and substance
satisfactory to the Initial Purchasers and counsel to the Initial
Purchasers), dated the Closing Date, permitting the Initial
Purchasers to rely on all other opinions rendered by such counsel
in connection with the Transactions; and
28
<PAGE> 29
(4) an opinion, dated the Closing Date, of Skadden,
Arps, Slate, Meagher & Flom LLP, in form and substance reasonably
satisfactory to the Initial Purchasers covering such matters as
are customarily covered in such opinions.
(ix) The Initial Purchasers shall have received
from Deloitte & Touche LLP with respect to the Issuer and its
Subsidiaries (other than 101 Main), and from Ernst & Young LLP with
respect to 101 Main, (A) a customary comfort letter, dated the date of
the Offering Circular, in form and substance reasonably satisfactory to
the Initial Purchasers, with respect to the financial statements and
certain financial information contained in the Offering Circular, and
(B) a customary comfort letter, dated the Closing Date, in form and
substance reasonably satisfactory to the Initial Purchasers, to the
effect that they reaffirm the statements made in the letter furnished
pursuant to clause (A), except that the specified date referred to shall
be a date not more than five days prior to the Closing Date.
(x) The Documents shall have been executed and
delivered by all parties thereto and the Initial Purchasers shall have
received a fully executed original of each Document.
(xi) On or prior to the Closing Date, the Initial
Purchasers shall have received copies of all opinions, certificates,
letters and other documents delivered under or in connection with the
Transactions and all other conditions precedent to the Transactions
shall have been satisfied or waived.
(xii) The Initial Purchasers shall have received
copies of duly executed payoff letters, UCC-3 termination statements,
mortgage releases and other collateral releases and terminations, each
in form and substance satisfactory to the Initial Purchasers, which,
upon the Closing, shall evidence (1) the repayment of the Issuer's 13%
Senior Secured Notes due 2002 with Contingent Interest, the Issuer's 13%
Priority Secured Notes due 1998, 101 Main's 13% First Mortgage Notes due
2000, and $20.1 million aggregate principal amount of other secured
Indebtedness of the Issuer and the Subsidiaries; (2) the termination of
each agreement or instrument relating thereto; and (3) the release of
each item of collateral securing such Indebtedness and the termination
of all Liens created thereunder, and each such payoff letter, release
and termination shall be in full force and effect.
(xiii) The Collateral Agent shall have received (A)
executed copies of each UCC-1 financing statement signed by the Issuer
and each Subsidiary, naming the Collateral Agent as secured party and
filed in such jurisdictions as the Initial Purchasers
29
<PAGE> 30
may reasonably require, (B) bailee letters, in form and substance
reasonably satisfactory to the Initial Purchasers, executed by the
Issuer or the appropriate Grantors for delivery to each of the Persons
identified in the Security Documents as holding Collateral, and (C) the
original stock certificates pledged to the Collateral Agent pursuant to
the Documents, together with undated stock powers or endorsements duly
executed in blank in connection therewith.
(xiv) Counsel to the Initial Purchasers shall have
been furnished with such documents as they may reasonably require for
the purpose of enabling them to review or pass upon the matters referred
to in this Section 9 and in order to evidence the accuracy, completeness
or satisfaction in all material respects of any of the representations,
warranties or conditions herein contained.
(b) The obligation of the Issuer to sell the Series A
Notes under this Agreement is subject to the satisfaction or waiver of
each of the following conditions:
(i) The Initial Purchasers shall have delivered
payment to the Issuer for the Series A Notes pursuant to Sections 2 and
4 of this Agreement.
(ii) All of the representations and warranties of
the Initial Purchasers in this Agreement shall be true and correct in
all material respects at and as of the Closing Date, with the same force
and effect as if made on and as of such date.
(iii) No injunction, restraining order or order of
any nature by a Governmental Authority shall have been issued as of the
Closing Date that would prevent or interfere with the issuance and sale
of the Series A Notes; and no stop order suspending the qualification or
exemption from qualification of any of the Series A Notes in any
jurisdiction shall have been issued and no Proceeding for that purpose
shall have been commenced or be pending or contemplated as of the
Closing Date.
10. TERMINATION AND SURVIVAL.
(a) The Initial Purchasers may terminate this Agreement at
any time prior to the Closing Date by written notice to the Issuer if
any of the following has occurred:
(i) since the date as of which information is given
in the Offering Circular, any Material Adverse Effect or development
involving a prospective Material Adverse Effect, whether or not arising
in the ordinary course of business, that could, in the judgment of the
Initial Purchasers, (i) make it impracticable or inadvisable
30
<PAGE> 31
to proceed with the offering or delivery of the Series A Notes on the
terms and in the manner contemplated in the Offering Circular or (ii)
materially impair the investment quality of any of the Notes;
(ii) the failure of the Issuer to satisfy the
conditions contained in Section 9(a) hereof on or prior to the third
business day following the date of this Agreement, except to the extent
that such failure is due to the act or failure to act of an Initial
Purchaser;
(iii) any outbreak or escalation of hostilities or
other national or international calamity or crisis or material adverse
change in economic conditions in or the financial markets of the United
States or elsewhere, if the effect of such outbreak, escalation,
calamity, crisis or material adverse change in the economic conditions
in or in the financial markets of the United States or elsewhere could
make it, in the judgment of the Initial Purchasers, impracticable or
inadvisable to market or proceed with the offering or delivery of the
Series A Notes on the terms and in the manner contemplated in the
Offering Circular or to enforce contracts for the sale of any of the
Series A Notes;
(iv) the suspension or limitation of trading
generally in securities on the New York Stock Exchange, the American
Stock Exchange or the NASDAQ National Market or any setting of
limitations on prices for securities on any such exchange or NASDAQ
National Market;
(v) the enactment, publication, decree or other
promulgation after the date hereof of any Applicable Law that in the
opinion of the Initial Purchasers materially and adversely affects, or
could materially and adversely affect, the properties, business,
prospects, operations, earnings, assets, liabilities or condition
(financial or otherwise) of the Issuer or any Subsidiary;
(vi) any securities of any Fitzgeralds Entity shall
have been downgraded or placed on any "watch list" for possible
downgrading by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 431(g)(2)
under the Act; or
(vii) the declaration of a banking moratorium by
any Governmen tal Authority; or the taking of any action by any
Governmental Authority after the date hereof in respect of its monetary
or fiscal affairs that in the opinion of the Initial Purchasers could
have a material adverse effect on the financial markets in the United
States or elsewhere.
31
<PAGE> 32
(b) The indemnities and contribution and expense
reimbursement provisions and other agreements, representations and
warranties set forth in or made pursuant to this Agreement shall remain
operative and in full force and effect, and will survive, regardless of
(i) any investigation, or statement as to the results thereof, made by
or on behalf of the Initial Purchasers, (ii) acceptance of the Notes,
and payment for them hereunder, and (iii) any termination of this
Agreement. Without limiting the foregoing, notwithstanding any
termination of this Agreement, the Fitzgeralds Entities shall be jointly
and severally liable (i) for all expenses that they have agreed to pay
pursuant to Section 5(f) hereof, and (ii) pursuant to Section 8 hereof.
11. DEFAULT BY INITIAL PURCHASERS. If any of the Initial
Purchasers shall fail or refuse to purchase the Series A Notes that it has
agreed to purchase hereunder on the Closing Date and arrangements satisfactory
to the Issuer for the purchase of such Series A Notes are not made within 36
hours after such default, this Agreement shall terminate without liability on
the part of the Issuer, except as otherwise provided in Section 10 hereof.
Nothing herein shall relieve any of the Initial Purchasers from liability for
its default.
12. MISCELLANEOUS.
(a) Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (i) if to the Issuer, 301
Fremont Street, Las Vegas, Nevada 89101, Attention: Chief Executive
Officer, with a copy to Hughes Hubbard & Reed LLP, 350 South Grand
Avenue, Suite 3600, Los Angeles, California 90071, Attention: Theodore
H. Latty, Esq. and (ii) if to the Initial Purchasers, to Jefferies &
Company, Inc., 11100 Santa Monica Boulevard, 10th Floor, Los Angeles,
California 90025, Attention: Jerry M. Gluck, Esq., with a copy to
Skadden, Arps, Slate, Meagher & Flom LLP, 300 South Grand Avenue, Suite
3400, Los Angeles, California 90071, Attention: Michael A. Woronoff,
Esq. (provided that any notice pursuant to Section 8 hereof will be
mailed, delivered, telegraphed or telecopied and confirmed to the party
to be notified and its counsel), or in any case to such other address as
the person to be notified may have requested in writing.
(b) This Agreement has been and is made solely for the
benefit of and shall be binding upon the Issuer, the Initial Purchasers
and, to the extent provided in Section 8 hereof, the controlling persons
officers, directors, partners, employees, representatives and agents
referred to in Section 8 and their respective heirs, executors,
administrators, successors and assigns, all as and to the extent
provided in this Agreement, and no other person shall acquire or have
any right under or by virtue of this Agreement. The term
32
<PAGE> 33
"successors and assigns" shall not include a purchaser of any of the
Series A Notes from the Initial Purchasers merely because of such
purchase. Notwithstanding the foregoing, it is expressly understood and
agreed that each purchaser who purchases Series A Notes from the Initial
Purchasers is intended to be a beneficiary of the Issuer's covenants
contained in the Registration Rights Agreement to the same extent as if
the Notes were sold and those covenants were made directly to such
purchaser by the Issuer, and each such purchaser shall have the right to
take action against the Issuer to enforce, and obtain damages for any
breach of, those covenants.
(c) THIS AGREEMENT SHALL BE CONSTRUED, INTERPRETED AND THE
RIGHTS OF THE PARTIES DETERMINED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
EACH FITZGERALDS ENTITY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION
OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE
CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF
MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND IRREVOCABLY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. EACH FITZGERALDS
ENTITY 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. EACH FITZGERALDS ENTITY 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 ANY FITZGERALDS ENTITY AT THE
ADDRESS SET FORTH HEREIN, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER
SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE INITIAL
PURCHASERS TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY FITZGERALDS
ENTITY IN ANY OTHER JURISDICTION.
33
<PAGE> 34
(d) This Agreement may be signed in various counterparts
which together shall constitute one and the same instrument.
(e) The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning
hereof.
(f) If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected, impaired or
invalidated, and the parties hereto shall use their best efforts to find
and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention of
the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such
that may be hereafter declared invalid, illegal, void or unenforceable.
(g) This Agreement may be amended, modified or
supplemented, and waivers or consents to departures from the provisions
hereof may be given, provided that the same are in writing and signed by
each of the signatories hereto.
(h) The indemnities and contribution and expense
reimbursement provisions set forth in or made pursuant to this Agreement
shall remain operative and in full force and effect, and will survive
delivery and payment for the Series A Notes, regardless of (i) any
investigation, or statement as to the results thereof, made by or on
behalf of any party hereto, (ii) acceptance of the Series A Notes, and
payment for them hereunder, and (iii) any termination of this Agreement.
34
<PAGE> 35
PURCHASE AGREEMENT
SIGNATURES
Please confirm that the foregoing correctly sets forth the
agreement between the Issuer and the Initial Purchasers.
Very truly yours,
FITZGERALDS GAMING CORPORATION
FITZGERALDS SOUTH, INC.
FITZGERALDS RENO, INC.
FITZGERALDS INCORPORATED
FITZGERALDS MISSISSIPPI, INC.
FITZGERALDS LAS VEGAS, INC.
FITZGERALDS BLACK HAWK, INC.
FITZGERALDS BLACK HAWK II, INC.
FITZGERALDS FREMONT EXPERIENCE
CORPORATION
101 MAIN STREET LIMITED LIABILITY
COMPANY,
By: /s/ PHILIP D. GRIFFIN
----------------------------------------------
Name: Philip D. Griffith
Title: President and Chief Executive Officer
of each of the above named entities
S-1
<PAGE> 36
Accepted and Agreed to:
JEFFERIES & COMPANY, INC.
By: /s/ M. BRENT STEVENS
--------------------------------
Name: M. Brent Stevens
Title: Managing Director
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
--------------------------------
Name:
Title:
S-2
<PAGE> 37
Accepted and Agreed to:
JEFFERIES & COMPANY, INC.
By:
--------------------------------
Name:
Title:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ MAY BECKER
--------------------------------
Name: M. Becker
Title: Vice President
S-3
<PAGE> 38
ANNEX A
<TABLE>
<CAPTION>
Principal
Amount
Initial Purchaser of Series A Notes
- ----------------- -----------------
<S> <C>
Jefferies & Company, Inc............................... $ 136,667,000
Merrill, Lynch, Pierce, Fenner & Smith
Incorporated............................... $ 68,333,000
=============
TOTAL.................................................. $ 205,000,000
</TABLE>
Ann-1
<PAGE> 39
EXHIBIT A
[Form of Opinions of Hughes Hubbard & Reed LLP]
1. Fitzgeralds New York, Inc. (i) has been duly incorporated and
is validly existing and in good standing under the laws of its jurisdiction of
the State of New York, and (ii) has all requisite power and authority to carry
on its business as it is currently being conducted, and to own, lease and
operate its properties as described in the Offering Circular.
2. To the best of our knowledge, immediately following the
Closing, (i) the only direct or indirect subsidiaries of the Issuer will be the
Subsidiaries; (ii) except as set forth in clause (i), above, the Issuer will not
directly or indirectly own any capital stock or other equity interest in, or be
a partner of, any other person; and (iii) except for Fitzgeralds Arizona
Management, Inc. and Fitzgeralds New York, Inc., the Issuer will directly and
indirectly beneficially own 100% of the outstanding shares of capital stock or
other equity interests of each Subsidiary, free and clear of all Liens, except
as granted pursuant to the Collateral Agreements.
3. Except for warrants to purchase 5,358 shares of common stock
of Fitzgeralds South, Inc. and warrants to purchase ___________ shares of common
stock of the Issuer, to the best of our knowledge, there are no outstanding (i)
securities convertible into or exchangeable for any capital stock of the Issuer
or any of the Subsidiaries, (ii) options, warrants or other rights to purchase
or subscribe to capital stock of any of Issuer or the Subsidiaries, or (iii)
contracts, commitments, agreements, understandings, arrangements, calls or
claims of any kind relating to the issuance of any capital stock of the Issuer
or the Subsidiaries, any such convertible or exchangeable securities, or any
such options, warrants or rights.
4. Each of the Indenture, the Series A Notes, the Guaranty, the
Purchase Agreement, the Registration Rights Agreement, the Security and Pledge
Agreement, the Mortgages and the Consent Solicitation Documents (collectively,
the "Documents") is a legal, valid and binding obligation of each Fitzgeralds
Entity that is a party thereto, enforceable against each such Person in
accordance with its terms, except that such enforcement may be subject to (A)
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance,
fraudulent transfer or other similar laws now or hereafter in effect relating to
or affecting creditors' rights generally, (B) general principles of equity,
including the possible unavailability of specific performance or the
unenforceability of waivers of certain rights or defenses (regardless of whether
such enforcement is considered in a proceeding in equity or at law), and (C)
limitations imposed upon the enforceability of indemnification provisions, under
certain circumstances, by federal or state securities laws or the policies
underlying such laws.
A-1
<PAGE> 40
5. The Series A Notes have been duly and validly authorized,
issued, executed and delivered by the Issuer, and when paid for in accordance
with the terms of the Purchase Agreement, will be legal, valid and binding
obligations of the Issuer, enforceable against the Issuer in accordance with
their terms, except that such enforcement may be subject to (A) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance, fraudulent
transfer or other similar laws now or hereafter in effect affecting creditors'
rights generally, and (B) general principles of equity, including the possible
unavailability of specific performance or the unenforceability of waivers of
certain rights or defenses (regardless of whether such enforcement is considered
in a proceeding in equity or at law). The Series B Notes have been duly and
validly authorized by the Issuer and, when issued, authenticated and delivered
in accordance with the terms of the Indenture and delivered in the Registered
Exchange Offer contemplated by the Registration Rights Agreement, will be legal,
valid and binding obligations of the Issuer, enforceable against the Issuer in
accordance with their terms, except that such enforcement may be subject to (A)
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance,
fraudulent transfer, preferential transfer or other similar laws now or
hereafter in effect relating to or affecting creditors' rights generally, and
(B) general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law).
6. The Guaranty is a legal, valid and binding obligation of each
Guarantor, enforceable against each Guarantor in accordance with its terms,
except that such enforcement may be subject to (A) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, fraudulent transfer or other
similar laws now or hereafter in effect relating to or affecting creditors'
rights generally, and (B) general principles of equity, including the possible
unavailability of specific performance or the unenforceability of waivers of
certain rights or defenses (regardless of whether such enforcement is considered
in a proceeding in equity or at law)
7. A California court to which the issue is properly presented
should conclude that the express choice of New York law as the governing law for
the Documents purporting to be governed by New York law is enforceable as a
matter of California choice-of-law rules.
8. No Permits are required in connection with, or as a condition
to, the execution, delivery or performance of the Documents or for the
consummation of the Transactions. Without limiting the foregoing, (a) no
registration under the Securities Act is required for the sale of the Notes and
the Guaranty to the Initial Purchasers as contemplated by the Purchase Agreement
or for the Exempt Resales, assuming (i) that the purchasers in the Exempt
Resales are QIBs, Accredited Investors or Reg S Investors, (ii) the accuracy of
the representations and warranties of the Initial Purchasers and the Issuer
contained in the Purchase Agreement and (iii) the accuracy of the
representations made by each Accredited Investor that purchases the Notes
pursuant to an Exempt Resale as set forth in the letters of representation in
the form of Annex A to the Offering Circular, (b) prior to the Registered
Exchange Offer or the effectiveness of the
A-2
<PAGE> 41
Shelf Registration Statement, the Indenture is not required to be qualified
under the TIA and (c) no registration under the Act, or filing under the
Exchange Act or the TIA is required in connection with the commencement or
consummation of the Consent Solicitation and the Amendments.
9. Each of the Preliminary Offering Circular and the Offering
Circular, as of its date (except for the financial statements, including the
notes and schedules thereto, and other financial or statistical data included
therein or omitted therefrom, as to which we express no opinion), contains all
the information specified in, and meets the requirements of, Rule 144A(d)(4)
under the Act.
10. No Fitzgeralds Entity is in violation of or in default under
(i) its Charter Documents, (ii) any Applicable Law that a lawyer exercising
customary professional diligence would reasonably recognize as being binding on
ir applicable to a Fitzgerald Entity or (iii) any Applicable Agreement known to
us, in the case of clause (ii) or (iii) except for such violations or defaults
that would not, singly or in the aggregate, have a Material Adverse Effect.
11. Neither the execution or delivery of any of the Documents nor
the consummation of any of the Transactions will conflict with, violate,
constitute a breach of or a default (with the passage of time or otherwise)
under, require the consent of any Person (other than consents already obtained)
under, or result in the imposition of a Lien on any properties or assets of the
Issuer or the Subsidiaries or an acceleration of indebtedness pursuant to, (i)
the Charter Documents of any Fitzgeralds Entity, (ii) any Applicable Agreement
known to us or (iii) any Applicable Law that a lawyer exercising customary
professional diligence would reasonably recognize as being applicable to the
Transactions (including, without limitation, Regulations G, T, U or X of the
Board of Governors of the Federal Reserve System).
12. There is no Proceeding before or by any Governmental
Authority now pending, or to the best of our knowledge threatened, that either
(i) seeks to restrain, enjoin, prevent the consummation of or otherwise
challenge any of the Documents or any of the Transactions or (ii) would, singly
or in the aggregate, have a Material Adverse Effect.
13. None of the Issuer nor any of the Subsidiaries is subject to
regulation, or shall become subject to regulation solely by reason of the
consummation of the transactions contemplated by the Documents, under the
Investment Company Act of 1940, as amended, and the rules and regulations and
interpretations promulgated thereunder, the Public Utility Holding Company Act
of 1935, as amended, the Federal Power Act, the Interstate Commerce Act, the
Commodity Exchange Act or any Federal or state statute or regulation limiting
its ability to incur or assume indebtedness for borrowed money.
A-3
<PAGE> 42
14. The terms of the Notes, the Guaranty, the Indenture, the
Registration Rights Agreement, the Intercreditor Agreement and the Security
Documents conform in all material respects to the descriptions thereof contained
in the Offering Circular under the caption "Description of Notes." We have
reviewed the information in the Offering Circular under the captions
"Description of Notes," "Certain Federal Income Tax Consequences," "Notice to
Investors," and "Plan of Distribution" and to the extent such information
constitutes matters of law, summaries of legal matters, summaries of securities,
instruments, agreements or other documents, summaries of proceedings or legal
conclusions, it is complete and correct in all material respects.
15. The Consent Solicitation and the Amendments complied with the
terms of the Note Purchase Agreement, the Old Indentures, the Warrant Agreement
and all Applicable Law; and the Amendments have been duly and validly adopted.
16. To the extent that Federal law applies to the perfection of
security interests in Patents, Trademarks, and Copyrights (each as defined in
the Security Agreement), upon recordation of the [Patent Security Agreement],
the Trademark Security Agreement and the Copyright Security Agreement in the
U.S. Patent and Trademark Office and the U.S. Copyright Office, respectively,
the security interests will be perfected in the [patents], registrations and
applications set forth on the schedules to the [Patent Security Agreement,] the
Trademark Security Agreement and the Copyright Security Agreement.
17. The provisions of the Security Agreement are effective to
create in favor of the Collateral Agent to secure the Secured Obligations (as
defined in the Security Agreement) a valid security interest in each Grantor's
rights in that portion of the Collateral (as defined in the Security Agreement)
which is subject to Article 9 of the New York UCC.
18. The provisions of the Security Agreement are effective to
create in favor of the Collateral Agent to secure the Secured Obligations (as
defined in the Security Agreement) a valid security interest in each Grantor's
rights in the certificates representing the shares of stock identified on
Schedule I to the Security Agreement (the "Pledged Stock") pledged by such
Grantor. Upon delivery of the Pledged Stock to the Collateral Agent, the
Collateral Agent will have a perfected interest in each Grantor's rights in the
Pledged Stock. Upon such delivery, no interest of any other creditor of the
respective Grantor will be equal or prior to the security interest of the
Collateral Agent in the Pledged Stock pledged by the respective Grantor.
19. We have participated in conferences with representatives of
the Issuer, representatives of the accountants of the Issuer, your
representatives and counsel, at which conferences the contents of the Offering
Circular and related matters were discussed and, although we have not
independently verified and are not passing upon and assume no responsibility for
the accuracy, completeness or fairness of the statements contained in the
Offering Circular (except
A-4
<PAGE> 43
as set forth above), nothing has come to our attention that causes us to believe
that the Offering Circular as of its date contained, or on the date hereof
contains, an untrue statement of a material fact or omitted or omits to state a
material fact required to be stated therein or necessary to make the statements
contained therein, in the light of the circumstances under which they were made,
not misleading (it being understood that we express no view with respect to the
financial statements, including the notes and schedules thereto, and other
financial or statistical data included therein or omitted therefrom or the
statements contained under the caption "Regulation and Licensing" included in
the Offering Circular).
A-5
<PAGE> 44
EXHIBIT B
[Form of Local Counsel Opinions]
1. [Each appropriate Fitzgeralds Entity](1) (i) has been duly
[organized/incorporated] and is validly existing and in good standing under the
laws of the State of [state], (ii) has all requisite power and authority to
carry on its business as it is currently being conducted and as proposed to be
conducted, and to own, lease and operate its properties, as described in the
Offering Circular, and (iii) is duly qualified and licensed to do business and
is in good standing under the laws of [state], and is duly qualified or licensed
to do business and is in good standing as a foreign corporation authorized to do
business in each jurisdiction set forth on Annex I hereto.
2. The authorized capital stock of [each appropriate Fitzgeralds
Entity] consists of [ ]. Each share of capital stock of [each appropriate
Fitzgeralds Entity] that is issued and outstanding is duly authorized and
validly issued, fully paid and nonassessable. There is no outstanding
subscription, option, warrant or other right calling for the issuance of any
share of capital stock of the Issuer or any security convertible into,
exercisable for, or exchangeable for stock of the Issuer.
3. [Each appropriate Fitzgeralds Entity] has all requisite
corporate power and authority to enter into, deliver and perform all of its
obligations under each of the Documents to which it is a party. [Each
appropriate Fitzgeralds Entity] has duly authorized, executed and delivered each
of the Documents to which it is a party.
4. Each Document to which [each appropriate Fitzgeralds Entity]
is a party, to the extent governed by the laws of the State of [state], is a
legal, valid and binding obligation of such person, enforceable against such
person in accordance with its terms, except that such enforcement may be subject
to (A) bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, fraudulent transfer or other similar laws now or hereafter in effect
relating to or affecting creditors' rights generally, (B) general principles of
equity (regardless of whether such enforcement is considered in a proceeding in
equity or at law), and (C) limitations imposed
- ----------
(1) The appropriate Fitzgeralds Entities are: (a) for Nevada counsel:
Fitzgeralds Gaming Corporation, Fitzgeralds South, Inc., Fitzgeralds
Reno, Inc., Fitzgeralds Incorporated, Fitzgeralds Arizona Management,
Inc., Fitzgeralds Black Hawk, Inc., Fitzgeralds Fremont Experience
Corporation, Fitzgeralds Las Vegas, Inc. and Fitzgeralds Management
Corporation; (b) for Colorado counsel: Fitzgeralds Black Hawk II, Inc.
and 101 Main Street Limited Liability Company; and (c) for Mississippi
counsel: Fitzgeralds Mississippi, Inc.
B-1
<PAGE> 45
upon the enforceability of indemnification provisions, under certain
circumstances, by federal or state securities laws or the policies underlying
such laws.
5. Neither the execution, delivery or performance of any of the
Documents (including the Guaranty) nor the consummation of the Transactions will
conflict with, violate, constitute a breach of or a default (with the passage of
time or otherwise) under, or require the consent of any Person (other than
consents that have already been obtained) under, or result in the imposition of
a Lien on any property or assets of the [appropriate Fitzgeralds Entity], or an
acceleration of any indebtedness pursuant to (i) the Charter Documents of the
[appropriate Fitzgeralds Entity], or (ii) any Applicable Law of the State of
[state].
6. No Permits, including, without limitation, Permits with
respect to engaging in gaming operations and the manufacture of gaming machines
(other than those that have been obtained or taken and are in full force and
effect), are required under the Applicable Laws of the State of [state] in
connection with, or as a condition to, the execution, delivery or performance of
the Document or for the consummation of the Transactions.
7. Each Regulated Person has, and to the best of our knowledge is
in compliance with the terms and conditions of, all Permits (including, without
limitation, Permits with respect to engaging in gaming operations and the
manufacture of gaming machines) necessary under the Applicable Laws of the State
of [state] to own, operate, lease and license its assets and properties and to
conduct its business as described in the Offering Circular. All of such Permits
are in full force and effect.
8. To the best of our knowledge, no Governmental Authority of the
State of [state] is investigating any Regulated Person (other than normal
overseeing reviews), and (b) there is no basis for any of such Gaming
Authorities to deny the renewal of the current Permits held by any of them.
9. We have reviewed the information in the Offering Circular
under the captions "Risk Factors - Government Regulation and Licensing,"
["Description of Capital Stock"] and "Regulation and Licensing - [Nevada Gaming
Regulation] [Mississippi Gaming Regulation] [Colorado Gaming Regulation] [Indian
Gaming Regulation]," and to the extent such information constitutes matters, or
summaries of matters, of the laws of the State of [state] or federal law, it is
complete and correct in all material respects.
10. There is no Proceeding before or by any Governmental
Authority in the State of [state] now pending, or to the best of our knowledge
threatened, that either (i) seeks to restrain, enjoin, prevent the consummation
of or otherwise challenge any of the Documents or any of the Transactions or
(ii) could, singly or in the aggregate, have a Material Adverse Effect.
B-2
<PAGE> 46
11. The [define financing statements] Financing Statement[s]
[is][are] in appropriate form for filing in the [define filing offices] Filing
Office[s] under the State of [state] UCC. With respect to that portion of the
Collateral as to which the filing of a financing statement is a permissible
method of perfection under the State of [state] UCC (the "UCC Filing
Collateral"), the security interest in favor of the Collateral Agent in that
portion of the UCC Filing Collateral which is described in the Financing
Statement[s] will be perfected upon filing of the Financing Statements in the
Filing Office[s].
12. [Maritime only.] Fitzgeralds Mississippi, Inc. ("FMI") is the
documented owner of the "Fitzgeralds Tunica" (Official #262757); and (ii) upon
filing and due recording of the [described ship mortgage] (the "Ship Mortgage")
in the National Vessel Documentation Center, The Bank of New York, as
Trustee-Mortgagee, will have a valid first preferred mortgage lien under the
Ship Mortgage Act on the vessel described in the Ship Mortgage, entitled to all
of the benefits and priorities accorded a first "preferred mortgage" under the
Ship Mortgage Act, prior to all Liens other than those expressly granted
priority under the Ship Mortgage Act over the lien of a first "preferred
mortgage," securing the Obligations.
13. (a) The [describe mortgage] (the "Mortgage") is in
appropriate form for recording in the recording offices indicated on Schedule
[] (the "Recording Offices") and is in appropriate form for filing as a "fixture
filing" under Article 9 of the Applicable UCC in the Filing Offices.
(b) Upon due recordation of the Mortgage in the Recording
Offices, the Mortgage will create, as security for the payment and performance
of the Obligations, (i) a valid, perfected and enforceable mortgage lien of
record on the entire interest of [each appropriate Fitzgerald Entity] in that
portion of the trust estate located in the State of [state] which constitutes
real property (including fixtures to the extent such fixtures constitute real
property) and (ii) a valid, perfected and enforceable security interest in the
leases and rents described in the Mortgage.
(c) The provisions of the Mortgage are effective to create
in favor of the Collateral Agent to secure the Secured Obligations (as defined
in the Security Agreement) a valid security interest in each Grantor's rights in
that portion of the Collateral described in the Mortgage that is subject to
Article 9 of the Applicable UCC (the "UCC Collateral").
(d) The Financing Statement[s] [is][are] in appropriate form
for filing in the Filing Office[s] under the State of [state] UCC. With respect
to that portion of the trust estate described in the Mortgage as to which the
filing of a financing statement is a permissible method of perfection under the
State of [state] UCC (the "UCC Filing Collateral"), the security interest in
favor of the Collateral Agent in that portion of the UCC Filing Collateral which
is described in the Financing Statement[s] will be perfected upon filing of the
Financing Statements in the Filing Office[s].
B-3
<PAGE> 47
(e) After the recordings and filings specified in the
foregoing paragraphs have been effected, no instruments need to be recorded,
registered or filed or re-recorded, re-registered or re-filed in any public
office in the State of [state], and no other act need be performed in order to
maintain the perfection and priority of the liens and security interests created
by the Mortgage, except for the filing of continuation statements at 5-year
intervals in respect of the Financing Statements in accordance with the
Applicable UCC.
14. [Nevada only.] Each of the leasehold mortgages identified on
Annex __ hereto is in form sufficient to create a lien on the leases described
therein and the fixtures located on the real property that is the subject of
such lease in favor of the Collateral Agent, and upon its execution,
acknowledgment and attestation, will be in proper form for recordation in real
estate records, and assuming the leases described therein or memoranda of leases
with respect thereto have been duly recorded in the applicable Filing or
Recording Offices, upon recordation of such liens, such liens are perfected by
the recordation of each leasehold mortgage in such offices.
15. There is no mortgage, mortgage recording, stamp, intangibles
or other similar tax (other than normal filing and recording fees) required to
be paid under the laws of the United States of America or the State of [state]
or any political subdivision thereof in connection with the execution, delivery,
recordation, filing or perfection, as applicable, of any of the Security
Documents or the obligations evidenced or secured thereby.
16. The law of the State of [state] does not require a lienholder
to make an election of remedies where such lienholder holds security interests
and liens in both the real estate and the personal property of the debtor or
require a lienholder to take recourse first or solely against its collateral.
17. In any action to enforce the security interests in the
Collateral in the State of [state], the law of the State of New York should
govern the legality of the interest and the other amounts to be paid and
received with respect to the Notes. If the law of the State of [state] were to
apply, the interest and other amounts to be paid with respect to the Notes would
not be usurious.
18. The Collateral Agent is not required to register as a foreign
entity or qualify to do business in the State of [state] solely by reason of the
Transactions.
19. The State of [state] has no law pursuant to which a lien
against any real property of [each appropriate Fitzgerald Entity] superior to
the lien created by the Mortgage could arise as a result of a violation of
environmental laws or regulations of the State of [state]. No environmental law
or regulation of the State of [state] would require any remedial or removal
action or certification of nonapplicability as a condition to the granting of
the Mortgage or the
B-4
<PAGE> 48
foreclosure or the sale of any property of [each appropriate Fitzgerald Entity]
located in the State of [state].
20. Based upon facts of which we have actual knowledge, the
transactions contemplated by the Security Documents do not constitute a
fraudulent conveyance or fraudulent transfer or a preferential transfer under
the laws of the State of [state], so long as the conveyances are made in good
faith.
21. Although we have not independently verified and are not
passing upon and assume no responsibility for the accuracy, completeness or
fairness of the statements contained in the Offering Circular (except as set
forth above), nothing has come to our attention that causes us to believe that
the "Risk Factors - Government Regulation and Licensing" and "Regulation and
Licensing - [Nevada Gaming Regulation] [Mississippi Gaming Regulation] [Colorado
Gaming Regulation] [Indian Gaming Regulation]" sections of the Offering Circular
as of its date contained, or on the date hereof contains, an untrue statement of
a material fact or omitted or omits to state a material fact required to be
stated therein or necessary to make the statements contained therein, in the
light of the circumstances under which they were made, not misleading (it being
understood that we express no view with respect to any other portion of the
Offering Circular).
B-5
<PAGE> 49
Schedule 6(d)
-------------
<TABLE>
<CAPTION>
Issuer's Direct
or Indirect Percentage Jurisdiction of
Subsidiaries of the Issuer Beneficial Ownership Organization
-------------------------- -------------------- ------------
<S> <C>
101 Main Street Limited Liability Company 100% Colorado
Fitzgeralds Black Hawk, Inc. 100% Nevada
Fitzgeralds Black Hawk II, Inc. 100% Colorado
Fitzgeralds Freemont Experience Corporation 100% Nevada
Fitzgeralds Incorporated 100% Nevada
Fitzgeralds Las Vegas, Inc. 100% Nevada
Fitzgeralds Management Corporation 100% Nevada
Fitzgeralds Mississippi, Inc. 100% Mississippi
Fitzgeralds Reno, Inc. 100% Nevada
Fitzgeralds South, Inc. 100% Nevada
Fitzgeralds New York, Inc. 85% New York
Fitzgeralds Arizona Management, Inc. 85% Nevada
</TABLE>
B-6
<PAGE> 1
EXHIBIT 10.1
FITZGERALDS GAMING CORPORATION
as issuer
and the Guarantors referred to herein
$255,000,000
12 1/4% Senior Secured Notes due 2004
--------------------------------------------
INDENTURE
Dated as of December 30, 1997
--------------------------------------------
THE BANK OF NEW YORK,
Trustee
<PAGE> 2
CROSS-REFERENCE TABLE*Trust Indenture
<TABLE>
<CAPTION>
Act Section Indenture Section
----------- -----------------
<S> <C>
310(a)(1).................................................................................7.10
(a)(2)...............................................................................7.10
(a)(3)................................................................................N/A
(a)(4)................................................................................N/A
(a)(5)...............................................................................7.10
(b).............................................................................7.8; 7.10
(c)...................................................................................N/A
311(a)....................................................................................7.11
(b)..................................................................................7.11
(c)...................................................................................N/A
312(a).....................................................................................2.5
(b)..................................................................................11.3
(c)..................................................................................11.3
313(a).....................................................................................7.6
(b)(1)................................................................................7.6
(b)(2)................................................................................7.6
(c)...................................................................................7.6
(d)...................................................................................7.6
314(a)................................................................................4.3; 4.4
(b)...................................................................................N/A
(c)(1)...............................................................................11.4
(c)(2)...............................................................................11.4
(c)(3)................................................................................N/A
(d)...................................................................................N/A
(e)..................................................................................11.5
(f)...................................................................................N/A
315(a).....................................................................................7.1
(b)...................................................................................7.5
(c)...................................................................................7.1
(d)...................................................................................7.1
(e)..................................................................................6.11
316(a)(last sentence)......................................................................2.9
(a)(1)(A).............................................................................6.5
(a)(1)(B).............................................................................6.4
(a)(2)................................................................................N/A
(b)...................................................................................9.2
(c)...................................................................................9.4
317(a)(1)..................................................................................6.8
(a)(2)................................................................................6.9
(b)...................................................................................2.4
318(a)....................................................................................11.1
(b)...................................................................................N/A
(c)..................................................................................11.1
</TABLE>
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
<S> <C> <C>
Section 1.1. Definitions ..........................................................1
Section 1.2. Other Definitions ...................................................22
Section 1.3. Incorporation by Reference of Trust Indenture Act ...................23
Section 1.4. Rules of Construction ...............................................24
ARTICLE 2
THE NOTES
Section 2.1. Form and Dating .....................................................24
Section 2.2. Execution and Authentication ........................................25
Section 2.3. Registrar, Paying Agent and Depository ..............................26
Section 2.4. Paying Agent to Hold Money in Trust .................................26
Section 2.5. Holder Lists ........................................................27
Section 2.6. Transfer and Exchange ...............................................27
Section 2.7. Replacement Notes ...................................................32
Section 2.8. Outstanding Notes ...................................................32
Section 2.9. Treasury Notes ......................................................33
Section 2.10. Temporary Notes ....................................................33
Section 2.11. Cancellation .......................................................34
Section 2.12. Defaulted Interest .................................................34
Section 2.13. Legends ............................................................34
ARTICLE 3
REDEMPTION
Section 3.1. Notices to Trustee ..................................................35
Section 3.2. Selection of Notes to Be Redeemed ...................................36
Section 3.3. Notice of Redemption ................................................36
Section 3.4. Effect of Notice of Redemption. .....................................37
Section 3.5. Deposit of Redemption Price. ........................................37
</TABLE>
i
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Section 3.6. Notes Redeemed in Part. .............................................38
Section 3.7. Optional Redemption. ................................................38
Section 3.8. Redemption in Accordance with Gaming Laws ...........................39
ARTICLE 4
COVENANTS
Section 4.1. Payment of Notes. ...................................................39
Section 4.2. Maintenance of Office or Agency. ....................................40
Section 4.3. Reports .............................................................40
Section 4.4. Compliance Certificate ..............................................42
Section 4.5. Taxes ...............................................................43
Section 4.6. Stay, Extension and Usury Laws ......................................43
Section 4.7. Limitation on Restricted Payments ...................................43
Section 4.8. Limitation on Restrictions on Subsidiary Dividends ..................46
Section 4.9. Limitation on Incurrence of Indebtedness ............................48
Section 4.10. Limitation on Asset Sales ..........................................50
Section 4.11. Limitation on Transactions With Affiliates .........................53
Section 4.12. Limitation on Liens ................................................54
Section 4.13. Corporate Existence ................................................54
Section 4.14. Repurchase Upon a Change of Control ................................55
Section 4.15. Maintenance of Properties ..........................................57
Section 4.16. Maintenance of Insurance ...........................................57
Section 4.17. Restrictions on Sale and Issuance of Subsidiary Stock ..............58
Section 4.18. Line of Business ...................................................58
ARTICLE 5
SUCCESSORS
Section 5.1. When the Company May Merge, etc. ....................................58
Section 5.2. Successor Substituted ...............................................60
</TABLE>
ii
<PAGE> 5
<TABLE>
<CAPTION>
Page
ARTICLE 6
DEFAULTS AND REMEDIES
<S> <C> <C>
Section 6.1. Events of Default ...................................................60
Section 6.2. Acceleration ........................................................63
Section 6.3. Other Remedies ......................................................63
Section 6.4. Waiver of Past Defaults .............................................64
Section 6.5. Control by Majority .................................................64
Section 6.6. Limitation on Suits .................................................64
Section 6.7. Rights of Holders to Receive Payment ................................65
Section 6.8. Collection Suit by Trustee ..........................................65
Section 6.9. Trustee May File Proofs of Claim ....................................66
Section 6.10. Priorities ..........................................................66
Section 6.11. Undertaking for Costs ...............................................67
ARTICLE 7
TRUSTEE
Section 7.1. Duties of Trustee ...................................................67
Section 7.2. Rights of Trustee ...................................................69
Section 7.3. Individual Rights of Trustee ........................................70
Section 7.4. Trustee's Disclaimer ................................................70
Section 7.5. Notice of Defaults ..................................................70
Section 7.6. Reports by Trustee to Holders .......................................71
Section 7.7. Compensation and Indemnity ..........................................71
Section 7.8. Replacement of Trustee ..............................................72
Section 7.9. Successor Trustee by Merger, etc. ...................................74
Section 7.10. Eligibility; Disqualification .......................................74
Section 7.11. Preferential Collection of Claims Against Company ...................74
ARTICLE 8
DISCHARGE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.1. Discharge; Option to Effect Legal Defeasance or
Covenant Defeasance................................................75
Section 8.2. Legal Defeasance and Discharge.......................................75
Section 8.3. Covenant Defeasance..................................................76
</TABLE>
iii
<PAGE> 6
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Section 8.4. Conditions to Legal or Covenant Defeasance................................76
Section 8.5. Deposited Cash and U.S. Government Obligations to be
Held in Trust; Other Miscellaneous Provisions.........................78
Section 8.6. Repayment to the Company...................................................78
Section 8.7. Reinstatement..............................................................79
ARTICLE 9
AMENDMENTS
Section 9.1. Without Consent of Holders................................................80
Section 9.2. With Consent of Holders...................................................81
Section 9.3. Compliance with Trust Indenture Act.......................................82
Section 9.4. Revocation and Effect of Consents.........................................82
Section 9.5. Notation on or Exchange of Notes..........................................83
Section 9.6. Trustee to Sign Amendments, etc...........................................83
ARTICLE 10
COLLATERAL AND SECURITY AND GUARANTY
Section 10.1. Collateral Documents.....................................................84
Section 10.2. Opinions.................................................................85
Section 10.3. Release of Collateral....................................................85
Section 10.4. Certificates of the Company..............................................86
Section 10.5. Authorization of Actions to be Taken by the Trustee
Under the Security Documents........................................86
Section 10.6. Authorization of Receipt of Funds by the Trustee
Under the Security Documents........................................87
Section 10.7. Guaranty.................................................................87
Section 10.8. Execution and Delivery of Guaranty.......................................89
Section 10.9. Limitation on Guarantor's Liability......................................89
Section 10.10. Rights under the Guaranty...............................................90
Section 10.11. Primary Obligations.....................................................90
Section 10.12. Guarantee by Subsidiary.................................................91
Section 10.13. Release of Guarantors...................................................91
</TABLE>
iv
<PAGE> 7
<TABLE>
<CAPTION>
Page
----
ARTICLE 11
MISCELLANEOUS
<S> <C> <C>
Section 11.1. Trust Indenture Act Controls.............................................92
Section 11.2. Notices..................................................................92
Section 11.3. Communication by Holders with Other Holders..............................93
Section 11.4. Certificate and Opinion as to Conditions Precedent.......................93
Section 11.5. Statements Required in Certificate or Opinion............................94
Section 11.6. Rules by Trustee and Agents..............................................94
Section 11.7. Legal Holidays...........................................................95
Section 11.8. No Recourse Against Others...............................................95
Section 11.9. Governing Law............................................................95
Section 11.10. No Adverse Interpretation of Other Agreements...........................96
Section 11.11. Successors..............................................................96
Section 11.12. Severability............................................................96
Section 11.13. Counterpart Originals...................................................96
Section 11.14. Table of Contents, Headings, etc........................................97
EXHIBIT A FORM OF SECURITY.....................................................A-1
EXHIBIT B CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR
REGISTRATION OF TRANSFER OF NOTES....................................B-1
EXHIBIT C FORM OF GUARANTY.....................................................C-1
EXHIBIT D FORM OF INTERCREDITOR AGREEMENT......................................D-1
EXHIBIT E FORM OF SHIP MORTGAGE................................................E-1
Schedule I Existing Liens....................................................Sch -1
</TABLE>
v
<PAGE> 8
INDENTURE, dated as of December 30, 1997, among Fitzgeralds
Gaming Corporation, a Nevada corporation (the "Company"), the Guarantors (as
defined) named herein and The Bank of New York, a New York banking corporation,
as trustee (the "Trustee").
The Company and the Trustee agree as follows for the benefit of
each other and for the equal and ratable benefit of the Holders (as defined) of
the Company's 12 1/4% Senior Secured Notes due 2004.
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.1. Definitions.
"Acquired Debt" means Indebtedness of a Person existing at the
time such Person is merged with or into the Company or a Restricted Subsidiary
or becomes a Restricted Subsidiary, other than Indebtedness incurred in
connection with, or in contemplation of, such Person merging with or into the
Company or a Restricted Subsidiary or becoming a Restricted Subsidiary.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean (i) the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise,
or (ii) beneficial ownership of 10% or more of the voting securities of such
Person. Notwithstanding the foregoing, neither of the Initial Purchasers nor any
of their respective Affiliates will be deemed to be Affiliates of the Company.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Asset Sale" means any (i) transfer (as hereinafter defined),
other than in the ordinary course of business, of any assets of the Company or
any Restricted Subsidiary or (ii) direct or indirect issuance or sale of any
Capital Stock
<PAGE> 9
of any Restricted Subsidiary (other than directors' qualifying shares), in each
case to any Person (other than the Company or a Restricted Subsidiary). For
purposes of this definition, (a) any series of transfers that are part of a
common plan shall be deemed a single Asset Sale and (b) the term "Asset Sale"
shall not include (1) any series of transfers that have a fair market value (or
result in gross proceeds) of less than $1 million, until the aggregate fair
market value and gross proceeds of the transfers excluded from the definition of
Asset Sale pursuant to this clause (b)(1) exceed $5 million, (2) any transfer by
the Company of the Tunica Road to the County of Tunica, Mississippi, or any
agency thereof, (3) any transfer of slot machines or other gaming equipment in
connection with the acquisition of similar gaming equipment in the ordinary
course of business, or (4) any disposition of all or substantially all of the
assets of the Company that is governed under and complies with Article V of this
Indenture.
"Bankruptcy Law" means title 11, U.S. Code, or any similar
Federal, state or foreign law for the relief of debtors.
"Board of Directors" means the board of directors or any duly
constituted committee thereof of any corporation or of a corporate general
partner of a partnership and any similar body empowered to direct the affairs of
any other entity.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, as to any Person, the
obligations of such Person under a lease that are required to be classified and
accounted for as capital lease obligations under GAAP, and the amount of such
obligations at any date shall be the capitalized amount of such obligations at
such date, determined in accordance with GAAP.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations, rights or other
equivalents (however designated) of corporate stock, and (ii) with respect to
any other Person, any and all partnership or other equity interests of such
Person.
"Cash Equivalent" means (i) 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), (ii) time deposits and
certificates of deposit and
2
<PAGE> 10
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 & 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, (iii) investments in money market funds
substantially all of whose assets comprise securities of the types described in
clauses (i) and (ii) above, and (iv) repurchase obligations with a term of not
more than seven days for underlying securities of the types described in clauses
(i) and (ii) above entered into with any financial institution meeting the
financial qualifications specified in clause (ii) above.
"Casino" means a gaming establishment owned, directly or
indirectly, by the Company or one of its Restricted Subsidiaries and any hotel,
building, restaurant, theater, amusement park or other entertainment facility,
parking facilities, retail shops, land, equipment and other property or asset
directly ancillary thereto and used or to be used in connection therewith.
"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" means:
(i) the transfer (in one transaction or a series of transactions)
of all or substantially all of the Company's assets (other than by way of merger
or consolidation) to any "person" or "group" (as such terms are used for
purposes of Section 13(d) and 14(d) of the Exchange Act, whether or not
applicable) other than the Existing Equity Holder or his Related Parties;
(ii)the liquidation or dissolution of the Company or the adoption
of a plan by the stockholders of the Company relating to the liquidation or
dissolution of the Company;
(iii) the time that the Company first determines or reasonably
should have known that (A) any "person" or "group" (as such terms are used for
purposes of Sections 13(d) and 14(d) of the Exchange Act, whether or not
applicable) is or
3
<PAGE> 11
becomes the "beneficial owner" (as such term is used in Rules 13d-3 and 13d-5
under the Exchange Act, whether or not applicable, except that a "person" shall
be deemed to have "beneficial ownership" of all shares that any such person has
the right to acquire, whether such right is exercisable immediately or only
after the passage of time), directly or indirectly (including as a result of a
merger or consolidation), of more than 35% of the total voting power in the
aggregate of all classes of Voting Stock of the Company then outstanding, but
excluding from the percentage of voting power held by any group the voting power
of shares owned by the Existing Equity Holder and his Related Parties who are
deemed to be members of the group, provided that the Existing Equity Holder and
his Related Parties beneficially own a majority of the total voting power of
Voting Stock of the Company held by such group, and (B) the Existing Equity
Holder and his Related Parties together fail to beneficially own, directly or
indirectly, at least the same percentage of the combined voting power of such
Voting Stock as the percentage "beneficially owned" by such person or group;
(iv)the failure of the Company and its Restricted Subsidiaries to
own 80% of the total voting power in the aggregate of all classes of Voting
Stock of any Restricted Subsidiary (other than FAMI or FNYI) then outstanding;
(v) during any period of 12 consecutive months after the Issue
Date, individuals who at the beginning of such period constituted the Board of
Directors of the Company (together with any new directors whose election by such
Board or whose nomination for election by the stockholders of the Company was
approved by a vote of a majority for the directors then still in office who were
either directors at the beginning of such period or whose election or nomination
for election was previously so approved or who were elected by the vote of one
or more of the Existing Equity Holder or his Related Parties) cease for any
reason to constitute a majority of the Board of Directors of the Company then in
office; or
(vi)if the Preferred Stock is then outstanding, a "Change of
Control," as defined in the Certificate of Designation of Preferences and Rights
of Cumulative Redeemable Preferred Stock of the Company filed with the Office of
the Secretary of State of the State of Nevada on December 18, 1995.
"Cliff Castle Casino" means the Cliff Castle Casino in Camp
Verde, Arizona, managed by FAMI.
4
<PAGE> 12
"Collateral" means any assets of the Company or any of its
Subsidiaries defined as "Collateral" in any of the Security Documents and assets
from time to time on which a Lien exists as security for any of the Obligations.
"Collateral Agent" shall have the meaning set forth in the
respective Security Documents.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or if at any time
after the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Exchange Act, the Securities
Act or the TIA, as the case may be, then the body performing such duties at such
time.
"Company" means the party named as such above, until a successor
replaces such Person in accordance with the terms of this Indenture, and
thereafter means such successor.
"Company Order" means a written request or order signed in the
name of the Company by its Chairman of the Board, President, Chief Executive
Officer or Senior or Executive Vice President, and by its Treasurer, an
Assistant Treasurer, its Secretary or an Assistant Secretary and delivered to
the Trustee.
"Consolidated EBITDA" means, with respect to any Person (the
referent Person) for any period, consolidated income (loss) from operations of
such Person and its subsidiaries for such period, determined in accordance with
GAAP, plus (to the extent such amounts are deducted in calculating such income
(loss) from operations of such Person for such period, and without duplication)
amortization, depreciation and other non-cash charges (including, without
limitation, amortization of goodwill, deferred financing fees and other
intangibles but excluding (a) non-cash charges incurred after the date of this
Indenture that require an accrual of or a reserve for cash charges for any
future period, and (b) normally recurring accruals such as reserves against
accounts receivable); provided, that (i) the income from operations of any
Person (including, without limitation, any Unrestricted Subsidiary) that is not
a Wholly Owned Subsidiary or that is accounted for by the equity method of
accounting will be included only to the extent of the amount of dividends or
distributions paid during such period to the referent Person or a Wholly Owned
Subsidiary of the referent Person, (ii) the income from operations of any Person
acquired in a pooling of interests transaction for any period prior to the date
of such acquisition will be excluded, and (iii) the income
5
<PAGE> 13
from operations of any Restricted Subsidiary will not be included to the extent
that declarations of dividends or similar distributions by that Restricted
Subsidiary are not at the time permitted, directly or indirectly, by operation
of the terms of its organization documents or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
that Restricted Subsidiary or its owners.
"Consolidated Interest Expense" means, with respect to any Person
for any period, the consolidated interest expense of such Person and its
subsidiaries for such period, whether paid or accrued (including amortization of
original issue discount, noncash interest payment, and the interest component of
Capital Lease Obligations), to the extent such expense was deducted in computing
Consolidated Net Income of such Person for such period.
"Consolidated Net Income" means, with respect to any Person (the
referent Person) for any period, the aggregate of the Net Income of such Person
and its subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP; provided, that (i) the Net Income of any Person
(including, without limitation, any Unrestricted Subsidiary) that is not a
Wholly Owned Subsidiary or that is accounted for by the equity method of
accounting will be included in calculating the referent Person's Consolidated
Net Income only to the extent of the amount of dividends or distributions paid
during such period to the referent Person or a Wholly Owned Subsidiary of the
referent Person, (ii) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition will
be excluded, and (iii) the Net Income of any Restricted Subsidiary will be
excluded to the extent that declarations of dividends or similar distributions
by that Restricted Subsidiary of such Net Income are not at the time permitted,
directly or indirectly, by operation of the terms of its organization documents
or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary or its owners.
"Consolidated Net Worth" means, with respect to any Person, the
total stockholders' equity of such Person determined on a consolidated basis in
accordance with GAAP, adjusted to exclude (to the extent included in calculating
such equity), (i) the amount of any such stockholders' equity attributable to
Disqualified Capital Stock or treasury stock of such Person, and (ii) all upward
revaluations and other write-ups in the book value of any asset of such Person
or a consolidated subsidiary of such Person subsequent to the Issue Date, and
(iii) all
6
<PAGE> 14
Investments in subsidiaries of such Person that are not consolidated
subsidiaries and in Persons that are not subsidiaries of such Person.
"Corporate Trust Office" shall be at the address of the Trustee
specified in Section 11.2 or such other address as the Trustee may specify by
notice to the Company.
"Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
"Default" means any event that is, or after notice or the passage
of time or both would be, an Event of Default.
"Definitive Notes" means Notes that are in the form of the Notes
attached hereto as Exhibit A, that do not include the information called for by
footnotes 1 and 3 thereof.
"Depository" means the Person specified in Section 2.3 hereof as
the Depository with respect to the Notes issuable in global form, until a
successor shall have been appointed and become such pursuant to the applicable
provision of this Indenture, and, thereafter, "Depository" shall mean or include
such successor.
"Disqualified Stock" means any Equity Interest that (i) either by
its terms (or by the terms of any security into which it is convertible or for
which it is exchangeable) is or upon the happening of an event (other than
pursuant to gaming law requirements) would be required to be redeemed or
repurchased prior to the final stated maturity of the Notes or is redeemable at
the option of the holder thereof at any time prior to such final stated maturity
or (ii) is convertible into or exchangeable at the option of the issuer thereof
or any other Person for debt securities.
"DTC" means The Depository Trust Company.
"Eligible Credit Facility" means a credit facility (and any
related notes, guarantees, collateral documents, instruments and agreements
executed in connection therewith) that (i) has terms and collections (including
with respect to applicable interest rates and fees) customary for similar
facilities extended to borrowers comparable to the Company, (ii) does not permit
the Company to incur Indebtedness under all Eligible Credit Facilities in the
aggregate at any time
7
<PAGE> 15
outstanding in excess of $15 million in principal amount, up to $10 million of
which may be used for working capital purposes and up to $5 million of which may
be used solely to finance capital expenditures at Fitzgeralds Black Hawk, and
(iii) may be secured by certain assets of the Company and its Subsidiaries,
subject to the terms and conditions of the Intercreditor Agreement.
"Equity Interests" means Capital Stock or warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Offer" means the offer that may be made by the Company
pursuant to the Registration Rights Agreement to exchange Series B Notes for
Series A Notes.
"Existing Equity Holder" means Philip D. Griffith.
"FAMI" means Fitzgeralds Arizona Management, Inc., a Nevada
corporation.
"FI" means Fitzgeralds, Inc., a Nevada corporation.
"Fitzgeralds Black Hawk" means Fitzgeralds Casino located in
Black Hawk, Colorado.
"Fitzgeralds Las Vegas" means Fitzgeralds Casino Hotel located in
downtown Las Vegas, Nevada.
"Fitzgeralds Reno" means Fitzgeralds Casino Hotel located in
Reno, Nevada.
"Fitzgeralds Tunica" means Fitzgeralds Casino Hotel located in
Tunica, Mississippi.
"FLVI" means Fitzgeralds Las Vegas, Inc., a Nevada corporation.
8
<PAGE> 16
"FNYI" means Fitzgeralds New York, Inc., a New York corporation.
"FRI" means Fitzgeralds Reno, Inc., a Nevada corporation.
"FSI" means Fitzgeralds South, Inc., a Nevada corporation.
"gaap" means generally accepted accounting principles set forth
in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession, and in the rules and regulations of the Commission.
"GAAP" means gaap as in effect on the date of this Indenture.
"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, any state, province or any
city or other political subdivision, whether now 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 the Company or any of its Subsidiaries.
"Gaming License" means every material license, franchise or other
approval or authorization on the date of the Indenture or thereafter required to
own, lease, operate or otherwise conduct gaming in any jurisdiction in which the
Company or any of its Subsidiaries conducts or proposes in good faith to conduct
gaming business, including any applicable liquor licenses.
"Global Note" means any Note that contains the paragraph referred
to in footnote 1 and the additional schedule referred to in footnote 3 in the
form of the Note attached hereto as Exhibit A.
"Guarantee" means any guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters of
credit and reim-
9
<PAGE> 17
bursement agreements in respect thereof), of all or any part of any Indebtedness
or other obligation. "Guarantee," when used as a verb, has a correlative
meaning.
"Guarantor" means any Restricted Subsidiary that has executed and
delivered in accordance with this Indenture an unconditional and irrevocable
Guarantee of the Company's obligations under the Notes on a senior secured basis
and such Person's successors and assigns.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates.
"Holder" means a Person in whose name a Note is registered.
"Indebtedness" of any Person means (without duplication) (1) all
liabilities and obligations, contingent or otherwise, of such Person (i) in
respect of borrowed money (whether or not the recourse of the lender is to the
whole of the assets of such Person or only to a portion thereof), (ii) evidenced
by bonds, debentures, notes or other similar instruments, (iii) representing the
deferred purchase price of property or services (other than liabilities incurred
in the ordinary course of business which are not more than 90 days past due),
(iv) created or arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person (even though the
rights and remedies of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property), (v) as lessee
under capitalized leases, (vi) under bankers' acceptance and letter of credit
facilities, (vii) to purchase, redeem, retire, defease or otherwise acquire for
value any Disqualified Stock, or (viii) in respect of Hedging Obligations, (2)
all Indebtedness of others that is Guaranteed by such Person, and (3) all
Indebtedness of others that is secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property (including, without limitation, accounts and contract
rights) owned by such Person; provided, that the amount of such Indebtedness
shall (to the extent such Person has not assumed or become liable for the
payment of such Indebtedness in full) be the lesser of (x) the fair market value
of such property at the time of determination and (y) the amount of such
Indebtedness. The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and the
10
<PAGE> 18
maximum liability, upon the occurrence of the contingency giving rise to the
obligation, of any contingent obligations at such date.
"Indenture" means this Indenture as amended or supplemented from
time to time.
"Initial Purchasers" means Jefferies & Company, Inc. and Merrill
Lynch, Pierce Fenner & Smith Incorporated.
"Intercreditor Agreement" means that certain Intercreditor
Agreement among the Trustee and one or more Lenders, substantially in the form
attached hereto as Exhibit D, which may be entered into after the Issue Date, as
amended or supplemented from time to time.
"Interest Coverage Ratio" means, for any period, the ratio of (i)
Consolidated EBITDA of the Company for such period, over (ii) Consolidated
Interest Expense of the Company for such period. In calculating the Interest
Coverage Ratio for any period, pro forma effect shall be given to: (a) the
incurrence, assumption, guarantee, repayment, repurchase, redemption or
retirement by the Company or any of its Subsidiaries of any Indebtedness
subsequent to the commencement of the period for which the Interest Coverage
Ratio is being calculated but on or prior to the date on which the event for
which the calculation is being made, as if the same had occurred at the
beginning of the applicable period; and (b) the occurrence of any Asset Sale
during such period by reducing Consolidated EBITDA for such period by an amount
equal to the Consolidated EBITDA (if positive) directly attributable to the
assets sold and by reducing Consolidated Interest Expense by an amount equal to
the Consolidated Interest Expense directly attributable to any Indebtedness
assumed by third parties or repaid with the proceeds of such Asset Sale, in each
case as if the same had occurred at the beginning of the applicable period. For
purposes of making the computation referred to above, acquisitions that have
been made by the Company or any of its Restricted Subsidiaries, including all
mergers and consolidations, subsequent to the commencement of such period but on
or prior to the date on which the event for which the calculation is being made
shall be calculated on a pro forma basis, assuming that all such acquisitions,
mergers and consolidations had occurred on the first day of such period. Without
limiting the foregoing, the financial information of the Company with respect to
any portion of such four fiscal quarters that falls before the Issue Date shall
be adjusted to give pro forma
11
<PAGE> 19
effect to the issuance of the Notes and the application of the proceeds
therefrom as if they had occurred at the beginning of such four fiscal quarters.
"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 (i) commission, travel
and similar advances to officers and employees of such Person made in the
ordinary course of business and (ii) 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, Equity Interests or other securities, and any other items that are
or would be classified as investments on a balance sheet prepared in accordance
with GAAP.
"Issue Date" means the date upon which the Series A Notes are
first issued.
"Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions in the City of New York or at a place of payment are
authorized by law, regulation or executive order to remain closed.
"Lender" means a Person that is not an Affiliate of the Company
and is a lender under an Eligible Credit Facility or under an instrument
governing the Permitted Tunica Debt.
"Lien" 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 Uniform Commercial Code (or equivalent
statutes) of any jurisdiction).
"Liquidated Damages" has the meaning set out in the Registration
Rights Agreement.
"NCI" means Nevada Club Inc., a Nevada corporation.
"Net Income" means, with respect to any Person for any period,
the net income (loss) of such Person for such period, determined in accordance
with GAAP, excluding (i) any gain or loss, together with any related provision
for taxes
12
<PAGE> 20
on such gain or loss, realized in connection with any Asset Sales and
dispositions pursuant to sale and leaseback transactions, and (ii) any
extraordinary gain or loss, together with any related provision for taxes on
such gain or loss.
"Net Proceeds" means the aggregate proceeds received in the form
of cash or Cash Equivalents in respect of any Asset Sale (including payments in
respect of deferred payment obligations when received), net of (i) the
reasonable and customary direct out-of-pocket costs relating to such Asset Sale
(including, without limitation, legal, accounting and investment banking fees
and sales commissions), other than any such costs payable to an Affiliate of the
Company, (ii) taxes actually payable directly as a result of such Asset Sale
(after taking into account any available tax credits or deductions (to the
extent reasonably allocable thereto) and any tax sharing arrangements), (iii)
amounts required to be applied to the permanent repayment of Indebtedness in
connection with such Asset Sale, and (iv) appropriate amounts provided as a
reserve by the Company or any Restricted Subsidiary, in accordance with GAAP,
against any liabilities associated with such Asset Sale and retained by the
Company or such Restricted Subsidiary, as the case may be, after such Asset
Sale, including, without limitation, as applicable, pension and other
post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations arising from such
Asset Sale.
"Non-Recourse Indebtedness" means Indebtedness of a Restricted
Subsidiary as to which none of the Company or any of its Restricted
Subsidiaries, 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 Company
or any other Restricted Subsidiary to be accelerated.
"Notes" means, collectively, the Series A Notes and the Series B
Notes.
"Obligations" means any principal, interest, premiums, penalties,
fees, indemnifications, reimbursements, damages and other obligations and
liabilities of the Company or any of the Restricted Subsidiaries under this
Indenture, the Security Documents, the Notes or the Guarantees of the Notes.
13
<PAGE> 21
"Officers" means the Chairman of the Board, the President, the
Chief Financial Officer, Chief Operating Officer, the Treasurer, any Assistant
Treasurer, Controller, Secretary, any Assistant Secretary or Senior Vice
President of the Company.
"Officers' Certificate" means a certificate signed on behalf of
the Company by two Officers of the Company, one of whom must be the Chairman of
the Board, President, Chief Executive Officer, Chief Financial Officer,
Treasurer, Controller or a Senior or Executive Vice President of the Company.
"Oneida Settlement Agreement" means the settlement agreement
between FNYI and the Oneida Indian Nation of New York and the related note
payable to FNYI.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee. Such counsel may be an employee of or
counsel to the Company, any Subsidiary of the Company or the Trustee.
"Other Expenses" means cash disbursements to, or cash payments on
behalf of, unconsolidated Affiliates of the Company to the extent such amounts
do not reduce Consolidated EBITDA of the Company during the period made.
"Permitted Investments" means (i) Investments in the Company or
in any Guarantor (including without limitation, Guarantees of Indebtedness of
any such Person), (ii) Investments in Cash Equivalents, (iii) Investments in a
Person, if as a result of such Investment (a) such Person becomes a Guarantor,
or (b) such Person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its assets to, or is liquidated into,
the Company or a Guarantor, (iv) Hedging Obligations, (v) Investments as a
result of consideration received in connection with an Asset Sale made in
compliance with Section 4.10 of this Indenture, (vi) Investments existing on the
date of this Indenture, (vii) credit extensions to gaming customers in the
ordinary course of business consistent with industry practices and (viii)
Investments paid for solely with Capital Stock (other than Disqualified Stock)
of the Company.
"Permitted Liens" means:
(i) Liens arising by reason of any judgment, decree or order of
any court for an amount and for a period not resulting in an Event of Default
with
14
<PAGE> 22
respect thereto, so long as such Lien is being contested in good faith and is
adequately bonded, and any appropriate legal proceedings that may have been duly
initiated for the review of such judgment, decree or order shall not have been
finally adversely terminated or the period within which such proceedings may be
initiated shall not have expired;
(ii) security for the performance of bids, tenders, trade,
contracts (other than contracts for the payment of money) or leases, surety
bonds, performance bonds and other obligations of a like nature incurred in the
ordinary course of business, consistent with industry practice;
(iii) Liens (other than Liens arising under ERISA) for taxes,
assessments or other governmental charges not yet due or that are being
contested in good faith and by appropriate proceedings if adequate reserves with
respect thereto are maintained on the books of the Company in accordance with
gaap;
(iv) Liens of carriers, warehousemen, mechanics, landlords,
material men, repairmen or other like Liens arising by operation of law in the
ordinary course of business consistent with industry practices (other than Liens
arising under ERISA) and Liens on deposits made to obtain the release of such
Liens if (a) the underlying obligations are not overdue for a period of more
than 30 days or (b) such Liens are being contested in good faith and by
appropriate proceedings and adequate reserves with respect thereto are
maintained on the books of the Company in accordance with gaap;
(v) easements, rights of way, zoning and similar restrictions and
other similar encumbrances or title defects incurred in the ordinary course of
business, consistent with industry practices that, in the aggregate, are not
substantial in amount, and that do not in any case materially detract from the
value of the property subject thereto (as such property is used by the Company
or a Subsidiary) or interfere with the ordinary conduct of the business of the
Company or any of its Subsidiaries; 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;
(vi) pledges or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other types
of social security legislation;
15
<PAGE> 23
(vii) Liens securing Refinancing Indebtedness incurred in
compliance with the Indenture to refinance Indebtedness secured by Liens,
provided, (a) such Liens do not extend to any additional property or assets; (b)
if the Liens securing the Indebtedness being refinanced were subordinated to or
pari passu with the Liens securing the Notes, the Guaranty or any intercompany
loan, as applicable, such new Liens are subordinated to or pari passu with such
Liens to the same extent, and any related subordination or intercreditor
agreement is confirmed; and (c) such Liens are no more adverse to the interests
of holders of the Notes than the Liens replaced or extended thereby;
(viii) Liens that secure Acquired Debt, provided, that such Liens
do not extend to or cover any property or assets other than those of the Person
being acquired and were not put in place in anticipation of such acquisition;
(ix) Liens that secure Purchase Money Obligations or Capital
Lease Obligations permitted to be incurred under the Indenture, provided that
such Liens do not extend to or cover any property or assets other than those
being acquired;
(x) Liens under the Security Documents;
(xi) Liens in favor of the Company or any Guarantor, which are
assigned to the Trustee as Collateral for the Notes or a Guaranty, as
applicable;
(xii) Liens of the Company or its Restricted Subsidiaries in
existence on the Issue Date, and set forth in Schedule I hereto;
(xiii) with respect to any vessel included in the Collateral,
maritime liens for crew's wages, general average, salvage and damages arising
out of maritime torts permitted to exist pursuant to the related Ship Mortgage;
(xiv) Liens that secure Indebtedness incurred pursuant to Section
4.9(b)(i) hereof, which Liens shall not attach to any assets other than the
assets financed thereby;
(xv) Liens on assets of the Company and its Subsidiaries securing
Permitted Tunica Debt; provided, that (a) the Indebtedness under outstanding
Notes are equally and ratably secured by such assets and (b) the Lender
thereunder and the Trustee enter into the Intercreditor Agreement; and
16
<PAGE> 24
(xvi) Liens securing Indebtedness of the Company under an
Eligible Credit Facility; provided that the Lender thereunder and the Trustee
enter into the Intercreditor Agreement.
"Permitted Tunica Debt" means Indebtedness incurred solely to
finance construction of a hotel at Fitzgeralds Tunica to be owned by the Company
or any Guarantor in an aggregate principal amount not to exceed the lesser of
(i) $30 million and (ii) 80% of the total actual out-of-pocket cost 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, the Company
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) hereof.
"Person" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof, or any other entity.
"Preferred Stock" means the 800,000 shares of Cumulative
Redeemable Preferred Stock, par value $0.01 per share, of Fitzgeralds Gaming
Corporation, issued in December 1995.
"Public Equity Offering" means a bona fide underwritten public
offering of Qualified Capital Stock of the Company, pursuant to a registration
statement filed with and declared effective by the Commission in accordance with
the Securities Act.
"Purchase Money Obligations" means Indebtedness representing, or
incurred to finance, the cost (i) of acquiring any assets and (ii) 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 the Company), provided, that (a) the principal amount of
such Indebtedness does not exceed 80% of such cost, including construction
charges, (b) 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
(c) such Indebtedness is incurred, and any Liens with respect thereto are
granted, within 180 days of the acquisition of such property or asset.
17
<PAGE> 25
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Qualified Capital Stock" means, with respect to any Person,
Capital Stock of such Person other than Disqualified Capital Stock.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the Issue Date, by and among the Company, the Guarantors
and the Initial Purchaser as such agreement may be amended, modified or
supplemented from time to time.
"Related Business" means gaming operations and the development of
games and marketing activities relating thereto conducted or proposed in good
faith to be conducted by the Company or any Subsidiary and any and all
materially related businesses conducted or proposed in good faith to be
conducted by the Company or any Subsidiary in support of and ancillary to the
foregoing.
"Related Party" means (i) any spouse or immediate family member
of the Existing Equity Holder, (ii) any trust set up for the benefit of the
Existing Equity Holder or any of the Persons specified in clause (i), or (iii)
in the case of the death of the Existing Equity Holder, his estate.
"Responsible Officer" when used with respect to the Trustee,
means any officer within the corporate trust department of the Trustee located
at the Corporate Trust Office (or any successor group of the Trustee) or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the designated officers, and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"Restricted Investment" means any Investment other than a
Permitted Investment.
"Restricted Securities" means Notes that bear or are required to
bear the legends set forth in Exhibit A hereto.
"Restricted Subsidiary" means a Subsidiary other than an
Unrestricted Subsidiary.
18
<PAGE> 26
"Rule 144A" means Rule 144A under the Securities Act, as such
Rule may be amended from time to time, or under any similar rule or regulation
hereafter adopted by the Commission.
"Settlement Debt" means Indebtedness of FRI in an aggregate
amount not to exceed $2 million 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.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Agreement" means the Security and Pledge Agreement,
dated as of the date hereof, by and among the Company and certain of the
Subsidiaries, on the one hand, and the Collateral Agent on the other, as amended
or supplemented from time to time.
"Security Documents" means, collectively, the Security Agreement,
the Intercreditor Agreement, any deeds of trust or mortgages, including any
vessel mortgages, and any other document, instrument or agreement executed or
delivered by the Company or any of its Subsidiaries from time to time pursuant
to which the Company or any such Subsidiary shall grant a Lien on any of their
respective properties, assets or revenues to secure payment of the Obligations
hereunder and under the Notes or relating to intercreditor matters.
"Series A Notes" means the Company's 12 1/4% Series A Senior
Notes due 2004, as authenticated and issued under this Indenture.
"Series B Notes" means the Company's 12 1/4% Series B Senior
Notes due 2004, as authenticated and issued under this Indenture.
"Ship Mortgage" means a preferred ship mortgage by the Company or
any Restricted Subsidiary granting a Lien on any vessel and related personal
property for the benefit of the Collateral Agent or the Collateral Agent and the
Company or the Restricted Subsidiary, as applicable, as from time to time
amended. Such ship mortgage shall be substantially in the form of Exhibit E,
except that such form shall be modified in a manner acceptable to the Collateral
Agent as required under applicable law to grant a valid Lien on such vessel of
the priority required hereby.
19
<PAGE> 27
"Significant Casino" means any Casino that has a Casino Square
Footage of at least 9,000 square feet.
"Significant Restricted Subsidiary" means any Restricted
Subsidiary (i) that, at any time, has (A) assets with a book or fair market
value of $1,000,000 or more or (B) net income, for the last four full fiscal
quarters for which internal financial statements are available immediately
preceding such time, of $250,000 or more, or (ii) in which the Company and the
Restricted Subsidiaries have made Investments aggregating $250,000 or more.
Notwithstanding the foregoing, neither FAMI nor FNYI shall be a Significant
Restricted Subsidiary so long as it is not a Wholly Owned Subsidiary.
"subsidiary" means, with respect to any Person, (i) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Voting Stock thereof is at the time owned or
controlled, directly or indirectly, by such Person or one or more of the other
subsidiaries of that Person or a combination thereof and (ii) any partnership in
which such Person or any of its subsidiaries is a general partner.
"Subsidiary" means any subsidiary of the Company.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb), as amended, as in effect on the date hereof until such
time as this Indenture is qualified under the TIA, and thereafter as in effect
on the date on which this Indenture is qualified under the TIA, unless the
context requires reference thereto as in effect from time to time.
"transfer" means any direct or indirect sale, assignment,
transfer, lease, conveyance, or other disposition (including, without
limitation, by way of merger or consolidation).
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"Tunica Road" means that certain road connecting Fitzgeralds
Tunica to Highway 304 in Tunica, Mississippi.
20
<PAGE> 28
"Unrestricted Subsidiary" means NCI and any Subsidiary of the
Company that, at or prior to the time of determination, shall have been
designated by the Board of Directors of the Company (by written notice to the
Trustee as provided below) as an Unrestricted Subsidiary; provided that such
Subsidiary (i) is not a Subsidiary in existence on the Issue Date, (ii) does not
hold any Indebtedness or Capital Stock of, or any Lien on any assets of, the
Company or any Restricted Subsidiary, and (iii) 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,
Fitzgeralds Reno, Fitzgeralds Tunica or Fitzgeralds Black Hawk. The Company
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 Subsidiary and its subsidiaries immediately
prior to such designation; provided, that if such Subsidiary is subsequently
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.
If, at any time, any Unrestricted Subsidiary would fail to meet
the foregoing requirements as an Unrestricted Subsidiary, it shall thereafter
cease to be an Unrestricted Subsidiary for purposes of the Indenture and any
indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted
Subsidiary of the Company as of such date.
The Board of Directors of the Company may at any time (by written
notice to the Trustee as provided below) designate any Unrestricted Subsidiary
to be a Restricted Subsidiary; provided, that such designation shall be deemed
to be an incurrence of Indebtedness by a Restricted Subsidiary of the Company of
any outstanding Indebtedness of such Unrestricted Subsidiary and such
designation shall only be permitted if (i) such Indebtedness is permitted under
Section 4.9(a) hereof calculated on a pro forma basis as if such designation had
occurred at the beginning of the four-quarter reference period, and (ii) no
Default or Event of Default would be in existence following such designation.
Any designation by the Board of Directors permitted by this
definition shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complies with the
foregoing conditions and is permitted by Section 4.9(a) hereof.
21
<PAGE> 29
"U.S. Government Obligations" means direct obligations of the
United States of America, or any agency or instrumentality thereof for the
payment of which the full faith and credit of the United States of America is
pledged.
"Voting Stock" means, with respect to any Person, (i) one or more
classes of the Capital Stock of such Person having general voting power to elect
at least a majority of the board of directors, managers or trustees of such
Person (irrespective of whether or not at the time Capital Stock of any other
class or classes have or might have voting power by reason of the happening of
any contingency) and (ii) any Capital Stock of such Person convertible or
exchangeable without restriction at the option of the holder thereof into
Capital Stock of such Person described in clause (i) above.
"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.
"Wholly Owned Subsidiary" means a Restricted Subsidiary all the
Capital Stock of which (other than directors' qualifying shares) is owned by the
Company or one or more Wholly Owned Subsidiaries.
Section 1.2. Other Definitions.
<TABLE>
<CAPTION>
Defined in
Term Section
---- -------
<S> <C>
"Affiliate Transaction"............................ 4.11
"Change of Control Offer".......................... 4.14
"Change of Control Payment"........................ 4.14
"Change of Control Payment Date"................... 4.14
"Covenant Defeasance".............................. 8.3
"Definitive Notes"................................. 2.1
"Event of Default"................................. 6.1
"Excess Proceeds".................................. 4.10
</TABLE>
22
<PAGE> 30
<TABLE>
<S> <C>
"Excess Proceeds Offer"............................ 4.10
"Excess Proceeds Offer Period"..................... 4.10
"Excess Proceeds Payment Date"..................... 4.10
"Guaranty"......................................... 10.7
"Legal Defeasance"................................. 8.2
"Paying Agent"..................................... 2.3
"Purchase Amount".................................. 4.10
"Refinance"........................................ 4.9(b)
"Refinancing Indebtedness"......................... 4.9(b)
"Registrar"........................................ 2.3
"Regulatory Redemption"............................ 3.8
"Regulatory Redemption Offer Price"................ 3.8
"Restricted Payments".............................. 4.7
</TABLE>
Section 1.3. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Notes means the Company, the Guarantors and any
successor obligor upon the Notes.
All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute, or defined by Commission rule
under the TIA have the meanings so assigned to them.
23
<PAGE> 31
Section 1.4. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to
it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural include
the singular; and
(5) provisions apply to successive events and transactions.
ARTICLE 2
THE NOTES
Section 2.1. Form and Dating.
The Notes and the Trustee's certificate of authentication shall
be substantially in the form of Exhibit A attached hereto, the terms of which
are incorporated in and made a part of this Indenture. Each Note shall include
the Guaranty executed by each of the Guarantors in the form of Exhibit C
attached hereto, the terms of which are incorporated in and made a part of this
Indenture. The Notes may have notations, legends or endorsements required by
law, stock exchange rule, agreements to which the Company is subject or usage.
Each Note shall be dated the date of its authentication. The Notes shall be
issued in denominations of $1,000 and integral multiples thereof.
The Notes will be issued (i) in global form (the "Global Notes"),
substantially in the form of Exhibit A attached hereto (including the text
referred to in footnotes 1 and 2 thereto) and (ii) under certain circumstances,
in definitive form (the "Definitive Notes"), substantially in the form of
Exhibit A attached hereto (excluding the text referred to in footnotes 1 and 2
thereto). Each Global Note shall represent the aggregate amount of outstanding
Notes from time to time endorsed thereon; provided, that the aggregate amount of
outstanding Notes
24
<PAGE> 32
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Note to reflect the amount of any increase or decrease in the amount of
outstanding Notes represented thereby shall be made by the Trustee, in
accordance with instructions given by the Holder thereof, as required by Section
2.6 hereof.
Section 2.2. Execution and Authentication.
Two Officers shall sign the Notes for the Company by manual or
facsimile signature. If an Officer whose signature is on a Note no longer holds
that office at the time the Note is authenticated, the Note shall nevertheless
be valid.
A Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature of the Trustee shall be conclusive
evidence that the Note has been authenticated under this Indenture. The form of
Trustee's certificate of authentication to be borne by the Notes shall be
substantially as set forth in Exhibit A attached hereto.
The Trustee shall, upon a Company Order, authenticate for
original issue up to $255,000,000 aggregate principal amount of the Notes. The
aggregate principal amount of Notes outstanding at any time may not exceed
$255,000,000, except as provided in Section 2.7 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. Unless limited by the terms of such appointment,
an authenticating agent may authenticate Notes whenever the Trustee may do so.
Each reference in this Indenture to authenticating by the Trustee includes
authenticating by such agent. An authenticating agent has the same rights as an
Agent to deal with the Company or an Affiliate of the Company.
The Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name any Note is registered as the owner
of such Note for the purpose of receiving payment of principal of and (subject
to the provisions of this Indenture and the Notes with respect to record dates)
interest on such Note and for all other purposes whatsoever, whether or not such
Note is overdue, and neither the Company, the Trustee nor any agent of the
Company or the Trustee shall be affected by notice to the contrary.
25
<PAGE> 33
Section 2.3. Registrar, Paying Agent and Depository.
The Company shall maintain (i) an office or agency where Notes
may be presented for registration of transfer or for exchange ("Registrar") and
(ii) an office or agency where Notes may be presented for payment ("Paying
Agent"). The Company initially appoints the Trustee as Registrar and Paying
Agent. The Registrar shall keep a register of the Notes and of their transfer
and exchange. The Company may appoint one or more co-registrars and one or more
additional paying agents. The term "Registrar" includes any co-registrar and the
term "Paying Agent" includes any additional paying agent. The Company may change
any Paying Agent or Registrar without notice to any Holder. The Company shall
notify the Trustee of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar, except that for purposes
of Articles Three and Eight and Sections 4.1, 4.10 and 4.14, neither the Company
nor any of its Subsidiaries shall act as Paying Agent.
The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture, which shall incorporate the provisions
of the TIA. The agreement shall implement the provisions of this Indenture that
relate to such Agent.
The Company initially appoints DTC to act as Depository with
respect to the Global Notes. The Trustee shall act as custodian for the
Depository with respect to the Global Notes.
Section 2.4. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent shall hold in trust for the
benefit of the Holders or the Trustee all money held by the Paying Agent for the
payment of principal, premium, if any, or interest on the Notes and shall notify
the Trustee in writing of any default by the Company in making any such payment.
While any such default continues, the Trustee may require a Paying Agent to pay
all money held by it to the Trustee. The Company at any time may require a
Paying Agent to pay all money held by it to the Trustee. Upon payment over to
the Trustee, the Paying Agent (if other than the Company or a Subsidiary of the
Company) shall have no further liability for the money delivered to the Trustee.
If the Company or
26
<PAGE> 34
a Subsidiary of the Company acts as Paying Agent (subject to Section 2.3), it
shall segregate and hold in a separate trust fund for the benefit of the Holders
all money held by it as Paying Agent.
Section 2.5. Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders,
including the aggregate principal amount thereof, and the Company shall
otherwise comply with TIA Section 312(a).
Section 2.6. Transfer and Exchange.
(a) Transfer and Exchange of Definitive Notes. When Definitive
Notes are presented by a Holder to the Registrar with a request (1) to register
the transfer of the Definitive Notes or (2) to exchange such Definitive Notes
for an equal principal amount of Definitive Notes of other authorized
denominations, the Registrar shall register the transfer or make the exchange as
requested if its requirements for such transactions are met; provided, that the
Definitive Notes so presented (A) have been duly endorsed or accompanied by a
written instruction of transfer in form satisfactory to the Registrar duly
executed by such Holder or by his attorney, duly authorized in writing; and (B)
in the case of a Restricted Security, such request shall be accompanied by the
following additional documents:
(i) if such Restricted Security is being delivered to the
Registrar by a Holder for registration in the name of such Holder,
without transfer, a certification to that effect (in substantially the
form of Exhibit B attached hereto); or
(ii) if such Restricted Security is being transferred to a QIB in
accordance with Rule 144A or pursuant to an effective registration
statement under the Securities Act, a certification to that effect (in
substantially the form of Exhibit B attached hereto); or
27
<PAGE> 35
(iii) if such Restricted Security is being transferred in
reliance on another exemption from the registration requirements of the
Securities Act, a certification to that effect (in substantially the
form of Exhibit B attached hereto) and an opinion of counsel reasonably
acceptable to the Company and the Registrar to the effect that such
transfer is in compliance with the Securities Act.
(b) Transfer of a Definitive Note for a Beneficial Interest in a
Global Note. A Definitive Note may be exchanged for a beneficial interest in a
Global Note only upon receipt by the Trustee of a Definitive Note, duly endorsed
or accompanied by appropriate instruments of transfer, in form satisfactory to
the Trustee, together with:
(i) written instructions directing the Trustee to make an
endorsement on the appropriate Global Note to reflect an increase in the
aggregate principal amount of the Notes represented by such Global Note,
and
(ii) if such Definitive Note is a Restricted Security, a
certification (in substantially the form of Exhibit B attached hereto)
and, if applicable, a legal opinion, in each case similar to that
required pursuant to Section 2.6(a)(i)-(iii), as applicable;
in which case the Trustee shall cancel such Definitive Note and cause the
aggregate principal amount of Notes represented by the appropriate Global Note
to be increased accordingly. If no Global Note is then outstanding, the Company
shall issue and the Trustee shall authenticate a new Global Note in the
appropriate principal amount.
(c) Transfer and Exchange of Global Notes. The transfer and
exchange of Global Notes or beneficial interests therein shall be effected
through the Depository in accordance with this Indenture and the procedures of
the Depository therefor, which shall include restrictions on transfer
comparable to those set forth herein to the extent required by the Securities
Act.
(d) Transfer of a Beneficial Interest in a Global Note for a
Definitive Note. Upon receipt by the Trustee of written transfer instructions
(or such other form of instructions as is customary for the Depository), from
the Depository (or its nominee) on behalf of any Person having a beneficial
interest in a Global Note, the Trustee shall, in accordance with the standing
instructions and proce-
28
<PAGE> 36
dures existing between the Depository and the Trustee, cause the aggregate
principal amount of Global Notes to be reduced accordingly and, following such
reduction, the Company shall execute and the Trustee shall authenticate and
deliver to the transferee a Definitive Note in the appropriate principal amount;
provided, that in the case of a Restricted Security, such instructions shall be
accompanied by the following additional documents:
(i) if such beneficial interest is being transferred to the
Person designated by the Depository as being the beneficial owner, a
certification to that effect (in substantially the form of Exhibit B
attached hereto); or
(ii) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A or pursuant to an effective registration
statement under the Securities Act, a certification to that effect (in
substantially the form of Exhibit B attached hereto); or
(iii) if such beneficial interest is being transferred in
reliance on another exemption from the registration requirements of the
Securities Act, a certification to that effect (in substantially the
form of Exhibit B attached hereto) and an opinion of counsel reasonably
acceptable to the Company and to the Registrar to the effect that such
transfer is in compliance with the Securities Act.
Definitive Notes issued in exchange for a beneficial interest in
a Global Note shall be registered in such names and in such authorized
denominations as the Depository shall instruct the Trustee.
(e) Transfer and Exchange of Global Notes. Notwithstanding any
other provision of this Indenture, the Global Note may not be transferred as a
whole except by the Depository to a nominee of the Depository or by a nominee of
the Depository to the Depository or another nominee of the Depository or by the
Depository or any such nominee to a successor Depository or a nominee of such
successor Depository; provided, that if:
(i) the Depository notifies the Company that the Depository is
unwilling or unable to continue as Depository and a successor Depository
is not appointed by the Company within 90 days after delivery of such
notice; or
29
<PAGE> 37
(ii) the Company, at its sole discretion, notifies the Trustee in
writing that it elects to cause the issuance of Definitive Notes under
this Indenture,
then the Company shall execute and the Trustee shall authenticate and deliver,
Definitive Notes in an aggregate principal amount equal to the aggregate
principal amount of the Global Note in exchange for such Global Note.
(f) Cancellation and/or Adjustment of Global Notes. At such time
as all beneficial interests in the Global Note have either been exchanged for
Definitive Notes, redeemed, repurchased or cancelled, the Global Note shall be
returned to (or retained by) and cancelled by the Trustee. At any time prior to
such cancellation, if any beneficial interest in the Global Note is exchanged
for Definitive Notes, redeemed, repurchased or cancelled, the aggregate
principal amount of Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be made on such Global Note by the Trustee
to reflect such reduction.
(g) General Provisions Relating to Transfers and Exchanges. To
permit registrations of transfers and exchanges, the Company shall execute and
the Trustee shall authenticate Definitive Notes and Global Notes at the
Registrar's request. All Definitive Notes and Global Notes issued upon any
registration of transfer or exchange of Definitive Notes or Global Notes shall
be legal, valid and binding obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Definitive
Notes or Global Notes surrendered upon such registration of transfer or
exchange.
No service charge shall be made to a Holder for any registration
of transfer or exchange, but the Company may require payment of a sum sufficient
to cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or similar governmental charge
payable upon exchange (without transfer to another person) pursuant to Sections
2.10, 3.7, 4.10, 4.14 and 9.5 of this Indenture).
The Company shall not be required to (i) issue, register the
transfer of or exchange Notes during a period beginning at the opening of
business 15 days before the day of any selection of Notes for redemption under
Section 3.2 hereof and ending at the close of business on the day of selection;
or (ii) register the transfer of or exchange any Note so selected for redemption
in whole or in part,
30
<PAGE> 38
except the unredeemed portion of any Note being redeemed in part; or (iii)
register the transfer of or exchange a Note between a record date and the next
succeeding interest payment date.
Prior to due presentment for the registration of a transfer of
any Note, the Trustee, any Agent and the Company may deem and treat the Person
in whose name any Note is registered as the absolute owner of such Note for all
purposes, and neither the Trustee, any Agent nor the Company shall be affected
by notice to the contrary.
(h) Exchange of Series A Notes for Series B Notes. The Series A
Notes may be exchanged for Series B Notes pursuant to the terms of the Exchange
Offer. The Trustee and Registrar shall make the exchange as follows:
The Company shall present the Trustee with an Officers'
Certificate certifying the following:
(A) upon issuance of the Series B Notes, the transactions
contemplated by the Exchange Offer have been consummated;
and
(B) the principal amount of Series A Notes properly tendered
in the Exchange Offer that are represented by a Global
Note and the principal amount of Series A Notes properly
tendered in the Exchange Offer that are represented by
Definitive Notes; the name of each Holder of such
Definitive Notes; the principal amount properly tendered
in the Exchange Offer by each such Holder; and the name
and address to which Definitive Notes for Series B Notes
shall be registered and sent for each such Holder.
The Trustee, upon receipt of (i) such Officers' Certificate, (ii)
an Opinion of Counsel (x) to the effect that the Series B Notes have been
registered under Section 5 of the Securities Act and this Indenture has been
qualified under the TIA and (y) with respect to the matters set forth in Section
6(p) of the Registration Rights Agreement and (iii) a Company Order, shall
authenticate (A) a Global Note for Series B Notes in aggregate principal amount
equal to the aggregate principal amount of Series A Notes represented by a
Global Note indicated in such Officers' Certificate as having been properly
tendered and (B) Definitive Notes
31
<PAGE> 39
representing Series B Notes registered in the names of, and in the principal
amounts indicated in such Officers' Certificate.
The Trustee shall make available for delivery such Definitive
Notes for Series B Notes to the Holders thereof as indicated in such Officers'
Certificate.
Section 2.7. Replacement Notes.
If any mutilated Note is surrendered to the Trustee, or the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Note, the Company shall issue and the Trustee
shall authenticate a replacement Note if the Trustee's requirements for
replacements of Notes are met. If required by the Trustee or the Company, an
indemnity bond must be supplied by the Holder that is sufficient in the judgment
of the Trustee and the Company to protect the Company, the Trustee, any Agent or
any authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Company or the Trustee may charge for its expenses in replacing a
Note.
Every replacement Note is an obligation of the Company and shall
be entitled to all of the benefits of this Indenture equally and proportionately
with all other Notes duly issued hereunder.
Section 2.8. Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated
by the Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding.
If a Note is replaced pursuant to Section 2.7 hereof, the
replaced Note ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under
Section 4.1 hereof, it ceases to be outstanding and interest on it ceases to
accrue.
Subject to Section 2.9 hereof, a Note does not cease to be
outstanding because the Company or an Affiliate of the Company holds the Note.
32
<PAGE> 40
Section 2.9. Treasury Notes.
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company or any Affiliate of the Company shall be considered as though not
outstanding, except that for purposes of determining whether the Trustee shall
be protected in relying on any such direction, waiver or consent, only Notes
that a Trustee knows to be so owned shall be considered as not outstanding.
Section 2.10. Temporary Notes.
Pending the preparation of definitive Notes, the Company (and the
Guarantors) may execute, and upon Company Order the Trustee shall authenticate
and deliver, temporary Notes that are printed, lithographed, typewritten,
mimeographed or otherwise reproduced, in any authorized denomination,
substantially of the tenor of the definitive Notes in lieu of which they are
issued and with such appropriate insertions, omissions, substitutions and other
variations as the officers executing such Notes may determine, as conclusively
evidenced by their execution of such Notes.
If temporary Notes are issued, the Company (and the Guarantors)
shall cause definitive Notes to be prepared without unreasonable delay. The
definitive Notes shall be printed, lithographed or engraved, or provided by any
combination thereof, or in any other manner permitted by the rules and
regulations of any principal national securities exchange, if any, on which the
Notes are listed, all as determined by the Officers executing such definitive
Notes. After the preparation of definitive Notes, the temporary Notes shall be
exchangeable for definitive Notes upon surrender of the temporary Notes at the
office or agency maintained by the Company for such purpose pursuant to Section
4.2 hereof, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Notes, the Company (and the Guarantors) shall execute, and
the Trustee shall authenticate and make available for delivery, in exchange
therefor the same aggregate principal amount of definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as definitive Notes.
33
<PAGE> 41
Section 2.11. Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment and
not previously received by the Trustee. The Trustee and no one else shall cancel
all Notes surrendered for registration of transfer, exchange, payment,
replacement or cancellation and shall retain or destroy cancelled Notes in
accordance with its normal practices (subject to the record retention
requirement of the Exchange Act) unless the Company directs them to be returned
to it. The Company may not issue new Notes to replace Notes that have been
redeemed or paid or that have been delivered to the Trustee for cancellation.
All such Notes cancelled by the Trustee and returned to the Company pursuant to
a written order, signed by one Officer of the Company.
Section 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, which date shall be at the earliest
practicable date but in all events at least ten Business Days prior to the
payment date, in each case at the rate provided in the Notes and in Section 4.1
hereof. The Company shall, with the consent of the Trustee, fix or cause to be
fixed each such special record date and payment date. At least 30 days before
the special record date, the Company (or the Trustee, in the name of and at the
expense of the Company, upon 15 days written notice to the Trustee) shall mail
to the Holders a notice that states the special record date, the related payment
date and the amount of such interest to be paid.
Section 2.13. Legends.
(a) Except as permitted by subsections (b) or (c) hereof, each
Note shall bear legends relating to restrictions on transfer pursuant to the
securities laws in substantially the form set forth on Exhibit A attached
hereto.
(b) Upon any sale or transfer of a Restricted Security (including
any Restricted Security represented by a Global Note) pursuant to Rule 144 under
34
<PAGE> 42
the Securities Act or pursuant to an effective registration statement under the
Securities Act:
(i) in the case of any Restricted Security that is a Definitive
Note, the Registrar shall permit the Holder thereof to exchange such
Restricted Security for a Definitive Note that does not bear the legends
required by subsection (a) above; and
(ii) in the case of any Restricted Security represented by a
Global Note, such Restricted Security shall not be required to bear the
legends required by subsection (a) above, but shall continue to be
subject to the provisions of Section 2.6(c) hereof; provided, that with
respect to any request for an exchange of a Restricted Security that is
represented by a Global Note for a Definitive Note that does not bear
the legends required by subsection (a) above, which request is made in
reliance upon Rule 144, the Holder thereof shall certify in writing to
the Registrar that such request is being made pursuant to Rule 144.
(c) The Company (and the Guarantors) shall issue and the Trustee
shall authenticate Series B Notes in exchange for Series A Notes accepted for
exchange in the Exchange Offer. The Series B Notes shall not bear the legends
required by subsection (a) above unless the Holder of such Series A Notes is
either (A) a broker-dealer who purchased such Series A Notes directly from the
Company to resell pursuant to Rule 144A or any other available exemption under
the Securities Act, (B) a Person participating in the distribution of the Series
A Notes or (C) a Person who is an affiliate (as defined in Rule 144A) of the
Company.
ARTICLE 3
REDEMPTION
Section 3.1. Notices to Trustee.
If the Company elects to redeem Notes pursuant to Section 3.7
hereof, it shall furnish to the Trustee, at least 30 days but not more than 60
days before a redemption date, an Officers' Certificate setting forth (i) the
clause of Section 3.7 pursuant to which the redemption shall occur, (ii) the
redemption date, (iii) the principal amount of Notes to be redeemed and (iv) the
redemption price.
35
<PAGE> 43
Section 3.2. Selection of Notes to Be Redeemed.
If less than all the Notes are to be redeemed pursuant to Section
3.7 hereof, the Trustee shall select the Notes to be redeemed in compliance with
the requirements of the principal national securities exchange, if any, on which
the Notes are listed, or, if the Notes are not so listed, pro rata, by lot or by
such method as the Trustee deems to be fair and reasonable.
The Trustee shall promptly notify the Company in writing of the
Notes selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000.
Provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
Section 3.3. Notice of Redemption.
At least 30 days but not more than 60 days before a redemption
date, the Company shall mail a notice of redemption by first class mail to each
Holder whose Notes are to be redeemed at such Holder's registered address.
The notice shall identify the Notes to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) if any Note is being redeemed in part only, the
portion of the principal amount of such Note to be redeemed and that,
after the redemption date, upon cancellation of the original Note, a new
Note or Notes in principal amount equal to the unredeemed portion shall
be issued;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
36
<PAGE> 44
(6) that, unless the Company defaults in making such
redemption payment, interest on Notes or portions of Notes called for
redemption ceases to accrue on and after the redemption date;
(7) the paragraph of the Notes and/or the section of this
Indenture pursuant to which the Notes called for redemption are being
redeemed; and
(8) the CUSIP number of the Notes to be redeemed.
At the Company's request, the Trustee shall give the notice of
redemption in the name of the Company and at its expense; provided that the
Company shall deliver to the Trustee, at least 45 days (unless a shorter period
is acceptable to the Trustee) prior to the redemption date, an Officers'
Certificate requesting that the Trustee give such notice and setting forth the
information to be stated in such notice as provided in the preceding paragraph.
Section 3.4. Effect of Notice of Redemption.
Once notice of redemption has been mailed to the Holders in
accordance with Section 3.3 herein, Notes called for redemption become due and
payable on the redemption date at the redemption price. At any time prior to the
mailing of a notice of redemption to the Holders pursuant to Section 3.3, the
Company may withdraw, revoke or rescind any notice of redemption delivered to
the Trustee without any continuing obligation to redeem the Notes as
contemplated by such notice of redemption.
Section 3.5. Deposit of Redemption Price.
At or before 12:00 p.m. immediately prior to the redemption date,
the Company shall deposit with the Trustee (to the extent not already held by
the Trustee) or with the Paying Agent money in immediately available funds
sufficient to pay the redemption price of and accrued interest on all Notes to
be redeemed on that date. The Trustee or the Paying Agent shall return to the
Company any money deposited with the Trustee or the Paying Agent by the Company
in excess of the amounts necessary to pay the redemption price of, and accrued
interest on, all Notes to be redeemed.
37
<PAGE> 45
Interest on the Notes to be redeemed shall cease to accrue on the
applicable redemption date, whether or not such Notes are presented for payment,
if the Company makes or deposits the redemption payment in accordance with this
Section 3.5. If any Note called for redemption shall not be paid upon surrender
for redemption because of the failure of the Company to comply with the
preceding paragraph, interest shall be paid on the unpaid principal, from the
redemption date until such principal is paid, and to the extent lawful on any
interest not paid on such unpaid principal, in each case at the rate provided in
the Notes.
Section 3.6. Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Company
shall issue and the Trustee shall authenticate for the Holder at the expense of
the Company a new Note equal in principal amount to the unredeemed portion of
the Note surrendered.
Section 3.7. Optional Redemption.
(a) Except as set forth in Sections 3.7(b) and 3.8 hereof, the
Notes are not redeemable at the Company's option prior to December 15, 2001.
Thereafter, the Notes will be subject to redemption at the option of the
Company, in whole or in part, at the redemption prices (expressed as percentages
of principal amount) set forth below, plus accrued and unpaid interest thereon,
if any, to the applicable redemption date, if redeemed during the 12-month
period beginning on December 15 of the years indicated below:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C> <C>
2001.........................106.250%
2002.........................104.166%
2003 ........................102.083%
2004 ........................100.000%
</TABLE>
(b) At any time or from time to time prior to December 15, 2001,
the Company may, at its option, redeem up to 35% of the original principal
amount of the Notes, at a redemption price of 112.5% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the applicable redemption
date, with the net cash proceeds of one or more Public Equity Offerings;
provided, that (a) such redemption shall occur within 90 days of the date of
closing of such public
38
<PAGE> 46
offering and (b) at least $133,250,000 aggregate principal amount of Notes
remains outstanding immediately after giving effect to each such redemption.
Section 3.8. Redemption in Accordance with Gaming Laws.
Each Holder and beneficial owner of the Notes, by accepting the
Notes, shall be deemed to have agreed (to the extent permitted by applicable
law) that if the Gaming Authority of any jurisdiction in which the Company or
any of its Subsidiaries conducts or proposes to conduct gaming requires that a
Person who is a Holder or a beneficial owner of any of the Notes must be
licensed or found suitable under applicable gaming laws, such Holder or
beneficial owner shall apply for a license or a finding of suitability within
the required time period. If such Person fails to apply or become licensed or is
found unsuitable, the Company shall have the right, at its option, (i) to
require such Person to dispose of its Notes or beneficial interest therein
within 30 days of receipt of notice of the Company's election or such earlier
date as may be ordered by such Gaming Authority, or (ii) to redeem such Notes (a
"Regulatory Redemption") at a price of the lesser of (a) such Person's cost and
(b) 100% of the principal amount thereof, plus accrued and unpaid interest to
the earlier of the date of redemption and the date of the finding of
unsuitability (the "Regulatory Redemption Offer Price"), which may be less than
30 days following the notice of redemption if so ordered by the Gaming
Authority. The Holder or beneficial owner applying for a license or finding of
suitability must pay all costs of the licensure or investigation for such
finding.
ARTICLE 4
COVENANTS
Section 4.1. Payment of Notes.
The Company shall pay the principal and premium, if any, of, and
interest on, the Notes on the dates and in the manner provided in the Notes.
Principal, premium, if any, and interest shall be considered paid on the date
due if the Paying Agent, other than the Company or a Subsidiary of the Company,
holds on or before that date money deposited by the Company in immediately
available funds and designated for and sufficient to pay all principal, premium,
if any, and interest then due. Such Paying Agent shall return to the Company, no
later than three Business Days following the date of payment, any money that
exceeds such amount of principal, premium, if any, and interest then due and
payable on the
39
<PAGE> 47
Notes. The Company shall pay any and all amounts, including, without limitation,
Liquidated Damages, if any, on the dates and in the manner required under the
Registration Rights Agreement.
The Company shall pay interest (including post-petition interest)
on overdue principal at the rate equal to 1% per annum in excess of the then
applicable interest rate on the Notes to the extent lawful; it shall pay
interest (including post-petition interest) on overdue installments of interest
(without regard to any applicable grace period) at the same rate to the extent
lawful.
Section 4.2. Maintenance of Office or Agency.
The Company shall maintain an office or agency (which may be an
office of the Trustee, Registrar or co-registrar) in the Borough of Manhattan,
the City of New York, where Notes may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company in
respect of the Notes and this Indenture may be served. The Company shall give
prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more
other offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided, that no such designation or rescission shall in any manner relieve
the Company of its obligation to maintain an office or agency for such purposes.
The Company shall give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.3.
Section 4.3. Reports.
(a) The Company shall file with the Trustee, within 15 days after
the time of filing with the Commission, copies of the reports, information and
40
<PAGE> 48
other documents (or copies of such portions of any of the foregoing as the
Commission may by rules and regulations prescribe) that the Company is required
to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act.
If the Company is not subject to the requirements of Section 13 or 15(d) of the
Exchange Act, the Company shall file with the Trustee all such reports,
information and other documents as it would be required to file if it were
subject to the requirements of Section 13 or 15(d) of the Exchange Act, within
such 15-day period. From and after the time the Company files a registration
statement with the Commission with respect to the Notes, the Company shall file
such information with the Commission; provided, that the Company shall not be in
default of the provisions of this Section 4.3 for any failure to file reports
with the Commission solely by refusal by the Commission to accept the same for
filing. The Company shall deliver (or cause the Trustee to deliver) copies of
all reports, information and documents required to be filed with the Trustee
pursuant to this Section 4.3 to the Holders at their addresses appearing in the
register of Notes maintained by the Registrar. The Company shall also comply
with the provisions of TIA Section 314(a).
(b) If the Company is required to furnish annual, quarterly or
current reports to its stockholders pursuant to the Exchange Act, the Company
shall cause any annual, quarterly, current or other financial report furnished
by it generally to its stockholders to be filed with the Trustee and mailed to
the Holders by the Company at their addresses appearing in the register of Notes
maintained by the Registrar. If the Company is not required to furnish annual,
quarterly or current reports to its stockholders pursuant to the Exchange Act,
the Company shall cause the financial statements of the Company and its
consolidated Subsidiaries, including any notes thereto (and, with respect to
annual reports, an auditors' report by an accounting firm of established
national reputation), and a "Management's Discussion and Analysis of Financial
Condition and Results of Operations," comparable to that which would have been
required to appear in annual or quarterly reports filed under Section 13 or
15(d) of the Exchange Act to be so filed with the Trustee and mailed to the
Holders by the Company promptly, but in any event, within 90 days after the end
of each of the fiscal years of the Company and within 45 days after the end of
each of the first three quarters of each such fiscal year.
(c) So long as is required for an offer or sale of the Notes to
qualify for an exemption under Rule 144A, the Company (and the Guarantors)
shall, upon request, provide the information required by clause (d)(4)
thereunder to
41
<PAGE> 49
each Holder and to each beneficial owner and prospective purchaser of Notes
identified by any Holder of Restricted Securities.
Section 4.4. Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 120 days
after the end of each fiscal year, an Officers' Certificate (provided, that one
of the signatories to such Officers' Certificate shall be the Company's
principal executive officer, principal financial officer or principal accounting
officer) stating that a review of the activities of the Company and its
Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determine whether each has
kept, observed, performed and fulfilled its obligations under this Indenture,
and further stating, as to each such Officer signing such certificate, that each
of the Company and its Subsidiaries has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions hereof
or thereof (or, if a Default or Event of Default shall have occurred, describing
all such Defaults or Events of Default of which he may have knowledge and what
action each is taking or proposes to take with respect thereto).
(b) The year-end financial statements delivered pursuant to
Section 4.3 above shall be accompanied by a written statement of the independent
public accountants of the Company (which shall be a firm of established national
reputation reasonably satisfactory to the Trustee) that in making the
examination necessary for certification of such financial statements nothing has
come to their attention which would lead them to believe that either the Company
or any of its Subsidiaries has violated any provisions of this Indenture or, if
any such violation has occurred, specifying the nature and period of existence
thereof, it being understood that such accountants shall not be liable directly
or indirectly to any Person for any failure to obtain knowledge of any such
violation.
(c) So long as any of the Notes are outstanding, the Company
shall deliver to the Trustee forthwith upon any Officer becoming aware of (i)
any Default or Event of Default or (ii) any event of default under any mortgage,
indenture or instrument referred to in Section 6.1(5) hereof, an Officers'
Certificate specifying such Default, Event of Default or other event of default
and what action the Company is taking or proposes to take with respect thereto.
42
<PAGE> 50
Section 4.5. Taxes.
The Company shall, and shall cause its Subsidiaries to, file all
tax returns required to be filed and to pay prior to delinquency all material
taxes, assessments and governmental levies except as contested in good faith and
by appropriate proceedings and for which reserves have been established in
accordance with GAAP.
Section 4.6. Stay, Extension and Usury Laws.
The Company (and each Guarantor) covenants (to the extent that it
may lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Company and
each Guarantor (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law and covenants that it shall not,
by resort to any such law, hinder, delay or impede the execution of any power
herein granted to the Trustee but shall suffer and permit the execution of every
such power as though no such law has been enacted.
Section 4.7. Limitation on Restricted Payments.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend or make any distribution
on account of any Equity Interests of the Company or any of its
Subsidiaries (other than (x) dividends or distributions payable in
Equity Interests (other than Disqualified Stock) of the Company or (y)
dividends or distributions payable to the Company or any Restricted
Subsidiary);
(ii) purchase, redeem or otherwise acquire or retire for
value any Equity Interest of the Company, any Subsidiary or any other
Affiliate of the Company (other than any such Equity Interest owned by
the Company or any Restricted Subsidiary and other than redemption of
the Preferred Stock required as a result of an order of any Gaming
Authority);
43
<PAGE> 51
(iii) make any principal payment on, or purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness of the
Company or any Guarantor that is pari passu with (other than any pari
passu secured Indebtedness) or subordinated in right of payment to the
Notes or such Guarantor's Guaranty, as the case may be, prior to any
scheduled principal payment, sinking fund payment or other payment at
the stated maturity thereof; or
(iv) make any Restricted Investment;
(all such payments and other actions set forth in clauses (i) through
(iv) above being collectively referred to as "Restricted Payments"),
unless, at the time of such Restricted Payment:
(1) no Default or Event of Default has occurred and is
continuing or would occur as a consequence thereof,
(2) immediately after giving effect to such Restricted
Payment on a pro forma basis, the Company could incur at least $1.00 of
additional Indebtedness under Section 4.9(a) hereof, and
(3) such Restricted Payment (the value of any such
payment, if other than cash, being determined in good faith by the Board
of Directors and evidenced by a resolution set forth in an Officers'
Certificate delivered to the Trustee), together with the aggregate of
all other Restricted Payments made after the date of this Indenture
(including Restricted Payments permitted by clauses (i), (ii) and (vii)
of Section 4.7(b) and excluding Restricted Payments permitted by the
other clauses therein), is less than the sum of (x) 50% of the
Consolidated Net Income of the Company for the period (taken as one
accounting period) from the beginning of the first quarter commencing
immediately after the date of this Indenture to the end of the Company's
most recently ended fiscal quarter for which internal financial
statements are available at the time of such Restricted Payment (or, if
such Consolidated Net Income for such period is a deficit, 100% of such
deficit), plus (y) 100% of the aggregate net cash proceeds (or of the
net cash proceeds received upon the conversion of non-cash proceeds into
cash) received by the Company from the issuance or sale, other than to a
Subsidiary, of Equity Interests of the Company (other than Disqualified
Stock) after the date of this Indenture and on or prior to the time of
such
44
<PAGE> 52
Restricted Payment, plus (z) 100% of the aggregate net cash proceeds (or
of the net cash proceeds received upon the conversion of non-cash
proceeds into cash) received by the Company from the issuance or sale,
other than to a Subsidiary, of any convertible or exchangeable debt
security of the Company that has been converted or exchanged into Equity
Interests of the Company (other than Disqualified Stock) pursuant to the
terms thereof after the date of this Indenture and on or prior to the
time of such Restricted Payment (including any additional net cash
proceeds received by the Company upon such conversion or exchange).
(b) The provisions of subsection (a) above shall not prohibit:
(i) the payment of any dividend within 60 days after the
date of declaration thereof, if at said date of declaration such payment
would not have been prohibited by the provisions of this Indenture;
(ii) the redemption, purchase, retirement or other
acquisition of any Equity Interests of the Company or Indebtedness of
the Company or any Restricted Subsidiary in exchange for, or out of the
proceeds of, the substantially concurrent sale (other than to a
Subsidiary) of, other Equity Interests of the Company (other than
Disqualified Stock);
(iii) the redemption, repurchase or payoff of any
Indebtedness of the Company or a Restricted Subsidiary with proceeds of
any Refinancing Indebtedness permitted to be incurred pursuant to the
provisions of Section 4.9(b)(ix) hereof;
(iv) the repurchase or redemption of the Preferred Stock
outstanding on the Issue Date; provided, that if such redemption or
repurchase is in connection with a Change of Control, the Company has
first complied with its obligations under the provisions of Section 4.14
hereof;
(v) the redemption, purchase or other acquisition of the
Equity Interests of FAMI or FNYI outstanding on the Issue Date and not
owned, directly or indirectly, by the Company;
(vi) Restricted Payments to acquire options or other
rights with respect to the management of Casinos by the Company or any
of its Subsidiaries; provided, that the aggregate amount of such
Restricted
45
<PAGE> 53
Payments 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;
(vii) pro rata cash dividends paid by either FAMI or FNYI,
as the case may be, solely out of its Net Income for the quarter
immediately preceding the quarter in which such dividend is declared, to
its minority stockholders contemporaneously with a cash dividend so paid
to the Company or a Restricted Subsidiary;
(viii) the prepayment or other retirement of the
Settlement Debt;
(ix) Restricted Investments in an aggregate amount not to
exceed $10 million less the sum of all Other Expense of the Company 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 the Company's most recently ended fiscal quarter for which
internal financial statements are available at the time of such
Restricted Investment; and
(x) other Restricted Payments in an aggregate amount not
to exceed $5 million;
provided, that with respect to clauses (iv), (v), (vi), (viii), (ix) and
(x) above, no Default or Event of Default shall have occurred and be
continu ing at the time, or shall occur as a consequence thereof.
(c) Not later than the date of making each Restricted Payment
(other than Restricted Payments contemplated by Section 4.7(b)), the Company
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted, and setting forth the basis upon which the
calculations required by this Section 4.7 were computed, which calculations may
be based upon the Company's latest available financial statements.
Section 4.8. Limitation on Restrictions on Subsidiary Dividends.
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist or
46
<PAGE> 54
become effective any encumbrance or restriction on the ability of any Restricted
Subsidiary
(a) to (1) pay dividends or make any other distributions to the
Company or any of its Restricted Subsidiaries (A) on such Restricted
Subsidiary's Capital Stock or (B) with respect to any other interest or
participation in, or measured by, such Restricted Subsidiary's profits or (2)
pay any indebtedness owed to the Company or any of its Restricted Subsidiaries,
or (b) to make loans or advances to the Company or any of its Restricted
Subsidiaries, or (c) to transfer any of its assets to the Company or any of its
Restricted Subsidiaries, except for such encumbrances or restrictions:
(i) existing under or by reason of this Indenture, the
Intercreditor Agreement, the Security Documents and the Notes,
(ii) existing under or by reason of applicable law
(including restrictions imposed by applicable Gaming Authorities),
(iii) contained in Acquired Debt; provided, that such
encumbrances and restrictions are not applicable to any Person or the
properties or assets of any Person, other than the Person or the
property or assets of the Person so acquired,
(iv) existing under or by reason of customary
non-assignment and net worth provisions of any contract or lease entered
into in the ordinary course of business,
(v) existing under or by reason of customary restrictions
on the transfer of assets subject to a Permitted Lien imposed by the
holder of such Lien,
(vi) existing under or by reason of Liens imposed by or in
connection with the incurrence of Indebtedness pursuant to Section
4.9(b)(i) hereof; provided, that such Lien is applicable only to the
assets acquired or leased; and
(vii) imposed pursuant to permitted Refinancing
Indebtedness, provided, that such restrictions contained in any
agreement governing
47
<PAGE> 55
such Refinancing Indebtedness are no more restrictive than those
contained in any agreements governing the Indebtedness being Refinanced.
Section 4.9. Limitation on Incurrence of Indebtedness.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, (1) create, incur, issue,
assume, guaranty or otherwise become directly or indirectly liable, with respect
to, contingently or otherwise (collectively, "incur"), any Indebtedness or (2)
issue any Disqualified Stock; provided, that the Company may incur Indebtedness
or issue shares of Disqualified Stock and any Restricted Subsidiary may incur
Acquired Debt, in each case if (x) 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, such incurrence or issuance, and (y) the Interest Coverage
Ratio for the Company's most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding the date on
which such additional Indebtedness (or Acquired Debt) is incurred or such
Disqualified Stock is issued would have been at least equal to the ratio set
forth below opposite the period in which such incurrence or issuance occurs,
determined on a pro forma basis (including a pro forma application of the net
proceeds therefrom), as if the additional Indebtedness (including, without
limitation, Acquired Debt) had been incurred, or the Disqualified Stock had been
issued, as the case may be, at the beginning of such four-quarter period:
<TABLE>
<CAPTION>
PERIOD ENDING RATIO
------------- -----
<S> <C> <C>
December 15, 1999............................... 2.00:1
Thereafter...................................... 2.25:1;
</TABLE>
provided, that in the case of Indebtedness (other than Purchase Money
Obligations or Acquired Debt), the Weighted Average Life to Maturity and final
stated maturity of such Indebtedness exceeds the Weighted Average Life to
Maturity and final stated maturity of the Notes.
(b) The limitations of Section 4.9(a) shall not prohibit the
incurrence of:
(i) Non-Recourse Indebtedness of a Restricted Subsidiary
incurred to finance the acquisition or lease after the Issue Date of (i)
48
<PAGE> 56
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; provided, that (x) the
aggregate amount of such Indebtedness outstanding with respect to any
such Signifi cant Casino (including such parking structure with respect
to Fitzgeralds Reno) shall not exceed $7.0 million at any time and (y)
the aggregate amount of such Indebtedness outstanding with respect to
such parking structure shall not exceed $3.0 million at any time;
(ii) performance bonds, appeal bonds, surety bonds,
insurance obligations or bonds and other similar bonds or obligations
(including obligations under letters of credit) incurred in the ordinary
course of business;
(iii) Hedging Obligations incurred to fix the interest
rate on any variable rate Indebtedness otherwise permitted by this
Indenture;
(iv) Indebtedness owed by the Company to any Guarantor or
by any Guarantor to the Company or any other Guarantor;
(v) Indebtedness outstanding on the date of this
Indenture, including $205 million aggregate principal amount of the
Notes and the Guaranty
(vi) Settlement Debt;
(vii) additional Indebtedness of the Company under an
Eligible Credit Facility in an aggregate principal amount not to exceed
$15 million outstanding at any time (up to $10 million of which may be
used for working capital purposes and up to $5 million of which may be
used solely to finance capital expenditures at Fitzgeralds Black Hawk),
and the guarantee of such Indebtedness by the Guarantors;
(viii) 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 Notes; and
49
<PAGE> 57
(ix) Indebtedness issued in exchange for, or the proceeds
of which are contemporaneously used to extend, refinance, renew,
replace, or refund (collectively, "Refinance") Indebtedness referred to
in clause (v) above or this clause (ix) or Indebtedness incurred
pursuant to the Interest Coverage Ratio test set forth in subsection (a)
above ("Refinancing Indebtedness"); provided, that (A) the principal
amount of such Refinancing Indebtedness does not exceed the principal
amount of Indebtedness so Refinanced (plus the premiums required to be
paid, and the out-of-pocket expenses (other than those payable to an
Affiliate of the Company) reasonably incurred, in connection
therewith), (B) the Refinancing Indebtedness has a final scheduled
maturity that is the same as or exceeds the final stated maturity, and a
Weighted Average Life to Maturity that is equal to or greater than the
Weighted Average Life to Maturity, of the Indebtedness being Refinanced,
and (C) the Refinancing Indebtedness ranks, in right of payment, no more
favorable to the Notes than the Indebtedness being Refinanced.
Section 4.10. Limitation on Asset Sales.
The Company shall not, and shall not permit any Restricted
Subsidiary to, make any Asset Sale unless (i) the Company or such Restricted
Subsidiary receives consideration at the time of such Asset Sale at least equal
to the fair market value of the assets subject to such Asset Sale, (ii) at least
80% of the consideration for such Asset Sale is in the form of cash, Cash
Equivalents or liabilities of the Company or any Restricted Subsidiary (other
than liabilities that are by their terms subordinated to the Notes or any
Guaranty) that are assumed by the transferee of such assets (provided, that
following such Asset Sale there is no further recourse to the Company or its
Restricted Subsidiaries with respect to such liabilities), or (iii) within 180
days of such Asset Sale, the Net Proceeds thereof are (a) invested in assets
related to the business of the Company or its Restricted Subsidiaries, (b)
applied to repay Indebtedness under Purchase Money Obligations incurred in
connection with the asset so sold or (c) to the extent not used as provided in
clauses (a) or (b), applied to make an offer to purchase Notes as described
below (an "Excess Proceeds Offer"); provided, that if the amount of Net Proceeds
from any Asset Sale not invested pursuant to clause (a) above is less than $5.0
million, the Company shall not be required to repay Indebtedness pursuant to
clause (b) or make an offer pursuant to clause (c) above. Pending the final
application of any such Net Proceeds, the Company or any Restricted Subsidiary
may temporarily invest such Net Proceeds in Cash Equivalents.
50
<PAGE> 58
The amount of Net Proceeds not invested or applied as set forth
in the preceding clauses (a) and (b) constitutes "Excess Proceeds." If the
Company elects, or becomes obligated to make an Excess Proceeds Offer, the
Company shall offer to purchase Notes having an aggregate principal amount equal
to the Excess Proceeds (the "Purchase Amount"), at a purchase price equal to
100% of the aggregate principal amount thereof, plus accrued and unpaid
interest, if any, to the purchase date. The Company must commence such Excess
Proceeds Offer not later than 30 days after the expiration of the 12-month
period following the Asset Sale that produced such Excess Proceeds. If the
aggregate purchase price for the Notes tendered pursuant to the Excess Proceeds
Offer is less than the Excess Proceeds, the Company and its Restricted
Subsidiaries may use the portion of the Excess Proceeds remaining after payment
of such purchase price for general corporate purposes.
Each Excess Proceeds Offer shall remain open for a period of 20
Business Days and no longer, unless a longer period is required by law (the
"Excess Proceeds Offer Period"). Promptly after the termination of the Excess
Proceeds Offer Period (the "Excess Proceeds Payment Date"), the Company shall
purchase and mail or deliver payment for the Purchase Amount for the Notes or
portions thereof tendered, pro rata or by such other method as may be required
by law, or, if less than the Purchase Amount has been tendered, all Notes
tendered pursuant to the Excess Proceeds Offer. The principal amount of Notes to
be purchased pursuant to an Excess Proceeds Offer may be reduced by the
principal amount of Notes acquired by the Company through purchase or redemption
(other than pursuant to a Change of Control Offer) subsequent to the date of the
Asset Sale and surrendered to the Trustee for cancellation.
Each Excess Proceeds Offer shall be conducted in compliance with
all applicable laws, including without limitation, Regulation 14E of the
Exchange Act and the rules thereunder and all other applicable Federal and state
securities laws. To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this Section 4.10, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.10 by virtue
thereof. The Company shall not, and shall not permit any of its Subsidiaries to,
create or suffer to exist or become effective any restriction that would impair
the ability of the Company to make an Excess Proceeds Offer upon an Asset Sale
or, if such Excess Proceeds Offer is made, to pay for the Notes tendered for
purchase.
51
<PAGE> 59
The Company shall, no later than 30 days following the expiration
of the 12-month period following the Asset Sale that produced Excess Proceeds,
commence the Excess Proceeds Offer by mailing to the Trustee and each Holder, at
such Holder's last registered address, a notice, which shall govern the terms of
the Excess Proceeds Offer, and shall state:
(1) that the Excess Proceeds Offer is being made pursuant
to this Section 4.10, the principal amount of Notes which shall be
accepted for payment and that all Notes validly tendered shall be
accepted for payment on a pro rata basis;
(2) the purchase price and the date of purchase;
(3) that any Notes not tendered or accepted for payment
pursuant to the Excess Proceeds Offer shall continue to accrue interest;
(4) that, unless the Company defaults in the payment of
the purchase price with respect to any Notes tendered, Notes accepted
for payment pursuant to the Excess Proceeds Offer shall cease to accrue
interest after the Excess Proceeds Payment Date;
(5) that Holders electing to have Notes purchased pursuant
to an Excess Proceeds Offer shall be required to surrender their Notes,
with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Note completed, to the Company prior to the close of
business on the third Business Day immediately preceding the Excess
Proceeds Payment Date;
(6) that Holders shall be entitled to withdraw their
election if the Company receives, not later than the close of business
on the second Business Day preceding the Excess Proceeds Payment Date, a
telegram, telex, facsimile transmission or letter setting forth the name
of the Holder, the principal amount of Notes the Holder delivered for
purchase and a statement that such Holder is withdrawing his election to
have such Notes purchased;
(7) that Holders whose Notes are purchased only in part
shall be issued Notes representing the unpurchased portion of the Notes
52
<PAGE> 60
surrendered; provided that each Note purchased and each new Note issued
shall be in principal amount of $1,000 or whole multiples thereof; and
(8) the instructions that Holders must follow in order to
tender their Notes.
On or before the Excess Proceeds Payment Date, the Company shall
(i) accept for payment the Notes or portions thereof (or an allocable amount
thereof) tendered pursuant to the Excess Proceeds Offer, (ii) deposit with the
Paying Agent money sufficient to pay the purchase price of all Notes or portions
thereof so accepted and (iii) deliver to the Trustee the Notes so accepted,
together with an Officers' Certificate stating that the Notes or portions
thereof (or an allocable amount thereof) tendered to the Company are accepted
for payment. The Paying Agent shall promptly mail to each Holder of Notes so
accepted payment in an amount equal to the purchase price of such Notes, and the
Trustee shall promptly authenticate and mail to such Holders new Notes equal in
principal amount to any unpurchased portion of the Notes surrendered.
The Company shall make a public announcement of the results of
the Excess Proceeds Offer as soon as practicable after the Excess Proceeds
Payment Date. For the purposes of this Section 4.10, the Trustee shall act as
the Paying Agent.
Section 4.11. Limitation on Transactions With Affiliates.
The Company shall not, and shall not permit any of the Restricted
Subsidiaries to, directly or indirectly, transfer any of its properties or
assets to, or purchase any property or assets from, or enter into any contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each of the foregoing, an "Affiliate Transaction"), except
for (i) Affiliate Transactions that, together with all Affiliate Transactions
entered into after the date hereof that are part of a common plan, have an
aggregate value of not more than $1.0 million; provided, that such transactions
are conducted in good faith and on terms that are no less favorable to the
Company or the relevant Restricted Subsidiary than those that would have been
obtained in a comparable transaction at such time on an arm's-length basis from
a Person that is not an Affiliate of the Company or such Restricted Subsidiary,
(ii) Affiliate Transactions that, together with all Affiliate Transactions that
are part of a common plan, have an aggregate value of not more than $7.0
million; provided, that a majority of the disinterested members
53
<PAGE> 61
of the Board of Directors of the Company determine that such transactions are
conducted in good faith and on terms that are no less favorable to the Company
or the relevant Restricted Subsidiary than those that would have been obtained
in a comparable transaction at such time on an arm's-length basis from a Person
that is not an Affiliate of the Company or such Restricted Subsidiary, and (iii)
Affiliate Transactions for which the Company delivers to the Trustee an opinion
as to the fairness to the Company or such Restricted Subsidiary from a financial
point of view, issued by an investment banking firm of national standing with
recognized experience in the gaming industry.
Notwithstanding the foregoing, the following will be deemed not
to be Affiliate Transactions: (a) employment agreements or arrangements entered
into by the Company or any Restricted Subsidiary in the ordinary course of
business with the approval of the disinterested members of the Company's Board
of Directors or, if none, unanimously by such Board of Directors, (b)
transactions between or among the Company and/or any or all of the Guarantors,
(c) Restricted Payments permitted by Section 4.7 hereof, and (d) reasonable and
customary fees and compensation paid to, and indemnity provided on behalf of,
directors of the Company.
Section 4.12. Limitation on Liens.
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create, incur, assume or suffer to exist
any Lien on any asset (including, without limitation, all real, tangible or
intangible property) of the Company or any Restricted Subsidiary, whether now
owned or hereafter acquired, or on any income or profits therefrom, or assign or
convey any right to receive income therefrom, except (a) Permitted Liens and (b)
prior to the earlier of the consummation of the Exchange Offer or the
effectiveness of the Initial Shelf Registration (as defined in the Registration
Rights Agreement), Liens on the Capital Stock of FSI, FLVI and FRI.
Section 4.13. Corporate Existence.
Subject to Article 5 of this Indenture, the Company shall do or
cause to be done all things necessary to preserve and keep in full force and
effect (i) its corporate existence, and the corporate, partnership or other
existence of each of its respective Subsidiaries, in accordance with their
respective organizational documents (as the same may be amended from time to
time) and (ii) its (and its
54
<PAGE> 62
Subsidiaries') rights (charter and statutory), licenses (including gaming and
related licenses) and franchises; provided, that the Company shall not be
required to preserve any such right, license or franchise, or the corporate,
partnership or other existence of any Subsidiary, if the Board of Directors on
behalf of the Company shall determine in good faith that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Subsidiaries taken as a whole and that the loss thereof is not adverse in
any material respect to the Holders.
Section 4.14. Repurchase Upon a Change of Control.
Upon the occurrence of a Change of Control, the Company shall
notify the Trustee in writing thereof and shall make an offer to purchase all of
the Notes then outstanding as described below (the "Change of Control Offer") at
a purchase price equal to 101% of the aggregate principal amount thereof, plus
accrued and unpaid interest, if any, to the date of repurchase (the "Change of
Control Payment").
The Change of Control Offer shall be made in compliance with all
applicable laws, including without limitation, Regulation 14E of the Exchange
Act and the rules thereunder and all other applicable Federal and state
securities laws. To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this Section 4.14, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.14 by virtue
thereof.
Within 20 days following any Change of Control, the Company shall
commence the Change of Control Offer by mailing to the Trustee and each Holder a
notice, which shall govern the terms of the Change of Control Offer, and shall
state that:
(i) the Change of Control Offer is being made pursuant to
this Section 4.14 and that all Notes tendered will be accepted for
payment,
(ii) the purchase price and the purchase date, which shall
be a Business Day no earlier than 30 days nor later than 45 days from
the date such notice is mailed (the "Change of Control Payment Date"),
(iii) that any Note not tendered for payment pursuant to
the Change of Control Offer shall continue to accrue interest,
55
<PAGE> 63
(iv) that, unless the Company defaults in the payment of
the Change of Control Payment, all Notes accepted for payment pursuant
to the Change of Control Offer shall cease to accrue interest on the
Change of Control Payment Date,
(v) that any Holder electing to have Notes purchased
pursuant to a Change of Control Offer shall be required to surrender
such Notes, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Notes completed, to the Paying Agent at the
address specified in the notice prior to the close of business on the
third Business Day preceding the Change of Control Payment Date,
(vi) that any Holder shall be entitled to withdraw such
election if the Paying Agent receives, not later than the close of
business on the second Business Day preceding the Change of Control
Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of Notes such
Holder delivered for purchase, and a statement that such Holder is
withdrawing his election to have such Notes purchased,
(vii) that a Holder whose Notes are being purchased only
in part shall be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered, which unpurchased portion
must be equal to $1,000 in principal amount or an integral multiple
thereof,
(viii) the instructions that Holders must follow in order
to tender their Notes, and
(ix) the circumstances and relevant facts regarding such
Change of Control.
On the Change of Control Payment Date, the Company shall, to the
extent lawful, (i) accept for payment the Notes or portions thereof tendered
pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent an
amount equal to the Change of Control Payment in respect of all Notes or
portions thereof so tendered and not withdrawn, and (iii) deliver or cause to be
delivered to the Trustee the Notes so accepted together with an Officers'
Certificate stating that the Notes or portions thereof tendered to the Company
are accepted for payment. The Paying Agent shall promptly mail to each Holder of
Notes so accepted
56
<PAGE> 64
payment in an amount equal to the purchase price for such Notes, and the Trustee
shall authenticate and mail to each Holder a new Note equal in principal amount
to any unpurchased portion of the Notes surrendered, if any, provided, that each
such new Note will be in principal amount of $1,000 or an integral multiple
thereof.
The Company shall make a public announcement of the results of
the Change of Control Offer on or as soon as practicable after the Change of
Control Payment Date. For the purposes of this Section 4.14, the Trustee shall
act as the Paying Agent.
The Company shall not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Section 4.14 and purchases all Notes validly
tendered and not withdrawn under such Change of Control Offer.
Section 4.15. Maintenance of Properties.
The Company shall, and shall cause each of its Subsidiaries to,
maintain their properties and assets in normal working order and condition as on
the date of this Indenture (reasonable wear and tear excepted) and make all
necessary repairs, renewals, replacements, additions, betterments and
improvements thereto, as shall be reasonably necessary for the proper conduct of
the business of the Company and its Subsidiaries taken as a whole; provided,
that nothing herein shall prevent the Company or any of its Subsidiaries from
discontinuing any maintenance of any such properties if the Company determines
that such discontinuance is desirable in the conduct of the business of the
Company and its Subsidiaries taken as a whole.
Section 4.16. Maintenance of Insurance.
The Company shall, and shall cause each of its Subsidiaries to,
maintain liability, casualty and other insurance (including self-insurance
consistent with prior practice) with responsible insurance companies in such
amounts and against such risks as is in accordance with customary industry
practice in the general areas in which the Company and its Subsidiaries operate.
57
<PAGE> 65
Section 4.17. Restrictions on Sale and Issuance of Subsidiary Stock.
The Company shall not sell, and shall not permit any of its
Restricted Subsidiaries to issue or sell, any Equity Interests of any Restricted
Subsidiary (other than directors' qualifying shares) to any Person other than
the Company or a Wholly Owned Subsidiary; provided, that (i) the Company and its
Restricted Subsidiaries may sell all (but not less than all) of the Capital
Stock of a Restricted Subsidiary owned by the Company and its Restricted
Subsidiaries if the Net Proceeds from such sale are used in accordance with the
provisions of Section 4.10 of this Indenture, and (ii) FSI may issue shares of
common stock upon the exercise of warrants outstanding on the Issue Date in
accordance with the terms thereof, provided, that immediately following such
exercise the Company owns at least 94.3% of the common stock of FSI.
Section 4.18. Line of Business.
The Company will not, and will not permit any Subsidiary to,
directly or indirectly engage in any business other than a Related Business.
Without limiting the foregoing, (a) FNYI shall not engage in any activity other
than holding and collecting amounts due and payable under the Oneida Settlement
Agreement and activities incidental thereto, and (b) FAMI shall not engage in
any activity other than the management of the Cliff Castle Casino pursuant to
the FAMI Management Agreement and activities reasonably related thereto. The
Company will cause FNYI to distribute to the holders of its Capital Stock
(including FI), promptly after receipt thereof, all amounts received from time
to time under the Oneida Settlement Agreement, to the extent permitted by law.
ARTICLE 5
SUCCESSORS
Section 5.1. When the Company May Merge, etc.
The Company shall not consolidate or merge with or into (whether
or not the Company is the surviving corporation), or transfer all or
substantially all of its properties or assets (determined on a consolidated
basis for the Company and its Restricted Subsidiaries) in one or more related
transactions to, any other Person unless:
58
<PAGE> 66
(i) the Company is the surviving Person or the Person
formed by or surviving any such consolidation or merger (if other than
the Company) or to which such transfer has been made is a corporation
organized and existing under the laws of the United States, any state
thereof or the District of Columbia,
(ii) the Person formed by or surviving any such
consolidation or merger (if other than the Company) or the Person to
which such transfer has been made assumes all the Obligations of the
Company, pursuant to a supplemental indenture and Security Documents in
a form reasonably satisfactory to the Trustee and the Collateral Agent,
under the Notes, this Indenture, the Security Documents and the
Registration Rights Agreement,
(iii) immediately after giving effect to such transaction
on a pro forma basis, no Default or Event of Default exists or would
occur, and
(iv) the Company, or any Person formed by or surviving any
such consolidation or merger, or to which such transfer has been made,
(A) has a Consolidated Net Worth (immediately after the transaction but
prior to any purchase accounting adjustments resulting from the
transaction) equal to or greater than the Consolidated Net Worth of the
Company immediately preceding the transaction and (B) shall be
permitted, at the time of such transaction and after giving pro forma
effect thereto as if such transaction had occurred at the beginning of
the applicable four-quarter period, to incur at least $1.00 of
additional Indebtedness pursuant to Section 4.9(a) hereof.
The Company shall deliver to the Trustee prior to the
consummation of any proposed transaction an Officers' Certificate to the
foregoing effect, an Opinion of Counsel, stating that all conditions precedent
to the proposed transaction provided for in this Indenture have been complied
with, and a written statement from a firm of independent public accountants of
established national reputation reasonably satisfactory to the Trustee stating
that the proposed transaction complies with clause (iv).
For purposes of this Section 5.1, the transfer of all or
substantially all of the properties and assets of one or more Subsidiaries of
the Company, which properties and assets, if held by the Company instead of such
Subsidiaries, would
59
<PAGE> 67
constitute all or substantially all of the properties and assets of the Company
on a consolidated basis, shall be deemed to be the transfer of all or
substantially all of the properties and assets of the Company.
Section 5.2. Successor Substituted.
In the event of any transaction (other than a lease) contemplated
by Section 5.1 hereof in which the Company is not the surviving Person, the
successor formed by such consolidation or into or with which the Company is
merged or to which such transfer is made, or formed by such reorganization, as
the case may be, shall succeed to, and be substituted for, and may exercise
every right and power of, the Company, and the Company shall be discharged from
its Obligations under this Indenture, the Notes, the Security Documents and the
Registration Rights Agreement with the same effect as if such successor Person
had been named as the Company herein or therein. The Trustee shall have the
right to require any such Person to ensure, by executing and delivering
appropriate instruments and Opinions of Counsel, that the Trustee continues to
hold a first priority Lien on all Collateral for the benefit of the Holders.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.1. Events of Default.
An "Event of Default" occurs if:
(1) the Company defaults in the payment of interest on any
Note when the same becomes due and payable and the Default continues
for a period of 30 days;
(2) the Company defaults in the payment of the principal
(or premium, if any) on any Note when the same becomes due and payable
at maturity, upon redemption, by acceleration, in connection with an
Excess Proceeds Offer, a Change of Control Offer or otherwise;
(3) the Company defaults in the performance of or breaches
the provisions of Sections 4.7, 4.8, 4.9, 4.10 or 4.14, or Article 5
hereof;
60
<PAGE> 68
(4) the Company or any Guarantor fails to comply with any
of its other agreements or covenants in, or provisions of, the Notes or
this Indenture or the Security Documents and the Default continues for
30 days after written notice thereof has been given to the Company by
the Trustee or to the Company and the Trustee by the Holders of at least
25% in aggregate principal amount of the then outstanding Notes, such
notice to state that it is a "Notice of Default;"
(5) a default occurs under (after giving effect to any
waivers, amendments, applicable grace periods or any extension of any
maturity date) any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any Restricted
Subsidiary (or the payment of which is guaranteed by the Company or any
Restricted Subsidiary), whether such Indebtedness or guarantee now
exists or is created after the date of this Indenture, if (a) either
(i) such default results from the failure to pay principal of or
interest on such Indebtedness or (ii) as a result of such default the
maturity of such Indebtedness has been accelerated, and (b) either (i)
such default is under an Eligible Credit Facility or Permitted Tunica
Debt or (ii) the principal amount of such Indebtedness, together with
the principal amount of any other such Indebtedness with respect to
which such a payment default (after the expiration of any applicable
grace period or any extension of the maturity date) has occurred, or
the maturity of which has been so accelerated, exceeds $5.0 million in
the aggregate;
(6) a final non-appealable judgment or judgments for the
payment of money (other than judgments as to which a reputable insurance
company has accepted full liability) is or are entered by a court or
courts of competent jurisdiction against the Company or any Restricted
Subsidiary and such judgment or judgments remain undischarged, unbonded
or unstayed for a period of 60 days after entry, provided that the
aggregate of all such judgments exceeds $5.0 million;
(7) repudiation by the Company or any Restricted
Subsidiary of its obligations under this Indenture, the Notes, the
Security Documents or the Guaranty, or the unenforceability of the
Indenture, the Security Documents, the Notes, or the Guaranty against
the Company or any of the Restricted Subsidiaries for any reason;
61
<PAGE> 69
(8) the revocation or suspension of a Gaming License
resulting in the cessation of operations of a Significant Casino for a
period of 60 consecutive days or more;
(9) the Company or any Guarantor pursuant to or within the
meaning of any Bankruptcy Law:
(a) commences a voluntary case,
(b) consents to the entry of an order for relief
against it in an involuntary case,
(c) consents to the appointment of a Custodian
of it or for all or substantially all of its
property,
(d) makes a general assignment for the benefit
of its creditors,
(e) admits in writing its inability to pay debts
as the same become due; or
(10) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(a) is for relief against the Company or any
Guarantor in an involuntary case,
(b) appoints a Custodian of the Company or any
Guarantor or for all or substantially all of
their property,
(c) orders the liquidation of the Company, or
any Guarantor,
and the order or decree remains unstayed and in effect for 60 days.
The Company shall, upon becoming aware that a Default or Event of
Default has occurred, deliver to the Trustee a statement specifying such Default
62
<PAGE> 70
or Event of Default and what action the Company is taking or proposes to take
with respect thereto.
Section 6.2. Acceleration.
If an Event of Default (other than an Event of Default specified
in clauses (9) and (10) of Section 6.1) occurs and is continuing, the Trustee by
written notice to the Company, or the Holders of at least 25% in principal
amount of the then outstanding Notes by written notice to the Company and the
Trustee, may declare the unpaid principal of and any accrued interest on all the
Notes to be due and payable. Upon such declaration the principal and interest
shall be due and payable immediately. If an Event of Default specified in clause
(9) or (10) of Section 6.1 with respect to the Company occurs, all outstanding
Notes shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder. At any time
after a declaration of acceleration, but before a judgment or decree for payment
of the money due has been obtained by the Trustee, the Holders of a majority in
aggregate principal amount of the Notes outstanding, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if (a) the Company has paid or deposited with the Trustee a sum
sufficient to pay (i) all sums paid or advanced by the Trustee and the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, (ii) all overdue interest (including any interest
accrued subsequent to an Event of Default specified in clauses (9) and (10) of
Section 6.1) on all Notes, (iii) the principal of and premium, if any, on any
Notes that have become due otherwise than by such declaration or occurrence of
acceleration and interest thereon at the rate borne by the Notes, and (iv) to
the extent that payment of such interest is lawful, interest upon overdue
interest at the rate borne by the Notes; (b) all Events of Default, other than
the non-payment of principal of and interest on the Notes that have become due
solely by such declaration or occurrence of acceleration, have been cured or
waived; and (c) the rescission would not conflict with any judgment, order or
decree of any court of competent jurisdiction.
Section 6.3. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy (under this Indenture or otherwise) to collect the
payment of principal or interest on the Notes to enforce the performance of any
provision of the Notes, this Indenture or the Security Documents.
63
<PAGE> 71
The Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. All remedies are cumulative
to the extent permitted by law.
Section 6.4. Waiver of Past Defaults.
Holders of a majority of the aggregate principal amount of the
then outstanding Notes by written notice to the Trustee may on behalf of the
Holders of all of the Notes (a) waive any existing Default or Event of Default
and its consequences under this Indenture except a continuing Default or Event
of Default in the payment of the principal of, or interest on, any Note or a
Default or an Event of Default with respect to any covenant or provision which
cannot be modified or amended without the consent of the Holder of each
outstanding Note affected, and/or (b) rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default (except nonpayment of principal or
interest that has become due solely because of the acceleration) have been cured
or waived. Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
Section 6.5. Control by Majority.
The Holders of a majority in principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it. However, the Trustee may refuse to follow any direction
that conflicts with law or this Indenture, that the Trustee determines may be
unduly prejudicial to the rights of other Holders, or that may involve the
Trustee in personal liability.
Section 6.6. Limitation on Suits.
A Holder may pursue a remedy with respect to this Indenture or
the Notes only if:
64
<PAGE> 72
(a) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(c) such Holder or Holders offer and, if requested, provide to
the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;
(d) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(e) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Notes do not give the Trustee a
direction inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another Holder or
to obtain a preference or priority over another Holder.
Section 6.7. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right
of any Holder of a Note to receive payment of principal and interest on the
Note, on or after the respective due dates expressed in the Note, or to bring
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of the Holder.
Section 6.8. Collection Suit by Trustee.
If an Event of Default specified in Section 6.1(1) or (2) occurs
and is continuing, the Trustee is authorized to recover judgment in its own name
and as trustee of an express trust against the Company for the whole amount of
principal and interest remaining unpaid on the Notes and interest on overdue
principal (and premium, if any) and, to the extent lawful, interest or overdue
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection,
65
<PAGE> 73
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
Section 6.9. Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to the Company (or any
other obligor under the Notes), their creditors or their property and shall be
entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.7 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.7 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders of the Notes
may be entitled to receive in such proceeding whether in liquidation or under
any plan of reorganization or arrangement or otherwise. Nothing herein contained
shall be deemed to authorize the Trustee to authorize or consent to or accept or
adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article, it
shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 7.7, including payment of all compensation, expense and
liabilities
66
<PAGE> 74
incurred, and all advances made, by the Trustee and the costs and expenses of
collection;
Second: to Holders for amounts due and unpaid on the Notes for
principal and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal and
interest, respectively;
Third: without duplication, to Holders for any other Obligations
owing to the Holders under the Notes or this Indenture; and
Fourth: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any
payment to Holders.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.6, or a suit by Holders of more than 10% in principal
amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
Section 7.1. Duties of Trustee.
(1) If an Event of Default has occurred and is continuing,
the Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent person
67
<PAGE> 75
would exercise or use under the circumstances in the conduct of his or her own
affairs.
(2) Except during the continuance of an Event of Default:
(a) The duties of the Trustee shall be determined
solely by the express provisions of this Indenture, and the Trustee need
perform only those duties that are specifically set forth in this
Indenture and the Security Documents, and no others, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee.
(b) In the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture and the Security Documents. However, the Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture and the Security Documents
(but need not confirm the accuracy of mathematical calculations or other
facts stated therein).
(3) The Trustee may not be relieved from liabilities for
its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(a) This paragraph does not limit the effect of
paragraph (2) of this Section.
(b) The Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the pertinent
facts.
(c) The Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.5.
(4) Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee is subject to
paragraphs (1), (2) and (3) of this Section.
68
<PAGE> 76
(5) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or incur any liability. The Trustee may
refuse to perform any duty or exercise any right or power unless it receives
indemnity satisfactory to it against any loss, liability or expense.
(6) The Trustee shall not be liable for interest on any
money received by it except as the Trustee may agree in writing with the
Company. Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.
(7) The Trustee is hereby appointed to act as Collateral
Agent and, in connection therewith, to enter into the Intercreditor Agreement
upon execution thereof by the other parties thereto.
Section 7.2. Rights of Trustee.
(1) The Trustee may conclusively rely and shall be
protected in acting or refraining from acting upon any document believed by it
to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(2) Before the Trustee acts or refrains from acting, it
may require an Officers' Certificate or an Opinion of Counsel or both. The
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officers' Certificate or Opinion of Counsel. The
Trustee may consult with counsel of its selection and the advice of such counsel
or any Opinion of Counsel shall be full and complete authorization and
protection from liability in respect of any action taken, suffered or omitted by
it hereunder in good faith and in reliance thereon.
(3) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(4) The Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be authorized or
within its rights or powers conferred upon it by this Indenture.
(5) Unless otherwise specifically provided in this
Indenture or the Security Documents, any demand, request, direction or notice
from the
69
<PAGE> 77
Company shall be sufficient if signed by an Officer of the Company, on behalf of
the Company.
(6) Except with respect to Section 4.1, the Trustee shall
have no duty to inquire as to the performance of the Company's covenants in
Article 4 hereof. In addition, the Trustee shall not be deemed to have knowledge
of any Default or Event of Default except (i) any Event of Default occurring
pursuant to Sections 6.1(1), 6.1(2) and 4.1, or (ii) any Default or Event of
Default of which the Trustee shall have received written notification or
obtained actual knowledge.
Section 7.3. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may otherwise deal with the Company or an
Affiliate of the Company with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. However, the Trustee is
subject to Sections 7.10 and 7.11.
Section 7.4. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Notes, it
shall not be accountable for the Company's use of the proceeds from the Notes or
any money paid to the Company or upon the Company's direction under any
provision hereof, it shall not be responsible for the use or application of any
money received by any Paying Agent other than the Trustee and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
Section 7.5. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if
the Trustee has actual knowledge thereof (within the meaning of Section 7.2(6)),
the Trustee shall mail to the Holders a notice of the Default or Event of
Default within 30 days after it occurs.
70
<PAGE> 78
Section 7.6. Reports by Trustee to Holders.
Within 60 days after each May 15 beginning with the May 15
following the date of this Indenture, the Trustee shall mail to the Holders a
brief report dated as of such reporting date that complies with TIA Section
313(a) (but if no event described in TIA Section 313(a) has occurred within the
twelve months preceding the reporting date, no report need be transmitted). The
Trustee also shall comply with TIA Section 313(b). The Trustee shall also
transmit by mail all reports as required by TIA Section 313(c).
Commencing at the time this Indenture is qualified under the TIA,
a copy of each report at the time of its mailing to the Holders shall be filed
with the Commission and each stock exchange on which the Notes are listed. The
Company shall promptly notify the Trustee when the Notes are listed on any
stock exchange.
Section 7.7. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time such
compensation as shall be agreed to in writing by the Company and the Trustee for
its acceptance of this Indenture and services hereunder. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse the Trustee promptly upon request for
all reasonable disbursements, advances and expenses incurred or made by it in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation, disbursements and expenses of the Trustee's agents and
counsel, except such disbursements, advances and expenses as may be attributable
to its negligence or bad faith.
The Company shall indemnify the Trustee and any predecessor
against any and all losses, liabilities, damages, claims or expenses incurred by
it without negligence or bad faith on its part arising out of or in connection
with the acceptance or administration of its duties under this Indenture, except
as set forth below. The Trustee shall notify the Company promptly of any claim
for which it may seek indemnity. Failure by the Trustee to so notify the Company
shall not relieve the Company of its obligations hereunder. The Company shall
defend the claim and the Trustee shall cooperate in the defense. In the event
that a conflict of interest or conflicting defenses would arise in connection
with the representation of the Company and the Trustee by the same counsel, the
Trustee may have separate
71
<PAGE> 79
counsel and the Company shall pay the reasonable fees and expenses of such
counsel. The Company need not pay for any settlement made without its consent,
which consent shall not be unreasonably withheld.
The obligations of the Company under this Section 7.7 shall
survive the satisfaction and discharge of this Indenture.
The Company need not reimburse any expense or indemnify against
any loss or liability incurred by the Trustee through its own negligence or bad
faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal of (and
premium, if any) and interest on particular Notes. Such Lien shall survive the
satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.1(9) or (10) occurs, the expenses and
the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The provisions of this Section shall survive the termination of
this Indenture.
Section 7.8. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section and upon the Company's
receipt of notice from the successor Trustee of such appointment.
The Trustee may resign at any time and be discharged from the
trust hereby created by so notifying the Company. The Holders of a majority in
principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Company. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
72
<PAGE> 80
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or
its property;
(d) the Trustee becomes incapable of acting; or
(e) the Trustee is found unsuitable or unqualified by any Gaming
Authority.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of at least 10% in principal amount of the then outstanding Notes
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee after written request by any Holder who has been a
Holder for at least six months fails to comply with Section 7.10, such Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to the Holders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, provided that all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.7. Notwithstanding replacement of the Trustee pursuant to this
Section 7.8, the Company's obligations under Section 7.7 hereof shall continue
for the benefit of the retiring Trustee, and
73
<PAGE> 81
the Company shall pay to any such replaced or removed Trustee all amounts owed
under Section 7.7 upon such replacement or removal.
Section 7.9. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation or banking association, the successor corporation without any
further act shall be the successor Trustee.
Section 7.10. Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that shall (a) be
a corporation organized and doing business under the laws of the United States
of America or of any state thereof or of the District of Columbia authorized
under such laws to exercise corporate trustee power, (b) be subject to
supervision or examination by Federal or state or the District of Columbia
authority, and (c) have a combined capital and surplus of at least $100,000,000
as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Sections 310(a)(1), 310(a)(2) and 310(a)(5). The Trustee is
subject to TIA Section 310(b); provided, however, that there shall be excluded
from the operations of TIA Section 310(b)(1) any indenture or indentures under
which other securities, or certificates of interest or participation in other
securities, of the Company are outstanding, if the requirements for such
exclusion set forth in TIA Section 310(b)(1) are met.
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee is subject to TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein. The provisions of TIA Section 311 shall apply to the Company, as
obligor on the Notes.
74
<PAGE> 82
ARTICLE 8
DISCHARGE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.1. Discharge; Option to Effect Legal Defeasance or Covenant
Defeasance.
This Indenture shall cease to be of further effect (except that
the Company's and the Guarantors' obligations under Section 7.7 and the
Trustee's and the Paying Agent's obligations under Sections 8.6 and 8.7 shall
survive) when all outstanding Notes theretofore authenticated and issued have
been delivered (other than destroyed, lost or stolen Notes that have been
replaced or paid) to the Trustee for cancellation and the Company or the
Guarantors have paid all sums payable hereunder. In addition, the Company may
elect at any time to have Section 8.2 or Section 8.3, at the Company's option,
of this Indenture applied to all outstanding Notes upon compliance with the
conditions set forth below in this Article 8.
Section 8.2. Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.1 hereof of the
option applicable to this Section 8.2, except as set forth below, the Company
and the Guarantors shall be deemed to have been discharged from their respective
obligations with respect to all outstanding Notes on the date the conditions
set forth below are satisfied (hereinafter, "Legal Defeasance"). Following such
Legal Defeasance, (a) the Company shall be deemed to have paid and discharged
the entire indebtedness outstanding hereunder, and this Indenture shall cease to
be of further effect as to all outstanding Notes and Guarantees, and (b) the
Company and the Guarantors shall be deemed to have satisfied all other of their
respective obligations under the Notes, the Guaranty and this Indenture (and the
Trustee, on demand of and at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder:
(i) the rights of Holders to receive payments in respect
of the principal of, premium, if any, and interest (and Liquidated
Damages, if any) on such Notes when such payments are due from the trust
described in Section 8.5;
75
<PAGE> 83
(ii) the Company's obligations under Sections 2.4, 2.6,
2.7, 2.10, 4.2, 8.5, 8.6 and 8.7 hereof; and
(iii) the rights, powers, trusts, duties and immunities of
the Trustee hereunder and the Company's and the Guarantors' obligations
in connection therewith.
Section 8.3. Covenant Defeasance.
Upon the Company's exercise under Section 8.1 hereof of the
option applicable to this Section 8.3, the Company and the Guarantors shall be
released from their respective obligations under the covenants contained in
Sections 4.3, 4.4, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.14, 4.15, 4.16, 4.17, 4.18
and Article V hereof on and after the date the conditions set forth below are
satisfied (hereinafter, "Covenant Defeasance"), and the Notes shall thereafter
be deemed not "outstanding" for the purposes of any direction, waiver, consent
or declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder. Following such Covenant Defeasance, (a)
neither the Company nor any Guarantor need comply with, and none of them shall
have any liability in respect of, any term, condition or limitation set forth in
any such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document, but, except as
specified above, the remainder of this Indenture, the Notes and the Guaranty
shall be unaffected thereby, and (b) Sections 6.1(3) through 6.1(8) hereof shall
not constitute Events of Default with respect to the Notes.
Section 8.4. Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of
either Section 8.2 or 8.3 hereof to the outstanding Notes:
(i) the Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements of
Section 7.10 hereof who shall agree to comply with the provisions of this
Article 8 applicable to it), in trust, for the benefit of the Holders, cash,
U.S. Government Obligations, or a combination thereof, in such amounts as will
be sufficient, in the opinion of a nationally recognized firm of independent
public accountants, to pay
76
<PAGE> 84
the principal of, premium, if any, and interest (and Liquidated Damages, if any)
on such outstanding Notes on the stated date for payment thereof or on the
redemption date of such principal or installment of principal of, premium, if
any, or interest on such Notes, and the holders of Notes must have a valid,
perfected, exclusive security interest in such trust;
(ii) in the case of Legal Defeasance, the Company shall have
delivered to the Trustee an opinion of counsel in the United States reasonably
acceptable to the trustee confirming that (A) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling or (B) since
the date of this Indenture, there has been a change in the applicable Federal
income tax law, in either case to the effect that, and based thereon such
opinion of counsel shall confirm that, the Holders will not recognize income,
gain or loss for Federal income tax purposes as a result of such Legal
Defeasance and will be subject to Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such Legal
Defeasance had not occurred;
(iii) in the case of Covenant Defeasance, the Company shall have
delivered to the Trustee an opinion of counsel in the United States reasonably
acceptable to such Trustee confirming that the Holders will not recognize
income, gain or loss for Federal income tax purposes as a result of such
Covenant Defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such Covenant Defeasance had not occurred;
(iv) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit;
(v) such Legal Defeasance or Covenant Defeasance will not result
in a breach or violation of, or constitute a default under any material
agreement or instrument to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries is bound;
(vi) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders over the other creditors of the Company with the
intent of defeating, hindering, delaying or defrauding other creditors of the
Company; and
77
<PAGE> 85
(vii) the Company shall have delivered to the Trustee an
Officers' Certificate and an opinion of counsel, each stating that the
conditions precedent provided for in, in the case of the Officers' Certificate,
(i) through (vi) and, in the case of the opinion of counsel, clauses (i) (with
respect to the validity and perfection of the security interest), (ii), (iii)
and (v) of this paragraph, have been complied with.
Section 8.5. Deposited Cash and U.S. Government Obligations to be Held in
Trust; Other Miscellaneous Provisions.
Subject to Section 8.6 hereof, all cash and U.S. Government
Obligations (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section 8.5, the
"Paying Agent") pursuant to Section 8.4 hereof in respect of the outstanding
Notes shall be held in trust and applied by the Paying Agent, in accordance with
the provisions of such Notes and this Indenture, to the payment, either directly
or through any other Paying Agent as the Trustee may determine, to the Holders
of such Notes of all sums due and to become due thereon in respect of principal,
premium, if any, and interest (and Liquidated Damages, if any).
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 8.4 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of Outstanding Notes.
Section 8.6. Repayment to the Company.
(a) The Trustee or the Paying Agent shall deliver or pay to the
Company from time to time upon the request of the Company any cash or U.S.
Government Obligations held by it as provided in Section 8.4 hereof which in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee (which may
be the opinion delivered under Section 8.4(a) hereof), are in excess of the
amount thereof that would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance.
(b) Any cash and U.S. Government Obligations (including the
proceeds thereof) deposited with the Trustee or any Paying Agent, or then held
by
78
<PAGE> 86
the Company, in trust for the payment of the principal of, premium, if any, or
interest (and Liquidated Damages, if any) on any Note and remaining unclaimed
for two years after such principal, and premium, if any, or interest has become
due and payable shall be paid to the Company on its request; and the Holder of
such Note shall thereafter look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money
shall thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, shall at the expense of the
Company cause to be published once, in the New York Times and The Wall Street
Journal (national edition), notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such notification or publication, any unclaimed balance of such money
then remaining will be repaid to the Company.
Section 8.7. Reinstatement.
If the Trustee or Paying Agent is unable to apply any cash or
U.S. Government Obligations in accordance with Section 8.2 or 8.3 hereof, as the
case may be, of this Indenture by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, or if any event occurs at any time in the period ending on the 91st
day after the date of deposit pursuant to Section 8.2 or 8.3 hereof which event
would constitute an Event of Default under Section 6.1 (9) or (10) had Legal
Defeasance or Covenant Defeasance, as the case may be, not occurred, then the
Company's and the Guarantors' obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.2 or 8.3 hereof until such time as the Trustee or Paying Agent is
permitted to apply such money in accordance with Sections 8.2 and 8.3 hereof, as
the case may be; provided, however, that, if the Company makes any payment of
principal of, premium, if any, or interest (and Liquidated Damages, if any) on
any Note following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the cash or U.S. Government Obligations held by the Trustee or Paying
Agent.
79
<PAGE> 87
ARTICLE 9
AMENDMENTS
Section 9.1. Without Consent of Holders.
The Company, the Guarantors and the Trustee may amend or
supplement this Indenture and the Notes without the consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or
in place of certificated Notes;
(3) to comply with Article 5 and Section 10.12 hereof;
(4) to make any change that would provide any additional
rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights hereunder or thereunder of any Holder;
(5) to comply with requirements of the Commission in order
to effect or maintain the qualification of this Indenture under the TIA;
or
(6) to release any Guarantee of the Notes permitted to be
released under Section 10.7 hereof.
Upon the request of the Company, accompanied by a resolution of
the Board of Directors of the Company authorizing the execution of any such
supplemental indenture or amendment, and upon receipt by the Trustee of the
documents described in Section 9.6 hereof required or requested by the Trustee,
the Trustee shall join with the Company in the execution of any supplemental
indenture or amendment authorized or permitted by the terms of this Indenture
and shall make any further appropriate agreements and stipulations which may be
therein contained, but the Trustee shall not be obligated to enter into such
supplemental indenture or amendment that affects its own rights, duties or
immunities under this Indenture or otherwise.
80
<PAGE> 88
Section 9.2. With Consent of Holders.
Subject to Sections 6.4 and 6.7 hereof, the Company and the
Trustee, as applicable, may amend, or waive any provision of, this Indenture or
the Notes, with the written consent of the Holders of at least a majority of the
principal amount of the then outstanding Notes (including consents obtained in
connection with a tender offer or exchange offer for Notes).
Upon the request of the Company, accompanied by a resolution of
the Board of Directors of the Company authorizing the execution of any such
supplemental indenture or amendment, and upon filing with the Trustee of
evidence satisfactory to the Trustee of the consent of the Holders as aforesaid,
and upon receipt by the Trustee of the documents described in Section 9.6
hereof, the Trustee shall join with the Company in the execution of such
supplemental indenture or amendment unless such supplemental indenture or
amendment affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed supplemental
indenture or amendment, but it shall be sufficient if such consent approves the
substance thereof.
After a supplemental indenture or amendment under this Section
becomes effective, the Company shall mail to the Holders of each Note affected
thereby a notice briefly describing the amendment or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture, amendment
or waiver.
Notwithstanding any other provision hereof, without the consent
of each Holder affected, an amendment or waiver under this Section may not (with
respect to any Notes held by a non-consenting Holder):
(1) reduce the principal amount of Notes whose Holders
must consent to an amendment, supplement or waiver;
81
<PAGE> 89
(2) reduce the rate of or change the time for payment of
interest, including default interest, on any Note;
(3) reduce the principal of, or the premium (including,
without limitation, redemption premium) on, or change the fixed maturity
of any Note or alter the provisions with respect to payment on
redemption of the Notes or the price at which the Company shall offer to
purchase such Notes pursuant to Section 4.10 or 4.14 hereof;
(4) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on, or redemption payment
with respect to, any Note (other than a Default in the payment of an
amount due as a result of an acceleration if the Holder rescinds such
acceleration pursuant to Section 6.2);
(5) make any Note payable in money other than that stated
in the Notes;
(6) make any change in Section 6.4 or 6.7 hereof or in
this Section 9.2 with respect to the requirement for the consent of any
affected Holder; or
(7) make any change adversely affecting the contractual
ranking of the Obligations.
Section 9.3. Compliance with Trust Indenture Act.
If, at the time of an amendment to this Indenture or the Notes,
this Indenture shall be qualified under the TIA, every amendment to this
Indenture or the Notes shall be set forth in a supplemental indenture that
complies with the TIA as then in effect.
Section 9.4. Revocation and Effect of Consents.
Until a supplemental indenture, an amendment or waiver becomes
effective, a consent to it by a Holder of a Note is a continuing consent by the
Holder and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
is
82
<PAGE> 90
not made on any Note. A supplemental indenture, amendment or waiver becomes
effective in accordance with its terms and thereafter binds every Holder.
The Company may fix a record date for determining which Holders
must consent to such supplemental indenture, amendment or waiver. If the Company
fixes a record date, the record date shall be fixed at (i) the later of 30 days
prior to the first solicitation of such consent or the date of the most recent
list of Holders furnished to the Trustee prior to such solicitation pursuant to
Section 2.5, or (ii) such other date as the Company shall designate.
Section 9.5. Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about a
supplemental indenture, amendment or waiver on any Note thereafter
authenticated. The Company in exchange for all Notes may issue and the Trustee
shall authenticate new Notes that reflect the amendment or waiver.
Failure to make the appropriate notation or issue a new Note
shall not affect the validity and effect of such amendment or waiver.
Section 9.6. Trustee to Sign Amendments, etc.
The Trustee shall sign any amendment or supplemental indenture
authorized pursuant to this Article 9 if the amendment does not adversely affect
the rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may, but need not, sign it. In signing or refusing to sign such
amendment or supplemental indenture, the Trustee shall be entitled to receive,
if requested, an indemnity reasonably satisfactory to it and to receive and,
subject to Section 7.1, shall be fully protected in relying upon, an Officers'
Certificate and an Opinion of Counsel as conclusive evidence that such amendment
or supplemental indenture is authorized or permitted by this Indenture, that it
is not inconsistent herewith, and that it shall be valid and binding upon the
Company in accordance with its terms. The Company may not sign an amendment or
supplemental indenture until the Board of Directors of the Company approves it.
83
<PAGE> 91
ARTICLE 10
COLLATERAL AND SECURITY AND GUARANTY
Section 10.1. Collateral Documents.
The due and punctual payment of the principal and premium, if
any, of, and interest on, the Notes when and as the same shall be due and
payable, whether on an interest payment date, at maturity, by acceleration,
repurchase, redemption or otherwise, interest on the overdue principal of and
interest (to the extent permitted by law), if any, on the Notes and performance
of all other Obligations, shall be secured as provided in the Security
Documents.
The Company shall, and shall cause each of its Restricted
Subsidiaries to, do or cause to be done all such acts and things as may be
necessary or proper, or as may be required by the provisions of the Security
Documents, to assure and confirm to the Collateral Agent the security interest
in the Collateral contemplated hereby and by the Security Documents, as from
time to time constituted, so as to render the same available for the security
and benefit of this Indenture and of the Notes secured hereby, according to the
intent and purposes herein and therein expressed. The Company shall, and shall
cause each of its Restricted Subsidiaries to, take, upon request of the Trustee
or the Collateral Agent, any and all actions required to cause the Security
Documents to create and maintain, as security for the Obligations, valid and
enforceable, perfected (except as expressly provided herein or therein), Liens
in and on all the Collateral, in favor of the Collateral Agent, superior to and
prior to the rights of all third Persons, and subject to no other Liens, other
than as provided herein and therein.
Without limiting the foregoing, the Company shall, and shall
cause each of its Restricted Subsidiaries to (i) do all things necessary or
advisable to obtain the consent of the Gaming Authorities in Nevada to the
pledge of, and the negative pledge on, the stock of FRI, FSI and FLVI prior to
the Exchange Offer; and (ii) use its best efforts to obtain all necessary
consents from the respective lessors and others to the grant of a first priority
Lien on the Company's interest in the Nevada Ground Leases (as defined in the
Offering Circular) and to the foreclosure by the Collateral Agent thereon
following an Event of Default as promptly as practicable following the Issue
Date. If the consents referred to in either clause (i) or (ii) above are
received, the Company shall, and shall cause the respective Subsidiaries to,
take such steps as may be necessary or advisable to pledge or create a negative
pledge on such stock as set forth in clause (i), or grant such first
84
<PAGE> 92
priority Lien as set forth in clause (ii), as the case may be, in either case,
in accordance with this Indenture and the Security Documents.
Section 10.2. Opinions.
The Company shall furnish to the Trustee within three months
after each anniversary of the Issue Date, an Opinion of Counsel, dated as of
such date, stating either that (i) in the opinion of such counsel, all action
has been taken with respect to the recording, registering, filing, re-recording,
re-registering and refiling of all supplemental indentures, financing
statements, continuation state ments or other instruments of further assurance
as is necessary to maintain the Liens of the Security Documents and reciting the
details of such action or (ii) in the opinion of such Counsel, no such action is
necessary to maintain such Liens, which Opinion of Counsel also shall state what
actions it then believes are neces sary to maintain the effectiveness of such
liens during the next two years.
Section 10.3. Release of Collateral.
(a) Unless a Default or Event of Default shall have occurred and
be continuing, Collateral shall be released from the Liens created by the
Security Documents from time to time at the sole cost and expense of the
Company:
(i) upon payment in full of the Notes and all other Obligations
then due and owing, or
(ii) upon Legal Defeasance or Covenant Defeasance of the Notes,
or
(iii) upon the sale or other disposition of such Collateral
pursuant to an Asset Sale made in accordance with Section 4.10 hereof,
or
(iv) upon a Guarantor (as to Collateral owned by it) being
released from its obligations hereunder pursuant to Section 10.13;
provided, that the Trustee shall not release any Lien on any Collateral unless
and until it shall have received an Officers' Certificate certifying that all
conditions precedent hereunder have been met and such other documents required
by Section 10.4 hereof. Upon compliance with the above provisions, the Trustee
shall execute, deliver or acknowledge any necessary or proper instruments of
termina-
85
<PAGE> 93
tion, satisfaction or release to evidence the release of any Collateral
permitted to be released pursuant to this Indenture or the Security Documents.
(b) The release of any Collateral from the terms of the Security
Documents shall not be deemed to impair the security under this Indenture in
contravention of the provisions hereof and of the Security Documents if and to
the extent the Collateral is released pursuant to the terms of this Indenture
and the Security Documents.
Section 10.4. Certificates of the Company.
The Company shall furnish to the Trustee, prior to each proposed
release of Collateral, all documents required by TIA Section 314(d). The Trustee
may, to the extent permitted by Sections 7.1 and 7.2 hereof, accept as
conclusive evidence of compliance with the foregoing provisions the appropriate
statements contained in such instruments. Any certificate or opinion required by
TIA Section 314(d) may be made by an Officer of the Company except in cases
where TIA Section 314(d) requires that such certificate or opinion be made by an
independent engineer, appraiser or other expert within the meaning of TIA
Section 314(d).
Section 10.5. Authorization of Actions to be Taken by the Trustee Under the
Security Documents.
The Trustee may, in its sole discretion and without the consent
of the Holders, on behalf of the Holders, take all actions it deems necessary or
appropriate in order to (a) enforce any of the terms of the Security Documents
and (b) collect and receive any and all amounts payable in respect of the
Obligations of the Company and the Guarantors hereunder. The Trustee shall have
the power to institute and to maintain such suits and proceedings as it may deem
expedient to prevent any impairment of the Collateral by any acts that may be
unlawful or in violation of the Security Documents or this Indenture, and such
suits and proceedings as the Trustee may deem expedient to preserve or protect
its interest and the interests of the Holders in the Collateral (including power
to institute and maintain suits or proceedings to restrain the enforcement of or
compliance with any legislative or other governmental enactment, rule or order
that may be unconstitutional or otherwise invalid if the enforcement of, or
compliance with, such enactment, rule or order would impair the security
interest hereunder or be prejudicial to the interests of the Holders or the
Trustee).
86
<PAGE> 94
Section 10.6. Authorization of Receipt of Funds by the Trustee Under the
Security Documents.
The Trustee is authorized to receive any funds for the benefit of
the Holders distributed under the Security Documents, and to make further
distributions of such funds to the Holders according to the provisions of this
Indenture and the Security Documents.
Section 10.7. Guaranty.
For good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, subject to Section 10.9 hereof, each Guarantor,
jointly and severally, hereby unconditionally guarantees (such guarantees,
together with further guarantees granted from time to time pursuant to Section
10.12, being the "Guaranty") to each Holder, the Trustee and the Collateral
Agent, irrespective of the validity or enforceability of this Indenture, the
Notes, the Security Documents or the Obligations hereunder or thereunder: (i)
the due and punctual payment of the principal and premium, if any, of, and
interest on, the Notes (including, without limitation, interest after the
filing of a petition initiating any proceedings referred to in clause (9) or
(10) of Section 6.1 hereof), whether at maturity or on an interest payment date,
by acceleration, call for redemption or otherwise; (ii) the due and punctual
payment of interest on the overdue principal and premium, if any, of, and
interest on, the Notes, if lawful; (iii) the due and punctual payment and
performance of all other Obligations, all in accordance with the terms set forth
herein and in the Notes and the Security Documents; and (iv) in case of any
extension of time of payment or renewal of any Notes or any of such other
Obligations, the due and punctual payment or performance thereof in accordance
with the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise.
Failing payment when due by the Company of any amount so
guaranteed for whatever reason, the Guarantors shall be jointly and severally
obligated to pay the same immediately.
Each Guarantor hereby agrees that (i) its obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes, this Indenture, the Security Documents or the
Obligations hereunder or thereunder, the absence of any action to enforce the
same, any waiver or consent by any Holder with respect to any provisions hereof
or thereof, any releases of
87
<PAGE> 95
Collateral, any amendment of the Indenture, the Notes or Security Documents, any
delays in obtaining or realizing upon or failures to obtain or realize upon
Collateral, the recovery of any judgment against the Company or any of its
Subsidiaries, any action to enforce the same, or any other circumstance that
might otherwise constitute a legal or equitable discharge or defense of a
guarantor and (ii) this Guaranty will not be discharged except by complete
performance of the Obligations.
Each Guarantor hereby agrees that it shall not be entitled to and
irrevocably waives (i) diligence, presentment, demand of payment, filing of
claim with a court in the event of insolvency or bankruptcy of the Company, any
Guarantor, any other Subsidiary of the Company or any other obligor under the
Notes, any right to require a proceeding first against the Company, any
Guarantor, any other Subsidiary of the Company or any other obligor under this
Indenture, the Notes or the Security Documents, protest, notice and all demands
whatsoever, (ii) any right of subrogation, reimbursement, exoneration,
contribution or indemnification in respect of any Obligations guaranteed hereby
and (iii) any claim or other rights that it may now or hereafter acquire against
the Company or any of its Subsidiaries that arise from the existence or
performance of its Obligations under this Guaranty, including, without
limitation, any right to participate in any claim or remedy of a Holder against
the Company or any of its Subsidiaries or any Collateral that a Holder now has
or hereafter acquires, whether or not such claim, remedy or right arises in
equity or under contract, statute or common law, by any payment made hereunder
or otherwise, and including, without limitation, the right to take or receive
from the Company or any of its Subsidiaries, directly or indirectly, in cash or
other property, by setoff or in any other manner, payment or security on account
of such claim or other rights.
If any Holder or the Trustee is required by any court or
otherwise to return to the Company, any Guarantor, any other Subsidiary of the
Company or any other obligor under this Indenture, the Notes or the Security
Documents, trustee, liquidator, or other similar official, any amount paid by
the Company, any Guarantor, any other Subsidiary of the Company or any other
obligor under this Indenture, the Notes or the Security Documents to the Trustee
or such Holder, this Guaranty, to the extent theretofore discharged, shall be
reinstated in full force and effect.
Each Guarantor agrees that, as between the Guarantors, on the one
hand, and the Holders and the Trustee, on the other hand, (i) the maturity of
the
88
<PAGE> 96
Obligations guaranteed hereby may be accelerated as provided in Section 6.2 for
the purposes of this Guaranty, notwithstanding any stay, injunction or other
prohibition preventing such acceleration as to the Company of the Obligations
guaranteed hereby, and (ii) in the event of any declaration of acceleration of
those Obligations as provided in Section 6.2, those Obligations (whether or not
due and payable) will forthwith become due and payable by each of the Guarantors
for the purpose of this Guaranty.
Section 10.8. Execution and Delivery of Guaranty.
To evidence the Guaranty set forth in Section 10.7, the Company
and each Guarantor hereby agrees that (a) a notation of such Guaranty
substantially as set forth on Exhibit C hereto shall be endorsed on each Note
authenticated and delivered by the Trustee, (b) such endorsement shall be
executed on behalf of each Guarantor by its Chairman of the Board, President,
Chief Financial Officer, Chief Operating Officer, Treasurer, Secretary or any
Vice President and (c) a counterpart signature page to this Indenture shall be
executed on behalf of each Guarantor by its Chairman of the Board, President or
one of its Vice Presidents and attested to by another officer acknowledging such
Guarantor's agreement to be bound by the provisions hereof and thereof.
Each Guarantor hereby agrees that its Guaranty set forth in
Section 10.7 shall remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Guaranty.
If an officer whose signature is on this Indenture no longer
holds that office at the time the Trustee authenticates the Notes on which a
Guaranty is endorsed, the Guaranty shall nevertheless be valid.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Guaranty set forth in
this Indenture on behalf of the Guarantor.
Section 10.9. Limitation on Guarantor's Liability.
Each Guarantor and by its acceptance hereof each Holder hereby
confirms that it is the intention of all such parties that the guarantee by such
Guarantor pursuant to its Guaranty not constitute a fraudulent transfer or
conveyance for purposes of any Federal or state law. To effectuate the
foregoing inten-
89
<PAGE> 97
tion, the Holders and the Guarantors hereby irrevocably agree that the
obligations of each Guarantor under its Guaranty shall be limited to the maximum
amount as will, after giving effect to all other contingent and fixed
liabilities of such Guarantor and to any collections from or payments made by
or on behalf of any other Guarantor in respect of the obligations of such other
Guarantor under its Guaranty, result in the Obligations of such Guarantor under
the Guaranty not constituting a fraudulent conveyance or fraudulent transfer
under Federal or state law.
Section 10.10. Rights under the Guaranty.
(a) No payment by any Guarantor pursuant to the provisions hereof
shall entitle such Guarantor to any payment out of any Collateral or give rise
to any claim of the Guarantors against the Trustee or any Holder.
(b) Each Guarantor waives notice of the issuance, sale and
purchase of the Notes and notice from the Trustee or the Holders from time to
time of any of the Notes of their acceptance and reliance on this Guaranty.
(c) No set-off, counterclaim, reduction or diminution of any
obligation or any defense of any kind or nature (other than performance by the
Guarantors of their obligations hereunder) that any Guarantor may have or assert
against the Trustee or any Holder shall be available hereunder to such
Guarantor.
(d) Each Guarantor shall pay all costs, expenses and fees,
including all reasonable attorneys' fees, that may be incurred by the Trustee in
enforcing or attempting to enforce the Guaranty or protecting the rights of the
Trustee or the Holder, if any, in accordance with this Indenture.
Section 10.11. Primary Obligations.
The Obligations of each Guarantor hereunder shall constitute a
guaranty of payment and not of collection. Each Guarantor agrees that it is
directly liable to each Holder hereunder, that the Obligations of each Guarantor
hereunder are independent of the Obligations of the Company or any other
Guarantor, and that a separate action may be brought against each Guarantor,
whether such action is brought against the Company or any other Guarantor or
whether the Company or any other Guarantor is joined in such action. Each
Guarantor agrees that its liability hereunder shall be immediate and shall not
be contingent upon the exercise or enforcement by the Trustee or the Holders of
whatever remedies they
90
<PAGE> 98
may have against the Company or any other Guarantor, or the enforcement of any
lien or realization upon any security Trustee may at any time possess. Each
Guarantor agrees that any release that may be given by the Trustee or the
Holders to the Company or any other Guarantor shall not release such Guarantor.
Section 10.12. Guarantee by Subsidiary.
The Company shall cause (i) each Significant Restricted
Subsidiary that is formed or acquired after the date hereof and (ii) each
Subsidiary that becomes a Significant Restricted Subsidiary after the date
hereof, in each case concurrently therewith, to (i) become a Guarantor hereunder
and execute and deliver to the Trustee a Guaranty in the form of Exhibit C
attached hereto and a supplemental indenture in form reasonably satisfactory to
the Trustee pursuant to which such Restricted Subsidiary shall unconditionally
guarantee all of the Company's Obligations as set forth in Section 10.7 of this
Indenture; and (ii) execute a Security Agreement (substantially in the form of
the Security Agreement entered into on the Issue Date) and other Security
Documents necessary or reasonably requested by the Trustee to grant the Trustee
a valid, enforceable, perfected Lien on the Collateral described therein,
subject only to Liens permitted under Section 4.12; and (iii) cause such
Restricted Subsidiary to deliver to the Trustee an Opinion of Counsel, in form
reasonably satisfactory to the Trustee, that (i) such Security Agreement,
supplemental indenture and Guaranty have been duly authorized, executed and
delivered by such Restricted Subsidiary and (ii) such Security Agreement, this
Indenture and such Guaranty constitute a legal, valid, binding and enforceable
obligation of such Restricted Subsidiary, subject to customary exceptions for
bankruptcy, fraudulent transfer and equitable principles.
Each Note issued after the date of execution by any Guarantor of
a Guaranty shall be endorsed with a form of Guaranty that has been executed by
such Guarantor. However, the failure of any Note to have endorsed thereon a
Guaranty executed by such Guarantor shall not affect the validity or
enforceability of such Guaranty against such Guarantor.
Section 10.13. Release of Guarantors.
If all of the Capital Stock of any Guarantor is sold to a Person
(other than the Company or any of its Restricted Subsidiaries) and the Net
Proceeds from such Asset Sale are used in accordance with Section 4.10, then
such Guarantor will
91
<PAGE> 99
be released and discharged from all of its obligations under its Guaranty of the
Notes and this Indenture.
ARTICLE 11
MISCELLANEOUS
Section 11.1. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by TIA Section 318(c), the imposed duties shall control.
Section 11.2. Notices.
Any notice or communication by the Company or the Trustee to the
others is duly given if in writing and delivered in Person or mailed by
first-class mail (registered or certified, return receipt requested), telecopier
or overnight air courier guaranteeing next day delivery, to the others'
addresses:
If to the Company:
Fitzgeralds Gaming Corporation
301 Fremont Street
Las Vegas, Nevada 89101
Attention: Chief Executive Officer
Telecopier No.: (702) 382-5562
If to the Trustee:
The Bank of New York
101 Barclay Street - 21W
New York, New York 10286
Attention: Corporate Trust Administration
Telecopier No.: (212) 815-5915
The Company or the Trustee by notice to the others may designate
additional or different addresses for subsequent notices or communications.
92
<PAGE> 100
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; upon receipt, if deposited in the mail, postage prepaid;
when receipt acknowledged, if telecopied; and the next Business Day after timely
delivery to the courier, if sent by overnight air courier guaranteeing next day
delivery. All notices and communications to the Trustee shall be deemed to have
been duly given only if actually received by the Trustee.
Any notice or communication to a Holder shall be mailed by
first-class mail, to his address shown on the register kept by the Registrar.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.
If a notice communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.
Section 11.3. Communication by Holders with Other Holders.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and any other person shall have the
protection of TIA Section 312(c).
Section 11.4. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 11.5) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
93
<PAGE> 101
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 11.5) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been complied with.
Section 11.5. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall include:
(a) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he has made
such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with,
provided that with respect to matters of fact, an Opinion of Counsel may rely
upon an Officers' Certificate or a certificate of a public official.
Section 11.6. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
94
<PAGE> 102
Section 11.7. Legal Holidays.
If a payment date is a Legal Holiday at a place of payment,
payment may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
Section 11.8. No Recourse Against Others.
No director, officer, employee, incorporator, stockholder or
controlling person of the Company or any Guarantor, as such, shall have any
liability for any obligations of the Company or any Guarantor under the Notes,
this Indenture, the Security Documents or the Registration Rights Agreement or
for any claim based on, in respect of, or by reason of such obligations or their
creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release shall be part of the consideration for the
issuance of the Notes and the Guaranty. Notwithstanding the foregoing, nothing
in this provision shall be construed as a waiver or release of any claims under
the Federal securities laws.
Section 11.9. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED, INTERPRETED AND THE RIGHTS OF
THE PARTIES DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS
APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THE COMPANY HEREBY IRREVOCABLY SUBMITS
TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF
MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF
MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND IRREVOCABLY ACCEPTS FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF
THE AFORESAID COURTS. THE COMPANY 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
95
<PAGE> 103
ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE COMPANY
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 THE COMPANY AT ITS ADDRESS SET FORTH HEREIN,
SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING HEREIN
SHALL AFFECT THE RIGHT OF ANY PURCHASER TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
THE COMPANY IN ANY OTHER JURISDICTION.
Section 11.10. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Company or any of its Subsidiaries. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
Section 11.11. Successors.
All agreements of the Company and any Guarantors in this
Indenture and the Notes shall bind their respective successors. All agreements
of the Trustee in this Indenture shall bind its successor.
Section 11.12. Severability.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 11.13. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
96
<PAGE> 104
Section 11.14. Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
97
<PAGE> 105
INDENTURE
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Indenture as of the date first written above.
FITZGERALDS GAMING CORPORATION
and each of:
FITZGERALDS SOUTH, INC.
FITZGERALDS RENO, INC.
FITZGERALDS INCORPORATED
FITZGERALDS MISSISSIPPI, INC.
FITZGERALDS LAS VEGAS, INC.
FITZGERALDS BLACK HAWK, INC.
FITZGERALDS BLACK HAWK II, INC.
FITZGERALDS FREMONT EXPERIENCE
CORPORATION
101 MAIN STREET LIMITED LIABILITY
COMPANY,
as Guarantors
By: /s/ PHILIP D. GRIFFITH
----------------------------------------------
Name: Philip D. Griffith
Title: President and Chief Executive Officer
of each of the above named entities
Attest:
/s/ MICHAEL E. MCPHERSON
- --------------------------------
Name: Michael E. McPherson
Title: Secretary
S-1
<PAGE> 106
THE BANK OF NEW YORK, as Trustee
By:/s/ THOMAS B. ZAKRZEWSKI
------------------------------------
Name: THOMAS B. ZAKRZEWSKI
Title: Assistant Vice President
S-2
<PAGE> 107
EXHIBIT A
(Face of Security)
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST
COMPANY (THE "DEPOSITORY") TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE
DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE
DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DEPOSITORY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR
SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DEPOSITORY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.(1)
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION
OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH NOTE, PRIOR TO THE DATE WHICH IS TWO YEARS (OR SUCH
SHORTER PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER RULE 144(k) AS PERMITTING
RESALES BY NON-AFFILIATES OF RESTRICTED SECURITIES WITHOUT RESTRICTION) AFTER
THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE
COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE (OR ANY
PREDECESSOR OF SUCH NOTE) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO
OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN
THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7)
UNDER THE SECURITIES ACT THAT IS PURCHASING THE NOTE FOR ITS OWN ACCOUNT, OR FOR
THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE
OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE
FORM APPEARING ON THIS NOTE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRUSTEE.
- --------
(1) This paragraph should be included only if the Note is issued in global form.
A-1
<PAGE> 108
FITZGERALDS GAMING CORPORATION
12 1/4% SENIOR SECURED NOTE
DUE 2004
NO. $___________
CUSIP NO.
Fitzgeralds Gaming Corporation, a Nevada corporation (the
"Company"), as obligor, for value received promises to pay to ______________ or
registered assigns, the principal sum of [ ] Dollars on December 15, 2004.
Interest Payment Dates: June 15 and December 15 and on the
maturity date. Record Dates: June 1 and December 1 (whether or not a Business
Day).
Reference is hereby made to the further provisions of this Note
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
Dated:
FITZGERALDS GAMING CORPORATION
By:
-----------------------------------------
Name:
Title:
By:
-----------------------------------------
Name:
Title:
Trustee's Certificate of Authentication:
Dated:
This is one of the Notes referred to
in the within-mentioned Indenture:
THE BANK OF NEW YORK, as Trustee
By:
-------------------------------
Authorized Signatory
A-2
<PAGE> 109
(Back of Security)
12 1/4% SENIOR SECURED NOTE
DUE 2004
1. Interest. Fitzgeralds Gaming Corporation, a Nevada corporation
(the "Company"), as obligor, promises to pay interest on the principal amount of
this Note at the rate and in the manner specified below.
The Company shall pay, in cash, interest on the principal amount
of this Note, at the rate of 12 1/4% per annum. The Company shall pay interest
semi-annually on June 15 and December 15 of each year, and on the maturity date,
commencing on June 15, 1998, or if any such day is not a Business Day, on the
next succeeding Business Day (each an "Interest Payment Date").
Interest shall be computed on the basis of a 360-day year
consisting of twelve 30-day months. Interest shall accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from
December 30, 1997. To the extent lawful, the Company shall pay interest on
overdue principal at the rate of 1% per annum in excess of the then applicable
interest rate on the Notes; the Company shall pay interest on overdue
installments of interest (without regard to any applicable grace periods) at the
same rate to the extent lawful.
2. Method of Payment. The Company shall pay interest on the Notes
(except defaulted interest) to the Persons who are registered Holders of Notes
at the close of business on the record date next preceding the Interest Payment
Date, even if such Notes are cancelled after such record date and on or before
such Interest Payment Date. The Holder must surrender this Note to a Paying
Agent to collect principal payments. The Company shall pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. The Company may pay principal
and interest by check to a Holder's registered address.
3. Paying Agent and Registrar. Initially, the Trustee shall act
as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-registrar without notice to any Holder. Subject to certain
exceptions, the Company or any of its Subsidiaries may act in any such capacity.
4. Indenture. The Company has issued the Notes under an
Indenture dated as of December 30, 1997 (the "Indenture") among the Company, the
Guarantors named therein and the Trustee. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939 (the "TIA") (15 U.S. Code Sections 77aaa-77bbbb) as
in effect on the date of the Indenture until such time as the Indenture is
qualified under the TIA and thereafter as in effect on the date the Indenture is
so qualified. The Notes are subject to all such terms, and Holders are referred
to the Indenture and such Act for a statement of such terms. The terms of the
Indenture shall govern any inconsistencies between the Indenture and the Notes.
Terms not otherwise defined herein shall have the meanings assigned in the
Indenture. The Notes are limited to $255 million in aggregate principal amount.
5. Optional Redemption. The Notes are not redeemable at the
Company's option prior to December 15, 2001. Thereafter, the Notes will be
subject to redemption at the option of the Company, in whole or in part, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued
A-3
<PAGE> 110
and unpaid interest thereon, if any, to the applicable redemption date, if
redeemed during the 12-month period beginning on December 15 of the years
indicated below:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2001............................ 106.250%
2002............................ 104.166%
2003 ........................... 102.083%
2004 and thereafter............. 100.000%
</TABLE>
Notwithstanding the foregoing, at any time or from time to time
prior to December 15, 2001, the Company may, at its option, redeem up to 35% of
the original principal amount of the Notes, at a redemption price of 112.5% of
the principal amount thereof, plus accrued and unpaid interest, if any, to the
applicable redemption date, with the net cash proceeds of one or more Public
Equity Offerings; provided, that (a) such redemption shall occur within 90 days
of the date of closing of such public offering and (b) at least $133,250,000
aggregate principal amount of Notes remains outstanding immediately after giving
effect to each such redemption.
Each holder, by accepting the Notes, shall be deemed to have
agreed (to the extent permitted by applicable law) that if the Gaming Authority
of any jurisdiction in which the Company or any of its Subsidiaries conducts or
proposes to conduct gaming requires that a Person who is a holder or a
beneficial owner of any of the Notes must be licensed or found suitable under
applicable gaming laws, such holder shall apply for a license or a finding of
suitability within the required time period. If such Person fails to apply or
become licensed or is found unsuitable, the Company shall have the right, at its
option, (i) to require such Person to dispose of its Notes or beneficial
interest therein within 30 days of receipt of notice of the Company's election
or such earlier date as may be ordered by such Gaming Authority, or (ii) to
redeem such Notes at a price of the lesser of (a) such Person's cost and (b)
100% of the principal amount thereof, plus accrued and unpaid interest to the
earlier of the date of redemption and the date of the finding of unsuitability,
which may be less than 30 days following the notice of redemption if so ordered
by the Gaming Authority. The holder or beneficial owner applying for a license
or finding of suitability must pay all costs of the licensure or investigation
for such finding.
6. Mandatory Redemption. There shall be no mandatory redemption
of the Notes.
7. Denominations, Transfer, Exchange. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar and the Company need not exchange
or register the transfer (i) of any Note or portion of a Note selected for
redemption or (ii) of any Notes for a period of 15 days before a selection of
Notes to be redeemed or during the period between a record date and the
corresponding Interest Payment Date.
8. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes, subject to the provisions of the
Indenture with respect to the record dates for the payment of interest.
A-4
<PAGE> 111
9. Amendments and Waivers. Subject to certain exceptions, the
Indenture or the Notes may be amended with the written consent of the Holders of
at least a majority in principal amount of the then outstanding Notes (including
consents obtained in connection with a tender offer or exchange offer for
Notes), and any existing Default or Event of Default (except certain payment
defaults) may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Notes (including consents obtained in
connection with a tender offer or exchange offer for Notes). Without the consent
of any Holders, the Indenture and the Notes may be amended or supplemented to
cure any ambiguity, defect or inconsistency, to provide for assumption of the
Company's obligations to the Holders in the case of a merger or consolidation,
to provide for uncertificated Notes in addition to or in place of certificated
Notes, to make any change that would provide any additional rights or benefits
to the Holders of the Notes, or that does not adversely affect the legal rights
under the Indenture of any Holder, to release any Guarantee of the Notes
permitted to be released under the terms of the Indenture or to comply with
requirements of the Commission in order to effect or maintain the qualification
of the Indenture under the TIA.
10. Defaults and Remedies. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare by written notice to the Company and the
Trustee all the Notes to be due and payable immediately, except that in the case
of an Event of Default arising from certain events of bankruptcy or insolvency,
all outstanding Notes become due and payable immediately without further action
or notice. Holders may not enforce the Indenture or the Notes except as provided
in the Indenture. The Trustee may require indemnity satisfactory to it before it
enforces the Indenture or the Notes. Subject to certain limitations, Holders of
a majority in principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. The Company must furnish an
annual compliance certificate to the Trustee.
11. Trustee Dealings with Company. The Trustee under the
Indenture, in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Company or its Affiliates, and may
otherwise deal with the Company or its Affiliates, as if it were not Trustee.
12. No Recourse Against Others. No director, officer, employee,
incorporator, stockholder or controlling person of the Company or Guarantor, as
such, shall have any liability for any obligations of the Company or any
Guarantor under the Notes, the Indenture or the Registration Rights Agreement or
for any claim based on, in respect of, or by reason of such obligations or their
creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes and the Guarantees. Notwithstanding the foregoing, nothing in this
provision shall be construed as a waiver or release of any claims under the
Federal securities laws.
13. Authentication. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
14. Abbreviations. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).
15. CUSIP Numbers. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes
A-5
<PAGE> 112
and has directed the Trustee to use CUSIP numbers in notices of redemption as a
convenience to Holders. No representation is made as to the accuracy of such
numbers either as printed on the Notes or as contained in any notice of
redemption and reliance may be placed only on the other identification numbers
placed thereon.
[16. Holders' Compliance with Registration Rights Agreement. Each
Holder of a Note, by his acceptance thereof, acknowledges and agrees to the
provisions of the Registration Rights Agreement, dated as of December 30, 1997,
among the Company and the parties named on the signature page thereof (the
"Registration Rights Agreement"), including but not limited to the obligations
of the Holders with respect to a registration and the indemnification of the
Company and the Purchasers (as defined therein) to the extent provided
therein.(2)
17. Governing Law. This Note and the Indenture shall be
construed, interpreted and the rights of the parties determined in accordance
with the laws of the State of New York, without regard to principles of
conflicts of law.
The Company shall furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to: Fitzgeralds Gaming Corporation, 301 Fremont Street,
Las Vegas, Nevada, 89101, Attention: Chief Executive Officer.
- --------
(2) This paragraph should only be included in the Series A Notes.
A-6
<PAGE> 113
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign
and transfer this Note to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint______________________________
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
- --------------------------------------------------------------------------------
Date:
--------------------
Your Signature:
--------------------------
(Sign exactly as your name appears
on the face of this Note)
Tax Identification Number:
---------------
Signature Guarantee*
- ----------------
* NOTICE: The signature must be guaranteed by an institution which is a member
of one of the following recognized signature guarantee programs:
(1) The Securities Transfer Agent Medallian Program (STAMP);
(2) The New York Stock Exchange Medallian Program (MSP);
(3) The Stock Exchange Medallian Program (SEMP).
A-7
<PAGE> 114
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Note purchased by
the Company pursuant to Section 4.10 or Section 4.14 of the Indenture, as the
case may be, state the amount you elect to have purchased (if all, write "ALL"):
$
--------------
Date:
--------------------------
Your Signature:
--------------------------
(Sign exactly as your name appears
on the face of this Note)
Signature Guarantee*
- --------------
* NOTICE: The signature must be guaranteed by an institution which is a member
of one of the following recognized signature guarantee programs:
(1) The Securities Transfer Agent Medallian Program (STAMP);
(2) The New York Stock Exchange Medallian Program (MSP);
(3) The Stock Exchange Medallian Program (SEMP).
A-8
<PAGE> 115
SCHEDULE OF EXCHANGES OF DEFINITIVE NOTES(3)
The following exchanges of a part of this Global Note for
Definitive Notes have been made:
<TABLE>
<CAPTION>
Amount of decrease in Amount of increase in Principal Amount of this
Principal Amount of this Principal Amount of this Global Note following Signature of authorized
Date of Exchange Global Note Global Note such decrease (or increase) officer of Trustee
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
</TABLE>
- --------
(3) This should only be included if the Note is issued in global form.
A-9
<PAGE> 116
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF NOTES
Re: [Series A] [Series B]12 1/4% Senior Secured Notes due 2004 (the "Notes")
of Fitzgeralds Gaming Corporation
This Certificate relates to $______ principal amount of Notes held in *
[ ] book-entry or * [ ] definitive form by _______________________ (the
"Transferor").
The Transferor, by written order, has requested the Trustee:
[ ] to deliver in exchange for its beneficial interest in the Global Note
held by the depository, a Note or Notes in definitive, registered form
of authorized denominations and an aggregate principal amount equal to
its beneficial interest in such Global Note (or the portion thereof
indicated above); or
[ ] to exchange or register the transfer of a Note or Notes. In connection
with such request and in respect of each such Note, the Transferor does
hereby certify that Transferor is familiar with the Indenture relating
to the above captioned Notes and, the transfer of this Note does not
require registration under the Securities Act of 1933, as amended (the
"Securities Act") because such Note:
[ ] is being acquired for the Transferor's own account, without transfer;
[ ] is being transferred pursuant to an effective registration statement;
[ ] is being transferred to a "qualified institutional buyer" (as defined in
Rule 144A under the Securities Act), in reliance on such Rule 144A;
[ ] is being transferred pursuant to an exemption from registration in
accordance with Rule 904 under the Securities Act;**
[ ] is being transferred pursuant to Rule 144 under the Securities Act;** or
[ ] is being transferred pursuant to another exemption from the registration
requirements of the Securities Act (explain:
----------------------------
--------------------------------------------------------------------).**
---------------------------
[INSERT NAME OF TRANSFEROR]
By:
-------------------------------
Date:
---------------------
* Check applicable box.
** If this box is checked, this certificate must be accompanied by
an opinion of counsel to the effect that such transfer is in
compliance with the Securities Act.
B-1
<PAGE> 117
EXHIBIT C
[FORM OF GUARANTY]
GUARANTY
For good and valuable consideration received from the Company by
the undersigned (hereinafter referred to as the "Guarantors," which term
includes any successor or additional Guarantors), the receipt and sufficiency of
which is hereby acknowledged, subject to Section 10.9 of the Indenture, each
Guarantor, jointly and severally, hereby unconditionally guarantees,
irrespective of the validity or enforceability of the Indenture, the Notes, the
Security Documents or the Obligations, (a) the due and punctual payment of the
principal and premium, if any, of and interest on the Notes (including, without
limitation, interest after the filing of a petition initiating any proceedings
referred to in Sections 6.1(9) or (10) of the Indenture), whether at maturity or
on an interest payment date, by acceleration, call for redemption or otherwise,
(b) the due and punctual payment of interest on the overdue principal and
premium, if any, of and interest, if any, on the Notes, if lawful, (c) the due
and punctual payment and performance of all other Obligations, all in accordance
with the terms set forth in the Indenture, the Notes and the Security Documents,
and (d) in case of any extension of time of payment or renewal of any Notes or
any of such other Obligations, the due and punctual payment or performance
thereof in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise.
No director, officer, employee, incorporator, stockholder or
controlling person of the Guarantor, as such, shall have any liability under
this Guaranty for any obligations of the Guarantor under the Notes, the
Indenture or the Registration Rights Agreement or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder of
the Notes by accepting a Note waives and releases all such liability.
FITZGERALDS SOUTH, INC. FITZGERALDS MISSISSIPPI, INC.
By: By:
----------------------------- -----------------------------
Name: Name:
--------------------------- ---------------------------
Title: Title:
-------------------------- --------------------------
FITZGERALDS LAS VEGAS, INC. FITZGERALDS FREMONT
EXPERIENCE CORPORATION
By:
----------------------------- By:
Name: -----------------------------
--------------------------- Name:
Title: ---------------------------
-------------------------- Title:
--------------------------
FITZGERALDS RENO, INC. FITZGERALDS INCORPORATED
By: By:
----------------------------- -----------------------------
Name: Name:
--------------------------- ---------------------------
Title: Title:
-------------------------- --------------------------
C-1
<PAGE> 118
FITZGERALDS BLACK HAWK, INC. FITZGERALDS BLACK HAWK II, INC.
By: By:
----------------------------- -----------------------------
Name: Name:
--------------------------- ---------------------------
Title: Title:
-------------------------- --------------------------
101 MAIN STREET LIMITED
LIABILITY COMPANY
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
C-2
<PAGE> 119
EXHIBIT E
[FORM OF SHIP MORTGAGE]
E-1
<PAGE> 120
[Tunica]
FIRST PREFERRED VESSEL MORTGAGE
ON THE WHOLE OF THE FITZGERALDS TUNICA
(U.S.C.G. Official Number 262757)
Maximum Amount of $255,000,000.00
FITZGERALDS MISSISSIPPI, INC., a Mississippi corporation,
having an address of
301 Fremont Street
Las Vegas, Nevada 89101,
Owner and Mortgagor
In Favor of
THE BANK OF NEW YORK, a New York banking association,
having an address of
101 Barclay Street - 21W
New York, New York 10286
in its capacity as Trustee
under that certain Indenture dated as of
December 30, 1997 by and among
Fitzgeralds Gaming Corporation,
a Nevada corporation,
the Guarantors named therein and
The Bank of New York,
Trustee-Mortgagee
Dated as of December 30, 1997
Discharge amount: $255,000,000.00 (or such lesser amount of principal
as shall have been advanced) Together WithInterest, Expenses,
Attorneys' Fees And Costs And Performance of Mortgage Covenants
<PAGE> 121
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 1.
DEFINITIONS AND RULES OF CONSTRUCTION................................5
1.1 Certain Definitions...........................................6
1.2 Rules of Construction.........................................6
ARTICLE 2.
GENERAL MORTGAGE PROVISIONS..........................................6
ARTICLE 3.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF MORTGAGOR...............7
3.1 Corporate Status of Mortgagor.................................7
3.2 Outstanding Liens.............................................7
3.3 Compliance with Law...........................................7
3.4 Operation of Vessel...........................................8
3.5 Payment of Taxes, Etc.........................................8
3.6 Notice of Mortgage............................................8
3.7 Release from Arrest...........................................9
3.8 Care of the Vessel............................................9
3.9 Access to Vessel..............................................9
3.10 Documentation of Vessel.......................................9
3.11 Sale, Charter or Mortgage of Vessel...........................9
3.12 Insurance....................................................10
3.13 Requisition of Title to Vessel...............................11
3.14 Requisition of Vessel but Not Title..........................11
3.15 Execution of Additional Documents............................12
ARTICLE 4.
EVENTS OF DEFAULT AND REMEDIES......................................12
4.1 Events of Default............................................12
4.2 Remedies.....................................................13
</TABLE>
- ii -
<PAGE> 122
<TABLE>
<CAPTION>
<S> <C>
4.3 Sale of Vessel by Mortgagee..................................14
4.4 Mortgagee to Sign for Mortgagor..............................15
4.5 Mortgagee to Collect Hire, Etc...............................15
4.6 Right to a Receiver..........................................15
4.7 Suits to Protect the Vessel..................................15
4.8 Costs of Mortgagee...........................................16
4.9 Right of Mortgagee...........................................16
4.10 Restoration of Position......................................16
4.11 Proceeds of Sale.............................................17
4.12 Gaming Approvals.............................................17
ARTICLE 5.
MISCELLANEOUS PROVISIONS............................................17
5.1 Addresses for Notices, Etc...................................17
5.2 Mortgagee's Expenses, Including Attorney's Fees..............18
5.3 Counterparts.................................................19
5.4 Interest of Mortgagee........................................19
5.5 Survivorship of Covenants....................................19
5.6 Amendments...................................................19
5.7 Discharge of Lien............................................19
5.8 Incorporation into Mortgage..................................19
5.9 GOVERNING LAW................................................19
5.10 Conflict.....................................................20
</TABLE>
- iii -
<PAGE> 123
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 December 30, 1997, 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: The Bank of New York, whose
address is 101 Barclay Street - 21W, New York, New York 10286, as Trustee under
that certain Indenture (as same may be amended or supplemented from time to time
hereafter, the "Indenture") dated December 30, 1997, by and among Fitzgeralds
Gaming Corporation, a Nevada corporation (the "Company"), Mortgagor and the
other Guarantors named therein and The Bank of New York, as Trustee-Mortgagee
("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 Indenture, the Company
has executed certain 12 1/4% Senior Secured Notes (together with any
replacements thereof contemplated in the Indenture and as same may be amended or
supplemented from time to time hereafter, the "Notes") dated as of December 30,
1997, and due in 2004, in the aggregate stated maximum principal amount of TWO
HUNDRED FIFTY FIVE MILLION DOLLARS AND NO/100 ($255,000,000.00).
C. Mortgagor is a wholly-owned subsidiary of the Company and has
guaranteed (as same may be amended, replaced or supplemented from time to time
hereafter, "Mortgagor's Guaranty"), pursuant to the terms of the Indenture,
payment by the Company of the indebtedness evidenced by the Notes and
performance by the Company of the obligations of the Company under the Notes and
the Indenture.
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
2
<PAGE> 124
"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 Subsidiary Guarantee
Obligations, as defined in the Deed of Trust.
E. In order to further secure the due and punctual payment and
performance of all of the Subsidiary Guarantee 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, 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 in the Deed of Trust), whether now owned or hereafter
acquired:
GRANTING CLAUSE ONE
[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 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
3
<PAGE> 125
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 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, 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, 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
4
<PAGE> 126
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, accessions,
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 Indenture, this
Mortgage or any other Security 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 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 Subsidiary Guarantee 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 Subsidiary
Guarantee 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
Subsidiary Guarantee 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:
5
<PAGE> 127
1.1 Certain Definitions. Capitalized terms used herein and not
otherwise defined herein but defined in the Indenture or the Deed of Trust shall
have the definitions provided in the Indenture 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.
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 Notes, the Guarantees and the other Subsidiary Guarantee Obligations
is an amount up to the maximum sum of TWO HUNDRED FIFTY FIVE MILLION DOLLARS AND
NO/100 ($255,000,000), as the total of all possible advances that may be made
under the loan evidenced by the Notes, together with interest, attorneys' fees
and costs of performance of the Subsidiary Guarantee Obligations and the
covenants of this Mortgage, the Notes, the Guarantees, the Deed of Trust and the
other Note Documents. The discharge amount is the same as such total amount,
together with interest, expenses, attorneys' fees and costs and performance of
the Subsidiary Guarantee Obligations and the covenants of this Mortgage, the
Notes, the Guarantees, the Deed of Trust and the other Note Documents.
6
<PAGE> 128
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
Indenture; 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 Liens and other matters permitted under the Indenture.
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 Subsidiary
Guarantee Obligations.
7
<PAGE> 129
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 Section 4.5 of
the Indenture, 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 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
The Bank of New York, a New York banking association, as mortgagee, to secure
payment of indebtedness. Under the terms of said Mortgage, 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
8
<PAGE> 130
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 Section 4.15 of the Indenture, 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
duly 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.
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 Indenture, Mortgagor covenants that at all times prior to the indefeasible
payment in full of the Subsidiary Guarantee 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 disposi-
9
<PAGE> 131
tion, 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.
3.11.2 Pari-Passu Liens. Mortgagor may grant a Lien on all or any
portion of the Vessel, which Lien (a "Pari Passu Encumbrance") shall,
notwithstanding the date of filing, rank "equally and ratably with" or "pari
passu" (as such terms are used herein or in the Indenture) with the Lien created
by this Mortgage, provided all of the following conditions are satisfied:
(i) the Lien is permitted by the terms of the Indenture to secure
Indebtedness equally and ratably with or pari passu with the Notes;
(ii) The instrument creating the applicable Lien (A) contains the
following statement: "Pursuant to Section 3.11.2 of that certain First
Preferred Vessel Mortgage dated as of December 30, 1997 from
Fitzgeralds Mississippi, Inc., as Mortgagor, to The Bank of New York, as
Mortgagee, the lien created by this instrument ranks equally and ratably
with or pari passu with the lien created by said First Preferred Vessel
Mortgage," and (B) provides for rights and remedies no greater than
those contained in the Note Documents; and
(iii) Mortgagor has complied with all other applicable terms and
provisions of the Indenture.
Mortgagee agrees to execute any additional documents which may be reasonably
required to confirm and establish that the lien of any Pari Passu Encumbrance is
pari passu with the Lien of this Mortgage; provided that, Mortgagee shall have
no liability thereunder and all costs and expenses thereof shall be paid by
Mortgagor.
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 Section 4.16 of the
Indenture. 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)
10
<PAGE> 132
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 Mortgagee 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 Section 4.10 of
the Indenture. Mortgagor shall not, without the prior written permission of
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 Section 4.10 of the Indenture. 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.
11
<PAGE> 133
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 Notes, the
Guarantees and the other Note Documents.
ARTICLE 4.
EVENTS OF DEFAULT AND REMEDIES
4.1 Events of Default. Subject to any applicable cure period provided
for in the Indenture 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 Indenture) 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 Collateral Documents or Note
Documents.
4.1.4 Any statement, representation or warranty given by
Mortgagor to Mortgagee in any of the Note Documents, in connection with the
Indenture 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 Beneficiary as provided in Section 3.11 hereof.
12
<PAGE> 134
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
Subsidiary Guarantee Obligations (except that such acceleration shall be
automatic if the Event of Default is caused by any of the events described in
Sections 6.1 (9) and 6.1 (10) of the Indenture), declare the outstanding
principal amount of the Notes and the interest accrued thereon, and all other
Subsidiary Guarantee Obligations, to be due and payable immediately, and upon
such declaration such principal and interest and other Subsidiary Guarantee
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
13
<PAGE> 135
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;
(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 sale 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 or any other holders of the
Notes 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.
14
<PAGE> 136
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 Note 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 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 Note 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
15
<PAGE> 137
Vessel by any acts which may be unlawful or in violation of the terms of this
Mortgage or any of the other Note 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 or the holders of the Notes. 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
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 Note 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 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 Subsidiary Guarantee
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.
16
<PAGE> 138
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
4.11.2 To the payment in full of any amounts then due and unpaid
under the Subsidiary Guarantee 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:
17
<PAGE> 139
Mortgagee: The Bank of New York,
A New York banking association
101 Barclay Street - 21W
New York, New York 10286
Attention: Corporate Trust Administration
Mortgagor: FITZGERALDS MISSISSIPPI, INC.
a Mississippi corporation
711 Lucky Lane
Robinsville, Mississippi 38664
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 Indenture, (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
proceed-
18
<PAGE> 140
ing, (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 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 Subsidiary Guarantee 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 NEW YORK, 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 PURSU-
19
<PAGE> 141
ANT 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 Indenture, the terms
and provisions of the Indenture shall control and govern the obligations, rights
and responsibilities of the parties hereto.
20
<PAGE> 142
IN WITNESS WHEREOF, Mortgagor has executed this Mortgage as of
the day and year first above written.
FITZGERALDS MISSISSIPPI, INC.,
a Mississippi corporation
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
21
<PAGE> 143
ACKNOWLEDGMENT
STATE OF )
) SS.
COUNTY OF )
On the ____________ day of December, 1997, before me
personally came ______________________to me known, who, being by me duly sworn,
did depose and say that he resides at _________________; that he is the
_____________________ of Fitzgeralds Mississippi, Inc., the corporation
described in and which executed the above instrument; that knows the seal of
said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by order of the Board of Directors of said
corporation, and acknowledged that _________________ signed ______________ name
thereto by like order.
-------------------------------------------
NOTARY PUBLIC
My Commission expires:
22
<PAGE> 144
EXHIBIT A
LEGAL DESCRIPTION OF LAND
- i -
<PAGE> 145
BOOK 141 PAGE 377
TRACT 1
A tract of land situated in Sections 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 4201.45 feet to a point; thence North 9 degrees, 09 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 4442.00 feet to a point on
the existing slope of the Mississippi River Commaree Trenchfill Investment
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, 06 seconds, 00 seconds East and continuing along
the said existing slope for 1751.00 feet to a point; thence
North 53 degrees, 45 minutes, 00 seconds East and continuing along the said
existing slope for 1049.02 feet to a point; thence
South 45 degrees, 17 minutes, 48 seconds East for 2113.63 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, 45 minutes, 12 seconds East for 122.36 feet to a point; thence
South 50 degrees, 13 minutes, 00 seconds West for 360.83 feet to a point, thence
South 54 degrees, 09 minutes, 04 seconds West for 483.00 feet to a point; thence
South 49 degrees, 09 minutes, 00 seconds West for 225.00 feet to a point; thence
North 47 degrees, 14 minutes, 08 seconds West for 314.00 feet to a point; thence
North 23 degrees, 95 minutes, 08 seconds West for 870.00 feet to the said
"Point of Beginning", containing 132.82 acres, more or less.
Bearings in the above description have an origin of TRUE NORTH based on
computations from celestial observations.
<PAGE> 146
BOOK 141 PAGE 378
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 Southwest 1/4, all in Sections 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, 06 minutes, 34 seconds West for 948.29 feet to an 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 249.86 feet to a point;
thence
North 57 degrees, 04 minutes, 05 seconds West for 461.24 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 320.25 feet to a point; thence
North 65 degrees, 43 minutes, 51 seconds West for 287.55 feet to a point; thence
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 177.13 feet to a point; thence
North 27 degrees, 20 minutes, 85 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, 08 seconds East along said northern line for
22.30 feet to a point; thence
North 50 degrees, 18 minutes, 09 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 204.92 feet to a point; thence
South 41 degrees, 36 minutes, 46 seconds East for 147.74 feet to a point; thence
South 48 degrees, 34 minutes, 22 seconds East for 388.74 feet to a point; thence
South 82 degrees, 34 minutes, 59 seconds East for 202.68 feet to a point;
thence
South 82 degrees, 39 minutes, 27 seconds East for 258.65 feet to a point; thence
South 68 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", containing 13.95 acres, more or less.
Bearings in the above description have an origin of TRUE NORTH based on
computations from celestial observations.
<PAGE> 147
BOOK 141 PAGE 379
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 an 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
198.42 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 848.14 feet to a point; thence
South 72 degrees, 54 minutes, 40 seconds West for 236.34 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 northern
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 97 degrees, 57 minutes, 16 seconds East for 560.07 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, 26 seconds East for 145.96 feet to a point; thence
South 31 degrees, 16 minutes, 14 seconds East for 487.57 feet to the said
"Point of Beginning", containing 6.04 acres, more or less.
Bearings in the above description have an origin of TRUE NORTH based on
computations from celestial observations.
<PAGE> 148
BOOK 141 PAGE 380
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 130.00 feet to the "Point of Beginning" of the tract
herein described; thence
North 6 degrees, 14 minutes, 14 seconds West along a line representing the west
line of said Section 11 for 346.00 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 948.09 feet to a point; thence
South 89 degrees, 39 minutes, 36 seconds West for 36.00 feet to the said
"Point of Beginning", containing 0.4339 acres, more or less.
Bearings in the above description have an origin of TRUE NORTH based on
computation from celestial observations.
<PAGE> 149
BOOK 141 PAGE 381
TRACT 8*
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 19 degrees,
39 minutes, 34 seconds East for 20.08 feet to the said "Point of Beginning" of
the tract herein described; thence
North 39 degrees, 39 minutes, 36 seconds East for 120.01 feet to a point; thence
North 8 degrees, 14 minutes, 36 seconds West for 1124.29 feet to a point; thence
North 11 degrees, 45 minutes, 30 seconds East for 190.77 feet to a point; thence
North 1 degree, 08 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
northern boundary of the Yazoo-Mississippi Delta Levee Commission property;
thence
North 83 degrees, 08 minutes, 40 seconds West along the said southern boundary
for 38.02 feet to a point; thence
South 30 degrees, 23 minutes, 00 seconds West and continuing along the said
southern boundary for 223.42 feet to a point; thence
South 0 degrees, 14 minutes, 36 seconds East for 4083.02 feet to the said
"Point of Beginning", containing 6.82 acres, more or less.
Bearings in the above description have an origin of TRUE NORTH based on
computations from celestial observations.
<PAGE> 150
Schedule 1
Existing Liens
Sch-1
<PAGE> 151
SCHEDULE 1 TO THE INDENTURE
EXISTING LIENS
<TABLE>
<CAPTION>
Principal outstanding as of
Fitzgeralds Las Vegas, Inc. December 31, 1997
--------------------------- ---------------------------
<S> <C>
Bally: slot equipment $ 13,490
Oppenheimer: slot equipment 455,354
IGT: slot equipment 64,699
IGT: slot equipment 71,608
IGT Smart System 783,803
Holidex System 20,209
IBM: computer hardware 105,731
Colonial Pacific: Micros system 86,673
WilTel Communications: phone system 167,431
Xpertx: Keno system 13,983
Young Electric: exterior signs 434,567
PDS Financial Corporation Equipment
NTFC Capital corporation Equipment
</TABLE>
<PAGE> 152
<TABLE>
<CAPTION>
Principal outstanding as of
Fitzgeralds Mississippi, Inc. December 31, 1997
----------------------------- ---------------------------
<S> <C>
CIT: slot equipment $400,000
Williams: slot equipment 35,530
IGT: slot equipment 36,276
IGT: slot equipment 11,995
IGT: slot equipment 15,089
CFS Leasing: Micro System 76,617
IBM: computer hardware 140,382
River Bend: sewer system 273,964
Young Electric: marquee sign 62,527
</TABLE>
<PAGE> 153
<TABLE>
<CAPTION>
Principal outstanding as of
Fitzgeralds Reno December 31, 1997
---------------- ---------------------------
<S> <C>
IGT: SMART equipment $ 381,978
IGT: slot equipment 14,336
IGT: slot equipment 40,906
IGT: slot equipment 39,332
IGT: slot equipment 39,332
Oppenheimer: slot equipment 377,972
Bally: slot equipment 6,229
Bally: slot equipment 41,913
Bally: slot equipment 13,719
Bally: slot equipment 76,594
IBM: computer hardware 84,981
Kronos: T&A system 12,997
Tru-Measur: F&B equipment 14,923
Lincoln Partners Note 327,742
Harolds Club settlement 1,525,000
First National Bank of Glencoe/Minnetonka, N.A. Equipment
Miller & Schroeder Investment Corporation Equipment
NFTC Capital Corporation Equipment
IDS Financial Corporation Equipment
Ecolab (Dish machine 5355192)
Ecolab (Dish machine 5620195)
</TABLE>
<PAGE> 154
<TABLE>
<CAPTION>
Fitzgeralds Black Hawk/ Principal outstanding as of
101 Main Street Limited Liability Company December 31, 1997
----------------------------------------- ---------------------------
<S> <C>
CIT: slot equipment $107,853
IGT: slot equipment 54,718
GE Capital: gaming equipment 645,572
PDS 132,292
ITT Commercial Finance Corp. (Various)
CIT Group/Equipment Finance (Equipment)
Young Electric Sign Company (Marquee Sign)
</TABLE>
<PAGE> 155
<TABLE>
<CAPTION>
Principal outstanding as of
Fitzgeralds Gaming Corporation December 31, 1997
------------------------------ ---------------------------
<S> <C>
Business Credit Leasing (Toshiba Copying Systems)
Bally Gaming, Inc. (Equipment)
</TABLE>
<PAGE> 1
EXHIBIT 10.2
FITZGERALDS GAMING CORPORATION
$205,000,000 12 1/4% Senior Secured Notes due 2004
REGISTRATION RIGHTS AGREEMENT
December 30, 1997
JEFFERIES & COMPANY, INC.
MERRILL LYNCH & CO.,
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
c/o JEFFERIES & COMPANY, INC.
11100 Santa Monica Boulevard
10th Floor
Los Angeles, California 90025
Ladies and Gentlemen:
FITZGERALDS GAMING CORPORATION, a Nevada corporation (the
"Company"), is issuing and selling to Jefferies & Company, Inc. and Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated (the
"Purchasers"), upon the terms set forth in a purchase agreement, dated as of
December 19, 1997 (the "Purchase Agreement"), $205,000,000 aggregate principal
amount of its 12 1/4% Senior Secured Notes due 2004, Series A, including the
guarantees endorsed thereon (the "Notes"). As an inducement to the Purchasers to
enter into the Purchase Agreement, the Company and each of the guarantors (the
"Guarantors") signatory to the Purchase Agreement agree with the Purchasers, for
the benefit of the holders of the Securities (defined below) (including, without
limitation, the Purchasers), as follows:
<PAGE> 2
1. Definitions
Capitalized terms used herein without definition shall have their
respective meanings set forth in the Purchase Agreement. As used in this
Agreement, the following terms shall have the following meanings:
Advice: See the last paragraph of Section 6.
Agreement: This Registration Rights Agreement.
Applicable Period: See Section 2(f).
Business Days: Any day other than (i) Saturday or Sunday, or (ii)
a day on which banking institutions in the State of New York are authorized or
obligated by law or executive order to be closed.
Closing Date: December 30, 1997.
Effectiveness Date: The 180th day following the Closing Date.
Effectiveness Period: See Section 3(a).
Event: See Section 4(a).
Event Date: See Section 4(a).
Exchange Act: The Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.
Exchange Offer: See Section 2(a).
Exchange Offer Registration Statement: See Section 2(a).
Exchange Securities: 12 1/4% Senior Secured Notes due 2004,
Series B, of the Company, including the guarantees endorsed thereon, identical
in all respects to the Notes, except for references to series and restrictive
legends.
Filing Date: The 120th day following the Closing Date.
2
<PAGE> 3
Holder: Each holder of Registrable Securities.
Indenture: The Indenture, dated the date hereof, among the
Company, the Guarantors and The Bank of New York, as trustee, pursuant to which
the Notes are being issued, as amended or supplemented from time to time, in
accordance with the terms thereof.
Initial Shelf Registration: See Section 3(a).
Losses: See Section 8(a).
NASD: The National Association of Securities Dealers, Inc.
Participating Broker-Dealer: See Section 2(f).
Person: An individual, trustee, corporation, partnership, joint
stock company, joint venture, trust, unincorporated organization or government
or any agency or political subdivision thereof, union, business association,
firm or other entity.
Private Exchange: See Section 2(g).
Private Exchange Securities: See Section 2(g).
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Securities covered by such Registration
Statement, and all other amendments and supplements to the Prospectus, including
post-effective amendments, and all material incorporated by reference or deemed
to be incorporated by reference in such Prospectus.
Registrable Securities: (i) Notes, (ii) Private Exchange
Securities and (iii) Exchange Securities received in the Exchange Offer that may
not be sold without restriction under federal or state securities law.
3
<PAGE> 4
Registration Statement: Any registration statement of the Company
that covers any of the Securities pursuant to the provisions of this Agreement,
including the Prospectus, amendments and supplements to such registration
statement, including post-effective amendments, all exhibits, and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.
Rule 144: Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule (other than Rule 144A) or
regulation hereafter adopted by the SEC.
Rule 144A: Rule 144A under the Securities Act, as such Rule may
be amended from time to time, or any similar rule (other than Rule 144) or
regulation hereafter adopted by the SEC.
Rule 415: Rule 415 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.
SEC: The Securities and Exchange Commission.
Securities: The Notes, the Private Exchange Securities and the
Exchange Securities, collectively.
Securities Act: The Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
Shelf Notice: See Section 2(i).
Shelf Registration: The Initial Shelf Registration and any
Subsequent Shelf Registration.
Special Counsel: Counsel chosen by the holders of a majority in
aggregate principal amount of Securities.
Subsequent Shelf Registration: See Section 3(b).
TIA: The Trust Indenture Act of 1939, as amended.
4
<PAGE> 5
Trustee: The trustee under the Indenture and, if any, the trustee
under any indenture governing the Exchange Securities or the Private Exchange
Securities.
Underwritten Registration or Underwritten Offering: A
registration in which securities of the Company are sold to an underwriter for
reoffering to the public.
Weekly Liquidated Damages Amount: means, with respect to any
Event, an amount per week per $1,000 principal amount of Registrable Securities
equal to (i) $.05 for the first 90 day period immediately following the
applicable Event Date, (ii) $.10 for the second 90 day period immediately
following the applicable Event Date, (iii) $.15 for the third 90 day period
immediately following the applicable Event Date, and (iv) $.20 thereafter.
2. Exchange Offer
(a) The Company and the Guarantors shall (i) prepare and file
with the SEC promptly after the date hereof, but in no event later than the
Filing Date, a registration statement (the "Exchange Offer Registration
Statement") on an appropriate form under the Securities Act with respect to a
proposed offer (the "Exchange Offer") to the Holders to issue and deliver to
such Holders, in exchange for the Notes, a like aggregate principal amount of
Exchange Securities, (ii) use their best efforts to cause the Exchange Offer
Registration Statement to become effective as promptly as practicable after the
filing thereof, but in no event later than the Effectiveness Date, (iii) keep
the Exchange Offer Registration Statement effective until the consummation of
the Exchange Offer pursuant to its terms, and (iv) unless the Exchange Offer
would not be permitted by a policy of the SEC, commence the Exchange Offer and
use their best efforts to issue, on or prior to 30 days after the date on which
the Exchange Offer Registration Statement is declared effective, Exchange
Securities in exchange for all Notes tendered prior thereto in the Exchange
Offer. The Exchange Offer shall not be subject to any conditions, other than
that the Exchange Offer does not violate Applicable Law or any applicable
interpretation of the staff of the SEC and that all Permits required under
applicable gaming laws shall have been obtained.
(b) The Exchange Securities shall be issued under, and entitled
to the benefits of, the Indenture or a trust indenture that is identical to the
Indenture (other than such changes as are necessary to comply with any
requirements of the SEC to effect or maintain the qualification thereof under
the TIA).
5
<PAGE> 6
(c) In connection with the Exchange Offer, the Company and the
Guarantors shall:
(i) mail to each Holder a copy of the Prospectus forming
part of the Exchange Offer Registration Statement, together with an appropriate
letter of transmittal that is an exhibit to the Exchange Offer Registration
Statement, and any related documents;
(ii) keep the Exchange Offer open for not less than the
minimum period required under Applicable Law; provided, however, that such
period shall not be less than 20 Business Days after the date notice thereof is
mailed to the Holders;
(iii) utilize the services of a depository for the Exchange
Offer with an address in the Borough of Manhattan, The City of New York;
(iv) permit Holders to withdraw tendered Notes at any time
prior to the close of business, New York time, on the last Business Day on which
the Exchange Offer shall remain open; and
(v) otherwise comply with all laws applicable to the
Exchange Offer.
(d) As soon as practicable after the close of the Exchange Offer,
the Company and the Guarantors shall:
(i) accept for exchange all Notes validly tendered and not
validly withdrawn pursuant to the Exchange Offer;
(ii) deliver to the Trustee for cancellation all Notes so
accepted for exchange; and
(iii)cause the Trustee promptly to authenticate and deliver
to each Holder of Notes, Exchange Securities equal in aggregate principal amount
to the Notes of such Holder so accepted for exchange.
(e) Interest on each Exchange Security and Private Exchange
Security will accrue from the last interest payment date on which interest was
paid on the Notes surrendered in exchange therefor or, if no interest has been
paid on the
6
<PAGE> 7
Notes, from the date of original issue of the Notes. Each Exchange Security and
Private Exchange Security shall bear interest at the rate set forth thereon;
provided, that interest with respect to the period prior to the issuance thereof
shall accrue at the rate or rates borne by the Notes from time to time during
such period.
(f) The Company and the Guarantors shall include within the
Prospectus contained in the Exchange Offer Registration Statement a section
entitled "Plan of Distribution," containing a summary statement of the positions
taken or policies made by the staff of the SEC with respect to the potential
"underwriter" status of any broker-dealer that is the beneficial owner (as
defined in Rule 13d-3 under the Exchange Act) of Exchange Securities received by
such broker-dealer in the Exchange Offer (a "Participating Broker-Dealer"). Such
"Plan of Distribution" section shall also allow the use of the Prospectus by all
Persons subject to the prospectus delivery requirements of the Securities Act,
including (without limitation) all Participating Brokers-Dealers, and include a
statement describing the means by which Participating Broker-Dealers may resell
the Exchange Securities. The Company shall use its best efforts to keep the
Exchange Offer Registration Statement effective and to amend and supplement the
Prospectus to be lawfully delivered by all Persons subject to the prospectus
delivery requirement of the Securities Act for such period of time as such
Persons must comply with such requirements in order to resell the Exchange
Securities (the "Applicable Period").
(g) If, prior to consummation of the Exchange Offer, any
Purchaser holds any Notes acquired by it and having the status as an unsold
allotment in the initial distribution, the Company shall, upon the request of
such Purchaser, simultaneously with the delivery of the Exchange Securities in
the Exchange Offer, issue (pursuant to the same indenture as the Exchange
Securities) and deliver to such Purchaser, in exchange for the Notes held by
such Purchaser (the "Private Ex change"), a like principal amount of debt
securities of the Company that are identical to the Exchange Securities (the
"Private Exchange Securities"). The Private Exchange Securities shall bear the
same CUSIP number as the Exchange Securities.
(h) The Company may require each Holder participating in the
Exchange Offer to represent to the Company and each Guarantor that, at the time
of the consummation of the Exchange Offer, (i) any Exchange Securities received
by such Holder in the Exchange Offer will be acquired in the ordinary course of
its business, (ii) such Holder will have no arrangement or understanding with
any Person to participate in the distribution of the Exchange Securities within
the meaning of the Securities Act or resale of the Exchange Securities in
violation of the
7
<PAGE> 8
Securities Act, (iii) if such Holder is not a broker-dealer, that it is not
engaged in and does not intend to engage in, the distribution of the Exchange
Securities, (iv) if such Holder is a broker-dealer that will receive Exchange
Securities for its own account in exchange for Notes that were acquired as a
result of market-making or other trading activities, that it will deliver a
prospectus, as required by law, in connection with any resale of such Exchange
Securities, and (v) if such Holder is an affiliate of the Company, that it will
comply with the registration and prospectus delivery requirements of the
Securities Act applicable to it.
(i) If (i) prior to the consummation of the Exchange Offer,
either the Company or the Holders of a majority in aggregate principal amount of
Registrable Securities determines in its or their reasonable judgment that (A)
the Exchange Securities would not, upon receipt, be tradeable by the Holders
thereof without restriction under the Securities Act and the Exchange Act and
without material restrictions under applicable Blue Sky or state securities
laws, or (B) the interests of the Holders under this Agreement, taken as a
whole, would be materially adversely affected by the consummation of the
Exchange Offer, (ii) applicable interpretations of the staff of the SEC would
not permit the consummation of the Exchange Offer prior to the Effectiveness
Date, (iii) subsequent to the consummation of the Private Exchange, any Holder
of Private Exchange Securities so requests, (iv) the Exchange Offer is not
consummated within 210 days of the Closing Date for any reason or (v) in the
case of any Holder not permitted to participate in the Exchange Offer or of any
Holder participating in the Exchange Offer that receives Exchange Securities
that may not be sold without restriction under state and federal securities laws
(other than due solely to the status of such Holder as an affiliate of the
Company within the meaning of the Securities Act) and, in either case
contemplated by this clause (v), such Holder notifies the Company within six
months of consummation of the Exchange Offer, then the Company shall promptly
deliver to the Holders (or in the case of any occurrence of the event described
in clause (iii) or (v) hereof, to any such Holder) and the Trustee notice
thereof (the "Shelf Notice") and shall as promptly as possible thereafter file
an Initial Shelf Registration pursuant to Section 3.
3. Shelf Registration
If a Shelf Notice is required to be delivered pursuant to Section
2(i)(i), (ii) or (iv), then this Section 3 shall apply to all Registrable
Securities. If a Shelf Notice is required to be delivered pursuant to Section
2(i)(iii), then this Section 3 shall apply to all Private Exchange Securities.
Otherwise, upon consum-
8
<PAGE> 9
mation of the Exchange Offer in accordance with Section 2, the provisions of
this Section 3 shall apply solely with respect to (i) Notes held by any Holder
thereof not permitted to participate in the Exchange Offer and (ii) Exchange
Securities that are not freely tradeable as contemplated by Section 2(i)(v)
hereof; provided, in each case, that such Holder has notified the Company within
six months of the Exchange Offer as required by Section 2(i)(v).
(a) Initial Shelf Registration. The Company and the Guarantors
shall prepare and file with the SEC a Registration Statement for an offering to
be made on a continuous basis pursuant to Rule 415 covering all of the
Registrable Securities (the "Initial Shelf Registration"). If the Company and
the Guarantors have not yet filed an Exchange Offer Registration Statement, the
Company and the Guarantors shall file with the SEC the Initial Shelf
Registration on or prior to the Filing Date. Otherwise, the Company and the
Guarantors shall use their best efforts to file the Initial Shelf Registration
within 40 days of the delivery of the Shelf Notice and, with respect to clause
2(i)(iii) or (v) above, as promptly as possible following the request of the
Holders of Private Exchange Securities. The Initial Shelf Registration shall be
on Form S-1 or another appropriate form permitting registration of such
Registrable Securities for resale by such Holders in the manner or manners
designated by them (including, without limitation, one or more underwritten
offerings). The Company and the Guarantors shall (i) not permit any securities
other than the Registrable Securities to be included in any Shelf Registration,
and (ii) use their best efforts to cause the Initial Shelf Registration to be
declared effective under the Securities Act as promptly as practicable after the
filing thereof and to keep the Initial Shelf Registration continuously effective
under the Securities Act until the date that is 18 months from the Effectiveness
Date (subject to extension pursuant to the last paragraph of Section 6 hereof)
(the "Effectiveness Period"), or such shorter period ending when (i) all
Registrable Securities covered by the Initial Shelf Registration have been sold
or (ii) a Subsequent Shelf Registration covering all of the Registrable
Securities has been declared effective under the Securities Act.
(b) Subsequent Shelf Registrations. If any Shelf Registration
ceases to be effective for any reason at any time during the Effectiveness
Period (other than because of the sale of all of the Registrable Securities
registered thereunder), the Company and the Guarantors shall use their best
efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof, and in any event shall within 30 days of such cessation
of effectiveness amend the Shelf Registration in a manner reasonably expected to
obtain the withdrawal of the order suspending the effectiveness thereof, or file
an additional "shelf" Registration
9
<PAGE> 10
Statement pursuant to Rule 415 covering all of the Registrable Securities (a
"Subsequent Shelf Registration"). If a Subsequent Shelf Registration is filed,
the Company and the Guarantors shall use their best efforts to cause the
Subsequent Shelf Registration to be declared effective as soon as practicable
after such filing and to keep such Subsequent Shelf Registration continuously
effective for a period equal to the number of days in the Effectiveness Period
less the aggregate number of days during which the Initial Shelf Registration,
and any Subsequent Shelf Registration, was previously effective.
4. Liquidated Damages.
(a) The Company and the Guarantors acknowledge and agree that the
Holders will suffer damages, and that it would not be feasible to ascertain the
extent of such damages with precision, if the Company and the Guarantors fail to
fulfill their obligations hereunder. Accordingly, in the event of such failure,
the Company and the Guarantors jointly and severally agree to pay liquidated
damages to each Holder under the circumstances and to the extent set forth
below:
(i) if neither the Exchange Offer Registration Statement nor the
Initial Shelf Registration has been filed with the SEC on or prior to the Filing
Date; or
(ii) if neither the Exchange Offer Registration Statement nor the
Initial Shelf Registration is declared effective by the SEC on or prior to the
Effectiveness Date; or
(iii)if the Company has not exchanged Exchange Securities for all
Notes validly tendered in accordance with the terms of the Exchange Offer within
30 days after the date on which an Exchange Offer Registration Statement is
declared effective by the SEC; or
(iv) if a Shelf Registration is filed and declared effective by
the SEC but thereafter ceases to be effective during the Effectiveness Period
without subsequently being declared effective or being succeeded by a
Subsequent Shelf Registration filed and declared effective, in each case within
30 days;
(each of the foregoing an "Event," and the date on which the Event occurs being
referred to herein as an "Event Date").
10
<PAGE> 11
Upon the occurrence of any Event, the Company shall pay, or cause
to be paid (and the Guarantors hereby guarantee the payment of), in addition to
amounts otherwise due under the Indenture and the Registrable Securities, as
liquidated damages, and not as a penalty, to each Holder for each weekly period
beginning on the Event Date an amount equal to the Weekly Liquidated Damages
Amount per $1,000 principal amount of Registrable Securities held by such
Holder; provided, that such liquidated damages will, in each case, cease to
accrue (subject to the occurrence of another Event) on the date on which all
Events have been cured. An Event under clause (i) above shall be cured on the
date that either the Exchange Offer Registration Statement or the Initial Shelf
Registration is filed with the SEC; an Event under clause (ii) above shall be
cured on the date that either the Exchange Offer Registration Statement or the
Initial Shelf Registration is declared effective by the SEC; an Event under
clause (iii) above shall be cured on the earlier of the date (A) the Exchange
Offer is consummated with respect to all Notes validly tendered or (B) the
Company delivers a Shelf Notice to the Holders; and an Event under clause (iv)
above shall be cured on the earlier of (A) the date on which the applicable
Shelf Registration is no longer subject to an order suspending the effectiveness
thereof or proceedings relating thereto or (B) a new Subsequent Shelf
Registration is declared effective.
(b) The Company shall notify the Trustee within five Business
Days after each Event Date. The Company shall pay the liquidated damages due on
the Registrable Securities by depositing with the Trustee, in trust, for the
benefit of the Holders thereof, by 12:00 noon, New York City time, on or before
the applicable semi-annual interest payment date for the Registrable Securities,
immediately available funds in sums sufficient to pay the liquidated damages
then due. The liquidated damages amount due shall be payable on each interest
payment date to the record Holder entitled to receive the interest payment to be
made on such date as set forth in the Indenture.
5. Gaming Consents.
Prior to consummating the Exchange Offer or filing the Initial
Shelf Registration, as the case may be, the Company and the Guarantors shall
make or obtain all Permits necessary or desirable for the consummation of the
transactions contemplated hereby, including without limitation, the required
approvals of the Nevada Gaming Authorities for the pledge of, or any negative
pledge on, the stock of Fitzgeralds Reno, Inc., Fitzgeralds South, Inc., and
Fitzgeralds Las Vegas, Inc.
11
<PAGE> 12
6. Registration Procedures
In connection with the registration of any Securities pursuant to
Sections 2 or 3 hereof, each of the Company and each Guarantor shall effect such
registrations to permit the sale of such Securities in accordance with the
intended method or methods of disposition thereof, and pursuant thereto the
Company and each Guarantor shall:
(a) Prepare and file with the SEC, as soon as practicable after
the date hereof but in any event on or prior to the Filing Date, a Registration
Statement or Registration Statements as prescribed by Section 2 or 3, and use
its best efforts to cause each such Registration Statement to become effective
and remain effective as provided herein; provided, that, if (i) such filing is
pursuant to Section 3 or (ii) a Prospectus contained in an Exchange Offer
Registration Statement filed pursuant to Section 2 is required to be delivered
under the Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Securities during the Applicable Period, before filing any Registration
Statement or Prospectus or any amendments or supplements thereto, the Company
and the Guarantors shall, if requested, furnish to and afford the Holders of the
Registrable Securities covered by such Registration Statement, their Special
Counsel, each Participating Broker-Dealer, the managing underwriters, if any,
and their counsel a reasonable opportunity to review and make available for
inspection by such Persons copies of all such documents (including copies of any
documents to be incorporated by reference therein and all exhibits thereto)
proposed to be filed, such financial and other information and books and records
of the Company and the Guarantors, and cause the officers, directors and
employees of the Company and the Guarantors, Company counsel and independent
certified public accountants of the Company, to respond to such inquiries, as
shall be necessary, in the opinion of respective counsel to such Holders,
Participating Broker-Dealer and underwriters, to conduct a reasonable
investigation within the meaning of the Securities Act. The Company may require
each Holder to agree to keep confidential any non-public information relating to
the Company received by such Holder and not disclose such information (other
than to an Affiliate or prospective purchaser who agrees to respect the
confidentiality provisions of this Section 6(a)) until such information has been
made generally available to the public unless the release of such information is
required by law or necessary to respond to inquiries of regulatory authorities
(including the National Association of Insurance Commissioners, or similar
organizations or their successors). Neither the Company nor any Guarantor shall
file any Registration Statement or Prospectus or any amendments or supplements
thereto in respect of which the Holders must be
12
<PAGE> 13
afforded an opportunity to review prior to the filing of such document, if the
Holders of a majority in aggregate principal amount of the Registrable
Securities covered by such Registration Statement, their Special Counsel, any
Participating Broker-Dealer or the managing underwriters, if any, or their
counsel shall reasonably object.
(b) Provide an indenture trustee for the Registrable Securities
or the Exchange Securities, as the case may be, and cause the Indenture (or
other indenture relating to the Registrable Securities) to be qualified under
the TIA not later than the effective date of the first Registration Statement;
and in connection therewith, to effect such changes to such indenture as may be
required for such indenture to be so qualified in accordance with the terms of
the TIA; and execute, and use its best efforts to cause such trustee to execute,
all documents as may be required to effect such changes, and all other forms and
documents required to be filed with the SEC to enable such indenture to be so
qualified in a timely manner.
(c) Prepare and file with the SEC such amendments and
post-effective amendments to the Registration Statement as may be necessary to
keep such Registration Statement continuously effective for the time periods
required hereby; cause the related Prospectus to be supplemented by any
Prospectus supplement required by Applicable Law, and as so supplemented to be
filed pursuant to Rule 424 (or any similar provisions then in force) under the
Securities Act; and comply in all material respects with the provisions of the
Securities Act and the Exchange Act applicable thereto with respect to the
disposition of all securities covered by such Registration Statement, as so
amended, or in such Prospectus, as so supplemented, in accordance with the
intended methods of distribution set forth in such Registration Statement or
Prospectus as so amended.
(d) Furnish to such selling Holders and Participating Broker-
Dealers who so request (i) upon the Company's receipt, a copy of the order of
the SEC declaring such Registration Statement and any post-effective amendment
thereto effective and (ii) such reasonable number of copies of such Registration
Statement and of each amendment and supplement thereto (in each case including
any documents incorporated therein by reference and all exhibits), (iii) such
reasonable number of copies of the Prospectus included in such Registration
Statement (including each preliminary Prospectus), and such reasonable number of
copies of the final Prospectus as filed by the Company pursuant to Rule 424(b)
under the Securities Act, in conformity with the requirements of the Securities
Act, and (iv) such other documents (including any amendments required to be
filed pursuant to clause (c) of this Section), as any such Person may reasonably
request. The Com-
13
<PAGE> 14
pany and the Guarantors hereby consent to the use of the Prospectus by each of
the selling Holders of Registrable Securities or each such Participating
Broker-Dealer, as the case may be, and the underwriters or agents, if any, and
dealers (if any), in connection with the offering and sale of the Registrable
Securities covered by, or the sale by Participating Broker-Dealers of the
Exchange Securities pursuant to, such Prospectus and any amendment thereto.
(e) If (A) a Shelf Registration is filed pursuant to Section 3 or
(B) a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities Act by
any Participating Broker-Dealer who seeks to sell Exchange Securities during the
Applicable Period, notify the selling Holders of Registrable Securities, their
Special Counsel, each Participating Broker-Dealer and the managing underwriters,
if any, promptly (but in any event within two Business Days), and confirm such
notice in writing, (i) when a Prospectus has been filed, and, with respect to a
Registration Statement or any post-effective amendment, when the same has become
effective under the Securities Act, (ii) of the issuance by the SEC of any stop
order suspending the effectiveness of a Registration Statement or of any order
preventing or suspending the use of any Prospectus or the initiation of any
proceedings for that purpose, (iii) if, at any time when a Prospectus is
required by the Securities Act to be delivered in connection with sales of the
Registrable Securities, the representations and warranties of the Company or of
any Guarantor contained in any agreement (including any underwriting agreement)
contemplated by Section 6(n) below cease to be true and correct in any material
respect, (iv) of the receipt by the Company or any Guarantor of any notification
with respect to the suspension of the qualification or exemption from
qualification of a Registration Statement or any of the Registrable Securities
or the Exchange Securities to be sold by any Participating Broker-Dealer for
offer or sale in any jurisdiction, or the contemplation, initiation or
threatening of any proceeding for such purpose, (v) of the happening of any
event that makes any statement made in such Registration Statement or related
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires the making of any
changes in such Registration Statement, Prospectus or documents so that it will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and (vi) of the Company's reasonable determination that a
post-effective amendment to a Registration Statement would be appropriate.
14
<PAGE> 15
(f) Use its best efforts to register or qualify, and, if
applicable, to cooperate with the selling Holders of Registrable Securities, the
underwriters, if any, and their respective counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of, Securities to be included in a Registration Statement for
offer and sale under the securities or Blue Sky laws of such jurisdictions
within the United States as any selling Holder, Participating Broker-Dealer or
the managing underwriters reasonably request in writing; and, if Securities are
offered other than through an Underwritten Offering, the Company shall cause its
counsel to perform Blue Sky investigations and file registrations and
qualifications required to be filed pursuant to this Section 6(f) at the expense
of the Company; keep each such registration or qualification (or exemption
therefrom) effective during the period such Registration Statement is required
to be kept effective and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Securities
covered by the applicable Registration Statement, provided, however, that none
of the Company nor the Guarantors shall be required to (i) qualify generally to
do business in any jurisdiction where it is not then so qualified, (ii) to take
action that would subject it to general service of process in any jurisdiction
where it is not so subject or (iii) subject it to taxation in respect of doing
business in any such jurisdiction where it is not then subject.
(g) Use its best efforts to prevent the issuance of any order
suspending the effectiveness of a Registration Statement or of any order
preventing or suspending the use of a Prospectus or suspending the qualification
(or exemption from qualification) of any of the Securities for sale in any
jurisdiction, and, if any such order is issued, to use its best efforts to
obtain the withdrawal of any such order at the earliest possible time.
(h) If (A) a Shelf Registration is filed pursuant to Section 3 or
(B) a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities Act by
any Participating Broker-Dealer who seeks to sell Exchange Securities during the
Applicable Period, and if requested by the managing underwriters, if any, or the
Holders of a majority in aggregate principal amount of the Registrable
Securities, (i) promptly incorporate in a Prospectus or post-effective amendment
such information as the managing underwriters, if any, or such Holders
reasonably request to be included therein required to comply with any Applicable
Law and (ii) make all required filings of such Prospectus or such post-effective
amendment as soon as practicable after the Company has received notification of
such matters required by Applicable Law to be incorporated in such Prospectus or
post-effective amendment.
15
<PAGE> 16
(i) If (A) a Shelf Registration is filed pursuant to Section 3 or
(B) a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities Act by
any Participating Broker-Dealer who seeks to sell Exchange Securities during the
Applicable Period, cooperate with the selling Holders and the managing
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold, which certificates
shall not bear any restrictive legends and shall be in a form eligible for
deposit with The Depository Trust Company ("DTC"); and enable such Registrable
Securities to be in such denominations and registered in such names as the
managing underwriters, if any, or Holders may request.
(j) If (i) a Shelf Registration is filed pursuant to Section 3 or
(ii) a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities Act by
any Participating Broker-Dealer who seeks to sell Exchange Securities during the
Applicable Period, upon the occurrence of any event contemplated by paragraph
6(e)(v) or 6(e)(vi) above, as promptly as practicable prepare a supplement or
post-effective amendment to the Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities being sold thereunder
or to the purchasers of the Exchange Securities to whom such Prospectus will be
delivered by a Participating Broker-Dealer, such Prospectus will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(k) Use its best efforts to cause the Securities covered by a
Registration Statement to be rated with the appropriate rating agencies, if
appropriate, if so requested by the holders of a majority in aggregate principal
amount of Securities covered by such Registration Statement or the managing
underwriters, if any.
(l) Prior to the effective date of the first Registration
Statement relating to the Securities, (i) provide the applicable trustee with
printed certificates for the Securities in a form eligible for deposit with DTC
and (ii) provide a CUSIP number for each of the Securities.
16
<PAGE> 17
(m) Use its best efforts to cause all Securities covered by such
Registration Statement to be listed on each securities exchange, if any, on
which similar debt securities issued by the Company are then listed.
(n) If a Shelf Registration is filed pursuant to Section 3, enter
into such agreements (including an underwriting agreement in form, scope and
substance as is customary in Underwritten Offerings) and take all such other
actions in connection therewith (including those reasonably requested by the
managing underwriters, if any, or the Holders of a majority in aggregate
principal amount of Registrable Securities being sold) in order to expedite or
facilitate the registration or the disposition of such Registrable Securities,
and in such connection, whether or not an underwriting agreement is entered into
and whether or not the registration is an Underwritten Registration, (i) make
such representations and warranties to the Holders and the underwriters, if any,
with respect to the business of the Company and its subsidiaries, and the
Registration Statement, Prospectus and documents, if any, incorporated or deemed
to be incorporated by reference therein, in each case, in form, substance and
scope as are customarily made by issuers to underwriters in Underwritten
Offerings, and confirm the same if and when reasonably requested; (ii) obtain
opinions of counsel to the Company and updates thereof (which counsel and
opinions (in form, scope and substance) shall be reasonably satisfactory to the
managing underwriters, if any, and the Holders of a majority in aggregate
principal amount of the Registrable Securities being sold), addressed to each
selling Holder and each of the underwriters, if any, covering the matters
customarily covered in opinions requested in Underwritten Offerings; (iii)
obtain "cold comfort" letters and updates thereof (which letters and updates (in
form, scope and substance) shall be reasonably satisfactory to the managing
underwriters) from the independent certified public accountants of the Company
(and, if necessary, any other independent certified public accountants of any
subsidiary of the Company or of any business acquired by the Company for which
financial statements and financial data are, or are required to be, included in
the Registration Statement), addressed to each of the underwriters and each
selling Holder, such letters to be in customary form and covering matters of the
type customarily covered in "cold comfort" letters in connection with
Underwritten Offerings and such other matters as reasonably requested by
underwriters; and (iv) deliver such documents and certificates as may be
reasonably requested by the Holders of a majority in principal amount of the
Registrable Securities being sold and the managing underwriters, if any, to
evidence the continued validity of the representations and warranties of the
Company and its subsidiaries made pursuant to clause (i) above and to evidence
compliance with any
17
<PAGE> 18
conditions contained in the underwriting agreement or other similar agreement
entered into by the Company.
(o) Comply with all applicable rules and regulations of the SEC
and make generally available to its security holders earnings statements
satisfying the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder (or any similar rule promulgated under the Securities Act) no later
than 45 days after the end of any 12-month period (or 90 days after the end of
any 12 month period if such period is a fiscal year) (i) commencing on the first
day of the fiscal quarter following each fiscal quarter in which Registrable
Securities are sold to underwriters in a firm commitment or best efforts
underwritten offering and (ii) if not sold to underwriters in such an offering,
commencing on the first day of the first fiscal quarter of the Company after the
effective date of a Registration Statement, which statements shall cover said
12-month periods.
(p) Upon consummation of an Exchange Offer or Private Exchange,
obtain an opinion of counsel to the Company (in form, scope and substance
reasonably satisfactory to the Purchaser), addressed to all Holders
participating in the Exchange Offer or Private Exchange, as the case may be, to
the effect that (i) the Company and the Guarantors have duly authorized,
executed and delivered the Exchange Securities or the Private Exchange
Securities, as the case may be, and the Indenture, (ii) the Exchange Securities
or the Private Exchange Securities, as the case may be, and the Indenture
constitute legal, valid and binding obligations of the Company and the
Guarantors, enforceable against the Company and the Guarantors in accordance
with their respective terms, except as such enforcement may be subject to (x)
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and (y) general principles of
equity (regardless of whether such enforcement is sought in a proceeding in
equity or at law), and (iii) all obligations of the Company and the Guarantors
under the Exchange Securities or the Private Exchange Securities, as the case
may be, and the Indenture are secured by Liens on the assets securing the
obligations of the Company under the Notes.
(q) If an Exchange Offer or Private Exchange is to be
consummated, upon delivery of the Registrable Securities by such Holders to the
Company (or to such other Person as directed by the Company) in exchange for the
Exchange Securities or the Private Exchange Securities, as the case may be, the
Company shall mark, or caused to be marked, on such Registrable Securities that
such Registrable Securities are being cancelled in exchange for the Exchange
Securities or the Private
18
<PAGE> 19
Exchange Securities, as the case may be, and in no event shall such Registrable
Securities be marked as paid or otherwise satisfied.
(r) Cooperate with each seller of Registrable Securities covered
by any Registration Statement and each underwriter, if any, participating in the
disposition of such Registrable Securities and their respective counsel in
connection with any filings required to be made with the NASD.
(s) Use its best efforts to take all other steps necessary to
effect the registration of the Registrable Securities covered by a Registration
Statement contemplated hereby.
The Company may require each seller of Registrable Securities or
Participating Broker-Dealer as to which any registration is being effected to
furnish to the Company such information regarding such seller or Participating
Broker-Dealer and the distribution of such Registrable Securities or Exchange
Securities as the Company may, from time to time, reasonably request in writing.
The Company may exclude from such registration the Registrable Securities of any
seller or Exchange Securities of any Participating Broker-Dealer who
unreasonably fails to furnish such information.
Each Holder and each Participating Broker-Dealer agrees by
acquisition of such Registrable Securities or Exchange Securities of any
Participating Broker-Dealer that, upon receipt of written notice from the
Company of the happening of any event of the kind described in Section 6(e)(ii),
6(e)(iv), 6(e)(v) or 6(e)(vi), such Holder will forthwith discontinue
disposition (in the jurisdictions specified in a notice of a 6(e)(iv) event, and
elsewhere in a notice of a 6(e)(ii), 6(e)(v) or 6(e)(vi) event) of such
Securities covered by such Registration Statement or Prospectus until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 6(j), or until it is advised in writing (the "Advice")
by the Company that offers or sales in a particular jurisdiction may be resumed
or that the use of the applicable Prospectus may be resumed, as the case may be,
and has received copies of any amendments or supplements thereto. If the Company
shall give such notice, each of the Effectiveness Period and the Applicable
Period shall be extended by the number of days during such periods from and
including the date of the giving of such notice to and including the date when
each seller of such Securities covered by such Registration Statement shall have
received (x) the copies of the supplemented or amended Prospectus contemplated
by Section 6(j) or (y) the Advice.
19
<PAGE> 20
7. Registration Expenses
(a) All fees and expenses incident to the performance of or
compliance with this Agreement by the Company and the Guarantors shall be borne
by the Company and the Guarantors whether or not the Exchange Offer or a Shelf
Registration is filed or becomes effective, including, without limitation:
(i) all registration and filing fees (including,
without limitation, (A) fees with respect to filings required to be made
with the NASD and (B) fees and expenses of compliance with state
securities or Blue Sky laws (including, without limitation, reasonable
fees and disbursements of counsel to the Company in connection with Blue
Sky qualifications of the Registrable Securities or Exchange Securities
and determination of the eligibility of the Registrable Securities or
Exchange Securities for investment under the laws of such jurisdictions
(x) where the Holders are located, in the case of the Exchange
Securities, or (y) as provided in Section 6(f), in the case of
Registrable Securities or Exchange Securities to be sold by a
Participating Broker-Dealer during the Applicable Period);
(ii) printing expenses (including, without limitation,
expenses of printing certificates for Registrable Securities or Exchange
Securities in a form eligible for deposit with DTC and of printing
prospectuses if the printing of prospectuses is reasonably requested by
the managing underwriters, if any, or, in respect of Registrable
Securities or Exchange Securities to be sold by a Participating
Broker-Dealer during the Applicable Period, by the Holders of a majority
in aggregate principal amount of the Registrable Securities included in
any Registration Statement or of such Exchange Securities, as the case
may be);
(iii) messenger, telephone, duplication, word
processing and delivery expenses incurred by the Company in the
performance of its obligations hereunder;
(iv) fees and disbursements of counsel for the Company;
(v) fees and disbursements of all independent certified
public accountants referred to in Section 6(n)(iii) (including, without
limitation, the expenses of any special audit and "cold comfort"
letters required by or incident to such performance);
20
<PAGE> 21
(vi) fees and expenses of any "qualified independent
underwriter" or other independent appraiser participating in an offering
pursuant to Rule 2720(c) of the NASD Conduct Rules, but only where the
need for such a "qualified independent underwriter" arises due to a
relationship with the Company;
(vii) Securities Act liability insurance, if the
Company so desires such insurance;
(viii) fees and expenses of all other Persons retained
by the Company; internal expenses of the Company (including, without
limitation, all salaries and expenses of officers and employees of the
Company performing legal or accounting duties); and the expense of any
annual audit; and
(ix) rating agency fees and the fees and expenses
incurred in connection with the listing of the Securities to be
registered on any securities exchange.
(b) The Company and the Guarantors shall reimburse (i) the
Purchasers for the reasonable fees and disbursements of counsel to the
Purchasers and other reasonable and necessary out-of-pocket expenses of the
Purchasers, in an aggregate amount not to exceed $25,000, incurred in connection
with the preparation and filing of the Exchange Offer Registration Statement,
and (ii) the Holders for the reasonable fees and disbursements of not more than
one counsel (in addition to appropriate local counsel) chosen by the Holders of
a majority in aggregate principal amount of the Registrable Securities to be
included in the Initial Shelf Registration or a Subsequent Shelf Registration
and other reasonable and necessary out-of-pocket expenses of the Holders
incurred in connection with the registration of the Registrable Securities.
8. Indemnification
(a) Indemnification by the Company. The Company and each of the
Guarantors, jointly and severally, shall, without limitation as to time,
indemnify and hold harmless each Holder and each Participating Broker-Dealer,
each Person who controls each such Holder (within the meaning of Section 15 of
the Securities Act or Section 20(a) of the Exchange Act) and the officers,
directors, partners, employees, representatives and agents of each such Holder,
Participating Broker-Dealer and controlling person, to the fullest extent
lawful, from and against any and
21
<PAGE> 22
all losses, claims, damages, liabilities, costs (including, without limitation,
costs of preparation and reasonable attorneys' fees) and expenses (including,
without limitation, costs and expenses incurred in connection with
investigating, preparing, pursuing or defending against any of the foregoing)
(collectively, "Losses"), as incurred, directly or indirectly caused by, related
to, based upon, arising out of or in connection with any untrue or alleged
untrue statement of a material fact contained in any Registration Statement,
Prospectus or form of prospectus, or in any amendment or supplement thereto, or
in any preliminary prospectus, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except insofar as such Losses are based upon information
relating to such Holder or Participating Broker-Dealer and furnished in writing
to the Company by such Holder or Participating Broker-Dealer expressly for use
therein; provided, however, that neither the Company nor any Guarantor will be
liable to any indemnified party under this Section 8 to the extent Losses were
caused by an untrue statement or omission or alleged untrue statement or
omission that was contained or made in any preliminary prospectus and corrected
in the Prospectus or any amendment or supplement thereto if (i) the Prospectus
does not contain any other untrue statement or omission or alleged untrue
statement or omission of a material fact that was the subject matter of a
related proceeding, (ii) any such Losses resulted from an action, claim or suit
by any Person who purchased Registrable Securities or Exchange Securities that
are the subject thereof from such indemnified party and (iii) it is established
in a related proceeding that such indemnified party failed to deliver or provide
a copy of the Prospectus (as amended or supplemented) to such Person with or
prior to the confirmation of the sale of such Registrable Securities or Exchange
Securities sold to such Person if required by Applicable Law, unless such
failure to deliver or provide a copy of the Prospectus (as amended or
supplemented) was a result of non-compliance by the Company with Section 6 of
this Agreement. The Company and each of the Guarantors shall also indemnify
underwriters, selling brokers, dealer managers and similar securities industry
professionals participating in the distribution, their officers, directors,
agents and employees and each Person who controls such Persons (within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act) to the same extent as provided above with respect to the indemnification of
the Holders or the Participating Broker-Dealer.
(b) Indemnification by Holder of Registrable Securities. In
connection with any Registration Statement, Prospectus or form of prospectus,
any amendment or supplement thereto, or any preliminary prospectus in which a
Holder
22
<PAGE> 23
is participating, such Holder shall furnish to the Company in writing such
information as the Company reasonably requests for use in connection with any
Registration Statement, Prospectus or form of prospectus, any amendment or
supplement thereto, or any preliminary prospectus and shall, without limitation
as to time, indemnify and hold harmless the Company, its directors, officers,
agents and employees, each Person, if any, who controls the Company (within the
meaning of Section 15 of the Securities Act and Section 20(a) of the Exchange
Act), and the directors, officers, agents or employees of such controlling
persons, to the fullest extent lawful, from and against all Losses arising out
of or based upon any untrue or alleged untrue statement of a material fact
contained in any Registration Statement, Prospectus or form of prospectus or in
any amendment or supplement thereto or in any preliminary prospectus, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading to the extent, but only
to the extent, that such untrue statement or alleged untrue statement of a
material fact or omission or alleged omission of a material fact is contained in
or omitted from any information so furnished in writing by such Holder to the
Company expressly for use therein. In no event shall the liability of any
selling Holder be greater in amount than the dollar amount of the proceeds (net
of payment of all expenses) received by such Holder upon the sale of the
Registrable Securities giving rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. If any Proceeding
shall be brought or asserted against any Person entitled to indemnity hereunder
(an "indemnified party"), such indemnified party shall promptly notify the party
or parties from which such indemnity is sought (the "indemnifying parties") in
writing; provided, that the failure to so notify the indemnifying parties shall
not relieve the indemnifying parties from any obligation or liability except to
the extent (but only to the extent) that it shall be finally determined by a
court of competent jurisdiction (which determination is not subject to appeal)
that the indemnifying parties have been prejudiced materially by such failure.
The indemnifying party shall have the right, exercisable by
giving written notice to an indemnified party, within 20 business days after
receipt of written notice from such indemnified party of such Proceeding, to
assume, at its expense, the defense of any such Proceeding, provided, that an
indemnified party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such indemnified party or parties
unless: (1) the indemnifying party
23
<PAGE> 24
has agreed to pay such fees and expenses; or (2) the indemnifying party shall
have failed promptly to assume the defense of such Proceeding or shall have
failed to employ counsel reasonably satisfactory to such indemnified party; or
(3) the named parties to any such Proceeding (including any impleaded parties)
include both such indemnified party and the indemnifying party or any of its
affiliates or controlling persons, and such indemnified party shall have been
advised by counsel in writing, a copy of which shall be provided to the
indemnifying party, that there may be one or more defenses available to such
indemnified party that are in addition to, or in conflict with, those defenses
available to the indemnifying party or such affiliate or controlling person (in
which case, if such indemnified party notifies the indemnifying parties in
writing that it elects to employ separate counsel at the expense of the
indemnifying parties, the indemnifying parties shall not have the right to
assume the defense thereof and the reasonable fees and expenses of such counsel
shall be at the expense of the indemnifying party; it being understood, however,
that, the indemnifying party shall not, in connection with any one such
Proceeding or separate but substantially similar or related Proceedings in the
same jurisdiction, arising out of the same general allegations or circumstances,
be liable for the fees and expenses of more than one separate firm of attorneys
(together with appropriate local counsel) at any time for such indemnified
party).
No indemnifying party shall be liable for any settlement of any
such Proceeding effected without its written consent, but if settled with its
written consent, or if there be a final judgment for the plaintiff in any such
Proceeding, each indemnifying party jointly and severally agrees, subject to the
exceptions and limitations set forth above, to indemnify and hold harmless each
indemnified party from and against any and all Losses by reason of such
settlement or judgment. The indemnifying party shall not consent to the entry of
any judgment or enter into any settlement that does not include as an
unconditional term thereof the giving by the claimant or plaintiff to each
indemnified party of a release, in form and substance reasonably satisfactory to
the indemnified party, from all liability in respect of such Proceeding for
which such indemnified party would be entitled to indemnification hereunder
(whether or not any indemnified party is a party thereto).
(d) Contribution. If the indemnification provided for in this
Section 8 is unavailable to an indemnified party or is insufficient to hold such
indemnified party harmless for any Losses in respect of which this Section 8
would otherwise apply by its terms (other than by reason of exceptions provided
in this Section 8), then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall have a joint and several obligation
to contribute to the amount paid or
24
<PAGE> 25
payable by such indemnified party as a result of such Losses, in such proportion
as is appropriate to reflect the relative benefits received by the indemnifying
party, on the one hand, and such indemnified party, on the other hand, from the
offering of the Notes, or (ii) if the allocation provided by clause (i) above is
not permitted by Applicable Law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the indemnifying party, on the one hand, and such indemnified
party, on the other hand, in connection with the actions, statements or
omissions that resulted in such Losses as well as any other relevant equitable
considerations. The relative fault of such indemnifying party, on the one hand,
and indemnified party, on the other hand, shall be determined by reference to,
among other things, whether any untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by such indemnifying party or indemnified party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent any such statement or omission. The amount paid or payable by
an indemnified party as a result of any Losses shall be deemed to include any
legal or other fees or expenses incurred by such party in connection with any
Proceeding, to the extent such party would have been indemnified for such fees
or expenses if the indemnification provided for in Section 8(a) or 8(b) was
available to such party.
The parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 8(d) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 8(d), an indemnifying party that
is a selling Holder shall not be required to contribute, in the aggregate, any
amount in excess of such Holder's Maximum Contribution Amount. A selling
Holder's "Maximum Contribution Amount" shall equal the excess of (i) the
aggregate proceeds received by such Holder pursuant to the sale of such
Registrable Securities over (ii) the aggregate amount of damages that such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
The indemnity and contribution agreements contained in this
Section 8 are in addition to any liability that the indemnifying parties may
have to the indemnified parties.
25
<PAGE> 26
9. Rule 144 and Rule 144A
Each of the Company and each Guarantor covenants that it shall
(a) file the reports required to be filed by it (if so required) under the
Securities Act and the Exchange Act in a timely manner and, if at any time any
such Person is not required to file such reports, it will, upon the request of
any Holder, make publicly available other information necessary to permit sales
pursuant to Rule 144 and Rule 144A and (b) take such further action as any
Holder may reasonably request, all to the extent required from time to time to
enable such Holder to sell Registrable Securities without registration under the
Securities Act pursuant to the exemptions provided by Rule 144 and Rule 144A.
Upon the request of any Holder, the Company and the Guarantors shall deliver to
such Holder a written statement as to whether they have complied with such
information and requirements.
10. Underwritten Registrations
If any of the Registrable Securities covered by any Shelf
Registration are to be sold in an Underwritten Offering, the investment banker
or investment bankers and manager or managers that will manage the offering will
be selected by the Holders of a majority in aggregate principal amount of such
Registrable Securities included in such offering; provided, however, that such
investment banker or investment bankers and manager or managers must be
reasonably acceptable to the Company.
No Holder may participate in any Underwritten Registration
hereunder unless such Holder (a) agrees to sell such Holder's Registrable
Securities on the basis provided in any underwriting arrangements approved by
the Persons entitled hereunder to approve such arrangements and (b) completes
and executes all questionnaires, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements.
11. Miscellaneous
(a) Remedies. In the event of a breach by the Company or any of
the Guarantors of any of its respective obligations under this Agreement, each
Holder, in addition to being entitled to exercise all rights provided herein, in
the Indenture or, in the case of the Purchasers, in the Purchase Agreement, or
granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Agreement. The Company and each of the
Guarantors agrees that
26
<PAGE> 27
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of any of the provisions of this Agreement and hereby
further agrees that, in the event of any action for specific performance in
respect of such breach, it shall waive the defense that a remedy at law would be
adequate.
(b) No Inconsistent Agreements. The Company has not entered into,
as of the date hereof, and shall not enter into, after the date of this
Agreement, any agreement with respect to any of its securities that is
inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof.
(c) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of Holders
of at least a majority of the then outstanding aggregate principal amount of
Registrable Securities; provided, that Sections 6(a) and 8 shall not be amended,
modified or supplemented, and waivers or consents to departures from this
proviso may not be given, unless the Company has obtained the written consent of
each Holder. Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of Holders whose securities are being sold pursuant to a Registration
Statement and that does not directly or indirectly affect the rights of other
Holders may be given by Holders of at least a majority in aggregate principal
amount of the Registrable Securities being sold by such Holders pursuant to such
Registration Statement, provided that the provisions of this sentence may not be
amended, modified or supplemented except in accordance with the provisions of
the immediately preceding sentence.
(d) Notices. All notices and other communications (including,
without limitation, any notices or other communications to the Trustee) provided
for or permitted hereunder shall be made in writing by hand-delivery, certified
first-class mail, return receipt requested, next-day air courier or facsimile:
(i) if to a Holder, at the most current address given
by such Holder to the Company in accordance with the provisions of this
Section 11(d), which address initially is, with respect to each Holder,
the address of such Holder maintained by the Registrar under the
Indenture, with a copy to Skadden, Arps, Slate, Meagher & Flom LLP, 300
South Grand Avenue, Los
27
<PAGE> 28
Angeles, California 90071, telecopy number (213) 687-5600, Attention:
Michael A. Woronoff, Esq.; and
(ii) if to the Company or any of the Guarantors,
initially at 301 Fremont Street, Las Vegas, Nevada, 89101, Attention:
Chief Executive Officer, telecopy number (702) 388-5562, with a copy to
Hughes Hubbard & Reed LLP, 350 South Grand Avenue, Suite 3600, Los
Angeles, California 90071-3442; telecopier (213) 613-2950, Attention:
Theodore H. Latty, Esq.; and thereafter at such other address, notice of
which is given in accordance with the provisions of this Section 11(d).
All such notices and communications shall be deemed to have been
duly given: when delivered by hand, if personally delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; one business day
after being timely delivered to a next-day air courier; and when receipt is
acknowledged by the addressee, if telecopied.
Copies of all such notices, demands or other communications shall
be concurrently delivered by the Person giving the same to the Trustee under the
Indenture at the address specified in such Indenture.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the 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 one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE COMPANY AND EACH GUARANTOR
HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW
28
<PAGE> 29
YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR
ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN
RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. EACH OF THE
COMPANY AND EACH GUARANTOR 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.
EACH OF THE COMPANY AND EACH GUARANTOR 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
THE COMPANY AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER
SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY HOLDER TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST THE COMPANY OR ANY GUARANTOR IN ANY OTHER
JURISDICTION.
(i) Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
29
<PAGE> 30
(j) Entire Agreement. This Agreement is intended by the parties
as a final expression of their agreement, and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein, with respect to the registration rights granted by the Company in
respect of securities sold pursuant to the Purchase Agreement. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
(k) Attorneys' Fees. In any Proceeding brought to enforce any
provision of this Agreement, or where any provision hereof is validly asserted
as a defense, the prevailing party, as determined by the courts, shall be
entitled to recover reasonable attorneys' fees in addition to its costs and
expenses and any other available remedy.
(l) Securities Held by the Company or its Affiliates. Whenever
the consent or approval of Holders of a specified percentage of Registrable
Securities is required hereunder, Registrable Securities held by the Company or
its affiliates (as such term is defined in Rule 405 under the Securities Act)
(other than Holders deemed to be such affiliates solely by reason of their
holdings of such Registrable Securities) shall not be counted in determining
whether such consent or approval was given by the Holders of such required
percentage.
30
<PAGE> 31
REGISTRATION RIGHTS AGREEMENT
SIGNATURES
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.
FITZGERALDS GAMING CORPORATION
FITZGERALDS SOUTH, INC.
FITZGERALDS RENO, INC.
FITZGERALDS INCORPORATED
FITZGERALDS MISSISSIPPI, INC.
FITZGERALDS LAS VEGAS, INC.
FITZGERALDS BLACK HAWK, INC.
FITZGERALDS BLACK HAWK II, INC.
FITZGERALDS FREMONT EXPERIENCE
CORPORATION
101 MAIN STREET LIMITED LIABILITY
COMPANY,
By: /s/ PHILIP D. GRIFFITH
----------------------------------------------
Name: Philip D. Griffith
Title: President and Chief Executive Officer
of each of the above named entities
S-1
<PAGE> 32
Accepted and Agreed to:
JEFFERIES & COMPANY, INC.
By: /s/ M. BRENT STEVENS
---------------------------------
Name: M. Brent Stevens
Title: Managing Director
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
---------------------------------
Name:
Title:
S-2
<PAGE> 33
Accepted and Agreed to:
JEFFERIES & COMPANY, INC.
By:
---------------------------------
Name:
Title:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ M. BECKER
---------------------------------
Name: M. Becker
Title: Vice President
S-3
<PAGE> 1
EXHIBIT 10.3
------------------------------------------------
SECURITY AND PLEDGE AGREEMENT
AMONG
FITZGERALDS GAMING CORPORATION,
CERTAIN OF ITS SUBSIDIARIES
PARTY HERETO,
AS GRANTORS
AND
THE BANK OF NEW YORK,
AS COLLATERAL AGENT
DATED AS OF DECEMBER 30, 1997.
------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C> <C>
1. Definitions...............................................................1
2. Creation of Security Interest, etc........................................8
3. Representations and Warranties...........................................10
3.1 Validity, Perfection and Priority..............................10
3.2 No Liens; Other Financing Statements...........................10
3.3 Chief Executive Office.........................................11
3.4 Location of Inventory..........................................11
3.5 Fair Labor Standards Act.......................................11
3.6 Tradenames; Prior Names........................................11
3.7 Pledged Securities.............................................11
3.8 Receivables....................................................12
3.9 Intellectual Property..........................................12
4. Covenants................................................................14
4.1 Books and Records..............................................14
4.2 Further Assurances.............................................14
4.3 Change of Chief Executive Office...............................15
4.4 Change of Location of Inventory................................15
4.5 Change of Name, Identity or Corporate Structure................16
4.6 Subsequently Acquired Pledged Securities, etc..................16
4.7 Delivery of Instruments........................................16
4.8 Delivery of Chattel Paper......................................16
4.9 Right of Inspection............................................17
4.10 Insurance......................................................17
4.11 Warehouse Receipts Non-negotiable..............................19
4.12 Compliance with Laws...........................................19
4.13 Payment of Obligations.........................................19
4.14 No Impairment..................................................20
4.15 Intercreditor Agreement........................................20
4.16 Negative Pledge................................................20
4.17 Limitations on Dispositions of Collateral......................20
4.18 Provisions Regarding Receivables...............................21
4.19 Intellectual Property..........................................21
4.20 Notice.........................................................23
4.21 Performance by Collateral Agent of Grantor's Obligations;
Reimbursement..................................................23
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C><C> <C>
5. Appointment of Sub-Agents................................................23
6. Voting, etc..............................................................23
7. Payments and Other Distributions.........................................24
8. Collateral Account.......................................................25
8.1 Collateral Account.............................................25
8.2 Deposit of Proceeds............................................25
8.3 Investment of Balance in Collateral Account....................25
9. Power of Attorney........................................................26
9.1 Collateral Agent's Appointment as Attorney-in-Fact.............26
10. Remedies................................................................28
10.1 Rights and Remedies Generally; Foreclosure.....................28
10.2 Proceeds.......................................................28
10.3 Direct Grantor to Dispose of Collateral........................29
10.4 Collateral Account.............................................30
10.5 Possession of Collateral.......................................30
10.6 Disposition of the Collateral..................................31
10.7 Registration Rights; Private Sales.............................32
10.8 Provisions Regarding Receivables...............................33
10.9 Recourse.......................................................34
10.10 Expenses; Attorneys' Fees......................................34
10.11 Preventing Impairment of the Collateral........................34
10.12 Limitation on Duties Regarding Preservation of Collateral......34
10.13 Waiver of Claims...............................................35
10.14 Discontinuance of Proceedings..................................36
10.15 Intellectual Property License..................................36
11. Additional Collateral...................................................36
12. Compensation and Indemnification........................................37
12.1 Compensation...................................................37
12.2 Indemnity, etc.................................................37
12.3 Indemnity Obligations Secured by Collateral; Survival..........38
13. Governing Law; Submission to Jurisdiction...............................38
14. Limitation of Liability.................................................39
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
15. Notices.................................................................39
16. Successors and Assigns..................................................40
17. Waivers and Amendments..................................................40
18. No Waiver; Remedies Cumulative..........................................40
19. Termination; Release....................................................40
20. Counterparts............................................................41
21. Headings Descriptive....................................................41
22. Marshalling.............................................................41
23. Severability............................................................41
24. Survival................................................................41
25. Powers Coupled with an Interest.........................................41
26. Authority of Collateral Agent...........................................41
27. Waiver..................................................................42
</TABLE>
iii
<PAGE> 5
Schedules
Schedule I Filing Offices
Schedule II Pledged Securities
Schedule III Inventory Locations
Schedule IV Inventory in Possession of Bailee
Schedule V Trade Names
Schedule VI Intellectual Property Collateral
Item A: Copyrights
Item B: Copyright Licenses
Item C: Patents
Item D: Patent Licenses
Item E: Trademarks
Item F: Trademark Licenses
Item G: Trade Secret
Item H: Intellectual Property Collateral Matters
Exhibit I Form of Trademark Security Agreement
Exhibit II Form of Patent Security Agreement
Exhibit III Form of Copyright Security Agreement
iv
<PAGE> 6
SECURITY AND PLEDGE AGREEMENT
THIS SECURITY AND PLEDGE AGREEMENT, dated as of December 30, 1997
is entered into among FITZGERALDS GAMING CORPORATION, a Nevada corporation
(together with its successors and assigns, the "Company"), its Subsidiaries
listed on Schedule A hereto (the Company and such Subsidiaries, together with
their successors and assigns, each a "Grantor" and collectively, the
"Grantors"), and THE BANK OF NEW YORK, as collateral agent (together with its
successors and assigns, the "Collateral Agent").
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, covenant and agree as follows:
1. Definitions. Unless the context hereof clearly requires
otherwise:
(a) words and terms defined in the Indenture and not
defined herein shall have the same meanings herein as therein provided; and
(b) the following words and terms shall have the following
meanings:
"Account Debtor" shall mean the person who is obligated on a
Receivable.
"Accounts" shall mean "accounts" as such term is defined in
Section 9-106 of the UCC.
"Applicable UCC" shall mean the Uniform Commercial Code as in
effect in any applicable jurisdiction.
"Assignment of Security Interest" shall mean any Trademark
Security Agreement, Patent Security Agreement or Copyright Security
Agreement in the forms attached hereto as Exhibits I, II and III,
respectively.
"Bankruptcy Code" shall mean Title 11 of the United States Code
entitled "Bankruptcy", as amended from time to time, and any successor
statute or statutes.
"Chattel Paper" shall mean "chattel paper" as such term is
defined in Section 9-105(b) of the UCC.
<PAGE> 7
"Collateral" shall have the meaning assigned to it in Section 2
hereof.
"Collateral Account" shall mean the account (which may be a
securities account) established and maintained pursuant to Section 8 of
this Security Agreement by the Collateral Agent, entitled Fitzgeralds
2004 Senior Secured Notes Collateral Account, The Bank of New York, as
collateral agent, secured party", and all funds, securities and other
property or other items from time to time credited to such account and
all interest, income and distributions thereon.
"Collateral Records" shall mean books, records, computer
software, computer printouts, customer lists, blueprints, technical
specifications, manuals, and similar items which relate to any
Collateral other than such items obtained under license or franchise
agreements that prohibit assignment or disclosure of such items.
"Contracts" shall mean all contracts between any Grantor and one
or more additional parties.
"Copyright Licenses" means all Contracts providing for the
granting of any right in or to Copyrights (whether a Grantor is licensee
or licensor thereunder), including, without limitation, each Contract
referred to in Item B of Schedule VI.
"Copyrights" means all United States and foreign copyrights
(including, without limitation, copyrights in software and databases)
and all semiconductor chip product mask works, whether registered or
unregistered, now or hereafter in force throughout the world, all
registrations and applications therefor including, without limitation,
the copyright and mask work registrations and applications referred to
in Item A of Schedule VI, all rights corresponding thereto throughout
the world, all extensions and renewals of any thereof, the right to sue
for past infringements of any of the foregoing, and all proceeds of the
foregoing, including, without limitation, royalties, income, payments,
claims, damages, and proceeds of suit.
"Distributions" shall mean all dividends, distributions, payments
of interest and principal and other amounts (whether consisting of
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.
2
<PAGE> 8
"Documents" shall mean "documents" as such term is defined in
Section 9-105(f) of the UCC.
"Equipment" shall mean "equipment" as such term is defined in
Section 9-109(2) of the UCC, including, without limitation:
(i) 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,
(ii) ships, boats, barges and vessels (whether under construction
or completed) and any and all masts, bowsprints, 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,
(iii) 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
(iv) 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.
"Excluded Assets" shall mean (i) cash, deposit accounts and other
cash equivalents; (ii) furniture, fixtures and equipment securing
Non-Recourse Indebtedness permitted to be incurred under the Indenture;
(iii) assets securing Purchase Money Obligations or Capital Lease
Obligations permitted to be incurred under the Indenture; and (iv) any
Contracts, permits, licenses or the like that cannot be subjected to a
Lien without the consent of third parties, which consent is not
obtainable by any Grantor (including all Gaming Licenses of any
Grantor); provided, that Excluded Assets does not include the proceeds
of the assets under clauses (ii), (iii) or (iv) or of any other
Collateral to the extent such proceeds do not constitute Excluded Assets
under clause (i) above.
3
<PAGE> 9
"Fixtures" shall mean "fixtures" as such term is defined in
Section 9-313 of the UCC.
"Gaming Laws" shall mean all gaming laws, rules and regulations,
including without limitation the Nevada Gaming Control Act.
"General Intangibles" shall mean "general intangibles" as such
term is defined in Section 9-106 of the UCC, including, without
limitation and in any event, rights to the payment of money, Trademarks,
Copyrights, Patents, and Contracts, licenses (including all Gaming
Licenses that are not Excluded Assets) and franchises, 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(1)(a) of the UCC) and
uncertificated securities (as defined in Section 8-102(1)(b) of the
UCC), computer programs and other computer software, inventions,
designs, trade secrets, goodwill, proprietary rights, customer lists,
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.
"Governmental Authority" shall mean any federal, state,
municipal or other governmental department, commission, board, bureau,
agency or instrumentality, or any court, in each case whether of the
United States or foreign.
"Hedging Agreements" shall mean 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.
"Indenture" shall mean that certain Indenture, dated as of the
date hereof, among the Company, the Grantors and the Trustee, as the
same may be amended, modified, supplemented or restated from time to
time.
"Instruments" shall mean "instruments" as such term is defined in
Section 9-105(1)(i) of the UCC.
4
<PAGE> 10
"Intellectual Property Collateral" means, collectively, the
Copyrights, the Copyright Licenses, the Patents, the Patent Licenses,
the Trademarks, the Trademark Licenses, and the Trade Secrets.
"Inventory" shall mean "inventory" as such term 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 any
Grantor 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 Grantor's business.
"Liquor License" shall mean all liquor licenses held by any
Grantor or any of its Affiliates relating to any of the Casinos and all
renewals, substitutions and replacements thereof.
"Liquor License Authority" shall mean any Governmental
Authority that issues a Liquor License.
"Majority Holders" shall mean the holder or holders of a majority
in aggregate principal amount of the outstanding Notes.
"Motor Vehicles" shall mean motor vehicles, tractors, trailers
and other like property, if title thereto is governed by a certificate
of title ownership.
"Non-located Assets" shall have the meaning provided in Section
4.4 of this Security Agreement.
"Patent Licenses" means all Contracts providing for the granting
of any right in or to Patents (whether a Grantor is licensee or licensor
thereunder) including, without limitation, each such Contract referred
to in Item D of Schedule VI.
"Patents" means all United States and foreign patents and
applications for letters patent throughout the world, including, without
limitation each patent and patent application referred to in Item C of
Schedule VI, all reissues, divisions, continuations,
continuations-in-part, extensions, renewals, and reexaminations of any
of the foregoing, all rights corresponding thereto throughout the world,
and all proceeds of the foregoing including, without limitation,
royalties, income, payments,
5
<PAGE> 11
claims, damages, and proceeds of suit and the right to sue for past
infringements of any of the foregoing.
"Pledged Securities" shall mean (i) all shares of capital stock
of any Subsidiary, and all options or rights to acquire any such shares
or interests, in each case now or hereafter owned by any Grantor,
including, without limitation, the capital stock and interests
identified on Schedule II hereto, (ii) all Distributions on Pledged
Securities (as constituted immediately prior to such Distribution)
constituting securities (whether debt or equity securities or
otherwise), and (iii) all 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) (A) by
way of stock-split, spin-off, split-up, reclassification, combination of
shares or similar rearrangement or (B) by reason of any consolidation,
merger, exchange of stock, conveyance of assets, liquidation, bankruptcy
or similar corporate reorganization or other disposition of Pledged
Securities.
"Proceeds" shall mean "proceeds" as such term is defined in
Section 9-306(1) of the UCC.
"Receivables" shall mean 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.
"Receivables Records" shall mean (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 Grantor or any computer bureau or agent from time to time
acting
6
<PAGE> 12
for any Grantor or otherwise and (c) all credit information, reports and
memoranda relating thereto.
"Security Agreement" shall mean this Security and Pledge
Agreement, as the same may be amended, modified, supplemented or
restated from time to time.
"Secured Obligations" shall mean (i) with respect to the Company,
all obligations, liabilities (including, without limitation, contingent
obligations) and indebtedness of every nature of the Company to the
Secured Parties now existing or hereafter incurred, or arising under or
in connection with the Collateral, this Security Agreement and the other
Security Documents, the Indenture, the Guaranty, the Registration Rights
Agreement and the Notes, and shall include interest on the Notes
accruing after the filing of any petition under the Bankruptcy Code at
the default rate applicable under the Indenture and (ii) with respect to
each Grantor other than the Company, all obligations, liabilities
(including, without limitation, contingent obligations) and indebtedness
of every nature of such Grantor to the Secured Parties now existing or
hereafter incurred, arising under or in connection with its Guarantee.
"Secured Parties" shall mean the collective reference to the
Collateral Agent, the Trustee and each Holder.
"Trademark Licenses" means all Contracts providing for the
granting of any right in or to Trademarks (whether a Grantor is licensee
or licensor thereunder) including, without limitation, each such
Contract referred to in Item F of Schedule VI.
"Trademarks" means all United States and foreign trademarks,
trade names, corporate names, company names, business names, fictitious
business names, trade styles, service marks, certification marks,
collective marks, logos, other source of business identifiers, designs
and general intangibles of a like nature, all registrations and
applications for any of the foregoing including, but not limited to the
registrations and applications referred to in Item E of Schedule VI, all
extensions or renewals of any of the foregoing; all of the goodwill of
the business connected with the use of and symbolized by the foregoing;
the right to sue for past infringement or dilution of any of the
foregoing or for any injury to goodwill, and all proceeds of the
foregoing, including, without limitation, license royalties, income,
payments, claims, damages, and proceeds of suit.
7
<PAGE> 13
"Trade Secrets" means all other confidential or proprietary
information and know-how now or hereafter owned or used in, or
contemplated at any time for use in, the business of any Grantor, in
each case, whether or not reduced to a writing or other tangible form,
including all documents and things embodying, incorporating, or
referring in any way to such Trade Secret, all Contracts providing for
the granting of any right in or to Trade Secrets (whether a Grantor is
licensee or licensor thereunder), including, without limitation, each
such Contract referred to in Item G of Schedule VI, the right to sue for
past infringement or dilution of any Trade Secret, and all proceeds of
the foregoing, including, without limitation, royalties, income,
payments, claims, damages, and proceeds of suit.
"Trustee" shall mean The Bank of New York, as trustee under the
Indenture, and any successor trustee thereunder.
"UCC" shall mean the Uniform Commercial Code as in effect in the
State of New York.
(c) All terms defined in the UCC and not otherwise defined
herein shall have the meanings assigned to them in the UCC.
2. Creation of Security Interest, etc.
(a) As security for the prompt and complete payment and
performance in full of all the Secured Obligations, each Grantor hereby assigns,
pledges, transfers and delivers to the Collateral Agent, for the benefit of the
Secured Parties, and grants to the Collateral Agent, for the benefit of the
Secured Parties, a security interest in and continuing lien on all of such
Grantor's right, title and interest in, to and under the following (except to
the extent constituting Excluded Assets), in each case whether now owned or
existing or hereafter acquired or arising, and wherever located (all of which
being hereinafter collectively called the "Collateral"):
(i) all Inventory;
(ii) all Accounts;
(iii) all Pledged Securities;
(iv) all Distributions;
(v) the Collateral Account;
8
<PAGE> 14
(vi) all Collateral Records;
(vii) all Documents;
(viii) all Chattel Paper;
(ix) all General Intangibles;
(x) all Instruments;
(xi) all Receivables;
(xii) all Receivables Records;
(xiii) all Intellectual Property Collateral;
(xiv) all Contracts;
(xv) all Equipment;
(xvi) all Fixtures;
(xvii) all Hedging Agreements;
(xviii) all insurance policies;
(xix) all Motor Vehicles; and
(xx) all accessions and additions to, all
substitutions and replacements for, and all Proceeds or products of, any
or all of the foregoing.
(b) Notwithstanding anything to the contrary contained
herein, the Collateral Agent expressly acknowledges and agrees that the pledge
of the Pledged Securities of FRI, FSI and FLVI pursuant hereto, and any
restrictions on the transfer of and agreements not to encumber such Pledged
Securities 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 Collateral Agent of its
rights and remedies hereunder is subject to the mandatory provisions of the
Gaming Laws.
9
<PAGE> 15
3. Representations and Warranties. Each Grantor jointly and
severally represents and warrants to the Secured Parties, which representations
and warranties shall survive the execution and delivery of this Security
Agreement, as follows:
3.1 Validity, Perfection and Priority.
(a) The security interests in the Collateral granted to
the Collateral Agent hereunder constitute valid and continuing security
interests in the Collateral.
(b) Upon (i) the filing of financing statements naming
each Grantor as "debtor" and the Collateral Agent as "secured party" and
describing the Collateral in the filing offices set forth on Schedule I hereto,
(ii) to the extent subject to U.S. federal law and not Article 9 of the
Applicable UCC, the recordation of the security interests granted hereunder 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 applications and
registrations, and (iii) the delivery by each Grantor of certificates and
instruments evidencing all of the Pledged Securities identified on Schedule II
hereto, indorsed in blank or accompanied by undated stock powers duly executed
in blank, as the case may be, with respect thereto, the security interests in
the Collateral granted to the Collateral Agent for the benefit of itself and the
other Secured Parties hereunder will constitute perfected security interests
therein superior and prior to all Liens (other than Permitted Liens), rights or
claims of all other Persons.
3.2 No Liens; Other Financing Statements.
(a) Except for the Lien granted to the Collateral Agent
hereunder for the benefit of the Secured Parties, the Grantors own and, as to
all Collateral whether now existing or hereafter acquired will continue to own,
each item of the Collateral free and clear of any and all Liens (other than
Permitted Liens), and the Grantors shall defend the Collateral against all
claims and demands of all Persons at any time claiming the same or any interest
therein adverse to any Secured Parties other than holders of Permitted Liens on
the Collateral entitled to priority therein under applicable law.
(b) No financing statement or other evidence of Lien
covering or purporting to cover any of the Collateral is on file and is
effective in any public office other than (i) financing statements filed or to
be filed in connection with the security interests granted to the Collateral
Agent hereunder, (ii) financing statements for which proper, executed
termination statements have been delivered to the Collateral Agent for filing
and (iii) financing statements filed in connection with Permitted Liens.
10
<PAGE> 16
3.3 Chief Executive Office. The chief executive office of each
Grantor is set forth on Schedule III hereto. The originals of the Receivables
Records and all Collateral Records are located at the locations identified on
Schedule III as such or at the chief executive office of the Company. All
Receivables are maintained at, and controlled and directed (including, without
limitation, for general accounting purposes) from the chief executive office or
the offices identified on Schedule III as such.
3.4 Location of Inventory. All Inventory (other than Non-located
Assets) is kept only at (or shall be in transit to) the locations listed on
Schedules III and IV hereto. None of such Inventory is in the possession of an
issuer of a negotiable document (as defined in Section 7-104 of the UCC)
therefor or otherwise in the possession of a bailee or other Person, except as
set forth on Schedule IV hereto.
3.5 Fair Labor Standards Act. Any goods now or hereafter produced
by any Grantor included in the Collateral have been and will be produced in
compliance with the requirements of the Fair Labor Standards Act, as amended.
3.6 Tradenames; Prior Names. The only names under which the
Grantors have conducted business during the last five years are as set forth on
Schedule V hereto.
3.7 Pledged Securities. Except as disclosed on Schedule 3.7, (a)
each Grantor is the legal, record and beneficial owner of, and has good title
to, the Pledged Securities listed on Schedule II hereto, and such Pledged
Securities are not subject to any put, call, option or other right in favor of
any other Person whatsoever, (b) the Pledged Securities listed on Schedule II
hereto constitutes all of the capital stock owned legally or beneficially by
each Grantor of any Subsidiary, (c) no Grantor is a party to or bound by any
agreement with any other Person (including, without limitation, any Subsidiary
or any other stockholder of any Subsidiary) which restricts the ability of any
Grantor to vote, transfer or dispose of any Pledged Securities, (d) no consent
of any other Person (including, without limitation, any Subsidiary or any other
stockholder of any such Subsidiary) is required to be obtained by any Grantor in
connection with the pledge by such Grantor of any of the Pledged Securities or
the consummation of the other transactions contemplated hereby, including,
without limitation, the exercise by the Collateral Agent of the voting or other
rights provided for in this Security Agreement with respect to the Pledged
Securities or the remedies in respect of the Pledged Securities provided
pursuant to this Security Agreement, and (e) all of the Pledged Securities
listed on Schedule II have been duly and validly issued, and are fully paid and
nonassessable. Each Grantor shall use its best efforts to obtain all approvals
of the Gaming Authorities in Nevada that are required for the pledge of or any
negative pledge on the stock of FRI, FSI, and FLVI.
11
<PAGE> 17
3.8 Receivables.
(a) Each Receivable (i) is and will be the genuine, legal,
valid and binding obligation of the Account Debtor in respect thereof,
representing an unsatisfied obligation of such Account Debtor, (ii) is and will
be enforceable in accordance with its terms, (iii) is and will be in full force
and effect and is not and will not be subject to any setoffs, defenses, taxes,
counterclaims (except (x) with respect to refunds, returns and allowances in the
ordinary course of business and (y) to the extent that such Receivable may not
yet have been earned by performance) and (iv) is and will be in compliance with
all applicable laws, whether federal, state, local or foreign.
(b) No Receivables in excess of $250,000 individually or
$2,000,000 in the aggregate are evidenced by any Instrument which has not been
delivered to the Collateral Agent.
(c) The representations and warranties contained in this
Section shall be deemed to be repeated by the applicable Grantor as of the time
when each Receivable arises.
3.9 Intellectual Property. Except as disclosed in Item H of
Schedule VI, as of the date hereof:
(a) all Intellectual Property Collateral material to the
business of each Grantor is subsisting and has not been adjudged invalid or
unenforceable, in whole or in part, and all United States Copyrights owned by
each Grantor which are material to its business are duly registered in the
United States Copyright Office;
(b) to the best of each Grantor's knowledge, all
Intellectual Property Collateral material to the business of such Grantor is
valid and enforceable;
(c) Schedule VI sets forth (i) all United States, state
and foreign registrations of and applications for Patents, Trademarks and
Copyrights of each Grantor and (ii) all Patent Licenses, Trademark Licenses,
Copyright Licenses and Trade Secret licenses material to the business of the
Grantors;
(d) all Trademark, Patent and Copyright registrations and
applications are (except as disclosed in Items A, C or E of Schedule VI hereof)
standing in the name of each Grantor, and none of the Trademarks, Patents,
Copyrights or Trade Secret Collateral material to the business of such Grantor
has been licensed by such Grantor to any affiliate or third party, except as
disclosed in Items B, D, F and G of Schedule VI;
12
<PAGE> 18
(e) each Grantor has been using appropriate statutory
notice of registration in connection with its use of registered Trademarks
material to the business of such Grantor, proper marking practices in connection
with the use of Patents material to the business of such Grantor and appropriate
notice of copyright in connection with the publication of Copyrights material to
the business of such Grantor;
(f) the Grantors are the exclusive owners of the entire
and unencumbered right, title and interest in and to all Intellectual Property
Collateral material to the business of the Grantors (subject only to Permitted
Liens and the licenses and other disclosures identified in Items B, D, F and G
of Schedule VI) and, no claim has been made or, to the best of any Grantor's
knowledge, threatened, that the use of such Intellectual Property Collateral
violates the rights of any third party;
(g) to the best of each Grantor's knowledge, the conduct
of each Grantor's business does not infringe upon any trademark, patent,
copyright, trade secret or similar intellectual property right owned or
controlled by a third party and, to the best of each Grantor's knowledge, no
third party is infringing upon any Intellectual Property Collateral;
(h) no holding, decision, or judgment has been rendered in
any action or proceeding challenging the validity of or any Grantor's rights to
use any Intellectual Property Collateral and no such action or proceeding is
pending or, to the best of each Grantor's knowledge, threatened;
(i) each Grantor has performed all acts and has paid all
required fees and taxes to maintain each and every registration and application
of Intellectual Property Collateral material to the business of each Grantor in
full force and effect;
(j) each Grantor owns or has valid rights to use, all
patents, trademarks, trade secrets, copyrights, and other intellectual property
rights used in and material to the business of each Grantor;
(k) the recordation of the Trademark Security Agreement,
in the form of Exhibit I hereto, in the United States Patent and Trademark
Office, together with filings on Form UCC-l pursuant to this Agreement will be
effective to perfect the security interest granted to the Collateral Agent in
the United States Trademarks covered by this Agreement;
(l) the recordation of the Patent Security Agreement, in
the form of Exhibit II hereto, in the United States Patent and Trademark Office,
together with filings on Form UCC-l pursuant to this Agreement will be effective
to perfect the security interest granted to the Collateral Agent in the United
States Patents covered by this Agreement.
13
<PAGE> 19
(m) the recordation of the Copyright Security Agreement,
in the form of Exhibit III hereto, in the United States Copyright Office, along
with the registration of all Copyrights therein and the filings on Form UCC-1
pursuant to this Agreement, will be effective to perfect the security interest
granted to the Collateral Agent in the United States Copyrights.
4. Covenants. Each Grantor jointly and severally covenants and
agrees that at all times during the term of this Security Agreement and until
the Secured Obligations have been full and finally paid:
4.1 Books and Records.
(a) Each Grantor shall keep accurate and complete books
and records concerning each category of the Collateral, including, but not
limited to, the originals of all documentation with respect to all Receivables
and records of all payments received and all credits granted on the Receivables,
all merchandise returned and all other dealings therewith. Each Grantor shall,
in form and manner reasonably satisfactory to the Collateral Agent, annotate all
Chattel Paper and Receivables Records with an appropriate reference to the fact
that the Chattel Paper and all other Receivables have been assigned to the
Collateral Agent for the benefit of the Secured Parties and that the Collateral
Agent has a security interest therein.
(b) Each Grantor shall furnish to the Collateral Agent at
such times and in such form and substance as the Collateral Agent may reasonably
request, but in any event within ten business days after the occurrence of an
Event of Default and at least every 30 days thereafter during the continuance of
such Event of Default, information reasonably adequate to enable the Collateral
Agent to identify the Collateral and determine the amount and value thereof,
including, without limitation, the location, cost, net book value and fair
market value of Collateral.
4.2 Further Assurances. (a) At any time and from time to time,
upon the reasonable request of the Collateral Agent, and at the sole expense of
the Grantors, the Grantors shall promptly do all such further things and duly
execute and deliver any and all such further conveyances, assignments,
agreements, instruments, indorsements, powers of attorney and other documents,
make such filings, give such notices and take such further action as the
Collateral Agent may reasonably deem necessary in obtaining the full benefits of
this Security Agreement and of the rights, remedies and powers herein granted or
in order to assure and confirm unto the Collateral Agent the Collateral Agent's
rights, powers and remedies hereunder, including, without limitation, (i) the
filing of any financing statements, in form reasonably acceptable to the
Collateral Agent under the Applicable UCC with respect to the Liens granted
hereby and (ii) with respect to any Intellectual Property Collateral, the filing
of any Assignment of Security Interest in the relevant office in the form of
Exhibit I, II or III hereto, as applicable. Each Grantor
14
<PAGE> 20
hereby authorizes the Collateral Agent to file any such instrument without the
signature of such Grantor to the extent permitted by applicable law. A photocopy
or other reproduction of this Security Agreement shall be sufficient as a
financing statement and may be filed in lieu of the original to the extent
permitted by applicable law. Each Grantor shall, at the request of the
Collateral Agent, confirm the grant of security in any Collateral, the form of
such confirmation to be in such form as may be reasonably satisfactory to the
Collateral Agent.
(b) The Grantors will pay or reimburse the Collateral Agent for
all filing fees and related reasonable out-of-pocket expenses and will make or
reimburse the Collateral Agent for making all searches reasonably deemed
necessary by the Collateral Agent to establish and determine the priority of the
security interests of the Collateral Agent created hereunder or to determine the
presence or priority of other secured parties, including the Lenders under the
Eligible Credit Facility or Permitted Tunica Debt.
4.3 Change of Chief Executive Office. No Grantor will move its
chief executive office from that disclosed in Section 3.3 hereof except to such
new location as such Grantor may establish in accordance with the last sentence
of this Section. The originals of all Receivables Records will continue to be
kept at such chief executive office, at the offices designated on Schedule III
as offices at which Receivables Records are located, or at such new locations as
any Grantor may establish in accordance with the last sentence of this Section.
All Receivables and Receivables Records of any Grantor will continue to be
maintained at, and controlled and directed (including, without limitation, for
general accounting purposes) from, such chief executive office or a location
identified as a location at which Receivables or Receivables records are
maintained, controlled and directed on Schedule III, or such new locations as
such Grantor may establish in accordance with the last sentence of this Section.
No Grantor shall establish a new location for its chief executive office or such
activities until (i) it shall have given to the Collateral Agent not less than
30 days' prior written notice of its intention to do so, clearly describing such
new location and providing such other information in connection therewith as the
Collateral Agent may reasonably request and (ii) with respect to such new
location, it shall have taken all action as the Collateral Agent may reasonably
request to maintain the security interest of the Collateral Agent in the
Collateral intended to be granted hereby at all times fully perfected with the
same or better priority and in full force and effect.
4.4 Change of Location of Inventory. Each Grantor agrees that (i)
all Inventory now held or subsequently acquired by it shall only be kept at (or
shall be in transit to) the locations shown on Schedule III hereto (or, in the
case of Inventory held by a bailee, those locations shown on Schedule IV
hereto), or such new locations as such Grantor may establish in accordance with
the last sentence of this Section. Any Grantor may establish a new location for
Inventory only if (i) it shall have given to the Collateral Agent not less than
30 days' prior written notice of its intention to do so, clearly
15
<PAGE> 21
describing such new location and providing such other information in connection
therewith as the Collateral Agent may reasonably request and (ii) with respect
to such new location, it shall have taken all action as the Collateral Agent may
reasonably request to maintain the security interest of the Collateral Agent in
the Collateral intended to be granted hereby at all times fully perfected with
the same or better priority and in full force and effect. Notwithstanding
anything to the contrary contained in this Section 4.4, any Grantor may keep
Inventory at locations other than those set forth on Schedule III and Schedule
IV hereto and locations other than with respect to which it has notified the
Collateral Agent in advance (collectively, "Non-located Assets"); provided,
however, that at no time shall the aggregate book value of all Non-located
Assets exceed (a) $500,000 in any State of the United States, province of Canada
or in any other country or (b) $1,000,000 in the aggregate for all such assets
and at all locations.
4.5 Change of Name, Identity or Corporate Structure. No Grantor
shall change its name (or conduct any significant portion of its business under
any tradenames (other than those identified with an asterisk on Schedule V
hereto)), identity or corporate structure unless (i) it shall have given to the
Collateral Agent not less than 30 days' prior written notice of its intention to
do so, clearly describing such new name, identity or corporate structure or such
new tradename and providing such other information in connection therewith as
the Collateral Agent may reasonably request and (ii) with respect to such new
name, identity or corporate structure or such new tradename, it shall have taken
all action as the Collateral Agent may reasonably request to maintain the
security interest of the Collateral Agent in the Collateral intended to be
granted hereby at all times fully perfected with the same or better priority and
in full force and effect.
4.6 Subsequently Acquired Pledged Securities, etc. If at any time
or from time to time after the date hereof, any Grantor shall acquire any
additional Pledged Securities (by purchase, stock dividend, in lieu of interest
or otherwise), such Grantor will forthwith pledge and deposit such Pledged
Securities with the Collateral Agent and deliver to the Collateral Agent
certificates or instruments therefor, indorsed in blank by such Grantor or
accompanied by undated stock powers duly executed in blank by such Grantor or
such other documentation reasonably required by the Collateral Agent to perfect
its first priority Lien.
4.7 Delivery of Instruments. If any Instrument in excess of
$250,000 individually or $2,000,000 in the aggregate shall at any time comprise
any portion of the Collateral, the applicable Grantor shall within thirty days
notify the Collateral Agent thereof, and promptly deliver such Instrument or
Instruments to the Collateral Agent appropriately indorsed or assigned or to the
order of the Collateral Agent or in such other manner as shall be satisfactory
to the Collateral Agent.
4.8 Delivery of Chattel Paper. If Chattel Paper representing
Receivables in excess of $250,000 individually or $2,000,000 in the aggregate
shall at any time
16
<PAGE> 22
comprise any portion of the Collateral, the applicable Grantor shall within
thirty days notify the Collateral Agent thereof, and promptly deliver such
Chattel Paper to the Collateral Agent.
4.9 Right of Inspection. The Collateral Agent shall at all times
have full and free access during normal business hours to all the books,
correspondence and records of each Grantor relating to the Collateral, and the
Collateral Agent and its representatives may examine the same, take extracts
therefrom and make photocopies thereof, and each Grantor agrees to render to the
Collateral Agent, at such Grantor's cost and expense, such clerical and other
assistance as may be reasonably requested with regard thereto. The Collateral
Agent and its representatives shall at all times during normal business hours
also have the right to enter into and upon any premises where any of the
Inventory is located for the purpose of inspecting the same, observing its use
or otherwise protecting its interests therein. The Collateral Agent shall, if no
Event of Default shall then exist, provide reasonable notice to applicable
Grantor of any access and inspections permitted under this Section and shall use
all reasonable efforts to ensure that the business of such Grantor will not be
unreasonably disrupted thereby.
4.10 Insurance.
(a) Each Grantor shall maintain or cause to be maintained with
financially sound and reputable insurers acceptable to the Collateral Agent and
licensed to do business in each state in which any of the Collateral covered by
any policy is located, insurance with respect to the Collateral and its use,
against loss or damage of the kinds customarily insured against by reputable
companies in the same or similar businesses, such insurance to be of such types
and in such amounts (with such deductible amounts) as is customary for such
companies under the same or similar circumstances, and the types, amounts and
terms of which shall, in any event, be reasonably acceptable to the Collateral
Agent. Without limiting the generality of the foregoing, each Grantor (i) will
keep the Collateral insured on an "all risk" basis, as appropriate for any
particular Collateral against loss or damage by fire, standard extended coverage
perils and such other hazards, occurrences and events customarily required by a
prudent lender in the area where the Collateral is located in amounts not less
than the replacement cost of the Collateral and (ii) will maintain in the amount
customarily obtained by the same or similar businesses, general public liability
insurance against claims for bodily injury, death or property damage. Each
Grantor shall not obtain or carry separate insurance concurrent in form or
contributing in the event of loss with that required in this Section to be
furnished by such Grantor unless the Secured Parties are included as named
insured, with loss payable as provided herein.
(b) All policies of insurance shall (i) name the Collateral
Agent, on behalf of the Secured Parties as additional insured (with respect to
liability insurance policies) or loss payees with a lender's loss payable
indorsement and a standard "New York"
17
<PAGE> 23
mortgagee provision with a no contribution clause (with respect to property
insurance policies), in each case as their respective interests may appear, (ii)
include waivers by the insurer of all claims for insurance premiums against the
Secured Parties, (iii) provide that any losses shall be payable to the
Collateral Agent notwithstanding (A) any act, failure to act or negligence of or
violation of warranties, declarations or conditions contained in such policy by
any Grantor, the Collateral Agent or any other Secured Parties, (B) any
foreclosure or other proceedings or notice of sale relating to any Collateral
insured thereunder, or (C) any change in the title to or ownership of any
Collateral insured thereunder and (iv) provide that no cancellation, termination
or lapse in coverage thereof shall be effective until at least 30 days after
receipt by the Collateral Agent of written notice thereof.
(c) Each Grantor shall pay the premiums for all policies of
insurance as the same become due and payable and shall deliver evidence thereof
to the Collateral Agent. At the request of the Collateral Agent, each Grantor
will assign and deliver all policies of insurance to the Collateral Agent. In
any event, a certificate of insurance for each of the policies of insurance
shall be issued to the Collateral Agent, and copies of all original policies,
together with the indorsements thereof required hereunder, shall be delivered to
the Collateral Agent within ten days of the Collateral Agent's request therefor.
Not later than fifteen days prior to the expiration date of each of the
policies, each Grantor will deliver to the Collateral Agent a renewal policy or
policies or certificates of insurance to the Collateral Agent.
(d) If at any time the Collateral Agent is not in receipt of
written evidence that all insurance required hereunder is in full force and
effect, the Collateral Agent shall have the right upon seven days' prior written
notice to the applicable Grantor to take such action as the Collateral Agent
deems necessary to protect its interest in the Collateral, including, without
limitation, the payment of any premiums that are due and payable or the
obtaining of such insurance coverage as the Collateral Agent in its reasonable
discretion deems appropriate, and all reasonable out-of-pocket expenses incurred
by the Collateral Agent in connection with such action or in obtaining such
insurance and keeping it in effect, together with interest thereon at the rate
of 10% per annum shall be paid by the applicable Grantor to the Collateral Agent
upon demand and such payment obligations shall be secured hereby.
(e) Anything contained in this Section to the contrary
notwithstanding, any and all insurance which any Grantor is obligated to carry
pursuant to this Section may be carried under a general coverage "floater"
policy, master insurance policy, "blanket" policy or policies covering other
properties or liabilities, provided that the coverage so provided in accordance
with the requirements set forth herein shall not be diminished or hindered by
reason of the inclusion of any such required insurance under a policy containing
aggregate loss limits.
18
<PAGE> 24
(f) If the Collateral shall be damaged or destroyed, in whole or
in part, by fire or other casualty, the applicable Grantor shall give prompt
notice thereof to the Collateral Agent. No settlement on account of any material
loss covered by insurance shall be made for less than insured value without the
consent of the Collateral Agent. Except with respect to third party liability
insurance, after the occurrence and during the continuance of an Event of
Default, all sums payable to the applicable Grantor by any insurer with respect
to a casualty relating to all or any part of the Collateral shall be paid to the
Collateral Agent. Unless an Event of Default shall have occurred and be
continuing and subject, in any event, to the terms of the Indenture, (i) all
insurance proceeds from any insurance policy held by any Grantor shall be paid
to such Grantor and (ii) such Grantor shall apply such proceeds in accordance
with Section 4.10 of the Indenture. If any Grantor shall receive any insurance
proceeds which are to be paid to the Collateral Agent pursuant to this Section,
such Grantor shall hold such proceeds in trust for the Collateral Agent, shall
segregate such proceeds from other funds of such Grantor, and shall immediately
forward such proceeds in the form received to the Collateral Agent
(appropriately indorsed by such Grantor to the order of the Collateral Agent or
in such other manner as shall be satisfactory to the Collateral Agent). All such
insurance proceeds may be retained by the Collateral Agent in the Collateral
Account as Collateral hereunder and/or applied by the Collateral Agent toward
payment of all or part of the Secured Obligations (whether matured or unmatured)
in such order as is provided herein. If any portion of the insurance proceeds
are made available to any Grantor, the Collateral Agent shall not be obligated
to see to the application of any amount paid to such Grantor.
4.11 Warehouse Receipts Non-negotiable. Each Grantor agrees that
if any warehouse receipt or receipt in the nature of a warehouse receipt or
other Document is issued with respect to any of its Inventory, such warehouse
receipt or receipt in the nature thereof or other Document shall not be
"negotiable" (as such term is used in Section 7-104 of the UCC or under other
relevant law).
4.12 Compliance with Laws. Each Grantor will comply in all
material respects with all requirements of law applicable to the Collateral or
any part thereof; provided, however, that such Grantor may contest any
requirement of law in any reasonable manner which shall not, in the reasonable
opinion of the Collateral Agent, materially and adversely affect the Collateral
Agent's or the Secured Parties' rights in any of the Collateral or adversely
affect the priority of the Liens created hereunder in any of the Collateral.
4.13 Payment of Obligations. Each Grantor will pay promptly when
due all taxes, assessments and governmental charges or levies imposed upon the
Collateral or in respect of its income or profits therefrom, as well as all
claims of any kind (including, without limitation, claims for labor, materials,
supplies and services) against or with respect to the Collateral, except that no
such charge need be paid if (i) the validity thereof is being contested in good
faith by appropriate proceedings, (ii) such proceedings do not
19
<PAGE> 25
involve, in the reasonable opinion of the Collateral Agent, any material danger
of the sale, forfeiture or loss of any of the Collateral or any interest therein
that could reasonably be expected to have an adverse effect on the Secured
Parties and (iii) such charge is adequately reserved against on the Company's
books in accordance with GAAP.
4.14 No Impairment. Except as expressly permitted herein or in
the Indenture, no Grantor will take or knowingly permit to be taken any action
which could impair the Collateral Agent's or any Secured Party's rights in the
Collateral.
4.15 Intercreditor Agreement.
(a) The Company will be permitted, as provided in the
Indenture, to enter into an Eligible Credit Facility; provided, that the
Collateral Agent and the Lender providing the Eligible Credit Facility enter
into the Intercreditor Agreement.
(b) The Company will be permitted, as provided in the
Indenture, to incur Permitted Tunica Debt that would be secured by Liens ranking
pari passu with the Liens securing the Notes; provided, that the Collateral
Agent and the Lender providing the Permitted Tunica Debt enter into the
Intercreditor Agreement.
(c) The relative rights of the Secured Parties, the
Lenders under the Eligible Credit Facility and the Lenders under the Permitted
Tunica Debt shall be governed by the terms of the Intercreditor Agreement, but
nothing therein shall affect the obligations of any of the Grantors to any of
the Secured Parties.
4.16 Negative Pledge. Subject to the last sentence of Section
3.7, no Grantor will create, incur or permit to exist, and each Grantor will
defend the Collateral against, and will take such other action as is necessary
to remove, any Lien or claim on or to the Collateral, other than (a) Permitted
Liens and (b) prior to the earlier of the consummation of the Exchange Offer or
the effectiveness of the Initial Shelf Registration Liens on the Capital Stock
of FSI, FLVI and FRI, and will defend the right, title and interest of the
Collateral Agent and the other Secured Parties in and to any of the Collateral
against the claims and demands of all Persons other than holders of Permitted
Liens on the Collateral entitled to priority therein under applicable law.
4.17 Limitations on Dispositions of Collateral. No Grantor will
make any Asset Sale unless the proceeds of such Asset Sale are applied as
permitted or required by Section 4.10 of the Indenture. In the event of an Asset
Sale permitted by this Section, the Collateral Agent shall, subject to the terms
of Section 10.3 of the Indenture, at the sole cost and expense of the applicable
Grantor, execute such documents as the applicable Grantor shall reasonably
request to evidence the release of the Lien created by this Security Agreement
with respect to such Collateral and, to the extent such Collateral is in
20
<PAGE> 26
the possession of the Collateral Agent, deliver such Collateral to such Grantor,
or its designee.
4.18 Provisions Regarding Receivables.
(a) Each Grantor shall perform in all material respects
all of its obligations with respect to the Receivables.
(b) Each Grantor shall use commercially reasonable efforts
(including, without limitation, prompt and diligent exercise of each material
right it may have under any Receivable (other than any right of termination)) to
cause to be collected from each Account Debtor, as and when due (including,
without limitation, amounts which are delinquent, such amounts to be collected
in accordance with generally accepted lawful collection procedures) any and all
amounts owing under or on account of any Receivable, and apply all collected
amounts to the outstanding balance of such Receivable immediately upon receipt
thereof. Notwithstanding the foregoing, each Grantor shall not be obligated to
exercise any rights with respect to any Receivables to the extent that it
determines in good faith that such exercise would not be commercially reasonable
or, in the exercise of its best business judgment, prudent. The costs of
collection, whether incurred by any Grantor or the Collateral Agent shall be
borne by the Grantors and if incurred by the Collateral Agent shall be
reimbursed, together with interest thereon at the rate of 10% per annum, to the
Collateral Agent upon demand and such reimbursement obligation shall be secured
hereby.
(c) Upon the occurrence and during the continuance of an
Event of Default, the Company shall establish such lock-box arrangements for the
collection of Receivables as the Collateral Agent may require in its sole
discretion.
(d) The Company shall, and shall cause each other Grantor
to, apply any payments on any intercompany Indebtedness among or between the
Company and such other Grantors first to the payment of intercompany
Indebtedness constituting intercompany Receivables until such intercompany
Receivables are paid in full.
4.19 Intellectual Property.
(a) No Grantor shall do any act or omit to do any act
whereby any of the Intellectual Property Collateral which is material to the
business of the Grantor may lapse or become abandoned or dedicated to the public
or unenforceable.
(b) No Grantor shall (i) cease the use of any of the
Trademarks which is material to the business of the Grantor or (ii) fail to
maintain as in the past the level of the quality of products and services
offered under any of such Trademarks.
21
<PAGE> 27
(c) Each Grantor shall promptly notify the Collateral
Agent if it knows that any item of the Intellectual Property Collateral that is
material to the business of the Grantors may become (a) abandoned or dedicated
to the public or placed in the public domain, (b) invalid or unenforceable, or
(c) subject to any adverse determination or development (including the
institution of proceedings) or any adverse determination or development in any
proceeding in the United States Patent and Trademark Office, the United States
Copyright Office, and state registry any foreign counterpart thereof or any
court.
(d) Each Grantor shall take all commercially reasonable
steps, including in the United States Patent and Trademark Office, the United
States Copyright Office, or any state or foreign counterpart thereof, to
maintain and pursue any application and to maintain any registration of each
Trademark, Patent, and Copyright owned by such Grantor which is material to the
business of the Grantor, including, but not limited to, the filing of
applications for renewal, affidavits of use, affidavits of incontestability, the
prosecution and defense of opposition, interference, and cancellation
proceedings, and the payment of fees and taxes.
(e) Each Grantor shall promptly (but in no event more than
ninety days after the Company obtains knowledge thereof) report to the
Collateral Agent (i) the filing of any application to register any Intellectual
Property Collateral (whether such application is filed by such Grantor or
through any agent, employee, licensee, or designee thereof) in the United States
Patent and Trademark Office, the United States Copyright Office, or any State or
foreign counterpart thereof and (ii) the registration of any Intellectual
Property Collateral by any such Office. Upon the request of the Collateral
Agent, each Grantor shall promptly execute and deliver any and all agreements,
instruments, documents, and papers as the Collateral Agent may reasonably
request, including but not limited to the execution of one or more Trademark
Security Agreements, Patent Security Agreements and Copyright Security
Agreements in the forms attached hereto as Exhibits to evidence the Collateral
Agent's security interest in such Intellectual Property Collateral. The Grantor
shall obtain U.S. copyright registrations for all material copyrights within
thirty (30) days after their "fixation in a tangible medium of expression" or
their acquisition by the Grantor, if acquired from a third party.
(f) Each Grantor shall, promptly upon the request of the
Collateral Agent, execute and deliver to the Collateral Agent any document
required to acknowledge, confirm, register, record or perfect the Collateral
Agent's interest in any part of the Intellectual Property Collateral.
(g) Each Grantor shall execute an Assignment of Security
Interest in United States Trademarks and Patents in the form attached hereto as
Exhibit I and hereby grants to the Collateral Agent an absolute power of
attorney to sign, upon the
22
<PAGE> 28
occurrence and during the continuance of an Event of Default, any document which
may be required (including, without limitation, those required by the United
States Patent and Trademark Office) in order to effect an absolute assignment of
all right, title and interest in each Trademark, and record the same.
(h) Each Grantor shall execute an Assignment of Security
Interest in United States Copyrights in the form attached hereto as Exhibit III
and hereby grants to the Collateral Agent an absolute power of attorney to sign,
upon the occurrence and during the continuance of an Event of Default, any
document which may be required (including, without limitation, those required by
the United States Patent and Trademark Office or the United States Copyright
Office) in order to effect an absolute assignment of all right, title and
interest in each Patent and Copyright, and to record the same.
4.20 Notice. Each Grantor will advise the Collateral Agent
promptly, in reasonable detail, in accordance with the provisions hereof (a) of
any Lien (other than Permitted Liens) on, or claim asserted against, any of the
Collateral and (b) of the occurrence of any other event which could reasonably
be expected to have a material adverse effect on the aggregate value of the
Collateral or any material component thereof or an adverse effect on the Liens
created hereunder.
4.21 Performance by Collateral Agent of Grantor's Obligations;
Reimbursement. If any Grantor fails to perform or comply with any of its
agreements contained herein, the Collateral Agent may, without consent by such
Grantor and upon such notice to such Grantor as the Collateral Agent reasonably
deems appropriate under the circumstances, perform or comply or cause
performance or compliance therewith, and the expenses of the Collateral Agent
incurred in connection with such performance or compliance, together with
interest thereon at a rate equal to 10% per annum, shall be payable by such
Grantor to the Collateral Agent on demand and such reimbursement obligation
shall be secured hereby.
5. Appointment of Sub-Agents. The Collateral Agent shall have the
right, if an Event of Default shall not then have occurred and be continuing, to
appoint one or more sub-agents or nominees for the purpose of retaining physical
possession of the Collateral, which may be held (if applicable and in the
discretion of the Collateral Agent) in the name of the Collateral Agent,
indorsed or assigned in blank or in favor of the Collateral Agent or any nominee
or nominees of the Collateral Agent or a sub-agent appointed by the Collateral
Agent. All references to the Collateral Agent herein shall be deemed to include
such sub-agents or nominees acting in their capacity as such.
6. Voting, etc. Subject to the terms of the Intercreditor
Agreement, unless and until an Event of Default shall have occurred and be
continuing, each Grantor shall be entitled to vote any and all of the Pledged
Securities and to give consents, waivers or ratifications in respect thereof;
provided, that no vote shall be cast or any consent, waiver
23
<PAGE> 29
or ratification given or any action taken that would (a) violate or be
inconsistent with any of the terms of this Security Agreement, any other
Security Document or the Indenture or any other instrument or agreement relating
to the Secured Obligations, (b) have the effect of impairing the position or
interests of any Secured Party hereunder or thereunder or (c) authorize or
effect actions prohibited under the terms of this Security Agreement, any other
Security Document, the Indenture or any instrument or agreement relating to the
Secured Obligations. All such rights of the Grantors to vote and to give
consents, waivers and ratifications shall cease in the event that an Event of
Default has occurred and is continuing. Each Grantor hereby grants to the
Collateral Agent an irrevocable proxy to vote the Pledged Securities, which
proxy shall be effective immediately upon the occurrence and during the
continuance of an Event of Default. After the occurrence and during the
continuance of an Event of Default and upon request of the Collateral Agent,
each Grantor agrees to deliver to the Collateral Agent such further evidence of
such irrevocable proxy or such further irrevocable proxies to vote the Pledged
Securities as the Collateral Agent may reasonably request.
7. Payments and Other Distributions. Subject to the terms of the
Intercreditor Agreement, unless an Event of Default shall have occurred and be
continuing, all cash Distributions payable in respect of the Pledged Securities
shall be paid to each Grantor. The Collateral Agent shall at all times be
entitled to receive directly, and to retain as part of the Collateral:
(a) all other or additional stock or securities or
property (other than cash) paid or distributed by way of Distribution in respect
of the Pledged Securities;
(b) all other or additional stock or other securities or
property paid or distributed in respect of the Pledged Securities by way of
stock-split, spin-off, split-up, reclassification, combination of shares or
similar rearrangement; and
(c) all other or additional stock or other securities or
property which may be paid in respect of the Pledged Securities by reason of any
consolidation, merger, exchange of stock, conveyance of assets, liquidation,
bankruptcy or similar corporate reorganization or other disposition of such
Pledged Securities.
All monies and other property which are payable to the Collateral Agent or which
the Collateral Agent is entitled to receive pursuant to this Section 7 and which
are received by any Grantor shall be held by such Grantor in trust for the
Collateral Agent and the other Secured Parties, segregated from other monies and
other property of such Grantor shall forthwith upon receipt by such Grantor be
turned over to the Collateral Agent in the same form received by such Grantor
(appropriately indorsed or assigned by such Grantor to the order of the
Collateral Agent or in such other manner as shall be reasonably satisfactory to
the Collateral Agent).
24
<PAGE> 30
8. Collateral Account.
8.1 Collateral Account. There is hereby established with the
Collateral Agent the Collateral Account. The Collateral Account shall be under
the sole and exclusive dominion and control of the Collateral Agent and no
Grantor shall have any rights with respect to the Collateral Account other than
with respect to the receipt of Proceeds of Collateral deposited therein upon the
termination of this Security Agreement and the full and final payment of all of
the Secured Obligations. Without limiting the generality of the foregoing, no
Grantor shall have any right of withdrawal or transfer from the Collateral
Account.
8.2 Deposit of Proceeds. Subject to the terms of the
Intercreditor Agreement, there shall be deposited in the Collateral Account from
time to time the cash proceeds (as defined in Section 9-306(1) of the UCC) of
any of the Collateral (including insurance proceeds thereon) required to be
delivered to the Collateral Agent pursuant hereto or under the Indenture. All
amounts and investments and other items credited to the Collateral Account from
time to time shall constitute Collateral hereunder and shall not constitute
payment of the Secured Obligations until applied as hereinafter provided. So
long as no Default or Event of Default has occurred and is continuing, the
Collateral Agent shall, upon five business days' prior written notice from any
Grantor (which notice shall be accompanied by a certificate (in form and
substance satisfactory to the Collateral Agent) executed by a senior officer of
such Grantor as to the absence of any such Default or Event of Default) release
funds then credited to the Collateral Account to such Grantor. At any time
following the occurrence and during the continuance of an Event of Default, the
Collateral Agent may in its discretion apply or cause to be applied (subject to
collection) the balance from time to time outstanding to the credit of the
Collateral Account to the payment of the Secured Obligations in the manner
specified herein.
8.3 Investment of Balance in Collateral Account. Subject to the
terms of the Intercreditor Agreement, if an Event of Default shall not then have
occurred and be continuing, substantially all amounts credited to the Collateral
Account shall be invested from time to time by the Collateral Agent upon the
direction of the Company in Cash Equivalents reasonably satisfactory to the
Collateral Agent and in which the Collateral Agent shall have a first priority
perfected security interest, which accounts, investments, instruments and
securities shall be held in the name and be under the control of the Collateral
Agent. If an Event of Default shall have occurred and be continuing, all amounts
credited to the Collateral Account shall be invested by the Collateral Agent in
such accounts (interest-bearing or otherwise), investments, instruments and
securities as the Collateral Agent shall elect in its sole discretion. The
Collateral Agent shall have no responsibility or liability for any losses in
connection with any investment in connection with the Collateral Account,
including, without limitation, losses incurred in connection with the
liquidation of any such investments.
25
<PAGE> 31
9. Power of Attorney.
9.1 Collateral Agent's Appointment as Attorney-in-Fact.
(a) Each Grantor hereby irrevocably constitutes and
appoints the Collateral Agent and any officer or agent thereof, with full power
of substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Grantor and in the name of
such Grantor or in its own name, from time to time in the Collateral Agent's
discretion, for the purpose of carrying out the terms of this Security
Agreement, to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes of this Security Agreement. Without limiting the generality of the
foregoing, each Grantor hereby gives the Collateral Agent the power and right,
on behalf of such Grantor, without assent by such Grantor and upon such notice
to the Company as the Collateral Agent deems appropriate under the
circumstances, to do the following at any time after the occurrence and during
the continuance of an Event of Default:
(i) in the name of the Grantors or its own
name, or otherwise, (A) to take possession of and indorse and collect
any checks, drafts, notes, acceptances or other instruments for the
payment of moneys due under, or with respect to, any Collateral; (B) to
direct any party liable for any payment under any of the Collateral to
make payment of any and all moneys due or to become due thereunder
directly to the Collateral Agent or as the Collateral Agent shall
direct; or (C) to ask or demand for, collect, receive payment of and
receipt for, any and all moneys, claims and other amounts due or to
become due at any time in respect of or arising out of any Collateral;
(ii) to prepare, sign and file any Uniform
Commercial Code financing statements in the name of the applicable
Grantor as debtor;
(iii) to take or cause to be taken all actions
necessary to perform or comply or cause performance or compliance with
the terms of this Security Agreement, including, without limitation, (A)
to pay or discharge taxes and Liens levied or placed on or threatened
against the Collateral, (B) to effect any repairs or obtain any
insurance called for by the terms of this Security Agreement and (C) to
pay all or any part of the premiums therefor and the costs thereof; and
(iv) to sign and indorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, drafts
against
26
<PAGE> 32
debtors, assignments, verifications, notices and other documents in
connection with any of the Collateral;
(v) to commence and prosecute any suits,
actions or proceedings at law or in equity, in any court of competent
jurisdiction, to collect the Collateral or any portion thereof and to
enforce any other right in respect of any Collateral; to defend any
suit, action or proceeding brought against any Grantor with respect to
any Collateral; and to settle, compromise or adjust any such suit,
action or proceeding and, in connection therewith, to give such
discharges or releases as the Collateral Agent may deem necessary or
commercially reasonable under the circumstances;
(vi) generally, to sell or transfer and make any
agreement with respect to or otherwise deal with any of the Collateral
as fully and completely as though the Collateral Agent were the absolute
owner thereof for all purposes, and to do, at the Collateral Agent's
option and each Grantor's expense, at any time, or from time to time,
all acts and things that the Collateral Agent deems necessary to
protect, preserve or realize upon the Collateral and the Liens of the
Secured Parties thereon and to effect the intent of this Security
Agreement, all as fully and effectively as the Grantors might do; and
(vii) to execute, in connection with any
foreclosure, any indorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral.
Each Grantor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. This power of attorney is a
power coupled with an interest and shall be irrevocable.
Each Grantor hereby acknowledges and agrees that in acting
pursuant to this power-of-attorney the Collateral Agent shall be acting in its
own interest and in the interest of the other Secured Parties, and each Grantor
acknowledges and agrees that the Collateral Agent shall have no fiduciary duties
to such Grantor hereby waives any claims to the rights of a beneficiary of a
fiduciary relationship hereunder.
(b) No Duty on the Part of Collateral Agent or Secured
Parties. The powers conferred on the Collateral Agent hereunder are solely to
protect the interests of the Secured Parties in the Collateral and shall not
impose any duty upon the Collateral Agent or any other Secured Party to exercise
any such powers. The Secured Parties shall be accountable only for amounts that
they actually receive as a result of the exercise of such powers, and neither
they nor any of their officers, directors, employees or agents
27
<PAGE> 33
shall be responsible to the Grantors for any act or failure to act hereunder
unless the same shall result from the gross negligence or willful misconduct of
such Person.
10. Remedies.
10.1 Rights and Remedies Generally; Foreclosure. (a) The
Collateral Agent shall have all the rights of a secured party under the
Applicable UCC, shall have all rights now or hereafter existing under all other
applicable laws, and, subject to any mandatory requirements of applicable law
then in effect, shall have all the rights set forth in this Security Agreement
and all the rights set forth with respect to the Collateral or this Security
Agreement in any other agreement between the parties. No enumeration of rights
in this Section or elsewhere in this Security Agreement or in any related
document or other agreement shall be deemed to in any way limit the rights of
the Collateral Agent as described in this Section.
(b) Subject to the terms of Applicable Law, if an Event of
Default occurs and is continuing, the Collateral Agent may, and within three
Business Days after instructions from the Majority Holders and the delivery of
such indemnities from such Holders against loss, liability or expense
satisfactory to the Collateral Agent shall, commence the taking of such actions
toward collection or enforcement of this Security Agreement and the Collateral
(or any portion thereof), including, without limitation, action toward
foreclosure upon any Collateral, as the Collateral Agent deems in its discretion
to be appropriate or as otherwise instructed by the Majority Holders.
(c) From and after the date on which any Secured Party
exercises any of its rights or remedies under any Security Document (including,
without limitation, a judicial or non-judicial foreclosure of the lien of any
deed of trust) to and including the date on which the transfer of any Liquor
License from any Grantor to Secured Party or its successor or assign is approved
by the applicable Liquor License Authority, such Grantor shall take any and all
action necessary or appropriate in the sole and absolute discretion of Secured
Party or its successor or assign to (i) maintain in full force and effect each
Liquor License and (ii) otherwise cause all alcoholic and other beverages now or
hereafter being sold, served, consumed, dispensed or otherwise made available to
the public in, on or about each Casino to be sold, served, consumed, dispensed
or otherwise made available to the public in, on or about such Casino.
10.2 Proceeds. (a) Subject to the terms of the Intercreditor
Agreement, if an Event of Default shall occur and be continuing, (i) all
Proceeds and Distributions received by any Grantor consisting of cash, checks
and other near-cash items shall be held by such Grantor in trust for the Secured
Parties, segregated from other funds of such Grantor in a separate deposit
account containing only Proceeds and Distributions, and shall forthwith upon
receipt by such Grantor, be turned over to the Collateral Agent in the same form
received by such Grantor (appropriately indorsed or assigned by such Grantor
28
<PAGE> 34
to the order of the Collateral Agent or in such other manner as shall be
satisfactory to the Collateral Agent) and (ii) any and all such Proceeds and
Distributions received by the Collateral Agent (whether from any Grantor or
otherwise), or any part thereof, may, in the sole discretion of the Collateral
Agent, be held by the Collateral Agent in the Collateral Account as Collateral
hereunder and/or then or at any time or from time to time thereafter, be applied
by the Collateral Agent against the Secured Obligations (whether matured or
unmatured), in the order provided for herein.
(b) Subject to the terms of the Intercreditor Agreement,
except as otherwise provided in Section 4.10 of the Indenture, the proceeds
received by the Collateral Agent in respect of any sale of, collection from or
other realization upon all or any part of the Collateral shall be applied,
together with any other sums then held by the Collateral Agent pursuant to this
Agreement (including, without limitation, sums credited to the Collateral
Account), promptly by the Collateral Agent as follows:
First, to the payment of all costs and expenses,
commissions and taxes of such sale, collection or other realization,
including, without limitation, compensation to the Collateral Agent and
its agents and counsel, and all expenses, liabilities and advances made
or incurred by the Collateral Agent in connection therewith;
Second, to the payment of all other costs and expenses of
such sale, collection or other realization, including, without
limitation, compensation to the Secured Parties and their agents and
counsel and all costs, liabilities and indebtedness made or incurred by
the Secured Parties in connection therewith;
Third, to the payment of the remaining outstanding Secured
Obligations to the Trustee under the Indenture for application in
accordance with the Indenture;
Fourth, (i) if the Secured Obligations have not been paid
and performed in full, the Collateral Agent shall deposit such surplus
in the Collateral Account or (ii) if the Secured Obligations have been
paid and performed in full, the Collateral Agent shall pay such surplus
to the Grantors, or their respective successors or assigns, or to
whomsoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.
10.3 Direct Grantor to Dispose of Collateral. If an Event of
Default shall occur and be continuing:
(a) the Collateral Agent may direct any Grantor to sell,
assign or otherwise liquidate or dispose of all or from time to time any portion
of the Collateral, and such Grantor shall do so. The Collateral Agent may direct
any Grantor to direct that
29
<PAGE> 35
all Proceeds of such Collateral be paid directly to the Collateral Agent or may
permit the Proceeds of such Collateral to be paid to such Grantor and all such
Proceeds consisting of cash, checks, or near-cash items shall be held by such
Grantor in trust for the Collateral Agent, segregated from other funds of such
Grantor in a separate deposit account containing only Proceeds and shall
forthwith upon receipt by such Grantor, be turned over to the Collateral Agent,
in the same form received by such Grantor (appropriately indorsed or assigned by
such Grantor to the order of the Collateral Agent or in such other manner as
shall be satisfactory to the Collateral Agent); and
(b) any and all such Proceeds received by the Collateral
Agent (whether from any Grantor or otherwise) may, in the sole discretion of the
Collateral Agent, be held by the Collateral Agent in the Collateral Account as
Collateral hereunder and/or then or at any time or from time to time thereafter,
be applied by the Collateral Agent against the Secured Obligations (whether
matured or unmatured) in the order provided for herein.
10.4 Collateral Account. If an Event of Default shall occur and
be continuing, the Collateral Agent may liquidate any investments, instruments
and securities credited to the Collateral Account (without any liability for any
losses sustained in such liquidation) and apply the proceeds thereof and any
other amounts credited to the Collateral Account to the Secured Obligations
(whether matured or unmatured) in the order provided for herein.
10.5 Possession of Collateral.
(a) If an Event of Default shall occur and be continuing,
and subject to mandatory provisions of applicable law, (i) the Collateral Agent
may, personally or by agents or attorneys, immediately take possession of the
Collateral or any part thereof, from each Grantor or any other Person who then
has possession of any part thereof with or without notice or judicial process,
and for that purpose may enter upon such Grantor's premises where any of the
Collateral is located and remove the same and may use in connection with such
removal any and all services, supplies, aids and other facilities of such
Grantor and (ii) upon 15 days' notice to any Grantor, such Grantor shall, at its
own expense, assemble the Collateral (or from time to time any portion thereof)
and make it available to the Collateral Agent at any place or places designated
by the Collateral Agent, whether at such Grantor's or the Collateral Agent's
premises or elsewhere. Each Grantor shall, at its sole expense, store and keep
any Collateral so assembled at such place or places pending further action by
the Collateral Agent and while the Collateral shall be so stored and kept,
provide such guards and maintenance services as shall be necessary to protect
the same and to preserve and maintain the Collateral in good condition. Each
Grantor's obligation so to assemble and deliver the Collateral is of the essence
of this Security Agreement and, accordingly, upon application
30
<PAGE> 36
to a court of equity having jurisdiction, the Collateral Agent shall be entitled
to a decree requiring specific performance by such Grantor of said obligation.
(b) When Collateral is in the Collateral Agent's
possession, (i) each Grantor shall pay (or reimburse the Collateral Agent on
demand for) all out-of-pocket expenses (including the cost of any insurance and
payment of taxes or other charges) reasonably incurred in the custody,
preservation, use or operation of the Collateral, and the obligation to
reimburse all such expenses shall be secured hereby and (ii) the risk of
accidental loss or damage to the Collateral shall be on each Grantor to the
extent of any deficiency in any effective insurance coverage.
10.6 Disposition of the Collateral. If an Event of Default shall
occur and be continuing, the Collateral Agent may sell, assign, lease, give an
option or options to purchase or otherwise dispose of the Collateral (or
contract to do any of the foregoing) under one or more contracts or as an
entirety, and without the necessity of gathering at the place of sale of the
property to be sold, at public or private sale or sales, conducted by any
officer, nominee or agent of, or auctioneer or attorney for the Collateral Agent
at any location of any third party conducting or otherwise involved in such sale
or any office of the Collateral Agent or any other Secured Party or elsewhere
and in general in such manner, at such time or times and upon such terms and
conditions and at such price as may be commercially reasonable, for cash or on
credit or for future delivery without assumption of any credit risk. The
Collateral Agent may in its discretion restrict prospective bidders as to their
number, nature of their business and investment intention. Any of the Collateral
may be sold, leased, assigned or options or contracts entered to do so, or
otherwise disposed of, in the condition in which the same existed when taken by
the Collateral Agent or after any overhaul or repair which the Collateral Agent
shall determine to be commercially reasonable. Any such disposition which shall
be a private sale or other private proceeding shall be made upon not less than
10 days' written notice to the applicable Grantor (which such Grantor agrees to
be commercially reasonable) specifying the time after which such disposition is
to be made and the intended sale price or other consideration therefor. Any such
disposition which shall be a public sale shall be made upon not less than 10
days' written notice to the Grantor (which such Grantor agrees to be
commercially reasonable) specifying the time and place of such sale and, in the
absence of applicable requirements of law to the contrary, shall be by public
auction (which may, at the Collateral Agent's option, be subject to reserve),
after publication of notice of such auction for not less than ten days prior
thereto in two newspapers in general circulation in New York City. To the extent
permitted by applicable law, the Collateral Agent and/or any other Secured Party
may bid for and become purchasers of the Collateral or any item thereof, offered
for sale in accordance with this Section without accountability to the
applicable Grantor (except to the extent of surplus money received) as provided
below. In the payment of the purchase price of the Collateral, the purchaser
shall be entitled to have credit on account of the purchase price thereof of
amounts owing to such purchaser on account of any obligations of the applicable
Grantor to it and any
31
<PAGE> 37
such purchaser may deliver notes, claims for interest, or claims for other
payment with respect to such obligations in lieu of cash up to the amount which
would, upon distribution of the net proceeds of such sale, be payable thereon.
Such notes, if the amount payable hereunder shall be less than the amount due
thereon, shall be returned to the holder thereof after being appropriately
stamped to show partial payment. Notwithstanding the foregoing, if the
Collateral or any portion thereof is perishable or threatens to decline speedily
in value or is of a type customarily sold in a recognized market, no notice of
disposition shall be required.
10.7 Registration Rights; Private Sales.
(a) If the Collateral Agent shall determine to exercise
its rights to sell any or all of the Pledged Securities pursuant to this Section
10, and if in the reasonable opinion of the Collateral Agent it is necessary or
advisable to have the Pledged Securities, or that portion thereof to be sold,
registered under the provisions of the Securities Act of 1933, as amended (the
"Securities Act"), each Grantor will use its best efforts to cause the issuer
thereof to (i) execute and deliver, and cause the directors and officers of the
issuer thereof to execute and deliver, all such instruments and documents, and
do or cause to be done all such other acts as may be, in the reasonable opinion
of the Collateral Agent, necessary to register the Pledged Securities, or that
portion thereof to be sold, under the provisions of the Securities Act, (ii) to
use its best efforts to cause the registration statement relating thereto to
become effective and to remain effective for a period of one year from the date
of the first public offering of the Pledged Securities, or that portion thereof
to be sold, and (iii) to make all amendments thereto and/or to the related
prospectus which, in the opinion of the Collateral Agent, 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. Each Grantor agrees to cause such issuer to comply with the provisions
of the securities or "Blue Sky" laws of any and all jurisdictions which the
Collateral Agent shall designate and to make available to its security holders,
as soon as practicable, an earnings statement (which need not be audited) which
will satisfy the provisions of Section 11(a) of the Securities Act.
(b) Each Grantor recognizes that the Collateral Agent may
be unable to effect a public sale of any or all the Pledged Securities, by
reason of certain prohibitions contained in the Securities Act and applicable
state securities laws or otherwise, and may be compelled to resort to one or
more private sales thereof to a restricted group of purchasers which will be
obliged to agree, among other things, to acquire such securities for their own
account for investment and not with a view to the distribution or resale
thereof. Each Grantor acknowledges and agrees that any such private sale may
result in prices and other terms less favorable than if such sale were a public
sale and, notwithstanding such circumstances, agrees that any such private sale
shall not be deemed to have been made in a commercially unreasonable manner
solely by
32
<PAGE> 38
reason of being private. The Collateral Agent shall be under no obligation to
delay a sale of any of the Pledged Securities for the period of time necessary
to permit the issuer to register such securities for public sale under the
Securities Act, or under applicable state securities laws, even if the issuer
thereof would agree to do so.
(c) Each Grantor further agrees to use its best efforts to
do or cause to be done all such other acts as may be reasonably necessary to
make such sale or sales of all or any portion of the Pledged Securities pursuant
to this Section 10.7 valid and binding and in compliance with any and all other
applicable requirements of law. Each Grantor further agrees that a breach of any
of the covenants contained in this Section 10.7 will cause irreparable injury to
the Collateral Agent and the other Secured Parties, that the Collateral Agent
and the other Secured Parties have no adequate remedy at law in respect of such
breach and, as a consequence, that each and every covenant contained in this
Section 10.7 shall be specifically enforceable against the Grantors, and each
Grantor hereby waives and agrees not to assert any defenses against an action
for specific performance of such covenants except for a defense that no Event of
Default has occurred.
10.8 Provisions Regarding Receivables.
(a) Anything herein to the contrary notwithstanding
(including without limitation the grant of any rights to the Collateral Agent),
each Grantor shall remain liable under each of the Receivables to observe and
perform all the conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms of any agreement giving rise to
each such Receivable. Neither the Collateral Agent nor any Secured Party shall
have any obligation or liability under any Receivable (or any agreement giving
rise thereto) by reason of or arising out of this Security Agreement or the
receipt by the Collateral Agent or any of the Secured Parties of any payment
relating to such Receivable pursuant hereto, nor shall the Collateral Agent or
any of the Secured Parties be obligated in any manner to perform any of the
obligations of any Grantor under or pursuant to any Receivable (or any agreement
giving rise thereto) to make any payment, to make any inquiry as to the nature
or the sufficiency of any payment received by it or as to the sufficiency of any
performance by any party under any Receivable (or any agreement giving rise
thereto), to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.
(b) At any time after an Event of Default shall have
occurred and be continuing, the Collateral Agent may, and upon request of the
Collateral Agent each Grantor shall, notify Account Debtors that the Receivables
have been assigned to the Collateral Agent and that payments in respect thereof
shall be made directly to the Collateral Agent. At any time after an Event of
Default shall have occurred and be continuing, the Collateral Agent may in its
own name or in the name of others
33
<PAGE> 39
communicate with Account Debtors to verify with them to its satisfaction the
existence, amount and terms of any Receivables.
(c) If required by the Collateral Agent at any time that
an Event of Default shall have occurred and be continuing, any payments of
Receivables, when collected by any Grantor, shall be forthwith (and, in any
event, within two Business Days) delivered by such Grantor to the Collateral
Agent in the exact form received, duly indorsed by such Grantor to the
Collateral Agent if required, for deposit in the Collateral Account, and, until
so turned over, shall be held by such Grantor in trust for the Collateral Agent
and the Secured Parties, segregated from other funds of such Grantor. All such
Proceeds, while held by the Collateral Agent (or by any Grantor in trust for the
Collateral Agent and the Secured Parties), shall continue to be Collateral
securing all of the Secured Obligations and shall not constitute payment thereof
until applied as hereinafter provided.
10.9 Recourse. Each Grantor shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to satisfy the Secured Obligations.
10.10 Expenses; Attorneys' Fees. Each Grantor shall reimburse the
Collateral Agent for all its reasonable out-of-pocket expenses in connection
with the exercise of its rights hereunder, including without limitation all
reasonable attorneys' fees and legal expenses incurred by the Collateral Agent
in connection therewith. Such out-of-pocket expenses including, without
limitation, all reasonable attorneys' fees and legal expenses shall constitute
Secured Obligations secured by this Security Agreement.
10.11 Preventing Impairment of the Collateral. Regardless of
whether there shall have occurred any Event of Default, the Collateral Agent may
institute and maintain or cause in the name of any Grantor or of the Collateral
Agent, to be instituted or maintained, such suits and proceedings as the
Collateral Agent may be advised by counsel shall be necessary to prevent any
impairment of the Collateral in contravention of the terms of this Security
Agreement, of the Notes, of the Purchase Agreement or of the Indenture.
10.12 Limitation on Duties Regarding Preservation of Collateral.
(a) The Collateral Agent's sole duty with respect to the
custody, safekeeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the Applicable UCC or otherwise, shall be to
deal with it in the same manner as the Collateral Agent deals with similar
property for its own account, it being understood that neither the Collateral
Agent nor any Secured Party shall have responsibility for (i) ascertaining or
taking action with respect to calls, conversations, exchanges, maturities,
tenders or other matters relative to any Collateral, whether or not the
Collateral Agent or
34
<PAGE> 40
any Secured Party has or is deemed to have knowledge of such matters, or (ii)
taking any necessary steps to preserve rights against any parties with respect
to any Collateral.
(b) The Collateral Agent shall have no obligation to take
any steps to preserve rights against prior parties to any Collateral.
(c) Subject to the requirements of the Applicable UCC, and
in the absence of gross negligence and wilful misconduct, neither the Collateral
Agent nor any of its directors, officers, employees or agents shall be liable
for failure to demand, collect or realize upon all or any part of the Collateral
or for any delay in doing so or shall be under any obligation to sell or
otherwise dispose of any Collateral upon the request of any Grantor or otherwise
and the rights of the Collateral Agent and the other Secured Parties hereunder
shall not be conditioned or contingent upon the pursuit by the Collateral Agent
or any other Secured Party of any right or remedy against any Grantor or against
any other Person which may be or become liable in respect of all or any part of
the Secured Obligations or against any collateral security therefor, guarantee
therefore or right of offset with respect thereto.
10.13 Waiver of Claims. Except as otherwise provided in this
Security Agreement, EACH GRANTOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL
AGENT'S TAKING POSSESSION OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING
FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH THE COMPANY AND
ITS SUBSIDIARIES WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF
THE UNITED STATES OR OF ANY STATE, and each Grantor hereby further waives, to
the extent permitted by law:
(a) all damages occasioned by such taking of possession
except any damages which are the sole and direct result of the Collateral
Agent's gross negligence or willful misconduct as determined in a final,
non-appealable judgment of a court of competent jurisdiction;
(b) all other requirements as to the time, place and terms
of sale or other requirements with respect to the enforcement of the Collateral
Agent's and the other Secured Parties' rights hereunder;
(c) demand of performance or other demand, notice of
intent to demand or accelerate, notice of acceleration presentment, protest,
advertisement or notice of any kind to or upon any Grantor or any other Person;
and
35
<PAGE> 41
(d) all rights of redemption, appraisement, valuation,
diligence, stay, extension or moratorium now or hereafter in force under any
applicable law in order to hinder, prevent or delay the enforcement of this
Security Agreement or the absolute sale of the Collateral or any portion thereof
and each Grantor, for itself and all who may claim under it, insofar as it or
they now or hereafter lawfully may, hereby waives the benefit of all such laws.
To the extent permitted by applicable law, any sale of, or
the exercise of any options to purchase, or any other realization upon, any
Collateral shall operate to divest all right, title, interest, claim and demand,
at law or in equity, of each Grantor therein and thereto, and shall be a
perpetual bar both at law and in equity against each Grantor and against any and
all persons claiming or attempting to claim the Collateral so sold, optioned or
realized upon, or any part thereof, through and under each Grantor.
10.14 Discontinuance of Proceedings. In case the Collateral Agent
shall have instituted any proceeding to enforce any right, power or remedy under
this Security Agreement by foreclosure, sale, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Collateral Agent, then and in every such
case each Grantor, the Collateral Agent and the other Secured Parties shall be
returned to their former positions and rights hereunder with respect to the
Collateral subject to the security interest created under this Security
Agreement, and all rights, remedies and powers of the Collateral Agent shall
continue as if no such proceeding had been instituted.
10.15 Intellectual Property License. Solely for the purpose of
enabling the Collateral Agent to exercise rights and remedies under this Section
10 and at such time as the Collateral Agent shall be lawfully entitled to
exercise such rights and remedies, each Grantor hereby grants to the Collateral
Agent, to the extent it has the right to do so, an irrevocable, non-exclusive
license (exercisable without payment of royalty or other compensation to such
Grantor), subject to rights to quality control and inspection in favor of such
Grantor sufficient to maintain the validity of the Trademarks, to use, license
or sublicense any Trademark, Patent, Copyright or Trade Secret now owned or used
pursuant to a Trademark License, Copyright License, Patent License or Trade
Secret License, or hereafter acquired by or licensed to such Grantor.
11. Additional Collateral. Without notice or consent of any
Grantor and without impairment of the security interest and rights created by
this Security Agreement, the Collateral Agent may accept from any person or
persons additional collateral or other security for the Secured Obligations. The
creation of the security interest created hereunder shall not prevent the
Collateral Agent from resorting to such additional collateral or security
without affecting the Collateral Agent's rights hereunder. The Collateral
Agent's acceptance of any such additional collateral or security shall not
36
<PAGE> 42
prevent the Collateral Agent from resorting to the Collateral without affecting
the Collateral Agent's rights in and to such additional collateral or security.
12. Compensation and Indemnification.
12.1 Compensation. The Company shall pay to the Collateral Agent
from time to time reasonable compensation for its services. The Collateral
Agent's compensation shall not be limited by any law on compensation of a
collateral agent pursuant to a security agreement.
12.2 Indemnity, etc.
(a) Each Grantor agrees to indemnify, reimburse and hold
the Collateral Agent and each other Secured Party, and their respective
officers, directors, employees, representatives, attorneys and agents
(hereinafter in this Section 12 referred to individually as "Indemnitee" and
collectively as "Indemnitees") harmless from and against any and all
liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, suits, costs, expenses or disbursements (including, without
limitation, reasonable attorneys' fees and expenses) (for the purposes of this
Section the foregoing are collectively called "expenses") of whatsoever kind or
nature which may be imposed on, asserted against or incurred by any of the
Indemnitees in any way relating to or arising out of the Security Documents or
the documents executed in connection therewith or in any other way connected
with the administration of the transactions contemplated thereby or the
enforcement of any of the terms of or the preservation of any rights hereunder,
or in any way relating to or arising out of the manufacture, ownership,
ordering, purchase, delivery, control, acceptance, lease, financing, possession,
operation, condition, sale, return or other disposition or use of the Collateral
(including, without limitation, latent or other defects, whether or not
discoverable), the violation of the laws of any country, state or other
governmental body or unit, any tort (including, without limitation, claims
arising or imposed under the doctrine of strict liability, or for or on account
of injury to or the death of any Person (including any Indemnitee), or for
property damage) or any contract claim; provided that no Indemnitee shall be
indemnified pursuant to this section for expenses to the extent solely caused by
the gross negligence or wilful misconduct of such Indemnitee as determined in a
final, non-appealable judgment of a court of competent jurisdiction. Each
Grantor agrees that upon written notice by any Indemnitee of any assertion that
could give rise to an expense, such Grantor shall, if so requested by such
Indemnitee, assume full responsibility for the defense thereof.
(b) Without limiting the application of subsection (a)
above, each Grantor agrees to pay, or reimburse the Collateral Agent for any and
all reasonable out-of-pocket fees, costs and expenses of whatever kind or nature
incurred in connection with the creation, preservation or protection of the
Collateral Agent's Liens on, and security
37
<PAGE> 43
interest in, the Collateral and the acceptance or administration or performance
by the Collateral Agent of its duties under the Security Documents, including,
without limitation, all fees and taxes in connection with the search of the
records of, and the recording or filing of instruments and documents in, public
offices, payment or discharge of any taxes or Liens upon or in respect of the
Collateral, premiums for insurance with respect to the Collateral and all other
reasonable out-of-pocket fees, costs and expenses in connection with protecting,
maintaining or preserving the Collateral and the Collateral Agent's interest
therein, whether through judicial proceedings or otherwise, or in defending or
prosecuting any actions, suits or proceedings arising out of or relating to the
Collateral.
(c) Without limiting the application of subsections (a) or
(b), above, each Grantor agrees to pay, indemnify and hold each Indemnitee
harmless from and against any expenses which such Indemnitee may suffer, expend
or incur in consequence of or growing solely out of any misrepresentation by any
Grantor and reliance thereon in this Security Agreement or in any statement or
writing contemplated by or made or delivered pursuant to or in connection with
this Security Agreement.
(d) If and to the extent that the obligations of any
Grantor under this Section 12 are unenforceable for any reason, such Grantor
hereby agrees to make the maximum contribution to the payment and satisfaction
of such obligations which is permissible under applicable law.
12.3 Indemnity Obligations Secured by Collateral; Survival. Any
amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Secured Obligations secured by the Collateral.
The indemnity obligations of each Grantor contained in this Security Agreement
shall continue in full force and effect notwithstanding the full payment and
performance of the Secured Obligations and notwithstanding the discharge
thereof.
13. Governing Law; Submission to Jurisdiction. THIS SECURITY
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK. EACH
GRANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE
COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL
COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF
ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND
IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, JURISDICTION OF
38
<PAGE> 44
THE AFORESAID COURTS. EACH GRANTOR 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. EACH GRANTOR 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 EACH GRANTOR AT ITS
SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.
NOTHING SHALL AFFECT THE RIGHT OF THE COLLATERAL AGENT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST ANY GRANTOR IN ANY OTHER JURISDICTION.
14. Limitation of Liability. No claim may be made by any Grantor
or any other Person against the Collateral Agent or any other Secured Party or
the affiliates, directors, officers, employees, attorneys or agent of any of
them for any special, indirect, consequential or punitive damages in respect of
any claim for breach of contract or any other theory of liability arising out of
or related to the transactions contemplated by this Security Agreement, or any
act, omission or event occurring in connection therewith except that the same
may be determined by a final, non-appealable judgment of a court of competent
jurisdiction to have resulted solely from such Person's actions taken in bad
faith; and each Grantor hereby waives, releases and agrees not to sue upon any
claim for any such damages, whether or not accrued and whether or not known or
suspected to exist in its favor. Each Grantor hereby agrees to indemnify the
Collateral Agent, each Secured Party and their affiliates, directors, officers,
employees, attorneys and agents for all of their costs and expenses (including
the attributed costs of internal counsel) incurred in connection with defending
any claim made by any Grantor or any other Person against any of them for any
special, indirect, consequential or punitive damages if in a final,
non-appealable judgment a court of competent jurisdiction does not award such
special, indirect, consequential or punitive damages or, if such damages are
awarded, the court does not determine that such person took actions in bad
faith. In performing its duties under the Security Documents, the Collateral
Agent shall be entitled to all of the powers, privileges and protections
afforded to the Trustee under the Indenture, including, without limitation, the
provisions contained in Article 7 thereof.
15. Notices. Except as otherwise expressly provided herein, all
notices, requests and demands to or upon the respective parties hereto to be
effective shall be in
39
<PAGE> 45
writing (including by facsimile, telex, or cable communication), in the case of
each party hereto, at its address specified in Section 11.2 of the Indenture, or
to such other address as may be designated by any party in a written notice to
the other party hereto, provided that notices and communications to the
Collateral Agent shall not be effective until received by the Collateral Agent.
All such notices, requests and demands shall be deemed to have been duly given:
when delivered by hand, if personally delivered; one business day after being
timely delivered to a next-day air courier; five business days after being
deposited in the mail, postage prepaid, if mailed; when answered back if
telexed; and when receipt is confirmed, if sent by facsimile.
16. Successors and Assigns. This Security Agreement shall be
binding upon and inure to the benefit of each Grantor, the Collateral Agent, the
other Secured Parties, all future Holders of the Secured Obligations and their
respective successors and assigns, except that no Grantor may assign or transfer
any of its rights or obligations under this Security Agreement without the prior
written consent of the Collateral Agent and each other Secured Party.
17. Waivers and Amendments. None of the terms or provisions of
this Security Agreement may be waived, amended, supplemented or otherwise
modified except in accordance with Sections 9.1 and 9.2 of the Indenture.
18. No Waiver; Remedies Cumulative. No failure or delay on the
part of the Collateral Agent in exercising any right, power or privilege
hereunder and no course of dealing between any Grantor and the Collateral Agent
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. A waiver by the
Collateral Agent of any right or remedy hereunder on any one occasion shall not
be construed as a bar to any right or remedy which the Collateral Agent would
otherwise have on any future occasion. The rights and remedies herein expressly
provided are cumulative, may be exercised singly or concurrently and as often
and in such order as the Collateral Agent deems expedient and are not exclusive
of any rights or remedies which the Collateral Agent would otherwise have
whether by agreement or now or hereafter existing under applicable law. No
notice to or demand on any Grantor in any case shall entitle such Grantor to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Collateral Agent to any other or
further action in any circumstances without notice or demand.
19. Termination; Release. When the Secured Obligations have been
finally paid and performed in full, this Security Agreement shall terminate, and
the Collateral Agent, at the request and sole expense of the Company, will
execute and deliver to each Grantor the proper instruments (including Uniform
Commercial Code termination statements) acknowledging the termination of this
Security Agreement, and will duly assign, transfer and deliver to each Grantor,
without recourse, representation or
40
<PAGE> 46
warranty of any kind whatsoever, such of the Collateral as may be in possession
of the Collateral Agent and has not theretofore been disposed of, applied or
released.
20. Counterparts. This Security Agreement may be executed in any
number of counterparts and by the parties hereto on separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same instrument.
21. Headings Descriptive. The headings in this Security Agreement
are for convenience of reference only and shall not limit or otherwise affect
the meaning of this Security Agreement.
22. Marshalling. Neither the Collateral Agent nor any other
Secured Party shall be under any obligation to marshall any assets in favor of
any Grantor or any other Person or against or in payment of any or all of the
Secured Obligations.
23. Severability. If any term, provision, covenant or restriction
of this Security Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
24. Survival. All indemnities set forth herein shall survive the
execution and delivery of this Security Agreement and the making and repayment
of the Secured Obligations.
25. Powers Coupled with an Interest. To the fullest extent
lawful, all authorizations and agencies herein contained with respect to the
Collateral are irrevocable and powers coupled with an interest.
26. Authority of Collateral Agent. Each Grantor acknowledges that
the rights and responsibilities of the Collateral Agent under this Security
Agreement with respect to any action taken by the Collateral Agent or the
exercise or non-exercise by the Collateral Agent of any option, right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Security Agreement shall, as between the Collateral Agent and the
other Secured Parties, be governed by the Indenture and by such other agreements
with respect thereto as may exist from time to time among them, but, as between
the Collateral Agent and any Grantor, the Collateral Agent shall be conclusively
41
<PAGE> 47
presumed to be acting as agent for the Secured Parties with full and valid
authority so to act or refrain from acting, to the extent it has the right to do
so and the Grantors shall not be under any obligation, or entitlement, to make
any inquiry respecting such authority.
27. Waiver. To the extent permitted by applicable law, each
Grantor hereby waives promptness, diligence, notice of acceptance and any other
notice with respect to any of the Secured Obligations and this Security
Agreement and any requirement that the Collateral Agent protect, secure, perfect
or insure any security interest or any property subject thereto or exhaust any
right or take any action against any Grantor, or any other person or entity.
42
<PAGE> 48
SECURITY AND PLEDGE AGREEMENT
SIGNATURES
IN WITNESS WHEREOF, each Grantor and the Collateral Agent
have caused this Security Agreement to be duly executed and delivered as of the
date first above written.
GRANTORS:
FITZGERALDS GAMING CORPORATION
FITZGERALDS SOUTH, INC.
FITZGERALDS RENO, INC.
FITZGERALDS INCORPORATED
FITZGERALDS MISSISSIPPI, INC.
FITZGERALDS LAS VEGAS, INC.
FITZGERALDS BLACK HAWK, INC.
FITZGERALDS BLACK HAWK II, INC.
101 MAIN STREET LIMITED LIABILITY
COMPANY
FITZGERALDS FREMONT EXPERIENCE
CORPORATION,
By: /s/ PHILIP D. GRIFFITH
-----------------------------------------------
Name: Philip D. Griffith
Title: President and Chief Executive Officer of
each of the above named entities
S-1
<PAGE> 1
EXHIBIT 10.4
Prepared By and Upon
Recordation Return To:
THE BANK OF NEW YORK
101 Barclay Street - 21W
New York, New York 10286
Attention: Corporate Trust Administration
- ------------------------------------------------------------------
DEED OF TRUST, SECURITY AGREEMENT AND
FIXTURE FILING WITH ASSIGNMENT OF RENTS
FITZGERALDS RENO, INC.,
as Trustor
NEVADA TITLE COMPANY
as Trustee
THE BANK OF NEW YORK,
as Beneficiary
Dated as of December 30, 1997
<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 30th day of
December, 1997 by Fitzgeralds Reno, Inc., a Nevada corporation ("Trustor"),
whose principal place of business is located at 255 North Virginia Street, Reno,
Nevada 89501, in favor of Nevada Title Company ("Trustee"), for the benefit of
The Bank of New York, a New York banking corporation, as Collateral Agent
("Beneficiary"), whose principal place of business is located at 101 Barclay
Street - 21W, New York, New York 10286, in its capacity as trustee under the
"Indenture" for the ratable benefit of the "Holders" (as each such term is
hereinafter defined).
THE MAXIMUM AMOUNT OF PRINCIPAL TO BE SECURED HEREBY IS $255,000,000 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
$255,000,000.
R E C I T A L S
A. Pursuant to that certain Indenture dated as of December 30,
1997 (as supplemented and otherwise amended from time to time, the "Indenture"),
by and among Fitzgeralds Gaming Corporation ("Fitzgeralds"), the Guarantors
(defined therein), and Beneficiary, as Trustee thereunder (in such capacity, the
"Indenture Trustee"), Fitzgeralds will issue 12 1/4 % Senior Secured Notes due
on or before 2004 in an aggregate principal amount of up to the maximum amount
of $255,000,000 (collectively, the "Notes"). Unless the context other requires,
all capitalized terms used and not otherwise defined herein shall have the
meanings ascribed thereto in the Indenture. Attached hereto as Schedule 1.1 is a
list of certain definitions for which reference should be made to the Indenture.
B. Pursuant to a guarantee included in the Indenture (as amended
from time to time, the "Subsidiary Guarantee"), the Guarantors (including
Trustor) have Guaranteed the obligations of Fitzgeralds under the Notes, the
Indenture and the other Security Documents to which Fitzgeralds is a party.
C. Pursuant to the Indenture, 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 Nevada ("Applicable Gaming Laws").
2
<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 Clark, State of Nevada, 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,
3
<PAGE> 4
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 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,
4
<PAGE> 5
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 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
5
<PAGE> 6
[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
6
<PAGE> 7
[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 Indenture, this Deed
of Trust or any other Security 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 (other than Excluded Assets) 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 Subsidiary
Guarantee, whether for principal of, or premium, if any, or interest on the
Notes, 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 Security 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 Security
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
7
<PAGE> 8
C. all future advances pursuant to the Indenture or any other of
the Security Documents, as future advances is defined by Nevada Revised Statutes
("NRS") 106.320. This Deed of Trust is intended to secure future advances. The
maximum amount f principal to be secured is $255,000,000. This instrument is to
begoverned by the provisions of NRS 106.300 et.seq.
in each case whether due or not due, direct or indirect, joint and/or several,
absolute or contingent, voluntary or involuntary, liquidated or un1iquidated,
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
Subsidiary Guarantee 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.
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 UCC" means the Uniform Commercial Code (as amended
from time to time) of the State of Nevada.
"BENEFICIARY" has the meaning set forth in the Preamble.
"CHATTEL PAPER" has the meaning set forth in Section 9.1.1.
"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
8
<PAGE> 9
(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
(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:
9
<PAGE> 10
(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" means (i) cash, deposit accounts and other cash
equivalents; (ii) furniture, fixtures and equipment securing Non-Recourse
Indebtedness permitted to be incurred under the Indenture; (iii) assets
securing Purchase Money Obligations or Capital Lease Obligations permitted to be
incurred under the Indenture; and (iv) any Contracts, permits, licenses or the
like that cannot be subjected to a Lien without the consent of third parties,
which consent is not obtainable by Trustor (including all Gaming Licenses of
Trustor); provided, that Excluded Assets does not include the proceeds of the
assets under clauses (ii), (iii) or (iv) or of any other Collateral to the
extent such proceeds do not constitute Excluded Assets under clause (i) above.
"FIXTURES" has the meaning set forth in Section 9.1.7.
"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," "hazardous wastes," "hazardous materials,"
10
<PAGE> 11
"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
(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
herein after 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 Rents, including mechanics and other Liens
permitted by Section 4.12 of the Indenture.
11
<PAGE> 12
"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
Reno" 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 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
12
<PAGE> 13
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 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.
"PCBS" means polychlorinated biphenyls.
"PERSONALTY" 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.
13
<PAGE> 14
"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 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 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 trademarks, servicemarks and trade names
(including without limitation, the trademarks listed on Schedule VI to the
Security and Pledge 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, servicemark or trade name owned by any
other Person.
"TRUST ESTATE" has the meaning set forth hereinabove.
14
<PAGE> 15
"UCC" means the Uniform Commercial Code (as amended from time to
time) of the State of New York.
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 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 Nevada, provided that, with respect to any
portion of the Trust Estate (other than Personalty) that is located outside the
State of Nevada, the law of the state in which such property is located shall
govern to the extent, and only to the extent, necessary to permit the
Beneficiary to enforce its rights, powers and remedies hereunder.
Notwithstanding the foregoing, the governing law provisions of
15
<PAGE> 16
the Security and Pledge Agreement, which provide, among other things, that the
perfection of security interests granted hereby in goods, documents and
instruments located in the State of Nevada shall be governed by the laws of the
State of Nevada, shall control with respect to the Collateral listed in Article
9 hereto, other than Fixtures.
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.
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
16
<PAGE> 17
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 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
Secretaries 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 Applicable 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 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
17
<PAGE> 18
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 Security 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 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 Reno Casino, other than
Excluded Assets.
18
<PAGE> 19
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
Security 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).
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
19
<PAGE> 20
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 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. Trustor, at its sole cost and expense,
will provide, maintain and keep in force the insurance required by Section 4.16
of the Indenture ("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 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 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, for-
20
<PAGE> 21
feited, 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 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 4.1 of the Indenture ("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.
21
<PAGE> 22
4.8.2. Except as otherwise provided herein, in the Indenture or in the other
Security 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 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
4.5 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.
22
<PAGE> 23
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-
0203264;
(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).
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 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
23
<PAGE> 24
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 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.
[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 Section 4.10 of the Indenture.
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,
24
<PAGE> 25
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 Net Proceeds from Insurance Policies shall be
treated in accordance with Section 4.10 of the Indenture and shall be released
to Trustor or applied to the discharge of the Secured Obligations as set forth
in the Indenture.
7.1.3. If Trustor elects to apply Net Proceeds of insurance to
restoration, Trustor agrees promptly and without delay (a) to enter into, and
deliver to Beneficiary a certified copy of, one or more architect and building
contracts providing for the restoration and reconstruction of the Property to
as good or better condition as existed prior to the Casualty and (b) to begin
to restore and reconstruct the Property and, thereafter, to proceed diligently
therewith in accordance with plans, specifications, architectural standards and
design reasonably determined by Trustor.
7.1.4. Notwithstanding anything to the contrary contained herein,
in the event of any uninsured Casualty, Trustor shall promptly within a
reasonable time, at its own cost and expense, restore and reconstruct the
Property to as good or better condition as existed prior to the Casualty.
Trustor shall have the sole right to settle any and all losses and claims unless
an Event of Default then exists.
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
4.10 of the Indenture.
25
<PAGE> 26
ARTICLE 8.
REMEDIES OF BENEFICIARY
SECTION 8.1. EVENT OF 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 6.1 of the Indenture) 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 Security Documents.
8.1.3. Any statement, representation or warranty given by Trustor
to Trustee or Beneficiary in any of the Security Documents, in connection with
the Indenture 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 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,
26
<PAGE> 27
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
Security 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. If the Secured Obligation become or are declared
immediately due and payable pursuant to Section 6.2 of the Indenture and Trustor
fails to make such payment 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 SECURITY
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 NOTES;
27
<PAGE> 28
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; 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 Indenture.
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. 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, 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
28
<PAGE> 29
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 Security 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, 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
29
<PAGE> 30
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.
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 Security
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
30
<PAGE> 31
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 Security 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 Security 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 Security
Documents unless, in the exercise of said rights, all Secured Obligations are
fully discharged.
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
Personalty and Fixtures, other than Excluded Assets, 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
31
<PAGE> 32
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, receivable 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;
9.1.6. "Inventory" as such term 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 Trustor'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, bowsprits, boilers, engines,
sails, fittings,
32
<PAGE> 33
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
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 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,
Trademarks, Copyrights (as defined in the Security and Pledge Agreement),
Patents (as defined in the Security and Pledge Agreement), and Contracts (as
defined in the Security and Pledge Agreement), licenses (including all Gaming
Licenses that are not Excluded Assets) 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 8-102(1)(a) of the UCC) and
uncertificated securities (as defined in Section 8-102(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-
33
<PAGE> 34
ary 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 account (which may be a securities account)
established and maintained pursuant to Section 8 of the Security and Pledge
Agreement by Beneficiary, entitled Fitzgeralds 2004 Senior Secured Notes
Collateral Account, The Bank of New York, as collateral agent, secured party",
and all funds, securities and other property or other items from time to time
credited to such account and all interest, income and distributions thereon
("Collateral Account").
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) 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(1)(i) of the UCC ("Instruments").
9.1.15. The Copyrights, the Copyright Licenses, the Patents, the
Patent Licenses, the Trademarks, the Trademark Licenses, and the Trade Secrets,
all as defined in the Security and Pledge Agreement ("Intellectual Property
Collateral").
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
34
<PAGE> 35
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 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 Applicable UCC and the other
Security 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
35
<PAGE> 36
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 Section 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 and Exhibit B-2 to this Deed
of Trust.
9.4.1.3. Secured Party is: The Bank of New York
9.4.1.4. Debtor is: Fitzgeralds Reno, Inc.
9.4.1.5. The record owner or lessee of the Property is:
Fitzgeralds Reno, Inc.
36
<PAGE> 37
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 Applicable 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 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
37
<PAGE> 38
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 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 (as defined in the
Purchase Agreement). Except as adequately disclosed in the Offering Circular or
as otherwise could not, singly or in the aggregate, have a Material Adverse
Effect:
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;
38
<PAGE> 39
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 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.
39
<PAGE> 40
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 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
40
<PAGE> 41
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
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 wi1lful 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.
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
41
<PAGE> 42
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 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
Security 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 Security 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.
42
<PAGE> 43
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 occurred under Section 6.1 of the Indenture; 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.
43
<PAGE> 44
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
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 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
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
Indenture. Any such request shall be accompanied by an Officers' Certificate (as
defined in the Indenture). Upon written request of Beneficiary and surrender of
this Deed of Trust to
44
<PAGE> 45
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.
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 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 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 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
45
<PAGE> 46
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 12.17. 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 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 Security 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
46
<PAGE> 47
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 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 the Fixtures, which are
the subject of the Security and Pledge Agreement shall be governed by and
construed in accordance with the laws of the state of New York, as applied to
contracts made and performed within the state of New York. Trustor hereby
irrevocably submits to the jurisdiction of any New York state court sitting in
the Borough of Manhattan in the City of New York or any federal court sitting in
the Borough of Manhattan in the City of New York in respect of any suit, action
or proceeding arising out of or relating to the subject of the Security and
Pledge Agreement, and irrevocably accepts for itself and in respect of its
property, generally and unconditionally, jurisdiction of the aforesaid courts.
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
47
<PAGE> 48
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.
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 provided under NRS Section 40.495, Guarantor waives the
applicable provisions of NRS Section 40.430 and further Guarantor waives:
48
<PAGE> 49
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.
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 Property that is owned by
Guarantor, and in no event shall
49
<PAGE> 50
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 SECURITY DOCUMENT OR ANY OTHER ACTION ARISING OUT OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY, REGARDLESS OF WHICH PARTY INITIATES SUCH ACTION
OR ACTIONS.
50
<PAGE> 51
IN WITNESS WHEREOF, Trustor has caused this Deed of Trust to be
executed as of the day and year first above written.
FITZGERALDS RENO, INC.,
a Nevada corporation
By: /s/ PHILIP D. GRIFFITH
------------------------------
Name: Philip D. Griffith
Title: Chief Executive Officer
<PAGE> 52
STATE OF NEVADA
COUNTY OF CLARK
On __________, 1997, before me, Judith A. Koehn, Notary Public, personally
appeared Philip D. Griffith, 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.
Signature /s/ JUDITH A. KOEHN (Seal)
-------------------
----------------------------------------------
NOTARY PUBLIC-STATE OF NEVADA
COUNTY OF CLARK
[SEAL] JUDITH A. KOEHN
No. 92-2585-1 My Appointment Expires
March 18, 2000
----------------------------------------------
<PAGE> 53
SCHEDULE 1.1
INDENTURE DEFINITIONS
1. Guarantors
2. Security Documents
3. Gaming Authority
4. Gaming License
5. Liens
6. Persons
7. Permitted Liens
8. Excluded Assets
9. Intercreditor Agreement
10. Non-Recourse Indebtedness
11. Purchase Money Obligations
12. Capital Lease Obligations
13. Collateral
14. Asset Sale
<PAGE> 54
SCHEDULE 12.8.
ADDRESSES
DEBTOR:
Fitzgeralds Reno, Inc.
255 North Virginia Street
Reno, Nevada 89501
SECURED PARTY:
THE BANK OF NEW YORK
101 Barclay Street - 21W
New York, New York 10286
Attention: Corporate Trust Administration
TRUSTEE:
Nevada Title Company
3320 West Sahara, Suite 200
Las Vegas, NV 89102
<PAGE> 55
DEBTOR: FITZGERALDS RENO, INC., a Nevada corporation
EXHIBIT A
LEGAL DESCRIPTION OF LAND
Parcel 1:
- --------
LOTS OF 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 2:
- --------
LOTS THIRTY-ONE (31) AND THIRTY-TWO (32) AND NORTH HALF (N 1/2) OF LOT THIRTY
(30) IN BLOCK 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.
<PAGE> 1
EXHIBIT 10.5
Prepared By and Upon
Recordation Return To:
THE BANK OF NEW YORK
101 Barclay Street - 21W
New York, New York 10286
Attention: Corporate Trust Administration
- -------------------------------------------------------------------------------
DEED OF TRUST, SECURITY AGREEMENT AND
FIXTURE FILING WITH ASSIGNMENT OF RENTS
FITZGERALDS LAS VEGAS, INC.,
as Trustor
NEVADA TITLE COMPANY
as Trustee
THE BANK OF NEW YORK,
as Beneficiary
Dated as of December 30, 1997
<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 30th day of
December, 1997 by Fitzgeralds 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 Nevada Title Company ("Trustee"), for the benefit of
The Bank of New York, a New York banking corporation, as Collateral Agent
("Beneficiary"), whose principal place of business is located at 101 Barclay
Street 21W, New York, New York 10286, in its capacity as trustee under the
"Indenture" for the ratable benefit of the "Holders" (as each such term is
hereinafter defined).
THE MAXIMUM AMOUNT OF PRINCIPAL TO BE SECURED HEREBY IS $255,000,000 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 $255,000,000.
R E C I T A L S
A. Pursuant to that certain Indenture dated as of December 30,
1997 (as supplemented and otherwise amended from time to time, the "Indenture"),
by and among Fitzgeralds Gaming Corporation ("Fitzgeralds"), the Guarantors
(defined therein), and Beneficiary, as trustee thereunder (in such capacity, the
"Indenture Trustee"), Fitzgeralds will issue 12 1/4% Senior Secured Notes due on
or before 2004 in an aggregate principal amount of up to the maximum amount of
$255,000,000 (collectively, the "Notes"). Unless the context other requires, all
capitalized terms used and not otherwise defined herein shall have the meanings
ascribed thereto in the Indenture. Attached hereto as Schedule 1.1 is a list of
certain definitions for which reference should be made to the Indenture.
B. Pursuant to a guarantee included in the Indenture (as amended
from time to time, the "Subsidiary Guarantee"), the Guarantors (including
Trustor) have Guaranteed the obligations of Fitzgeralds under the Notes, the
Indenture and the other Security Documents to which Fitzgeralds is a party.
C. Pursuant to the Indenture, the Subsidiary Guarantee of Trustor
is required to be secured by, among other things, this Deed of Trust.
2
<PAGE> 3
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 Nevada ("Applicable Gaming Laws").
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, TRUST OR 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 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, benefitting, relating or appertaining to the Owned Land,
the airspace over the Owned Land, the "Improvements" (as hereinafter defined),
or both, or which hereinafter shall in any way belong, relate or be appurtenant
thereto.
To the fullest extent allowed by Applicable Law and each
respective Ground Lease (as defined below), all of Trustor's right, title and
interest in the leasehold estate created by those certain lease agreements
described in Exhibit B-1, Exhibit C-1, Exhibit D-1, Exhibit E-1 and Exhibit F-1,
attached hereto and by this reference incorporated herein ("Ground Lease" or
"Ground Leases"), by and between Trustor, as lessee, and those certain parties
referenced on said Exhibits, as lessor (each, a "Lessor" and collectively, the
"Lessors"), 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, Exhibit C-2, Exhibit D-2, Exhibit E-2 and
Exhibit F-2(collectively, the "Leased Land"), together with all and singular the
tenements, hereditament, rights, reversions, remainders,
3
<PAGE> 4
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 Leased Land, the airspace over the
Leased Land, the "Improvements" (as hereinafter defined), or both, or which
hereinafter shall in any way belong, relate or be appurtenant thereto.
The Owned Land and the Leased Land shall colectively be 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 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 blinds, curtains, lamps, chandeliers and other
lighting fixtures.
4
<PAGE> 5
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 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).
5
<PAGE> 6
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.
6
<PAGE> 7
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, (vi) parking or similar services or rights afforded to all or
any part of the Property and (vii) the Ground Leases.
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.
7
<PAGE> 8
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 Indenture, this Deed
of Trust or any other Security 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 (other than Excluded Assets) 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 Subsidiary
Guarantee, whether for principal of, or premium, if any, or interest on the
Notes, 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 Security 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 Security
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 Security Documents, as future advances is defined by Nevada Revised Statutes
("NRS") 106.320. This Deed of Trust is intended to secure future advances. The
maximum amount f principal to be secured is $255,000,000. This instrument is to
begoverned by the provisions of NRS 106.300 et.seq.
8
<PAGE> 9
in each case whether due or not due, direct or indirect, joint and/or several,
absolute or contingent, voluntary or involuntary, liquidated or un1iquidated,
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
Subsidiary Guarantee 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.
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 UCC" means the Uniform Commercial Code (as amended
from time to time) of the State of Nevada.
"BENEFICIARY" has the meaning set forth in the Preamble.
"CHATTEL PAPER" has the meaning set forth in Section 9.1.1.
"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
9
<PAGE> 10
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 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
10
<PAGE> 11
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" means (i) cash, deposit accounts and other cash
equivalents; (ii) furniture, fixtures and equipment securing Non-Recourse
Indebtedness permitted to be incurred under the Indenture; (iii) assets securing
Purchase Money Obligations or Capital Lease Obligations permitted to be incurred
under the Indenture; and (iv) any Contracts, permits, licenses or the like that
cannot be subjected to a Lien without the consent of third parties, which
consent is not obtainable by Trustor (including all Gaming Licenses of Trustor);
provided, that Excluded Assets does not include the proceeds of the assets under
clauses (ii), (iii) or (iv) or of any other Collateral to the extent such
proceeds do not constitute Excluded Assets under clause (i) above.
"FIXTURES" has the meaning set forth in Section 9.1.7.
"GENERAL INTANGIBLES" has the meaning set forth in Section 9.1.10.
"GROUND LEASE" has the meaning set forth in Granting Clause One.
"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
11
<PAGE> 12
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. ss. 9601, et seq.; the
Hazardous Materials Transportation Act, as amended, 49 U.S.C. ss. 1801, et seq.;
the Resource Conservation and Recovery Act, as amended, 42 U.S.C. ss. 6901, et
seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. ss. 1251,
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 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 Rents, including mechanics and other Liens
permitted by Section 4.12 of the Indenture.
"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.
12
<PAGE> 13
"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
Las Vegas" 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 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
13
<PAGE> 14
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
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, but excluding the Ground Leases.
"PCBS" means polychlorinated biphenyls.
"PERSONALTY" 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.
"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 of the Property and/or used in the
operation of any
14
<PAGE> 15
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 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 trademarks, servicemarks and trade names
(including without limitation, the trademarks listed on Schedule VI to the
Security and Pledge 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, servicemark 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) of the State of New York.
SECTION 1.2 RELATED MATTERS.
15
<PAGE> 16
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 Nevada, provided that, with respect to any
portion of the Trust Estate (other than Personalty) that is located outside the
State of Nevada, the law of the state in which such property is located shall
govern to the extent, and only to the extent, necessary to permit the
Beneficiary to enforce its rights, powers and remedies hereunder.
Notwithstanding the foregoing, the governing law provisions of the Security and
Pledge Agreement, which provide, among other things, that the perfection of
security interests granted hereby in goods, documents and instruments located in
the State of Nevada shall be governed by the laws of the State of Nevada, shall
control with respect to the Collateral listed in Article 9 hereto, other than
Fixtures.
16
<PAGE> 17
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.
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 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.
17
<PAGE> 18
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 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 Secretaries 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 Applicable 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 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 enjoys the peaceful and
undisturbed possession of any Leased 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
18
<PAGE> 19
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 (including, without limitation, the Ground
Leases), (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 Security 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 Ground Leases, 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 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,
19
<PAGE> 20
threatened before any court, quasi-judicial body, Governmental Authority or
administrative agency relating to the validity of the Security 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).
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
20
<PAGE> 21
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 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. Trustor, at its sole cost and expense,
will provide, maintain and keep in force the insurance required by Section 4.16
of the Indenture ("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 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 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.
21
<PAGE> 22
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 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 4.1 of the Indenture ("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 Security 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
22
<PAGE> 23
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 4.5 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
88-0266868;
23
<PAGE> 24
(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).
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 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
24
<PAGE> 25
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 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 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 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 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 premises for such purposes. Any default by the Trustor as lessee
under any of 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
25
<PAGE> 26
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
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.
5.2.3. So long as this Deed of Trust is in effect, there shall
be no merger of any or all of the Ground Leases or any interest therein nor of
the leasehold estate created thereby with the fee estate in the 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 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 any
applicable Ground Lease, Trustor shall, promptly after the execution and
delivery of this Deed of Trust or of any instrument or agreement supplemental
thereto, notify each Lessor
26
<PAGE> 27
in writing of the execution and delivery thereof and deliver to each such Lessor
a copy of each such Deed of Trust, instrument or agreement, as the case may be.
5.2.6. If any Ground Lease is terminated prior to the 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 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 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. ss. 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 acts 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
27
<PAGE> 28
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 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 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 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
28
<PAGE> 29
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
Indenture; 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 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:
29
<PAGE> 30
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 Section 4.10 of the Indenture.
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 Net Proceeds from Insurance Policies shall
be treated in accordance with Section 4.10 of the Indenture and shall be
released to Trustor or applied to the discharge of the Secured Obligations as
set forth in the Indenture.
7.1.3. If Trustor elects to apply Net Proceeds of insurance to
restoration, Trustor agrees promptly and without delay (a) to enter into, and
deliver to Beneficiary a certified copy of, one or more architect and building
contracts providing for the restoration and reconstruction of the Property to as
good or better condition as existed prior to the Casualty and (b)to begin to
restore and reconstruct the Property and, thereafter, to proceed diligently
therewith in accordance with plans, specifications, architectural standards and
design reasonably determined by Trustor.
7.1.4. Notwithstanding anything to the contrary contained
herein, in the event of any uninsured Casualty, Trustor shall promptly within a
reasonable time, at its own cost and expense, restore and reconstruct the
Property to as good or better condition as existed prior to the Casualty.
Trustor shall have the sole right to settle any and all losses and claims unless
an Event of Default then exists.
SECTION 7.2. CONDEMNATION. Trustor, immediately upon obtaining
knowledge of the institution of any proceedings for the condemnation of the
entire
30
<PAGE> 31
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 4.10 of the Indenture.
ARTICLE 8.
REMEDIES OF BENEFICIARY
SECTION 8.1. EVENT OF 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 6.1 of the Indenture) 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 Security
Documents.
8.1.3. Any statement, representation or warranty given by
Trustor to Trustee or Beneficiary in any of the Security Documents, in
connection with the Indenture 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.
8.1.6. Failure of Trustor to perform any material obligation
under any Ground Lease, if such failure has not been cured within any applicable
cure period set forth in such Ground Lease.
31
<PAGE> 32
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, (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
Security 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;
32
<PAGE> 33
8.2.5. If the Secured Obligation become or are declared
immediately due and payable pursuant to Section 6.2 of the Indenture and Trustor
fails to make such payment 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 SECURITY
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 NOTES;
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; 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 Indenture.
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
truthful-
33
<PAGE> 34
ness 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, 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 Security 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, shall be conclusive proof of such default, recording, election, elapsing
of time, and of the due giving of such notice, and that the
34
<PAGE> 35
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 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.
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 Security
Document relating to the Trust Estate (after the lapse of any cure period
provided therein), then Beneficiary
35
<PAGE> 36
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 Security 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 Security 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 Security
Documents unless, in the exercise of said rights, all Secured Obligations are
fully discharged.
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
36
<PAGE> 37
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 Personalty and Fixtures,
other than Excluded Assets, 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 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, receivable 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
37
<PAGE> 38
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 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 Trustor'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, 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 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 sanitary purposes,
elevators, safes, laundry, kitchen and athletic
38
<PAGE> 39
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,
Trademarks, Copyrights (as defined in the Security and Pledge Agreement),
Patents (as defined in the Security and Pledge Agreement), and Contracts (as
defined in the Security and Pledge Agreement), licenses (including all Gaming
Licenses that are not Excluded Assets) 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 8-102(1)(a) of the UCC) and
uncertificated securities (as defined in Section 8-102(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 account (which may be a securities account)
established and maintained pursuant to Section 8 of the Security and Pledge
Agreement by Beneficiary, entitled Fitzgeralds 2004 Senior Secured Notes
Collateral Account, The Bank of New York, as collateral agent, secured party",
and all funds, securities and other property or other items from time to time
credited to such account and all interest, income and distributions thereon
("Collateral Account").
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
39
<PAGE> 40
(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) 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(1)(i) of the UCC ("Instruments").
9.1.15. The Copyrights, the Copyright Licenses, the Patents,
the Patent Licenses, the Trademarks, the Trademark Licenses, and the Trade
Secrets, all as defined in the Security and Pledge Agreement ("Intellectual
Property Collateral").
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;
40
<PAGE> 41
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 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 Applicable UCC and the other
Security 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
41
<PAGE> 42
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 Section 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, Exhibit B-2, Exhibit
C-2, Exhibit D-2, Exhibit E-2 and Exhibit F-2 to this Deed of Trust.
9.4.1.3.
Secured Party is: The Bank of New York
9.4.1.4.
Debtor is: Fitzgeralds Las Vegas, Inc.
9.4.1.5. The record owner or lessee of the Property is:
Fitzgeralds Las Vegas, Inc.
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-negotia-
42
<PAGE> 43
ble 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 Applicable 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 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 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
43
<PAGE> 44
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 (as defined in the
Purchase Agreement). Except as adequately disclosed in the Offering Circular or
as otherwise could not, singly or in the aggregate, have a Material Adverse
Effect:
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 whose liability
for any release of Hazardous Materials,
44
<PAGE> 45
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.
45
<PAGE> 46
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 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.
46
<PAGE> 47
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
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 wi1lful 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.
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,
47
<PAGE> 48
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 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
Security 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 Security 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.
48
<PAGE> 49
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 occurred under Section 6.1 of the Indenture; 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.
49
<PAGE> 50
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 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 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
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
Indenture. Any such request shall be accompanied
50
<PAGE> 51
by an Officers' Certificate (as defined in the Indenture). 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.
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 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 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 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
51
<PAGE> 52
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 12.17. 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 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 Security
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
52
<PAGE> 53
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 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 the Fixtures, which are
the subject of the Security and Pledge Agreement shall be governed by and
construed in accordance with the laws of the state of New York, as applied to
contracts made and performed
53
<PAGE> 54
within the state of New York. Trustor hereby irrevocably submits to the
jurisdiction of any New York state court sitting in the Borough of Manhattan in
the City of New York or any federal court sitting in the Borough of Manhattan in
the City of New York in respect of any suit, action or proceeding arising out of
or relating to the subject of the Security and Pledge Agreement, and irrevocably
accepts for itself and in respect of its property, generally and
unconditionally, jurisdiction of the aforesaid courts. 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.
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
54
<PAGE> 55
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 provided 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.
55
<PAGE> 56
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 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 SECURITY DOCUMENT OR ANY OTHER ACTION ARISING OUT OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, REGARDLESS OF WHICH PARTY INITIATES
SUCH ACTION OR ACTIONS.
56
<PAGE> 57
IN WITNESS WHEREOF, Trustor has caused this Deed of Trust to be
executed as of the day and year first above written.
FITZGERALDS LAS VEGAS, INC.,
a Nevada corporation
By: /s/ PHILIP D. GRIFFITH
----------------------------------
Name: Philip D. Griffith
Title: President and
Chief Executive Officer
<PAGE> 58
STATE OF NEVADA
COUNTY OF CLARK
On __________, 1997, before me, Judith A. Koehn, Notary Public, personally
appeared Philip D. Griffith, 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.
Signature /s/ JUDITH A. KOEHN (Seal)
-------------------
----------------------------------------------
NOTARY PUBLIC-STATE OF NEVADA
COUNTY OF CLARK
[SEAL] JUDITH A. KOEHN
No. 92-2585-1 My Appointment Expires
March 18, 2000
----------------------------------------------
<PAGE> 59
SCHEDULE 1.1
INDENTURE DEFINITIONS
1. Guarantors
2. Security Documents
3. Gaming Authority
4. Gaming License
5. Liens
6. Persons
7. Permitted Liens
8. Excluded Assets
9. Intercreditor Agreement
10. Non-Recourse Indebtedness
11. Purchase Money Obligations
12. Capital Lease Obligations
13. Collateral
14. Asset Sale
<PAGE> 60
SCHEDULE 12.8.
ADDRESSES
DEBTOR:
Fitzgeralds Las Vegas, Inc.
301 Fremont Street
Las Vegas, Nevada 89101
SECURED PARTY:
THE BANK OF NEW YORK
101 Barclay Street - 21W
New York, New York 10286
Attention: Corporate Trust Administration
TRUSTEE:
Nevada Title Company
3320 West Sahara, Suite 200
Las Vegas, NV 89102
<PAGE> 1
EXHIBIT 10.6
Prepared By and Upon
Recordation Return To:
THE BANK OF NEW YORK [_____ QUARTER(S) [OR BLOCKS
101 Barclay Street - 21W _____ OF _______ LOCATED IN],
New York, New York 10286 SECTION ____, TOWNSHIP ____,
Attention: Corporate Trust Administration RANGE ______ CITY OF _______
TUNICA COUNTY, MISSISSIPPI
[_____ QUARTER(S) [OR BLOCKS
_____ OF _______ LOCATED IN],
SECTION ____, TOWNSHIP ____,
RANGE ______ CITY OF _______
TUNICA COUNTY, MISSISSIPPI
- -------------------------------------------------------------------------------
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
THE BANK OF NEW YORK,
as Beneficiary
Dated as of December 30, 1997
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 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 30th day of
December, 1997 by Fitzgeralds Mississippi, Inc., a Mississippi corporation
("Trustor"), whose principal place of business is located at 711 Lucky Lane,
Robinsville, MS 38664, in favor of Commonwealth Land Title Company ("Trustee"),
for the benefit of The Bank of New York, a New York banking corporation, as
Collateral Agent ("Beneficiary"), whose principal place of business is located
at 101 Barclay Street - 21W, New York, New York 10286, in its capacity as
trustee under the "Indenture" for the ratable benefit of the "Holders" (as each
such term is hereinafter defined).
THE MAXIMUM AMOUNT OF PRINCIPAL TO BE SECURED HEREBY IS $255,000,000 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
$255,000,000.
R E C I T A L S
A. Pursuant to that certain Indenture dated as of December 30,
1997 (as supplemented and otherwise amended from time to time, the "Indenture"),
by and among Fitzgeralds Gaming Corporation ("Fitzgeralds"), the Guarantors
(defined therein), and Beneficiary, as Trustee thereunder (in such capacity, the
"Indenture Trustee"), Fitzgeralds will issue 12 1/4% Senior Secured Notes due on
or before 2004 in an aggregate principal amount of up to $255,000,000
(collectively, the "Notes"). Unless the context other requires, all capitalized
terms used and not otherwise defined herein shall have the meanings ascribed
thereto in the Indenture. Attached hereto as Schedule 1.1 is a list of certain
definitions for which reference should be made to the Indenture.
B. Pursuant to a guarantee included in the Indenture (as amended
from time to time, the "Subsidiary Guarantee"), the Guarantors (including
Trustor) have Guaranteed the obligations of Fitzgeralds under the Notes, the
Indenture and the other Security Documents to which Fitzgeralds is a party.
C. Pursuant to the Indenture, the Subsidiary Guarantee of Trustor
is required to be secured by, among other things, this Deed of Trust.
2
<PAGE> 3
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 Mississippi ("Applicable Gaming Laws").
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 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, 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
3
<PAGE> 4
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, 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, 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 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 thereun-
4
<PAGE> 5
der, 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 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 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,
5
<PAGE> 6
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.
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
6
<PAGE> 7
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 Indenture, this Deed
of Trust or any other Security 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.
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
7
<PAGE> 8
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 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, 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, 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 of that
certain First Preferred Vessel Mortgage executed by Trustor of even date
herewith ("Vessel Mortgage") and any charter hire or other compensation
resulting from a requisition pursuant to Section 3.14 of the Vessel Mortgage.
Trustor and Beneficiary acknowledge that significant structures, improvements,
additions, equipment and other
8
<PAGE> 9
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 (other than Excluded Assets) 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 Subsidiary
Guarantee, whether for principal of, or premium, if any, or interest on the
Notes, 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 Security 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 Security
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 Security Documents.
in each case whether due or not due, direct or indirect, joint and/or several,
absolute or contingent, voluntary or involuntary, liquidated or un1iquidated,
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
Subsidiary Guarantee 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:
9
<PAGE> 10
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 UCC" means the Uniform Commercial Code (as amended
from time to time) of the State of Mississippi.
"BENEFICIARY" has the meaning set forth in the Preamble.
"CHATTEL PAPER" has the meaning set forth in Section 9.1.1.
"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;
10
<PAGE> 11
(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
sub paragraphs (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.
11
<PAGE> 12
"EQUIPMENT" has the meaning set forth in Section 9.1.7.
"EXCLUDED ASSETS" means (i) cash, deposit accounts and other cash
equivalents; (ii) furniture, fixtures and equipment securing Non-Recourse
Indebtedness permitted to be incurred under the Indenture; (iii) assets
securing Purchase Money Obligations or Capital Lease Obligations permitted to be
incurred under the Indenture; and (iv) any Contracts, permits, licenses or the
like that cannot be subjected to a Lien without the consent of third parties,
which consent is not obtainable by Trustor (including all Gaming Licenses of
Trustor); provided, that Excluded Assets does not include the proceeds of the
assets under clauses (ii), (iii) or (iv) or of any other Collateral to the
extent such proceeds do not constitute Excluded Assets under clause (i) above.
"FIXTURES" has the meaning set forth in Section 9.1.7.
"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," "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. ss. 9601, et seq.; the Hazardous Materials Transportation Act, as
amended, 49 U.S.C. ss. 1801, et seq.; the Resource Conservation and Recovery
Act, as amended, 42 U.S.C. ss. 6901, et seq.; the Federal Water Pollution
Control Act, as amended, 33 U.S.C. ss. 1251, 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
12
<PAGE> 13
(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 Rents, including mechanics and other Liens
permitted by Section 4.12 of the Indenture.
"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, the Vessel or the Improvements, including, without 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, trademarks or
service marks, whether or not registered, now or hereafter
13
<PAGE> 14
used in the operation of the Land or the Vessel 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, 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
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 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
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 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 Vessel, 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 or the Vessel, including, without limitation, any Gaming Licenses.
"INVENTORY" has the meaning set forth in Section 9.1.6.
14
<PAGE> 15
"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.
"PCBS" means polychlorinated biphenyls.
"PERSONALTY" 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.
"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 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 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 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 Property or the Vessel and those items
of Fixtures
15
<PAGE> 16
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 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
or the Vessel, 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 or the Vessel.
"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 VI to the
Subsidiary Security and Pledge 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, servicemark 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) of the State of New York.
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
16
<PAGE> 17
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 Mississippi, provided that, with respect to
any portion of the Trust Estate (other than Personalty) that is located outside
the State of Mississippi, the law of the state in which such property is located
shall govern to the extent, and only to the extent, necessary to permit the
Beneficiary to enforce its rights, powers and remedies hereunder.
Notwithstanding the foregoing, the governing law provisions of the Security and
Pledge Agreement shall control with respect to the Collateral listed in Article
9 hereto, other than Fixtures.
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.
17
<PAGE> 18
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 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 and in the real estate and
Applicable UCC 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 U.S. federal
18
<PAGE> 19
law and not Article 9 of the Applicable 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 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 Security 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
19
<PAGE> 20
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 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 Tunica Casino, other than
the 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
Security 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,
20
<PAGE> 21
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 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 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.
21
<PAGE> 22
SECTION 4.4. INSURANCE. Trustor, at its sole cost and expense,
will provide, maintain and keep in force the insurance required by Section 4.16
of the Indenture ("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 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 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
22
<PAGE> 23
(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 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 4.1 of the Indenture ("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 Security 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
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.
23
<PAGE> 24
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
4.5 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 88-
0299002;
(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).
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.
24
<PAGE> 25
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 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 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.
25
<PAGE> 26
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 Section 4.10 of the Indenture.
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 Net Proceeds from Insurance Policies shall be
treated in accordance with Section 4.10 of the Indenture and shall be released
to Trustor or applied to the discharge of the Secured Obligations as set forth
in the Indenture.
7.1.3. If Trustor elects to apply Net Proceeds of insurance to
restoration, Trustor agrees promptly and without delay (a) to enter into, and
deliver to Beneficiary a certified copy of, one or more architect and building
contracts providing for the restoration and reconstruction of the Property to
as good or better condition as existed prior to the Casualty and (b)to begin to
restore and reconstruct the
26
<PAGE> 27
Property and, thereafter, to proceed diligently therewith in accordance with
plans, specifications, architectural standards and design reasonably determined
by Trustor.
7.1.4. Notwithstanding anything to the contrary contained herein,
in the event of any uninsured Casualty, Trustor shall promptly within a
reasonable time, at its own cost and expense, restore and reconstruct the
Property to as good or better condition as existed prior to the Casualty.
Trustor shall have the sole right to settle any and all losses and claims unless
an Event of Default then exists.
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
4.10 of the Indenture.
ARTICLE 8.
REMEDIES OF BENEFICIARY
SECTION 8.1. EVENT OF 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 6.1 of the Indenture) 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 Security Documents.
8.1.3. Any statement, representation or warranty given by Trustor
to Trustee or Beneficiary in any of the Security Documents, in connection with
the Indenture or in any other document provided by Trustor, including this Deed
of Trust, is found to be materially false or misleading.
27
<PAGE> 28
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.
8.1.6. The occurrence of one or more "Events of Default" (as
defined in the Vessel Mortgage) shall constitute an "Event of Default" under
this Deed of Trust.
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, (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
Security 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
28
<PAGE> 29
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. Intentionally Deleted.
8.2.5. If the Secured Obligation become or are declared
immediately due and payable pursuant to Section 6.2 of the Indenture and Trustor
fails to make such payment 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 SECURITY
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 NOTES;
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; 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 Indenture.
SECTION 8.3. POWER OF SALE. If Trustor shall be in default as
provided in Section 8.1 hereof, then, in that event, the entire Subsidiary
Guarantee 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 the request of Beneficiary, sell the Property
conveyed, or a sufficiency thereof, to satisfy the Subsidiary Guarantee
Obligations at public outcry to the highest bidder for cash. Sale of the
Property shall be advertised for three (3) consecutive weeks preceding the sale
in a newspaper published in the county where the 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, if any, as far 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
29
<PAGE> 30
how it is described. If the 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 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
officer thereof may declare Trustor to be in default as provided in Section 8.1
hereof and request Trustee to sell the Property. Beneficiary shall have the same
right to purchase the Property at the foreclosure sale as would a purchaser who
is not a party to this Deed of Trust.
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 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 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.
30
<PAGE> 31
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 Security
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 Security 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 hereun-
31
<PAGE> 32
er or under the Security 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 Security Documents unless, in the exercise of said
rights, all Secured Obligations are fully discharged.
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
Personalty and Fixtures, other than Excluded Assets, 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 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,
32
<PAGE> 33
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, receivable 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;
9.1.6. "Inventory" as such term 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 Trustor'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 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
33
<PAGE> 34
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 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,
Trademarks, Copyrights (as defined in the Security and Pledge Agreement),
Patents (as defined in the Security and Pledge Agreement), and Contracts (as
defined in the Security and Pledge Agreement), licenses (including all Gaming
Licenses that are not Excluded Assets) 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(1)(a) of the UCC) and uncertificated securities (as defined in
Section 8-102(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 account (which may be a securities account)
established and maintained pursuant to Section 8 of the Security and Pledge
Agreement by Beneficiary, entitled Fitzgeralds 2004 Senior Secured Notes
Collateral Account, The Bank of New
34
<PAGE> 35
York, as collateral agent, secured party", and all funds, securities and other
property or other items from time to time credited to such account and all
interest, income and distributions thereon ("Collateral Account").
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) 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(1)(i) of the UCC ("Instruments").
9.1.15. The Copyrights, the Copyright Licenses, the Patents, the
Patent Licenses, the Trademarks, the Trademark Licenses, and the Trade Secrets,
all as defined in the Security and Pledge Agreement ("Intellectual Property
Collateral").
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
35
<PAGE> 36
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 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 Applicable UCC and the other
Security 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
36
<PAGE> 37
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: The Bank of New York
9.4.1.4.
Debtor is: Fitzgeralds Mississippi, Inc., a Mississippi
corporation
9.4.1.5. The record owner or lessee of the Property is:
Fitzgeralds Mississippi, Inc., a Mississippi
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)
37
<PAGE> 38
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 Applicable 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 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 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
38
<PAGE> 39
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 (as defined in the
Purchase Agreement). Except as adequately disclosed in the Offering Circular or
as otherwise could not, singly or in the aggregate, have a Material Adverse
Effect:
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 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
39
<PAGE> 40
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.
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
40
<PAGE> 41
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 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, com-
41
<PAGE> 42
plaint, 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
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 wi1lful 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.
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 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
42
<PAGE> 43
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
Security 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 Security 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.
43
<PAGE> 44
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 Section 6.1 of the Indenture; 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
44
<PAGE> 45
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
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 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
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
Indenture. Any such request shall be accompanied by an Officers' Certificate (as
defined in the Indenture). 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.
45
<PAGE> 46
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 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 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 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 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 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
46
<PAGE> 47
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 Security 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
47
<PAGE> 48
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 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 the Fixtures, which are
the subject of the Security and Pledge Agreement shall be governed by and
construed in accordance with the laws of the state of New York, as applied to
contracts made and performed within the state of New York. Trustor hereby
irrevocably submits to the jurisdiction of any New York state court sitting in
the Borough of Manhattan in the City of New York or any federal court sitting in
the Borough of Manhattan in the City of New York in respect of any suit, action
or proceeding arising out of or relating to the subject of the Security and
Pledge Agreement, and irrevocably accepts for itself and in respect of its
property, generally and unconditionally, jurisdiction of the aforesaid courts.
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
48
<PAGE> 49
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
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, 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 inde-
49
<PAGE> 50
pendent 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.
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 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 SECURITY DOCUMENT OR ANY OTHER ACTION ARISING OUT OF THE TRANSACTIONS
CONTEM-
50
<PAGE> 51
PLATED HEREBY OR THEREBY, REGARDLESS OF WHICH PARTY INITIATES SUCH ACTION OR
ACTIONS.
51
<PAGE> 52
IN WITNESS WHEREOF, Trustor has caused this Deed of Trust to be
executed as of the day and year first above written.
FITZGERALDS MISSISSIPPI, INC.,
a Mississippi corporation
By: /s/ PHILIP D. GRIFFITH
------------------------------------
Name: Philip D. Griffith
Title: President and
Chief Executive Officer
<PAGE> 53
STATE OF NEVADA
COUNTY OF CLARK
On __________, 1997, before me, Judith A. Koehn, Notary Public, personally
appeared Philip D. Griffith, 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.
Signature /s/ JUDITH A. KOEHN (Seal)
-------------------
----------------------------------------------
NOTARY PUBLIC-STATE OF NEVADA
COUNTY OF CLARK
[SEAL] JUDITH A. KOEHN
No. 92-2585-1 My Appointment Expires
March 18, 2000
----------------------------------------------
<PAGE> 54
SCHEDULE 1.1
INDENTURE DEFINITIONS
1. Guarantors
2. Security Documents
3. Gaming Authority
4. Gaming License
5. Liens
6. Persons
7. Permitted Liens
8. Excluded Assets
9. Intercreditor Agreement
10. Non-Recourse Indebtedness
11. Purchase Money Obligations
12. Capital Lease Obligations
13. Collateral
14. Asset Sale
<PAGE> 55
SCHEDULE 12.8.
ADDRESSES
DEBTOR:
Fitzgeralds Mississippi, Inc.
711 Lucky Lane
Robinsville, MS 38664
SECURED PARTY:
THE BANK OF NEW YORK
101 Barclay Street - 21W
New York, New York 10286
Attention: Corporate Trust Administration
TRUSTEE:
<PAGE> 56
EXHIBIT A
LEGAL DESCRIPTION OF LAND
<PAGE> 57
BOOK 141 PAGE 377
TRACT 1
A tract of land situated in Sections 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 4201.45 feet to a point; thence North 9 degrees, 09 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 4442.00 feet to a point on
the existing slope of the Mississippi River Commaree Trenchfill Investment
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, 06 seconds, 00 seconds East and continuing along
the said existing slope for 1751.00 feet to a point; thence
North 53 degrees, 45 minutes, 00 seconds East and continuing along the said
existing slope for 1049.02 feet to a point; thence
South 45 degrees, 17 minutes, 48 seconds East for 2113.63 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, 45 minutes, 12 seconds East for 122.36 feet to a point; thence
South 50 degrees, 13 minutes, 00 seconds West for 360.83 feet to a point, thence
South 54 degrees, 09 minutes, 04 seconds West for 483.00 feet to a point; thence
South 49 degrees, 09 minutes, 00 seconds West for 225.00 feet to a point; thence
North 47 degrees, 14 minutes, 08 seconds West for 314.00 feet to a point; thence
North 23 degrees, 95 minutes, 08 seconds West for 870.00 feet to the said
"Point of Beginning", containing 132.82 acres, more or less.
Bearings in the above description have an origin of TRUE NORTH based on
computations from celestial observations.
<PAGE> 58
BOOK 141 PAGE 378
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 Southwest 1/4, all in Sections 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, 06 minutes, 34 seconds West for 948.29 feet to an 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 249.86 feet to a point;
thence
North 57 degrees, 04 minutes, 05 seconds West for 461.24 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 320.25 feet to a point; thence
North 65 degrees, 43 minutes, 51 seconds West for 287.55 feet to a point; thence
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 177.13 feet to a point; thence
North 27 degrees, 20 minutes, 85 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, 08 seconds East along said northern line for
22.30 feet to a point; thence
North 50 degrees, 18 minutes, 09 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 204.92 feet to a point; thence
South 41 degrees, 36 minutes, 46 seconds East for 147.74 feet to a point; thence
South 48 degrees, 34 minutes, 22 seconds East for 388.74 feet to a point; thence
South 82 degrees, 34 minutes, 59 seconds East for 202.68 feet to a point;
thence
South 82 degrees, 39 minutes, 27 seconds East for 258.65 feet to a point; thence
South 68 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", containing 13.95 acres, more or less.
Bearings in the above description have an origin of TRUE NORTH based on
computations from celestial observations.
<PAGE> 59
BOOK 141 PAGE 379
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 an 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
198.42 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 848.14 feet to a point; thence
South 72 degrees, 54 minutes, 40 seconds West for 236.34 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 northern
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 97 degrees, 57 minutes, 16 seconds East for 560.07 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, 26 seconds East for 145.96 feet to a point; thence
South 31 degrees, 16 minutes, 14 seconds East for 487.57 feet to the said
"Point of Beginning", containing 6.04 acres, more or less.
Bearings in the above description have an origin of TRUE NORTH based on
computations from celestial observations.
<PAGE> 60
BOOK 141 PAGE 380
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 130.00 feet to the "Point of Beginning" of the tract
herein described; thence
North 6 degrees, 14 minutes, 14 seconds West along a line representing the west
line of said Section 11 for 346.00 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 948.09 feet to a point; thence
South 89 degrees, 39 minutes, 36 seconds West for 36.00 feet to the said
"Point of Beginning", containing 0.4339 acres, more or less.
Bearings in the above description have an origin of TRUE NORTH based on
computation from celestial observations.
<PAGE> 61
BOOK 141 PAGE 381
TRACT 8*
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 19 degrees,
39 minutes, 34 seconds East for 20.08 feet to the said "Point of Beginning" of
the tract herein described; thence
North 39 degrees, 39 minutes, 36 seconds East for 120.01 feet to a point; thence
North 8 degrees, 14 minutes, 36 seconds West for 1124.29 feet to a point; thence
North 11 degrees, 45 minutes, 30 seconds East for 190.77 feet to a point; thence
North 1 degree, 08 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
northern boundary of the Yasee-Mississippi Delta Levee Commission property;
thence
North 83 degrees, 08 minutes, 40 seconds West along the said southern boundary
for 38.02 feet to a point; thence
South 30 degrees, 23 minutes, 00 seconds West and continuing along the said
southern boundary for 223.42 feet to a point; thence
South 0 degrees, 14 minutes, 36 seconds East for 4083.02 feet to the said
"Point of Beginning", containing 6.82 acres, more or less.
Bearings in the above description have an origin of TRUE NORTH based on
computations from celestial observations.
<PAGE> 1
EXHIBIT 10.7
Prepared By and Upon
Recordation Return To:
THE BANK OF NEW YORK
101 Barclay Street - 21W
New York, New York 10286
Attention: Corporate Trust Administration
- --------------------------------------------------------------------
DEED OF TRUST, SECURITY AGREEMENT AND
FIXTURE FILING WITH ASSIGNMENT OF RENTS
101MAIN STREET LIMITED LIABILITY COMPANY, a Colorado
limited liability company,
as Trustor
THE PUBLIC TRUSTEE OF THE COUNTY OF GILPIN, COLORADO
as Trustee
THE BANK OF NEW YORK,
as Beneficiary
Dated as of December 30, 1997
<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 30th day of
December, 1997 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 The Bank of New
York, a New York banking corporation, as Collateral Agent ("Beneficiary"), whose
principal place of business is located at 101 Barclay Street - 21W, New York,
New York 10286, in its capacity as trustee under the "Indenture" (as such term
is hereinafter defined) for the ratable benefit of the Holders (as such term is
defined in the Indenture).
THE MAXIMUM AMOUNT OF PRINCIPAL TO BE SECURED HEREBY IS $ 255,000,000 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 $255,000,000.
R E C I T A L S
A. Pursuant to that certain Indenture dated as of December 30,
1997 (as supplemented and otherwise amended from time to time, the "Indenture"),
by and among Fitzgeralds Gaming Corporation ("Fitzgeralds"), the Guarantors
(defined therein), and Beneficiary, as trustee thereunder (in such capacity, the
"Indenture Trustee"), Fitzgeralds will issue 12 1/4% Senior Secured Notes due
2004 in an aggregate principal amount of up to $255,000,000 (collectively, the
"Notes"). Unless the context other requires, all capitalized terms used and not
otherwise defined herein shall have the meanings ascribed thereto in the
Indenture. Attached hereto as Schedule 1.1 is a list of certain definitions for
which reference should be made to the Indenture.
B. Pursuant to a guarantee included in the Indenture (as amended
from time to time, the "Subsidiary Guarantee"), the Guarantors (including
Trustor) have Guaranteed the obligations of Fitzgeralds under the Notes, the
Indenture and the other Security Documents to which Fitzgeralds is a party.
C. Pursuant to the Indenture, 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").
2
<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),
3
<PAGE> 4
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 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 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
4
<PAGE> 5
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).
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.
5
<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 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.
6
<PAGE> 7
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 Indenture, this Deed
of Trust or any other Security 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 (other than Excluded Assets) 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 Subsidiary
Guarantee, whether for principal of, or premium, if any, or interest on the
Notes, 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 Security 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 Security
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 Security Documents.
in each case whether due or not due, direct or indirect, joint and/or several,
absolute or contingent, voluntary or involuntary, liquidated or un1iquidated,
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
7
<PAGE> 8
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 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" has the meaning set forth in Section 9.1.2.
"APPLICABLE UCC" means the Uniform Commercial Code (as amended
from time to time) of the State of Colorado.
"BENEFICIARY" has the meaning set forth in the Preamble.
"CHATTEL PAPER" has the meaning set forth in Section 9.1.1.
"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,
8
<PAGE> 9
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
9
<PAGE> 10
(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" means (i) cash, deposit accounts and other cash
equivalents; (ii) furniture, fixtures and equipment securing Non-Recourse
Indebtedness permitted to be incurred under the Indenture; (iii) assets securing
Purchase Money Obligations or Capital Lease Obligations permitted to be incurred
under the Indenture; and (iv) any Contracts, permits, licenses or the like that
cannot be subjected to a Lien without the consent of third parties, which
consent is not obtainable by Trustor (including all Gaming Licenses of Trustor);
provided, that Excluded Assets does not include the proceeds of the assets under
clauses (ii), (iii) or (iv) or of any other Collateral to the extent such
proceeds do not constitute Excluded Assets under clause (i) above.
"FIXTURES" has the meaning set forth in Section 9.1.7.
"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," "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 1251, 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
10
<PAGE> 11
(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 Rents, including mechanics and other Liens
permitted by Section 4.12 of the Indenture.
"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 licensee or franchisee, and, in each case,
together with the goodwill associated therewith; (b)
11
<PAGE> 12
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 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
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 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
12
<PAGE> 13
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.
"PCBS" means polychlorinated biphenyls.
"PERSONALTY" 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.
"SUBSIDIARY GUARANTEE OBLIGATIONS" has the meaning set forth
herein above.
"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 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 therefore), calculators, adding machines, video game and slot
machines, and any other
13
<PAGE> 14
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 VI to the
Security and Pledge 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, servicemark 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) of the State of New York.
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
14
<PAGE> 15
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 Colorado, provided that, with respect to any
portion of the Trust Estate (other than Personalty) that is located outside the
State of Colorado, the law of the state in which such property is located shall
govern to the extent, and only to the extent, necessary to permit the
Beneficiary to enforce its rights, powers and remedies hereunder.
Notwithstanding the foregoing, the governing law provisions of the Security and
Pledge Agreement shall control with respect to the Collateral listed in Article
9 hereto, other than Fixtures.
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.
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
15
<PAGE> 16
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, 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 Gilpin County, Colorado, (b)
upon the filing of financing statements naming Trustor as "Debtor" and
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 Applicable 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 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
16
<PAGE> 17
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 Security 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 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
17
<PAGE> 18
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
Security 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).
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
18
<PAGE> 19
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 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. Trustor, at its sole cost and expense,
will provide, maintain and keep in force the insurance required by Section 4.16
of the Indenture ("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 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 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.
19
<PAGE> 20
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 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 4.1 of the Indenture ("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 Security 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
reason of: (i) any damage to or destruction of or any condemnation or similar
21
<PAGE> 21
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 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
84-1423521;
(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).
21
<PAGE> 22
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 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 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
22
<PAGE> 23
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.
[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 Section 4.10 of the Indenture.
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 Net Proceeds from Insurance Policies shall be
treated in accordance with Section 4.10 of the Indenture and shall be released
to Trustor or applied to the discharge of the Secured Obligations as set forth
in the Indenture.
23
<PAGE> 24
7.1.3. If Trustor elects to apply Net Proceeds of insurance to
restoration, Trustor agrees promptly and without delay (a) to enter into, and
deliver to Beneficiary a certified copy of, one or more architect and building
contracts providing for the restoration and reconstruction of the Property to as
good or better condition as existed prior to the Casualty and (b) to begin to
restore and reconstruct the Property and, thereafter, to proceed diligently
therewith in accordance with plans, specifications, architectural standards and
design reasonably determined by Trustor.
7.1.4. Notwithstanding anything to the contrary contained herein,
in the event of any uninsured Casualty, Trustor shall promptly within a
reasonable time, at its own cost and expense, restore and reconstruct the
Property to as good or better condition as existed prior to the Casualty.
Trustor shall have the sole right to settle any and all losses and claims unless
an Event of Default then exists.
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 Beneficiary of the
pendency of such proceedings. 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 4.10 of the Indenture.
ARTICLE 8.
REMEDIES OF BENEFICIARY
SECTION 8.1. EVENT OF 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 6.1 of the Indenture) 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 Security Documents.
8.1.3. Any statement, representation or warranty given by Trustor
to Trustee or Beneficiary in any of the Security Documents, in connection with
the Indenture or in any other
24
<PAGE> 25
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 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 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
Security 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.
25
<PAGE> 26
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 become or are declared
immediately due and payable pursuant to Section 6.2 of the Indenture and Trustor
fails to make such payment 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 SECURITY
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 NOTES;
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; 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 Indenture.
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 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, 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,
26
<PAGE> 27
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 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 Security
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
27
<PAGE> 28
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 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.
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 Security
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
28
<PAGE> 29
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 Security 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 Security 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 Security
Documents unless, in the exercise of said rights, all Secured Obligations are
fully discharged.
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
Personalty and Fixtures, other than Excluded Assets, 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");
29
<PAGE> 30
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 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 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 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 Trustor's business ("Inventory");
30
<PAGE> 31
9.1.7. Any and all "equipment" as such term is defined in Section
9-109(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 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
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 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,
Trademarks, Copyrights (as defined in the Security and Pledge Agreement),
Patents (as defined in the Security and Pledge Agreement), Contracts (as defined
in the Security and Pledge Agreement), licenses (including all Gaming Licenses
that are not Excluded Assets) 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
31
<PAGE> 32
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(1)(a) of the UCC) and
uncertificated securities (as defined in Section 8-102(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 account (which may be a securities account)
established and maintained pursuant to Section 8 of the Security and Pledge
Agreement by Beneficiary, entitled "Fitzgeralds 2004 Senior Secured Notes
Collateral Account, The Bank of New York, as collateral agent, secured party",
and all funds, securities and other property or other items from time to time
credited to such account and all interest, income and distributions thereon
("Collateral Account").
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) 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(1)(i) of the UCC ("Instruments").
9.1.15. The Copyrights, the Copyright Licenses, the Patents, the
Patent Licenses, the Trademarks, the Trademark Licenses, and the Trade Secrets,
all as defined in the Security and Pledge Agreement ("Intellectual Property
Collateral").
32
<PAGE> 33
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 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 Applicable UCC and the other
Security 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
33
<PAGE> 34
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 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: The Bank of New York
9.4.1.4. Debtor is: 101 Main Street Limited Liability
Company, a Colorado limited liability company.
34
<PAGE> 35
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 Applicable 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 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
35
<PAGE> 36
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 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;
36
<PAGE> 37
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 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,
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 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.
37
<PAGE> 38
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 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 Require-
38
<PAGE> 39
ments, 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
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 wi1lful 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.
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 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
39
<PAGE> 40
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
Security 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 Security 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.
40
<PAGE> 41
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 Indenture; 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 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 Trustee's sale or
judicial foreclosure.
41
<PAGE> 42
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 Obliga tions, 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
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
Indenture or by Applicable Laws. Any such request shall be accompanied by an
Officers' Certificate (as defined in the Indenture). 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 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.
42
<PAGE> 43
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 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 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 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 12.17. 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 Security Documents, is
intended by the parties as a
43
<PAGE> 44
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. 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 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.
44
<PAGE> 45
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 the Fixtures, which are
the subject of the Security and Pledge Agreement shall be governed by and
construed in accordance with the laws of the state of New York, as applied to
contracts made and performed within the state of New York. Trustor hereby
irrevocably submits to the jurisdiction of any New York state court sitting in
the Borough of Manhattan in the City of New York or any federal court sitting in
the Borough of Manhattan in the City of New York in respect of any suit, action
or proceeding arising out of or relating to the subject of the Security and
Pledge Agreement, and irrevocably accepts for itself and in respect of its
property, generally and unconditionally, jurisdiction of the aforesaid courts.
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.
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
45
<PAGE> 46
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, 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
46
<PAGE> 47
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 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 SECURITY DOCUMENT OR ANY OTHER ACTION ARISING OUT OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY, REGARDLESS OF WHICH PARTY INITIATES SUCH ACTION
OR ACTIONS.
47
<PAGE> 48
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/ PHILIP D. GRIFFITH
-------------------------------
Name: Philip D. Griffith
Title: President and Chief Executive Officer
<PAGE> 49
STATE OF NEVADA
COUNTY OF CLARK
On __________, 1997, before me, Judith A. Koehn, Notary Public, personally
appeared Philip D. Griffith, 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.
Signature /s/ JUDITH A. KOEHN (Seal)
-------------------
----------------------------------------------
NOTARY PUBLIC-STATE OF NEVADA
COUNTY OF CLARK
[SEAL] JUDITH A. KOEHN
No. 92-2585-1 My Appointment Expires
March 18, 2000
----------------------------------------------
<PAGE> 50
SCHEDULE 1.1
INDENTURE DEFINITIONS
1. Guarantors
2. Security Documents
3. Gaming Authority
4. Gaming License
5. Holders
6. Liens
7. Persons
8. Permitted Liens
9. Excluded Assets
10. Intercreditor Agreement
11. Non-Recourse Indebtedness
12. Purchase Money Obligations
13. Capital Lease Obligations
14. Collateral
15. Asset Sale
<PAGE> 51
SCHEDULE 12.8.
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:
THE BANK OF NEW YORK
101 Barclay Street - 21W
New York, New York 10286
Attention: Corporate Trust Administration
TRUSTEE:
The Public Trustee of the County of Gilpin, Colorado
<PAGE> 52
EXHIBIT A
LEGAL DESCRIPTION
<PAGE> 53
Commitment Number TG11636
SCHEDULE A - CONTINUED
4. 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,
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 BOBTAIL STREET AS DESCRIBED IN BOOK 586 AT PAGE 113, WHICH POINT IS ON A
CURVE CONCAVE TO THE NORTH;
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 RIGHT,
CENTRAL ANGLE = 30 DEGREES 58'34", RADIUS = 140.00 FEET, AN ARC LENGTH OF 75.69
FEET TO A POINT OF TANGECY, 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 FEET, 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 DESCRBIED 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 GALPIN, STATE OF COLORADO.
<PAGE> 1
EXHIBIT 10.8
Prepared By and Upon
Recordation Return To:
THE BANK OF NEW YORK
101 Barclay Street - 21W
New York, New York 10286
Attention: Corporate Trust Administration
- -------------------------------------------------------------------------------
DEED OF TRUST, SECURITY AGREEMENT AND
FIXTURE FILING WITH ASSIGNMENT OF RENTS
FITZGERALDS RENO, INC.,
as Trustor
NEVADA TITLE COMPANY
as Trustee
THE BANK OF NEW YORK,
as Beneficiary
Dated as of December 30, 1997
<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 30th day of
December, 1997 by Fitzgeralds Reno, Inc., a Nevada corporation ("Trustor"),
whose principal place of business is located at 255 North Virginia Street, Reno,
Nevada 89501, in favor of Nevada Title Company ("Trustee"), for the benefit of
The Bank of New York, a New York banking corporation, as Collateral Agent
("Beneficiary"), whose principal place of business is located at 101 Barclay
Street - 21W, New York, New York 10286, in its capacity as trustee under the
"Indenture" for the ratable benefit of the "Holders" (as each such term is
hereinafter defined).
THE MAXIMUM AMOUNT OF PRINCIPAL TO BE SECURED HEREBY IS $255,000,000 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 $255,000,000.
R E C I T A L S
A. Pursuant to that certain Indenture dated as of December 30,
1997 (as supplemented and otherwise amended from time to time, the "Indenture"),
by and among Fitzgeralds Gaming Corporation ("Fitzgeralds"), the Guarantors
(defined therein), and Beneficiary, as Trustee thereunder (in such capacity, the
"Indenture Trustee"), Fitzgeralds will issue 12 1/4 % Senior Secured Notes due
on or before 2004 in an aggregate principal amount of up to the maximum amount
of $255,000,000 (collectively, the "Notes"). Unless the context other requires,
all capitalized terms used and not otherwise defined herein shall have the
meanings ascribed thereto in the Indenture. Attached hereto as Schedule 1.1 is a
list of certain definitions for which reference should be made to the Indenture.
B. Pursuant to a guarantee included in the Indenture (as amended
from time to time, the "Subsidiary Guarantee"), the Guarantors (including
Trustor) have Guaranteed the obligations of Fitzgeralds under the Notes, the
Indenture and the other Security Documents to which Fitzgeralds is a party.
C. Pursuant to the Indenture, 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 Nevada ("Applicable Gaming Laws").
2
<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 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, benefitting, relating or appertaining to the Owned Land,
the airspace over the Owned Land, the "Improvements" (as hereinafter defined),
or both, 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
leasehold estate created by that certain lease agreement described in Exhibit
B-1 attached hereto and by this reference incorporated herein ("Ground Lease"),
by and between Trustor, as lessee, and that certain party referenced on said
Exhibit, as 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 Washoe, State of Nevada described in Exhibit B-2 (the "Leased 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 Leased Land,
the airspace over the Leased Land, the "Improvements" (as hereinafter
3
<PAGE> 4
defined), or both, or which hereinafter shall in any way belong, relate or be
appurtenant thereto.
The Owned Land and the Leased Land shall collectively be 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 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 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
4
<PAGE> 5
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 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]
5
<PAGE> 6
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.
GRANTING CLAUSE TEN
[DEPOSITS, ADVANCE PAYMENTS AND REFUNDS OF INSURANCE, UTILITIES, ETC.]
6
<PAGE> 7
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, (vi) parking or similar services or rights afforded to all or
any part of the Property and (vii) the Ground Lease.
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 Indenture, this Deed
of Trust or any other Security 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.
7
<PAGE> 8
The entire estate, property and interest hereby conveyed to
Trustee (other than Excluded Assets) 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 Subsidiary
Guarantee, whether for principal of, or premium, if any, or interest on the
Notes, 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 Security 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 Security
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 Security Documents, as future advances is defined by Nevada Revised Statutes
("NRS") 106.320. This Deed of Trust is intended to secure future advances. The
maximum amount of principal to be secured is $255,000,000. This instrument is to
be governed by the provisions of NRS 106.300 et.seq.
in each case whether due or not due, direct or indirect, joint and/or several,
absolute or contingent, voluntary or involuntary, liquidated or un1iquidated,
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
Subsidiary Guarantee 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.
DEFINITIONS AND RELATED MATTERS
8
<PAGE> 9
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 UCC" means the Uniform Commercial Code (as amended
from time to time) of the State of Nevada.
"BENEFICIARY" has the meaning set forth in the Preamble.
"CHATTEL PAPER" has the meaning set forth in Section 9.1.1.
"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,
9
<PAGE> 10
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, ground water 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" means (i) cash, deposit accounts and other cash
equivalents; (ii) furniture, fixtures and equipment securing Non-Recourse
Indebtedness permitted to be incurred under the Indenture; (iii) assets
securing Purchase
10
<PAGE> 11
Money Obligations or Capital Lease Obligations permitted to be incurred under
the Indenture; and (iv) any Contracts, permits, licenses or the like that cannot
be subjected to a Lien without the consent of third parties, which consent is
not obtainable by Trustor (including all Gaming Licenses of Trustor); provided,
that Excluded Assets does not include the proceeds of the assets under clauses
(ii), (iii) or (iv) or of any other Collateral to the extent such proceeds do
not constitute Excluded Assets under clause (i) above.
"FIXTURES" has the meaning set forth in Section 9.1.7.
"GENERAL INTANGIBLES" has the meaning set forth in Section
9.1.10.
[ "GROUND LEASE" has the meaning set forth in Granting Clause One.
"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 Nevada; the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. ss.
9601, et seq.; the Hazardous Materials Transportation Act, as amended, 49 U.S.C.
ss. 1801, et seq.; the Resource Conservation and Recovery Act, as amended, 42
U.S.C. ss. 6901, et seq.; the Federal Water Pollution Control Act, as amended,
33 U.S.C. ss. 1251, 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 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
11
<PAGE> 12
(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 Rents, including mechanics and other Liens
permitted by Section 4.12 of the Indenture.
"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
Reno" 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
12
<PAGE> 13
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 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 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 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
13
<PAGE> 14
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, but excluding the Ground Lease.
"PCBS" means polychlorinated biphenyls.
"PERSONALTY" 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.
"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 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,
14
<PAGE> 15
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 trademarks, servicemarks and trade names
(including without limitation, the trademarks listed on Schedule VI to the
Security and Pledge 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, servicemark 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) of the State of New York.
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.
15
<PAGE> 16
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 Nevada, provided that, with respect to any
portion of the Trust Estate (other than Personalty) that is located outside the
State of Nevada, the law of the state in which such property is located shall
govern to the extent, and only to the extent, necessary to permit the
Beneficiary to enforce its rights, powers and remedies hereunder.
Notwithstanding the foregoing, the governing law provisions of the Security and
Pledge Agreement, which provide, among other things, that the perfection of
security interests granted hereby in goods, documents and instruments located in
the State of Nevada shall be governed by the laws of the State of Nevada, shall
control with respect to the Collateral listed in Article 9 hereto, other than
Fixtures.
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.
16
<PAGE> 17
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 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
Secretaries 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
17
<PAGE> 18
Applicable 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 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 enjoys the peaceful and
undisturbed possession of any Leased 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 (including, without limitation, the Ground Lease),
(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 Security 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
18
<PAGE> 19
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 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
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
Security 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
Benefi-
19
<PAGE> 20
ciary 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 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 Property.
20
<PAGE> 21
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. Trustor, at its sole cost and expense,
will provide, maintain and keep in force the insurance required by Section 4.16
of the Indenture ("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 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 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.
21
<PAGE> 22
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 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 4.1 of the Indenture ("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 Security 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
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.
22
<PAGE> 23
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
4.5 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 88-
0203264;
(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).
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
23
<PAGE> 24
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 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 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 shall be conclusively deemed reasonable; provided, however, that no
such prior notice shall be necessary
24
<PAGE> 25
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 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
premises for such purposes. Any default by the Trustor as lessee under any of
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
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 Leased Land or any portion
thereof by reason of the
25
<PAGE> 26
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 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 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 each Lessor
in writing of the execution and delivery thereof and deliver to each such Lessor
a copy of each such Deed of Trust, instrument or agreement, as the case may be.
5.2.6. If any Ground Lease is terminated prior to the 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 for so long as the
Deed of Trust is in effect and further warrants and agrees to defend the
leasehold estate created
26
<PAGE> 27
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 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. ss. 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 acts 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 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 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.
27
<PAGE> 28
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 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 Indenture; 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.
28
<PAGE> 29
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 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. TRANSFERABILITY. Trustor shall not make any Asset
Sale unless the proceeds of such Asset Sale are applied as permitted or required
by Section 4.10 of the Indenture.
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.
29
<PAGE> 30
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 Net Proceeds from Insurance Policies shall be
treated in accordance with Section 4.10 of the Indenture and shall be released
to Trustor or applied to the discharge of the Secured Obligations as set forth
in the Indenture.
7.1.3. If Trustor elects to apply Net Proceeds of insurance to
restoration, Trustor agrees promptly and without delay (a) to enter into, and
deliver to Beneficiary a certified copy of, one or more architect and building
contracts providing for the restoration and reconstruction of the Property to
as good or better condition as existed prior to the Casualty and (b) to begin
to restore and reconstruct the Property and, thereafter, to proceed diligently
therewith in accordance with plans, specifications, architectural standards and
design reasonably determined by Trustor.
7.1.4. Notwithstanding anything to the contrary contained herein,
in the event of any uninsured Casualty, Trustor shall promptly within a
reasonable time, at its own cost and expense, restore and reconstruct the
Property to as good or better condition as existed prior to the Casualty.
Trustor shall have the sole right to settle any and all losses and claims unless
an Event of Default then exists.
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
4.10 of the Indenture.
30
<PAGE> 31
ARTICLE 8.
REMEDIES OF BENEFICIARY
SECTION 8.1. EVENT OF 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 6.1 of the Indenture) 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 Security Documents.
8.1.3. Any statement, representation or warranty given by Trustor
to Trustee or Beneficiary in any of the Security Documents, in connection with
the Indenture 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.
8.1.6. Failure of Trustor to perform any material obligation
under any Ground Lease, if such failure has not been cured within any applicable
cure period set forth in such Ground Lease.
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, (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
31
<PAGE> 32
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
Security 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. If the Secured Obligation become or are declared
immediately due and payable pursuant to Section 6.2 of the Indenture and Trustor
fails to make such payment 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 SECURITY
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 NOTES;
32
<PAGE> 33
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; 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 Indenture.
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. 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, 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
33
<PAGE> 34
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 Security 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, 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
34
<PAGE> 35
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.
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 Security
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
35
<PAGE> 36
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 Security 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 Security 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 Security
Documents unless, in the exercise of said rights, all Secured Obligations are
fully discharged.
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
Personalty and Fixtures, other than Excluded Assets, 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
36
<PAGE> 37
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, receivable 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;
9.1.6. "Inventory" as such term 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 Trustor'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, bowsprits, boilers, engines,
sails, fittings,
37
<PAGE> 38
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
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 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,
Trademarks, Copyrights (as defined in the Security and Pledge Agreement),
Patents (as defined in the Security and Pledge Agreement), and Contracts (as
defined in the Security and Pledge Agreement), licenses (including all Gaming
Licenses that are not Excluded Assets) 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 8-102(1)(a) of the UCC) and
uncertificated securities (as defined in Section 8-102(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-
38
<PAGE> 39
ary 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 account (which may be a securities account)
established and maintained pursuant to Section 8 of the Security and Pledge
Agreement by Beneficiary, entitled Fitzgeralds 2004 Senior Secured Notes
Collateral Account, The Bank of New York, as collateral agent, secured party",
and all funds, securities and other property or other items from time to time
credited to such account and all interest, income and distributions thereon
("Collateral Account").
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) 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(1)(i) of the UCC ("Instruments").
9.1.15. The Copyrights, the Copyright Licenses, the Patents, the
Patent Licenses, the Trademarks, the Trademark Licenses, and the Trade Secrets,
all as defined in the Security and Pledge Agreement ("Intellectual Property
Collateral").
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
39
<PAGE> 40
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 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 Applicable UCC and the other
Security 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
40
<PAGE> 41
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 Section 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 and Exhibit B-2 to this Deed
of Trust.
9.4.1.3.
Secured Party is: The Bank of New York
9.4.1.4.
Debtor is: Fitzgeralds Reno, Inc.
9.4.1.5. The record owner or lessee of the Property is:
Fitzgeralds Reno, Inc.
41
<PAGE> 42
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 Applicable 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 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
42
<PAGE> 43
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 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 (as defined in the
Purchase Agreement). Except as adequately disclosed in the Offering Circular or
as otherwise could not, singly or in the aggregate, have a Material Adverse
Effect:
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;
43
<PAGE> 44
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 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.
44
<PAGE> 45
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 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
45
<PAGE> 46
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
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 Indem nitee's grossly negligent or wi1lful 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.
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
46
<PAGE> 47
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 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
Security 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 Security 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.
47
<PAGE> 48
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 occurred under Section 6.1 of the Indenture; 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.
48
<PAGE> 49
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
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 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
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
Indenture. Any such request shall be accompanied by an Officers' Certificate (as
defined in the Indenture). Upon written request of Beneficiary and surrender of
this Deed of Trust to
49
<PAGE> 50
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 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. 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 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 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 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
50
<PAGE> 51
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 12.17. 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 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 Security 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
51
<PAGE> 52
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 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 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 the Fixtures, which are
the subject of the Security and Pledge Agreement shall be governed by and
construed in accordance with the laws of the state of New York, as applied to
contracts made and performed within the state of New York. Trustor hereby
irrevocably submits to the jurisdiction of any New York state court sitting in
the Borough of Manhattan in the City of New York or any federal court sitting in
the Borough of Manhattan in the City of New York in respect of any suit, action
or proceeding arising out of or relating to the subject of the Security and
Pledge Agreement, and irrevocably accepts for itself and in respect of its
property, generally and unconditionally, jurisdiction of the aforesaid courts.
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
52
<PAGE> 53
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.
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 provided under NRS Section 40.495, Guarantor waives the
applicable provisions of NRS Section 40.430 and further Guarantor waives:
53
<PAGE> 54
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.
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 Property that is owned by
Guarantor, and in no event shall
54
<PAGE> 55
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 SECURITY DOCUMENT OR ANY OTHER ACTION ARISING OUT OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY, REGARDLESS OF WHICH PARTY INITIATES SUCH ACTION
OR ACTIONS.
55
<PAGE> 56
IN WITNESS WHEREOF, Trustor has caused this Deed of Trust to be
executed as of the day and year first above written.
FITZGERALDS RENO, INC.,
a Nevada corporation
By: /s/ PHILIP D. GRIFFITH
------------------------------
Name: Philip D. Griffith
Title: President and
Chief Executive Officer
<PAGE> 57
STATE OF NEVADA
COUNTY OF CLARK
On __________, 1997, before me, Judith A. Koehn, Notary Public, personally
appeared Philip D. Griffith, 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.
Signature /s/ JUDITH A. KOEHN (Seal)
-------------------
----------------------------------------------
NOTARY PUBLIC-STATE OF NEVADA
COUNTY OF CLARK
[SEAL] JUDITH A. KOEHN
No. 92-2585-1 My Appointment Expires
March 18, 2000
----------------------------------------------
<PAGE> 58
SCHEDULE 1.1
INDENTURE DEFINITIONS
1. Guarantors
2. Security Documents
3. Gaming Authority
4. Gaming License
5. Liens
6. Persons
7. Permitted Liens
8. Excluded Assets
9. Intercreditor Agreement
10. Non-Recourse Indebtedness
11. Purchase Money Obligations
12. Capital Lease Obligations
13. Collateral
14. Asset Sale
<PAGE> 59
SCHEDULE 12.8.
ADDRESSES
DEBTOR:
Fitzgeralds Reno, Inc.
255 North Virginia Street
Reno, Nevada 89501
SECURED PARTY:
THE BANK OF NEW YORK
101 Barclay Street - 21W
New York, New York 10286
Attention: Corporate Trust Administration
TRUSTEE:
Nevada Title Company
3320 West Sahara, Suite 200
Las Vegas, NV 89102
<PAGE> 60
DEBTOR: FITZGERALDS RENO, INC., a Nevada corporation
EXHIBIT A
LEGAL DESCRIPTION OF OWNED LAND
ALL THAT REAL PROPERTY SITUATE IN THE CITY OF RENO, COUNTY OF WASHOE, STATE OF
NEVADA, DESCRIBED AS FOLLOWS:
PARCEL 1:
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
QUARTER (SW 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.
PARCEL 2:
THAT CERTAIN TRIANGULAR SHAPED PARCEL OF LAND SITUATE IN THE SOUTHEAST CORNER OF
THE NORTHWEST QUARTER (NW 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 QUARTER (NW 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
QUARTER (NW 1/4) OF SAID SECTION 11.
PARCEL 3:
PARCELS 2, 3, AND 4 OF PARCEL MAP NO. 2690, FOR EL DORADO HOTEL ASSOCIATES AND
FITZGERALD'S 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.
EXCEPTING THEREFROM THOSE PORTIONS LYING WITHIN NORTH SIERRA STREET, NORTH
VIRGINIA STREET, AND COMMERCIAL ROW.
PARCEL 4:
LOTS 16, 17, 18, 19, 209, 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.
<PAGE> 61
DEBTOR: FITZGERALDS RENO, INC., a Nevada corporation
EXHIBIT A
LEGAL DESCRIPTION OF OWNED LAND
PARCEL 5:
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.
<PAGE> 62
DEBTOR: FITZGERALDS RENO, INC., a Nevada corporation
EXHIBIT B-1
DESCRIPTION OF LEASE
Unrecorded Lease dated __________________, by and between Meta K. Fitzgerald
Trust, as Lessor, and Fitzgeralds Reno, Inc., a Nevada corporation, as Lessee,
as dis closed by a Memorandum thereof recorded in the Official Records of the
County of Washoe, State of Nevada on December 30, 1997 in Book _____, Page ____
Document Number ___________, as amended or assigned.
<PAGE> 63
DEBTOR: FITZGERALDS RENO, INC., a Nevada corporation
EXHIBIT B-2
LEGAL DESCRIPTION OF LEASED LAND
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.
<PAGE> 1
EXHIBIT 10.9
[Tunica]
FIRST PREFERRED VESSEL MORTGAGE
ON THE WHOLE OF THE FITZGERALDS TUNICA
(U.S.C.G. Official Number 262757)
Maximum Amount of $255,000,000.00
FITZGERALDS MISSISSIPPI, INC., a Mississippi corporation,
having an address of
301 Fremont Street
Las Vegas, Nevada 89101,
Owner and Mortgagor
In Favor of
THE BANK OF NEW YORK, a New York banking association,
having an address of
101 Barclay Street - 21W
New York, New York 10286
in its capacity as Trustee
under that certain Indenture dated as of
December 30, 1997 by and among
Fitzgeralds Gaming Corporation,
a Nevada corporation,
the Guarantors named therein and
The Bank of New York,
Trustee-Mortgagee
Dated as of December 30, 1997
Discharge amount: $255,000,000.00 (or such lesser amount of principal
as shall have been advanced) Together With Interest, Expenses,
Attorneys' Fees And Costs And Performance of Mortgage Covenants
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 1.
DEFINITIONS AND RULES OF CONSTRUCTION................................5
1.1 Certain Definitions...........................................6
1.2 Rules of Construction.........................................6
ARTICLE 2.
GENERAL MORTGAGE PROVISIONS..........................................6
ARTICLE 3.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF MORTGAGOR...............7
3.1 Corporate Status of Mortgagor.................................7
3.2 Outstanding Liens.............................................7
3.3 Compliance with Law...........................................7
3.4 Operation of Vessel...........................................8
3.5 Payment of Taxes, Etc.........................................8
3.6 Notice of Mortgage............................................8
3.7 Release from Arrest...........................................9
3.8 Care of the Vessel............................................9
3.9 Access to Vessel..............................................9
3.10 Documentation of Vessel.......................................9
3.11 Sale, Charter or Mortgage of Vessel...........................9
3.12 Insurance....................................................10
3.13 Requisition of Title to Vessel...............................11
3.14 Requisition of Vessel but Not Title..........................11
3.15 Execution of Additional Documents............................12
ARTICLE 4.
EVENTS OF DEFAULT AND REMEDIES......................................12
4.1 Events of Default............................................12
4.2 Remedies.....................................................13
</TABLE>
- ii -
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C>
4.3 Sale of Vessel by Mortgagee..................................14
4.4 Mortgagee to Sign for Mortgagor..............................15
4.5 Mortgagee to Collect Hire, Etc...............................15
4.6 Right to a Receiver..........................................15
4.7 Suits to Protect the Vessel..................................15
4.8 Costs of Mortgagee...........................................16
4.9 Right of Mortgagee...........................................16
4.10 Restoration of Position......................................16
4.11 Proceeds of Sale.............................................17
4.12 Gaming Approvals.............................................17
ARTICLE 5.
MISCELLANEOUS PROVISIONS............................................17
5.1 Addresses for Notices, Etc...................................17
5.2 Mortgagee's Expenses, Including Attorney's Fees..............18
5.3 Counterparts.................................................19
5.4 Interest of Mortgagee........................................19
5.5 Survivorship of Covenants....................................19
5.6 Amendments...................................................19
5.7 Discharge of Lien............................................19
5.8 Incorporation into Mortgage..................................19
5.9 GOVERNING LAW................................................19
5.10 Conflict.....................................................20
</TABLE>
- iii -
<PAGE> 4
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 December 30, 1997, 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: The Bank of New York, whose
address is 101 Barclay Street - 21W, New York, New York 10286, as Trustee under
that certain Indenture (as same may be amended or supplemented from time to time
hereafter, the "Indenture") dated December 30, 1997, by and among Fitzgeralds
Gaming Corporation, a Nevada corporation (the "Company"), Mortgagor and the
other Guarantors named therein and The Bank of New York, as Trustee-Mortgagee
("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 Indenture, the Company
has executed certain 12 1/4% Senior Secured Notes (together with any
replacements thereof contemplated in the Indenture and as same may be amended or
supplemented from time to time hereafter, the "Notes") dated as of December 30,
1997, and due in 2004, in the aggregate stated maximum principal amount of TWO
HUNDRED FIFTY FIVE MILLION DOLLARS AND NO/100 ($255,000,000.00).
C. Mortgagor is a wholly-owned subsidiary of the Company and has
guaranteed (as same may be amended, replaced or supplemented from time to time
hereafter, "Mortgagor's Guaranty"), pursuant to the terms of the Indenture,
payment by the Company of the indebtedness evidenced by the Notes and
performance by the Company of the obligations of the Company under the Notes and
the Indenture.
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
2
<PAGE> 5
"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 Subsidiary Guarantee
Obligations, as defined in the Deed of Trust.
E. In order to further secure the due and punctual payment and
performance of all of the Subsidiary Guarantee 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, 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 in the Deed of Trust), whether now owned or hereafter
acquired:
GRANTING CLAUSE ONE
[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 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
3
<PAGE> 6
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 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, 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, 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
4
<PAGE> 7
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, accessions,
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 Indenture, this
Mortgage or any other Security 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 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 Subsidiary Guarantee 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 Subsidiary
Guarantee 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
Subsidiary Guarantee 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:
5
<PAGE> 8
1.1 Certain Definitions. Capitalized terms used herein and not
otherwise defined herein but defined in the Indenture or the Deed of Trust shall
have the definitions provided in the Indenture 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.
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 Notes, the Guarantees and the other Subsidiary Guarantee Obligations
is an amount up to the maximum sum of TWO HUNDRED FIFTY FIVE MILLION DOLLARS AND
NO/100 ($255,000,000), as the total of all possible advances that may be made
under the loan evidenced by the Notes, together with interest, attorneys' fees
and costs of performance of the Subsidiary Guarantee Obligations and the
covenants of this Mortgage, the Notes, the Guarantees, the Deed of Trust and the
other Note Documents. The discharge amount is the same as such total amount,
together with interest, expenses, attorneys' fees and costs and performance of
the Subsidiary Guarantee Obligations and the covenants of this Mortgage, the
Notes, the Guarantees, the Deed of Trust and the other Note Documents.
6
<PAGE> 9
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
Indenture; 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 Liens and other matters permitted under the Indenture.
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 Subsidiary
Guarantee Obligations.
7
<PAGE> 10
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 Section 4.5 of
the Indenture, 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 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
The Bank of New York, a New York banking association, as mortgagee, to secure
payment of indebtedness. Under the terms of said Mortgage, 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
8
<PAGE> 11
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 Section 4.15 of the Indenture, 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
duly 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.
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 Indenture, Mortgagor covenants that at all times prior to the indefeasible
payment in full of the Subsidiary Guarantee 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 disposi-
9
<PAGE> 12
tion, 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.
3.11.2 Pari-Passu Liens. Mortgagor may grant a Lien on all or any
portion of the Vessel, which Lien (a "Pari Passu Encumbrance") shall,
notwithstanding the date of filing, rank "equally and ratably with" or "pari
passu" (as such terms are used herein or in the Indenture) with the Lien created
by this Mortgage, provided all of the following conditions are satisfied:
(i) the Lien is permitted by the terms of the Indenture to secure
Indebtedness equally and ratably with or pari passu with the Notes;
(ii) The instrument creating the applicable Lien (A) contains the
following statement: "Pursuant to Section 3.11.2 of that certain First
Preferred Vessel Mortgage dated as of December 30, 1997 from
Fitzgeralds Mississippi, Inc., as Mortgagor, to The Bank of New York, as
Mortgagee, the lien created by this instrument ranks equally and ratably
with or pari passu with the lien created by said First Preferred Vessel
Mortgage," and (B) provides for rights and remedies no greater than
those contained in the Note Documents; and
(iii) Mortgagor has complied with all other applicable terms and
provisions of the Indenture.
Mortgagee agrees to execute any additional documents which may be reasonably
required to confirm and establish that the lien of any Pari Passu Encumbrance is
pari passu with the Lien of this Mortgage; provided that, Mortgagee shall have
no liability thereunder and all costs and expenses thereof shall be paid by
Mortgagor.
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 Section 4.16 of the
Indenture. 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)
10
<PAGE> 13
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 Mortgagee 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 Section 4.10 of
the Indenture. Mortgagor shall not, without the prior written permission of
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 Section 4.10 of the Indenture. 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.
11
<PAGE> 14
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 Notes, the
Guarantees and the other Note Documents.
ARTICLE 4.
EVENTS OF DEFAULT AND REMEDIES
4.1 Events of Default. Subject to any applicable cure period provided
for in the Indenture 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 Indenture) 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 Collateral Documents or Note
Documents.
4.1.4 Any statement, representation or warranty given by
Mortgagor to Mortgagee in any of the Note Documents, in connection with the
Indenture 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 Beneficiary as provided in Section 3.11 hereof.
12
<PAGE> 15
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
Subsidiary Guarantee Obligations (except that such acceleration shall be
automatic if the Event of Default is caused by any of the events described in
Sections 6.1 (9) and 6.1 (10) of the Indenture), declare the outstanding
principal amount of the Notes and the interest accrued thereon, and all other
Subsidiary Guarantee Obligations, to be due and payable immediately, and upon
such declaration such principal and interest and other Subsidiary Guarantee
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
13
<PAGE> 16
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;
(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 sale 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 or any other holders of the
Notes 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.
14
<PAGE> 17
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 Note 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 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 Note 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
15
<PAGE> 18
Vessel by any acts which may be unlawful or in violation of the terms of this
Mortgage or any of the other Note 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 or the holders of the Notes. 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
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 Note 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 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 Subsidiary Guarantee
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.
16
<PAGE> 19
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
4.11.2 To the payment in full of any amounts then due and unpaid
under the Subsidiary Guarantee 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:
17
<PAGE> 20
Mortgagee: The Bank of New York,
A New York banking association
101 Barclay Street - 21W
New York, New York 10286
Attention: Corporate Trust Administration
Mortgagor: FITZGERALDS MISSISSIPPI, INC.
a Mississippi corporation
711 Lucky Lane
Robinsville, Mississippi 38664
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 Indenture, (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
proceed-
18
<PAGE> 21
ing, (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 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 Subsidiary Guarantee 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 NEW YORK, 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 PURSU-
19
<PAGE> 22
ANT 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 Indenture, the terms
and provisions of the Indenture shall control and govern the obligations, rights
and responsibilities of the parties hereto.
20
<PAGE> 23
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/ PHILIP D. GRIFFITH
-------------------------------------------
Name: Philip D. Griffith
-----------------------------------------
Title: President and Chief Executive Officer
----------------------------------------
<PAGE> 24
EXHIBIT A
LEGAL DESCRIPTION OF LAND
- i -
<PAGE> 25
BOOK 141 PAGE 377
TRACT 1
A tract of land situated in Sections 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 4201.45 feet to a point; thence North 9 degrees, 09 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 4442.00 feet to a point on
the existing slope of the Mississippi River Commaree Trenchfill Investment
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, 06 seconds, 00 seconds East and continuing along
the said existing slope for 1751.00 feet to a point; thence
North 53 degrees, 45 minutes, 00 seconds East and continuing along the said
existing slope for 1049.02 feet to a point; thence
South 45 degrees, 17 minutes, 48 seconds East for 2113.63 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, 45 minutes, 12 seconds East for 122.36 feet to a point; thence
South 50 degrees, 13 minutes, 00 seconds West for 360.83 feet to a point, thence
South 54 degrees, 09 minutes, 04 seconds West for 483.00 feet to a point; thence
South 49 degrees, 09 minutes, 00 seconds West for 225.00 feet to a point; thence
North 47 degrees, 14 minutes, 08 seconds West for 314.00 feet to a point; thence
North 23 degrees, 95 minutes, 08 seconds West for 870.00 feet to the said
"Point of Beginning", containing 132.82 acres, more or less.
Bearings in the above description have an origin of TRUE NORTH based on
computations from celestial observations.
<PAGE> 26
BOOK 141 PAGE 378
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 Southwest 1/4, all in Sections 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, 06 minutes, 34 seconds West for 948.29 feet to an 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 249.86 feet to a point;
thence
North 57 degrees, 04 minutes, 05 seconds West for 461.24 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 320.25 feet to a point; thence
North 65 degrees, 43 minutes, 51 seconds West for 287.55 feet to a point; thence
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 177.13 feet to a point; thence
North 27 degrees, 20 minutes, 85 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, 08 seconds East along said northern line for
22.30 feet to a point; thence
North 50 degrees, 18 minutes, 09 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 204.92 feet to a point; thence
South 41 degrees, 36 minutes, 46 seconds East for 147.74 feet to a point; thence
South 48 degrees, 34 minutes, 22 seconds East for 388.74 feet to a point; thence
South 82 degrees, 34 minutes, 59 seconds East for 202.68 feet to a point;
thence
South 82 degrees, 39 minutes, 27 seconds East for 258.65 feet to a point; thence
South 68 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", containing 13.95 acres, more or less.
Bearings in the above description have an origin of TRUE NORTH based on
computations from celestial observations.
<PAGE> 27
BOOK 141 PAGE 379
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 an 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
198.42 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 848.14 feet to a point; thence
South 72 degrees, 54 minutes, 40 seconds West for 236.34 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 northern
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 97 degrees, 57 minutes, 16 seconds East for 560.07 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, 26 seconds East for 145.96 feet to a point; thence
South 31 degrees, 16 minutes, 14 seconds East for 487.57 feet to the said
"Point of Beginning", containing 6.04 acres, more or less.
Bearings in the above description have an origin of TRUE NORTH based on
computations from celestial observations.
<PAGE> 28
BOOK 141 PAGE 380
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 130.00 feet to the "Point of Beginning" of the tract
herein described; thence
North 6 degrees, 14 minutes, 14 seconds West along a line representing the west
line of said Section 11 for 346.00 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 948.09 feet to a point; thence
South 89 degrees, 39 minutes, 36 seconds West for 36.00 feet to the said
"Point of Beginning", containing 0.4339 acres, more or less.
Bearings in the above description have an origin of TRUE NORTH based on
computation from celestial observations.
<PAGE> 29
BOOK 141 PAGE 381
TRACT 8*
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 19 degrees,
39 minutes, 34 seconds East for 20.08 feet to the said "Point of Beginning" of
the tract herein described; thence
North 39 degrees, 39 minutes, 36 seconds East for 120.01 feet to a point; thence
North 8 degrees, 14 minutes, 36 seconds West for 1124.29 feet to a point; thence
North 11 degrees, 45 minutes, 30 seconds East for 190.77 feet to a point; thence
North 1 degree, 08 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
northern boundary of the Yazoo-Mississippi Delta Levee Commission property;
thence
North 83 degrees, 08 minutes, 40 seconds West along the said southern boundary
for 38.02 feet to a point; thence
South 30 degrees, 23 minutes, 00 seconds West and continuing along the said
southern boundary for 223.42 feet to a point; thence
South 0 degrees, 14 minutes, 36 seconds East for 4083.02 feet to the said
"Point of Beginning", containing 6.82 acres, more or less.
Bearings in the above description have an origin of TRUE NORTH based on
computations from celestial observations.
<PAGE> 1
EXHIBIT 10.10
Prepared By and Upon
Recordation Return To:
THE BANK OF NEW YORK [_____ QUARTER(S) [OR BLOCKS
101 Barclay Street - 21W _____ OF _______ LOCATED IN],
New York, New York 10286 SECTION ____, TOWNSHIP ____,
Attention: Corporate Trust Administration RANGE ______ CITY OF _______
TUNICA COUNTY, MISSISSIPPI
[_____ QUARTER(S) [OR BLOCKS
_____ OF _______ LOCATED IN],
SECTION ____, TOWNSHIP ____,
RANGE ______ CITY OF _______
TUNICA COUNTY, MISSISSIPPI
- --------------------------------------------------------------------
ASSIGNMENT OF RENTS, LEASES AND PROFITS
FITZGERALDS MISSISSIPPI, Inc.,
as Assignor
THE BANK OF NEW YORK,
as Assignee
Dated as of December 30, 1997
<PAGE> 2
ASSIGNMENT OF RENTS, LEASES AND PROFITS
THIS ASSIGNMENT OF RENTS, LEASES AND PROFITS ("Assignment of Rents and
Leases"), is made as of the 30th day of December, 1997 by Fitzgeralds
Mississippi, Inc., a Mississippi corporation ("Assignor"), whose principal place
of business is located at 711 Lucky Lane, Robinsville, MS 38664, in favor of The
Bank of New York, a New York banking corporation, as Collateral Agent
("Assignee"), whose principal place of business is located at 101 Barclay Street
- - 21W, New York, New York 10286, in its capacity as trustee under the
"Indenture" (as such term is hereinafter defined) for the ratable benefit of the
Holders (as such term is defined in the Indenture).
WITNESSETH:
WHEREAS, pursuant to that certain Indenture dated as of December 30,
1997 (as supplemented and otherwise amended from time to time, the "Indenture"),
by and among Fitzgeralds Gaming Corporation ("Fitzgeralds"), the Guarantors
(defined therein), and Assignee, as trustee thereunder (in such capacity, the
"Indenture Trustee"), Fitzgeralds will issue 12 1/4% Senior Secured Notes due
2004 in an aggregate principal amount of up to $255,000,000 (collectively, the
"Notes"). Unless the context other requires, all capitalized terms used and not
otherwise defined herein shall have the meanings ascribed thereto in the
Indenture; and
WHEREAS, pursuant to a guarantee included in the Indenture (as amended
from time to time, the "Subsidiary Guarantee"), the Guarantors (including
Assignor) have Guaranteed the obligations of Fitzgeralds under the Notes, the
Indenture and the other Security Documents to which Fitzgeralds is a party; and
WHEREAS, pursuant to the Indenture, the Subsidiary Guarantee of Assignor
is secured by, among other things, (a) a Deed of Trust ("Deed of Trust") of even
date from Assignor, as Trustor, to Commonwealth Land Title Company, as Trustee,
for the use and benefit of Assignee, as Beneficiary, encumbering certain
property situate in the County of Tunica, State of Mississippi, as is more
particularly described on Exhibit A attached hereto and incorporated herein by
this reference, and the buildings and improvements now or hereafter located
thereon, and (b) a First Preferred Vessel Mortgage of even date from Assignor,
as Owner and Mortgagor, and Assignee, as Trustee-Mortgagee ("Vessel Mortgage"),
encumbering that certain vessel and appurtenances (the "Vessel") known as the
"FITZGERALDS TUNICA", number 262757, as
2
<PAGE> 3
more pareticularly described in the Vessel Mortgage (said property, Vessel,
buildings and improvements being collectively referred to as the "Property");
and
WHEREAS, Assignor is desirous of further securing to Assignee the
performance of the terms, covenants and agreements of the Notes, the Deed of
Trust, the Vessel Mortgage and each other document executed by or on behalf of
Assignor evidencing, securing or relating to the indebtedness evidenced by the
Notes, as each of the foregoing may from time to time be amended (collectively,
"Security Documents").
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Assignor does hereby irrevocably and unconditionally transfer,
sell, assign, pledge and convey to Assignee all of the right, title and interest
of Assignor in and to (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
[RENTS, ETC.]
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
Assignor 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 Assignor to collect and apply such Rents.
GRANTING CLAUSE TWO
[LEASES, INCLUDING DEPOSITS AND ADVANCE RENTALS]
TOGETHER WITH, (a) all estate, right, title and interest of
Assignor 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
3
<PAGE> 4
entered into, together with all amendments, extensions and renewals of any of
the foregoing, (b) all right, title, claim, estate and interest of Assignor
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 (collectively, "Leases") and (c) the
right to enforce against any tenants thereunder and otherwise any and all
remedies under any of the foregoing, including Assignor'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 Assignor 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).
TO HAVE AND TO HOLD the same unto Assignee, its successors and assigns,
as additional security for the payment of the principal, interest and all other
sums due Assignee under the Notes according to the terms thereof and for the
observance, performance and discharge of each and every obligation, covenant and
agreement on the part of Assignor, its successors and assigns, to be observed,
performed and discharged under the Security Documents.
IT IS AGREED that, notwithstanding that this instrument is a present and
executed assignment of the Rents and of the Leases and a present and executed
grant of the powers herein granted to assignee, Assignor shall be permitted, at
the sufferance of Assignee and at its discretion after default by Assignor, to
collect and retain the Rents unless and until there shall be a default in the
payment of principal, interest, taxes, insurance or any other sums due under the
terms of the Security Documents or there shall be a default in the performance
or observance of any of the other obligations, covenants, warranties,
representations, terms or conditions of the Security Documents. In the event of
such default, Assignee, without in any way waiving such default, shall have the
sole and exclusive right and authority, without any notice whatsoever to
Assignor and without regard to the adequacy of the security therefor, either in
person, by agent or by a receiver appointed by a court upon application, to take
possession of the Property and to: (a) manage and operate the same; (b) collect
the Rents therefrom, including those past due and unpaid, with full power to
employ agents to manage the
4
<PAGE> 5
Property; and (c) do all acts relating to such management, including, but not
limited to, negotiation of new Leases thereon, making adjustments of existing
Leases, contracting and paying for such repairs and replacements to the
buildings and fixtures, equipment and personal property located therein and used
in any way in the operation, use and occupancy of the Property as in the sole
judgment and discretion of Assignee may be necessary to maintain the same in a
tenantable condition, purchasing and paying for such additional furniture and
equipment as in the sole judgment of Assignee may be necessary to maintain a
proper rental income from the Property, employing necessary maintenance
employees, purchasing fuel, providing utilities and paying for all other
necessary expenses incurred in the operation of the Property, maintaining
adequate insurance coverage over hazards customarily insured against and paying
the premiums therefor. Assignee may apply the net Rents so collected from the
Property, after deducting the costs of collection thereof, including, without
limitation, reasonable attorneys' fees and a reasonable management fee for any
management agent so employed, against the amount expended for repairs, upkeep,
maintenance, service, fuel, utilities, taxes, assessments, insurance premiums
and such other expenses as Assignee incurs in connection with the operation of
the Property, and against principal, interest and other charges which have or
which may become due, from time to time, under the terms of the Security
Documents, in such order or priority as to any of the items so mentioned as
Assignee, in its sole discretion, may determine. The exercise by Assignee of the
rights granted Assignee in this paragraph, and the collection of Rents and the
application thereof as herein provided, shall not be considered a waiver by
Assignee of any default by Assignor under the Security Documents or prevent
foreclosure of the Property, Assignee hereby expressly reserving all of its
rights and privileges under the Deed of Trust and Vessel Mortgage and the other
Security Documents as fully as though this Assignment of Rents and Leases had
not been entered into.
In the event of such default, Assignor agrees to assign and deliver to
Assignee all then existing Leases. Without limiting the provisions of the
immediately preceding sentence, and whether or not Assignor assigns or delivers
said Leases to Assignee, as aforesaid, this Assignment of Rents and Leases shall
be deemed to be an assignment of all such Leases to Assignee. The provisions
hereof shall not limit the effect of any assignments of particular Leases in
fact given to Assignee by Assignor.
Notwithstanding any rights granted hereinabove, in the event Assignor
shall fail to make any payment or to perform any act required under the terms
hereof, then Assignee may, but shall not be obligated to, without prior notice
to or demand on Assignor, and without releasing Assignor from any obligation
hereof, make or perform the same in such manner and to such extent as Assignee
may deem necessary to protect
5
<PAGE> 6
the security hereof, including specifically, without limitation, appearing in
and defending any action or proceeding purporting to affect the security hereof
or the rights or powers of Assignee, performing or discharging any obligation,
covenant or agreement of Assignor under any of the Leases, and, in exercising
any of such powers, paying all necessary costs and expenses, employing counsel
and incurring and paying reasonable attorneys' fees. Any sum advanced or paid by
Assignee for any such purpose, including, without limitation, reasonable
attorneys' fees, shall be immediately due and payable to Assignee by Assignor on
demand, shall be added to the outstanding principal balance of the Notes (even
if such addition results in the outstanding principal balance being in excess of
the face amount of the Notes) and shall bear interest at the Default Rate (as
defined in Section 4.1 of the Indenture) from the date paid or advanced by
Assignee until repaid by Assignor.
IT IS FURTHER AGREED that this Assignment of Rents and Leases is made
upon the following terms, covenants and conditions:
1. This Assignment of Rents and Leases shall not operate to place
responsibility for the control, care, management or repair of the Property upon
Assignee, nor for the performance of any of the terms and conditions of any of
the Leases assigned hereunder, nor shall it operate to make Assignee responsible
or liable for any waste committed on the Property by the tenants or any other
party or for any dangerous or defective condition of the Property or for any
negligence in the management, upkeep, repair or control of the Property
resulting in loss or injury or death to any tenant, invitee, licensee, employee
or stranger. Assignee shall not be liable for any loss sustained by Assignor
resulting from Assignee's failure to let the Property or from any other act or
omission of Assignee in managing the Property, absent gross negligence or
willful misconduct by Assignee. Except to the extent caused by Assignee's
willful misconduct or gross negligence, Assignor shall and do hereby agree to
indemnify and to hold Assignee harmless from and against any and all liability,
loss or damage which may or might be incurred by reason of this Assignment of
Rents and Leases and from and against any and all claims and demands whatsoever
which may be asserted against Assignee by reason of any alleged obligations or
undertakings on its part to perform or discharge any of the terms, covenants or
agreements contained in any of the Leases. Should Assignee incur any liability
by reason of this Assignment of Rents and Leases or in defense of any claim or
demand for loss or damage as provided above, the amount thereof, without
limitation, costs, expenses and reasonable attorneys' fees, shall be added to
the outstanding principal balance of the Notes (even if such addition results in
the outstanding principal balance being in excess of the face amount of the
Notes), shall bear interest at the Default Rate from the date paid by Assignee
until repaid by Assignor
6
<PAGE> 7
and shall be secured hereby and Assignor shall reimburse Assignee therefor
immediately upon demand. Notwithstanding anything contained in this paragraph,
Assignor shall not be required to indemnify Assignee for any damage suffered by
Assignee due to Assignee's negligence relating to Assignee's operation of the
Property.
2. This Assignment of Rents and Leases shall not be construed as making
Assignee a mortgagee in possession.
3. Assignee is obligated to account to Assignor only for such Rents as
are actually collected by Assignee.
4. Assignor hereby assigns to Assignee: (a) any award of other payment
which Assignor may hereafter become entitled to receive with respect to any of
the Leases as a result of or pursuant to any bankruptcy, insolvency or
reorganization or similar proceedings involving the tenants under such Leases;
and (b) any and all payments made by or on behalf of any tenant of any part of
the Property in lieu of Rent. Assignor hereby irrevocably appoints Assignee as
its attorney-in-fact to appear in any such proceeding and/or to collect any such
award or payment, which power of attorney is coupled with an interest by virtue
of this Assignment of Rents and Leases and is irrevocable.
5. Assignor represents and warrants: (a) that assignor now is (or with
respect to any Leases not yet in existence, will be immediately upon the
execution thereof) the absolute owner of the landlord's interest in the Leases,
with full right and title to assign the same and the Rents due or to become due
thereunder; (b) that, except for this Assignment of Rents and Leases and except
as otherwise expressly permitted by the terms of the Deed of Trust and Vessel
Mortgage, there are, and will be, no outstanding assignments or pledges of the
Leases or Rents; (c) that no Rents payable under the Leases have been or will be
hereafter anticipated, discounted, released, waived, compromised or otherwise
discharged without Assignee's prior written consent, except that Assignor shall
be permitted to enter into agreements with tenants to vacate the property within
30 days after default on a lease in exchange for statement of rent; (d) to the
best of Assignor's knowledge and except as otherwise disclosed in writing to
Assignee on or prior to the date hereof, that there are no defaults now existing
under any of the Leases and there exists no state of facts which, with the
giving of notice or lapse of time or both, would constitute a default under any
of the Leases; and (e) that Assignor will observe and perform all covenants,
conditions and agreements in the Leases on the part of the landlord to be
observed and performed thereunder.
7
<PAGE> 8
6. Assignor covenants and agrees that Assignor will not, without the
prior written consent of Assignee: accept any payment of Rent or installments of
Rent for more than one month in advance or take any action or exercise any right
or operation which would permit the tenant under any Lease to cancel or
terminate said Lease. Assignor will immediately furnish to Assignee copies of
all notices of default received from any tenant under any of the Leases, and
Assignee shall have the right, at Assignor's expense, but shall not be
obligated, to cure any default by Assignor under any of the Leases which
Assignor is not proceeding diligently to cure itself.
7. Assignor covenants and agrees that Assignor shall, at its sole cost
and expense, appear in and defend any action or proceeding arising under,
growing out of, or in any manner connected with the Leases or the obligations,
duties or liabilities of the landlord or tenant thereunder, and shall pay all
reasonable costs and expenses, including, without limitation, attorneys' fees,
which Assignee may incur in connection with Assignee's appearance, voluntary or
otherwise, in any such action or proceeding.
8. Assignee may, at its option, upon any Event of Default under the
Security Documents, notify any tenants or other parties of the existence of this
Assignment of Rents and Leases. Assignor does hereby specifically authorize,
instruct and direct each and every present and future tenant, lessee, sublessee
and licensee of the whole or any part of the Property to pay all unpaid and
future Rents agreed upon in each tenancy to Assignee upon receipt of demand from
Assignee to so pay the same and Assignor hereby agrees that each such present
and future tenant, lessee, sublessee and licensee may rely upon such written
demand from Assignee to so pay said Rents without any inquiry into whether
Assignor is in default hereunder or under the Security Documents or whether
Assignee is otherwise entitled to said Rents.
9. Assignee may take or release other security, may release any party
primarily or secondarily liable for any indebtedness secured hereby, may grant
extensions, renewals or indulgences with respect to any indebtedness secured
hereby and may apply any other security therefor held by it to the satisfaction
of any indebtedness secured hereby without prejudice to any of its rights
hereunder.
10. The acceptance of this Assignment of Rents, Leases and Profits and
the collection of the Rents hereby assigned in the event of a default, as
referred to above, shall be without prejudice to Assignee. The remedies of
Assignee hereunder are cumulative and the exercise of any one or more of the
remedies provided for herein shall not be construed as a waiver of any of the
other remedies of Assignee, at law or in
8
<PAGE> 9
equity or otherwise, so long as any obligation under the Security Documents
remains unsatisfied.
11. All rights of Assignee hereunder shall inure to the benefit of its
successors and assigns; and all obligations of Assignor shall bind its
successors and assigns and any subsequent owner of the Property. All rights of
Assignee in, to and under this Assignment of Rents and Leases and in and to the
security provided hereby shall pass to and may be exercised by any assignee
thereof. Assignor agrees that if Assignee gives notice to Assignor of an
assignment of said rights, upon such notice the liability of Assignor to the
Assignee shall be immediate and absolute. Assignor will not set up any claim
against Assignee or any intervening assignee as a defense, counterclaim or
set-off to any action brought by Assignee or any intervening assignee for any
amounts due hereunder or for possession of or the exercise of rights with
respect to the security provided hereby.
12. Any default by Assignor in the performance or observance of any
covenants or condition hereof shall be deemed an Event of Default under the Deed
of Trust and Vessel Mortgage, entitling Assignee to exercise all or any remedies
available to Assignee under the terms of any or all of the Security Documents,
and any Event of Default under any Security Document shall be deemed a default
hereunder, entitling Assignee to exercise any or all remedies provided for
herein.
13. Failure by Assignee to exercise any right which it may have
hereunder shall not be deemed a waiver thereof unless so agreed in writing by
Assignee, and the waiver by Assignee of any default by Assignor hereunder shall
not constitute a continuing waiver or a waiver of any other default or of the
same default on any future occasion. No collection by Assignee of any Rents
pursuant to this Assignment of Rents and Leases shall constitute or result in a
waiver of any default then existing under any of the Security Documents.
14. If any provision under this Assignment of Rents and Leases shall be
invalid, illegal or unenforceable, it shall not affect or impair the validity,
legality and enforceability of any other provision of this Assignment of Rents
and Leases.
15. This Assignment of Rents and Leases may not be amended, modified or
otherwise changed except by a written instrument duly executed by Assignor and
Assignee.
9
<PAGE> 10
16. This Assignment of Rents and Leases shall be in full force and
effect continuously from the date hereof to and until the Deed of Trust shall be
released of record, and the release of the Deed of Trust shall, for all
purposes, terminate this Assignment of Rents, Leases and Profits.
17. In case of conflict between any provision of this instrument and any
provision of the Deed of Trust and Vessel Mortgage, the Deed of Trust shall
prevail and be controlling.
18. This Assignment of Rents and Leases shall be governed by and
construed in accordance with the laws of the State of Mississippi.
19. All notices and other communications under this Assignment of Rents
and leases 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 19, notices and
other communications shall be given to the parties hereto at their respective
addresses (or to their respective telex or telecopier numbers) indicated below:
ASSIGNOR:
Fitzgeralds Mississippi, Inc.
711 Lucky Lane
Robinsville, MS 38664
ASSIGNEE:
THE BANK OF NEW YORK
101 Barclay Street - 21W
New York, New York 10286
Attention: Corporate Trust Administration
20. WAIVER OF TRIAL BY JURY. ASSIGNOR AND ASSIGNEE WAIVE THE RIGHT TO A
TRIAL BY JURY IN ANY ACTION UNDER THIS ASSIGNMENT OF RENTS AND LEASES OR ANY
OTHER SECURITY DOCUMENT OR ANY OTHER ACTION ARISING OUT OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY, REGARDLESS OF WHICH PARTY INITIATES SUCH ACTION
OR ACTIONS.
10
<PAGE> 11
IN WITNESS WHEREOF, Assignor has caused this Assignment of Rents
and Leases to be executed 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
11
<PAGE> 12
ACKNOWLEDGMENT
STATE OF CALIFORNIA )
) SS.
COUNTY OF LOS ANGELES )
On the 30th day of December, 1997, before me personally came Michael E.
McPherson to me known, who, being by me duly sworn, did depose and say that he
resides at 245 Meadow Brook Dr. Reno, NV; that he is the Senior Vice President
of Fitzgeralds Mississippi, Inc., the corporation described in and which
executed the above instrument; that _____________________ knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by order of the Board of Directors of said corporation,
and acknowledged that Michael E. McPherson signed his name thereto by like
order.
/s/ BARBARA A. GREEN
------------------------------
NOTARY PUBLIC
My Commission expires: April 7, 1998.
[SEAL] BARBARA A. GREEN
COMM. #1022678
NOTARY PUBLIC-CALIFORNIA
LOS ANGELES COUNTY
My Comm. Expires April 7, 1998
12
<PAGE> 13
EXHIBIT A
Legal Description
<PAGE> 14
BOOK 141 PAGE 377
TRACT 1
A tract of land situated in Sections 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 4201.45 feet to a point; thence North 9 degrees, 09 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 4442.00 feet to a point on
the existing slope of the Mississippi River Commaree Trenchfill Investment
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, 06 seconds, 00 seconds East and continuing along
the said existing slope for 1751.00 feet to a point; thence
North 53 degrees, 45 minutes, 00 seconds East and continuing along the said
existing slope for 1049.02 feet to a point; thence
South 45 degrees, 17 minutes, 48 seconds East for 2113.63 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, 45 minutes, 12 seconds East for 122.36 feet to a point; thence
South 50 degrees, 13 minutes, 00 seconds West for 360.83 feet to a point, thence
South 54 degrees, 09 minutes, 04 seconds West for 483.00 feet to a point; thence
South 49 degrees, 09 minutes, 00 seconds West for 225.00 feet to a point; thence
North 47 degrees, 14 minutes, 08 seconds West for 314.00 feet to a point; thence
North 23 degrees, 95 minutes, 08 seconds West for 870.00 feet to the said
"Point of Beginning", containing 132.82 acres, more or less.
Bearings in the above description have an origin of TRUE NORTH based on
computations from celestial observations.
<PAGE> 15
BOOK 141 PAGE 378
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 Southwest 1/4, all in Sections 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, 06 minutes, 34 seconds West for 948.29 feet to an 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 249.86 feet to a point;
thence
North 57 degrees, 04 minutes, 05 seconds West for 461.24 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 320.25 feet to a point; thence
North 65 degrees, 43 minutes, 51 seconds West for 287.55 feet to a point; thence
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 177.13 feet to a point; thence
North 27 degrees, 20 minutes, 85 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, 08 seconds East along said northern line for
22.30 feet to a point; thence
North 50 degrees, 18 minutes, 09 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 204.92 feet to a point; thence
South 41 degrees, 36 minutes, 46 seconds East for 147.74 feet to a point; thence
South 48 degrees, 34 minutes, 22 seconds East for 388.74 feet to a point; thence
South 82 degrees, 34 minutes, 59 seconds East for 202.68 feet to a point;
thence
South 82 degrees, 39 minutes, 27 seconds East for 258.65 feet to a point; thence
South 68 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", containing 13.95 acres, more or less.
Bearings in the above description have an origin of TRUE NORTH based on
computations from celestial observations.
<PAGE> 16
BOOK 141 PAGE 379
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 an 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
198.42 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 848.14 feet to a point; thence
South 72 degrees, 54 minutes, 40 seconds West for 236.34 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 northern
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 97 degrees, 57 minutes, 16 seconds East for 560.07 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, 26 seconds East for 145.96 feet to a point; thence
South 31 degrees, 16 minutes, 14 seconds East for 487.57 feet to the said
"Point of Beginning", containing 6.04 acres, more or less.
Bearings in the above description have an origin of TRUE NORTH based on
computations from celestial observations.
<PAGE> 17
BOOK 141 PAGE 380
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 130.00 feet to the "Point of Beginning" of the tract
herein described; thence
North 6 degrees, 14 minutes, 14 seconds West along a line representing the west
line of said Section 11 for 346.00 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 948.09 feet to a point; thence
South 89 degrees, 39 minutes, 36 seconds West for 36.00 feet to the said
"Point of Beginning", containing 0.4339 acres, more or less.
Bearings in the above description have an origin of TRUE NORTH based on
computation from celestial observations.
<PAGE> 18
BOOK 141 PAGE 381
TRACT 8*
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 19 degrees,
39 minutes, 34 seconds East for 20.08 feet to the said "Point of Beginning" of
the tract herein described; thence
North 39 degrees, 39 minutes, 36 seconds East for 120.01 feet to a point; thence
North 8 degrees, 14 minutes, 36 seconds West for 1124.29 feet to a point; thence
North 11 degrees, 45 minutes, 30 seconds East for 190.77 feet to a point; thence
North 1 degree, 08 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
northern boundary of the Yazoo-Mississippi Delta Levee Commission property;
thence
North 83 degrees, 08 minutes, 40 seconds West along the said southern boundary
for 38.02 feet to a point; thence
South 30 degrees, 23 minutes, 00 seconds West and continuing along the said
southern boundary for 223.42 feet to a point; thence
South 0 degrees, 14 minutes, 36 seconds East for 4083.02 feet to the said
"Point of Beginning", containing 6.82 acres, more or less.
Bearings in the above description have an origin of TRUE NORTH based on
computations from celestial observations.
<PAGE> 1
EXHIBIT 10.11
Prepared By and Upon
Recordation Return To:
THE BANK OF NEW YORK
101 Barclay Street - 21W
New York, New York 10286
Attention: Corporate Trust Administration
- -------------------------------------------------------------------------------
ASSIGNMENT OF RENTS, LEASES AND PROFITS
101 MAIN STREET LIMITED LIABILITY COMPANY,
a Colorado limited liability company,
as Assignor
THE BANK OF NEW YORK,
as Assignee
Dated as of December 30, 1997
<PAGE> 2
ASSIGNMENT OF RENTS, LEASES AND PROFITS
THIS ASSIGNMENT OF RENTS, LEASES AND PROFITS ("Assignment of Rents and
Leases"), is made as of the 30th day of December, 1997 by 101 Main Street
Limited Liability Company, a Colorado limited liability company ("Assignor"),
whose principal place of business is located at 101 Main Street, Black Hawk,
Colorado 80422, in favor of The Bank of New York, a New York banking
corporation, as Collateral Agent ("Assignee"), whose principal place of business
is located at 101 Barclay Street - 21W, New York, New York 10286, in its
capacity as trustee under the "Indenture" (as such term is hereinafter defined)
for the ratable benefit of the Holders (as such term is defined in the
Indenture).
WITNESSETH:
WHEREAS, pursuant to that certain Indenture dated as of December 30,
1997 (as supplemented and otherwise amended from time to time, the "Indenture"),
by and among Fitzgeralds Gaming Corporation ("Fitzgeralds"), the Guarantors
(defined therein), and Assignee, as trustee thereunder (in such capacity, the
"Indenture Trustee"), Fitzgeralds will issue 12 1/4% Senior Secured Notes due
2004 in an aggregate principal amount of up to $255,000,000 (collectively, the
"Notes"). Unless the context other requires, all capitalized terms used and not
otherwise defined herein shall have the meanings ascribed thereto in the
Indenture; and
WHEREAS, pursuant to a guarantee included in the Indenture (as amended
from time to time, the "Subsidiary Guarantee"), the Guarantors (including
Assignor) have Guaranteed the obligations of Fitzgeralds under the Notes, the
Indenture and the other Security Documents to which Fitzgeralds is a party; and
WHEREAS, pursuant to the Indenture, the Subsidiary Guarantee of Assignor
is secured by, among other things, a Deed of Trust ("Deed of Trust") of even
date from Assignor, as Trustor, to the Public Trustee of the County of Gilpin,
Colorado, as Trustee, for the use and benefit of Assignee, as Beneficiary, and a
Security and Pledge Agreement, encumbering certain property situate in the
County of Gilpin, State of Colorado, as is more particularly described on
Exhibit A attached hereto and incorporated herein by this reference, and the
buildings and improvements now or hereafter located thereon (said property,
buildings and improvements being collectively referred to as the "Property");
and
2
<PAGE> 3
WHEREAS, Assignor is desirous of further securing to Assignee the
performance of the terms, covenants and agreements of the Notes, the Deed of
Trust and each other document executed by or on behalf of Assignor evidencing,
securing or relating to the indebtedness evidenced by the Notes, as each of the
foregoing may from time to time be amended (collectively, "Security Documents").
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Assignor does hereby irrevocably and unconditionally transfer,
sell, assign, pledge and convey to Assignee all of the right, title and interest
of Assignor in and to (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
[RENTS, ETC.]
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
Assignor 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 Assignor to collect and apply such Rents.
GRANTING CLAUSE TWO
[LEASES, INCLUDING DEPOSITS AND ADVANCE RENTALS]
TOGETHER WITH, (a) all estate, right, title and interest of
Assignor 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 Assignor thereunder, including, without limitation, all
claims of the lessor thereunder, letters of credit, guarantees or
3
<PAGE> 4
security deposits, advance rentals, and any and all deposits or payments of
similar nature (collectively, "Leases") and (c) the right to enforce against any
tenants thereunder and otherwise any and all remedies under any of the
foregoing, including Assignor'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 Assignor 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).
TO HAVE AND TO HOLD the same unto Assignee, its successors and assigns,
as additional security for the payment of the principal, interest and all other
sums due Assignee under the Notes according to the terms thereof and for the
observance, performance and discharge of each and every obligation, covenant and
agreement on the part of Assignor, its successors and assigns, to be observed,
performed and discharged under the Security Documents.
IT IS AGREED that, notwithstanding that this instrument is a present and
executed assignment of the Rents and of the Leases and a present and executed
grant of the powers herein granted to assignee, Assignor shall be permitted, at
the sufferance of Assignee and at its discretion after default by Assignor, to
collect and retain the Rents unless and until there shall be a default in the
payment of principal, interest, taxes, insurance or any other sums due under the
terms of the Security Documents or there shall be a default in the performance
or observance of any of the other obligations, covenants, warranties,
representations, terms or conditions of the Security Documents. In the event of
such default, Assignee, without in any way waiving such default, shall have the
sole and exclusive right and authority, without any notice whatsoever to
Assignor and without regard to the adequacy of the security therefor, either in
person, by agent or by a receiver appointed by a court upon ex parte
application, to take possession of the Property and to: (a) manage and operate
the same; (b) collect the Rents therefrom, including those past due and unpaid,
with full power to employ agents to manage the Property; and (c) do all acts
relating to such management, including, but not limited to, negotiation of new
Leases thereon, making adjustments of existing Leases, contracting and paying
for such repairs and replacements to the buildings and
4
<PAGE> 5
fixtures, equipment and personal property located therein and used in any way in
the operation, use and occupancy of the Property as in the sole judgment and
discretion of Assignee may be necessary to maintain the same in a tenantable
condition, purchasing and paying for such additional furniture and equipment as
in the sole judgment of Assignee may be necessary to maintain a proper rental
income from the Property, employing necessary maintenance employees, purchasing
fuel, providing utilities and paying for all other necessary expenses incurred
in the operation of the Property, maintaining adequate insurance coverage over
hazards customarily insured against and paying the premiums therefor. Assignee
may apply the net Rents so collected from the Property, after deducting the
costs of collection thereof, including, without limitation, reasonable
attorneys' fees and a reasonable management fee for any management agent so
employed, against the amount expended for repairs, upkeep, maintenance, service,
fuel, utilities, taxes, assessments, insurance premiums and such other expenses
as Assignee incurs in connection with the operation of the Property, and against
principal, interest and other charges which have or which may become due, from
time to time, under the terms of the Security Documents, in such order or
priority as to any of the items so mentioned as Assignee, in its sole
discretion, may determine. The exercise by Assignee of the rights granted
Assignee in this paragraph, and the collection of Rents and the application
thereof as herein provided, shall not be considered a waiver by Assignee of any
default by Assignor under the Security Documents or prevent foreclosure of the
Property, Assignee hereby expressly reserving all of its rights and privileges
under the Deed of Trust and the other Security Documents as fully as though this
Assignment of Rents and Leases had not been entered into.
In the event of such default, Assignor agrees to assign and deliver to
Assignee all then existing Leases. Without limiting the provisions of the
immediately preceding sentence, and whether or not Assignor assigns or delivers
said Leases to Assignee, as aforesaid, this Assignment of Rents and Leases shall
be deemed to be an assignment of all such Leases to Assignee. The provisions
hereof shall not limit the effect of any assignments of particular Leases in
fact given to Assignee by Assignor.
Notwithstanding any rights granted hereinabove, in the event Assignor
shall fail to make any payment or to perform any act required under the terms
hereof, then Assignee may, but shall not be obligated to, without prior notice
to or demand on Assignor, and without releasing Assignor from any obligation
hereof, make or perform the same in such manner and to such extent as Assignee
may deem necessary to protect the security hereof, including specifically,
without limitation, appearing in and defending any action or proceeding
purporting to affect the security hereof or the rights or powers of Assignee,
performing or discharging any obligation, covenant or agreement
5
<PAGE> 6
of Assignor under any of the Leases, and, in exercising any of such powers,
paying all necessary costs and expenses, employing counsel and incurring and
paying reasonable attorneys' fees. Any sum advanced or paid by Assignee for any
such purpose, including, without limitation, reasonable attorneys' fees, shall
be immediately due and payable to Assignee by Assignor on demand, shall be added
to the outstanding principal balance of the Notes (even if such addition results
in the outstanding principal balance being in excess of the face amount of the
Notes) and shall bear interest at the Default Rate (as defined in Section 4.1 of
the Indenture) from the date paid or advanced by Assignee until repaid by
Assignor.
IT IS FURTHER AGREED that this Assignment of Rents and Leases is made
upon the following terms, covenants and conditions:
1. This Assignment of Rents and Leases shall not operate to place
responsibility for the control, care, management or repair of the Property upon
Assignee, nor for the performance of any of the terms and conditions of any of
the Leases assigned hereunder, nor shall it operate to make Assignee responsible
or liable for any waste committed on the Property by the tenants or any other
party or for any dangerous or defective condition of the Property or for any
negligence in the management, upkeep, repair or control of the Property
resulting in loss or injury or death to any tenant, invitee, licensee, employee
or stranger. Assignee shall not be liable for any loss sustained by Assignor
resulting from Assignee's failure to let the Property or from any other act or
omission of Assignee in managing the Property, absent gross negligence or
willful misconduct by Assignee. Except to the extent caused by Assignee's
willful misconduct or gross negligence, Assignor shall and do hereby agree to
indemnify and to hold Assignee harmless from and against any and all liability,
loss or damage which may or might be incurred by reason of this Assignment of
Rents and Leases and from and against any and all claims and demands whatsoever
which may be asserted against Assignee by reason of any alleged obligations or
undertakings on its part to perform or discharge any of the terms, covenants or
agreements contained in any of the Leases. Should Assignee incur any liability
by reason of this Assignment of Rents and Leases or in defense of any claim or
demand for loss or damage as provided above, the amount thereof, without
limitation, costs, expenses and reasonable attorneys' fees, shall be added to
the outstanding principal balance of the Notes (even if such addition results in
the outstanding principal balance being in excess of the face amount of the
Notes), shall bear interest at the Default Rate from the date paid by Assignee
until repaid by Assignor and shall be secured hereby and Assignor shall
reimburse Assignee therefor immediately upon demand. Notwithstanding anything
contained in this paragraph, Assignor
6
<PAGE> 7
shall not be required to indemnify Assignee for any damage suffered by Assignee
due to Assignee's negligence relating to Assignee's operation of the Property.
2. This Assignment of Rents and Leases shall not be construed as making
Assignee a mortgagee in possession.
3. Assignee is obligated to account to Assignor only for such Rents as
are actually collected by Assignee.
4. Assignor hereby assigns to Assignee: (a) any award of other payment
which Assignor may hereafter become entitled to receive with respect to any of
the Leases as a result of or pursuant to any bankruptcy, insolvency or
reorganization or similar proceedings involving the tenants under such Leases;
and (b) any and all payments made by or on behalf of any tenant of any part of
the Property in lieu of Rent. Assignor hereby irrevocably appoints Assignee as
its attorney-in-fact to appear in any such proceeding and/or to collect any such
award or payment, which power of attorney is coupled with an interest by virtue
of this Assignment of Rents and Leases and is irrevocable.
5. Assignor represents and warrants: (a) that assignor now is (or with
respect to any Leases not yet in existence, will be immediately upon the
execution thereof) the absolute owner of the landlord's interest in the Leases,
with full right and title to assign the same and the Rents due or to become due
thereunder; (b) that, except for this Assignment of Rents and Leases and except
as otherwise expressly permitted by the terms of the Deed of Trust, there are,
and will be, no outstanding assignments or pledges of the Leases or Rents; (c)
that no Rents payable under the Leases have been or will be hereafter
anticipated, discounted, released, waived, compromised or otherwise discharged
without Assignee's prior written consent, except that Assignor shall be
permitted to enter into agreements with tenants to vacate the property within 30
days after default on a lease in exchange for statement of rent; (d) to the best
of Assignor's knowledge and except as otherwise disclosed in writing to Assignee
on or prior to the date hereof, that there are no defaults now existing under
any of the Leases and there exists no state of facts which, with the giving of
notice or lapse of time or both, would constitute a default under any of the
Leases; and (e) that Assignor will observe and perform all covenants, conditions
and agreements in the Leases on the part of the landlord to be observed and
performed thereunder.
6. Assignor covenants and agrees that Assignor will not, without the
prior written consent of Assignee: accept any payment of Rent or installments of
Rent for
7
<PAGE> 8
more than one month in advance or take any action or exercise any right or
operation which would permit the tenant under any Lease to cancel or terminate
said Lease. Assignor will immediately furnish to Assignee copies of all notices
of default received from any tenant under any of the Leases, and Assignee shall
have the right, at Assignor's expense, but shall not be obligated, to cure any
default by Assignor under any of the Leases which Assignor is not proceeding
diligently to cure itself.
7. Assignor covenants and agrees that Assignor shall, at its sole cost
and expense, appear in and defend any action or proceeding arising under,
growing out of or in any manner connected with the Leases or the obligations,
duties or liabilities of the landlord or tenant thereunder, and shall pay all
reasonable costs and expenses, including, without limitation, attorneys' fees,
which Assignee may incur in connection with Assignee's appearance, voluntary or
otherwise, in any such action or proceeding.
8. Assignee may, at its option, upon any Event of Default under the
Security Documents, notify any tenants or other parties of the existence of this
Assignment of Rents and Leases. Assignor does hereby specifically authorize,
instruct and direct each and every present and future tenant, lessee, sublessee
and licensee of the whole or any part of the Property to pay all unpaid and
future Rents agreed upon in each tenancy to Assignee upon receipt of demand from
Assignee to so pay the same and Assignor hereby agrees that each such present
and future tenant, lessee, sublessee and licensee may rely upon such written
demand from Assignee to so pay said Rents without any inquiry into whether
Assignor is in default hereunder or under the Security Documents or whether
Assignee is otherwise entitled to said Rents.
9. Assignee may take or release other security, may release any party
primarily or secondarily liable for any indebtedness secured hereby, may grant
extensions, renewals or indulgences with respect to any indebtedness secured
hereby and may apply any other security therefor held by it to the satisfaction
of any indebtedness secured hereby without prejudice to any of its rights
hereunder.
10. The acceptance of this Assignment of Rents, Leases and Profits and
the collection of the Rents hereby assigned in the event of a default, as
referred to above, shall be without prejudice to Assignee. The remedies of
Assignee hereunder are cumulative and the exercise of any one or more of the
remedies provided for herein shall not be construed as a waiver of any of the
other remedies of Assignee, at law or in equity or otherwise, so long as any
obligation under the Security Documents remains unsatisfied.
8
<PAGE> 9
11. All rights of Assignee hereunder shall inure to the benefit of its
successors and assigns; and all obligations of Assignor shall bind its
successors and assigns and any subsequent owner of the Property. All rights of
Assignee in, to and under this Assignment of Rents and Leases and in and to the
security provided hereby shall pass to and may be exercised by any assignee
thereof. Assignor agrees that if Assignee gives notice to Assignor of an
assignment of said rights, upon such notice the liability of Assignor to the
Assignee shall be immediate and absolute. Assignor will not set up any claim
against Assignee or any intervening assignee as a defense, counterclaim or
set-off to any action brought by Assignee or any intervening assignee for any
amounts due hereunder or for possession of or the exercise of rights with
respect to the security provided hereby.
12. Any default by Assignor in the performance or observance of any
covenants or condition hereof shall be deemed an Event of Default under the Deed
of Trust, entitling Assignee to exercise all or any remedies available to
Assignee under the terms of any or all of the Security Documents, and any Event
of Default under any Security Document shall be deemed a default hereunder,
entitling Assignee to exercise any or all remedies provided for herein.
13. Failure by Assignee to exercise any right which it may have
hereunder shall not be deemed a waiver thereof unless so agreed in writing by
Assignee, and the waiver by Assignee of any default by Assignor hereunder shall
not constitute a continuing waiver or a waiver of any other default or of the
same default on any future occasion. No collection by Assignee of any Rents
pursuant to this Assignment of Rents and Leases shall constitute or result in a
waiver of any default then existing under any of the Security Documents.
14. If any provision under this Assignment of Rents and Leases shall be
invalid, illegal or unenforceable, it shall not affect or impair the validity,
legality and enforceability of any other provision of this Assignment of Rents
and Leases.
15. This Assignment of Rents and Leases may not be amended, modified or
otherwise changed except by a written instrument duly executed by Assignor and
Assignee.
16. This Assignment of Rents and Leases shall be in full force and
effect continuously from the date hereof to and until the Deed of Trust shall be
released of record, and the release of the Deed of Trust shall, for all
purposes, terminate this Assignment of Rents, Leases and Profits.
9
<PAGE> 10
17. In case of conflict between any provision of this instrument and any
provision of the Deed of Trust, the Deed of Trust shall prevail and be
controlling.
18. This Assignment of Rents and Leases shall be governed by and
construed in accordance with the laws of the State of Colorado.
19. All notices and other communications under this Assignment of Rents
and leases 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 19, notices and
other communications shall be given to the parties hereto at their respective
addresses (or to their respective telex or telecopier numbers) indicated below:
ASSIGNOR:
101 MAIN STREET LIMITED LIABILITY COMPANY,
a Colorado limited liability company
120 Gregory Street
P.O. Box P
Black Hawk, Colorado 80422
ASSIGNEE:
THE BANK OF NEW YORK
101 Barclay Street - 21W
New York, New York 10286
Attention: Corporate Trust Administration
20. WAIVER OF TRIAL BY JURY. ASSIGNOR AND ASSIGNEE WAIVE THE RIGHT TO A
TRIAL BY JURY IN ANY ACTION UNDER THIS DEED OF TRUST OR ANY OTHER SECURITY
DOCUMENT OR ANY OTHER ACTION ARISING OUT OF THE TRANSACTIONS CONTEMPLATED HEREBY
OR THEREBY, REGARDLESS OF WHICH PARTY INITIATES SUCH ACTION OR ACTIONS.
10
<PAGE> 11
IN WITNESS WHEREOF, Assignor has caused this Assignment of Rents
and Leases 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,
Chief Financial Officer,
Treasurer and Secretary
11
<PAGE> 12
STATE OF CALIFORNIA )
) ss.
COUNTY OF LOS ANGELES )
The foregoing instrument was acknowledged before me this 30th day of
December, 1997 by Michael E. McPherson, an individual.
Witness my hand and official seal.
Notary Public /s/ BARBARA A. GREEN
--------------------
My commission expires: April 7, 1998
- ---------------------------------------
BARBARA A. GREEN
COMM. #1022678
[SEAL] NOTARY PUBLIC-CALIFORNIA
LOS ANGELES COUNTY
My Comm. Expires April 7, 1998
- ---------------------------------------
12
<PAGE> 13
EXHIBIT A
Legal Description
<PAGE> 14
Commitment Number TG11636
SCHEDULE A - CONTINUED
4. 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,
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 BOBTAIL STREET AS DESCRIBED IN BOOK 586 AT PAGE 113, WHICH POINT IS ON A
CURVE CONCAVE TO THE NORTH;
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 RIGHT,
CENTRAL ANGLE = 30 DEGREES 58'34", RADIUS = 140.00 FEET, AN ARC LENGTH OF 75.69
FEET TO A POINT OF TANGECY, 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 FEET, 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 DESCRBIED 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 GALPIN, STATE OF COLORADO.
<PAGE> 1
EXHIBIT 99.1
FITZGERALDS GAMING CORPORATION
301 FREMONT STREET
LAS VEGAS, NEVADA 89101
December 12, 1997
To Holders of the securities referred to below (the "Securities"):
Fitzgeralds Gaming Corporation (the "Company") is soliciting the consent
of holders of record of (i) the Company's 13% Senior Secured Notes due 2002 With
Contingent Interest (the "Notes"), (ii) the Company's Common Stock Purchase
Warrants issued in conjunction with the Notes (both Restricted and Unrestricted
Note and Preferred Stock Warrants) (the "Warrants"), (iii) the Company's 13%
Priority Secured Notes due December 31, 1998 (the "Priority Notes") and (iv) the
13% First Mortgage Notes due 2000 (the "101 Main Notes") of 101 Main Street
Limited Liability Company ("101 Main") to certain waivers and amendments in
connection with the proposed issuance by the Company of new senior secured notes
(the "Offering"). The details of the waivers and amendments and the Offering are
more fully described in the attached Solicitations of Consents (the "Consents"),
including Waiver Two as described in the Solicitation of Consents of 101 Main.
It is necessary that the Consents be signed by the holders of record as
of December 12, 1997 of the Securities. However, to facilitate the Offering, the
Company is requesting that the beneficial owners of the Securities agree to
direct and cause the record owner of those Securities for which they were the
beneficial owner as of December 12, 1997 to sign and deliver the Consents. The
Company, on behalf of itself and 101 Main Street Limited Liability Company,
hereby requests that you sign this letter as indicated below, thereby indicating
your agreement to direct and cause the record holder of the Securities of which
you were the beneficial owner as of December 12, 1997 to sign and deliver the
Consents and thereby consent to the waivers and the amendments. Thank you for
your cooperation in this matter.
Fitzgeralds Gaming Corporation
By:
-----------------------------------------
Philip Griffith, Chief Executive Officer
The undersigned, as the beneficial owner as of December 12, 1997 of the
following Securities, hereby agrees to direct the record holder as of December
12, 1997 of such Securities to sign and deliver the aforementioned Consents
(other than Waiver Two) and thereby consent to the waivers and the amendments
with regard to such Securities. By checking one of the following boxes, the
undersigned hereby similarly agrees to direct the record holder as of December
12, 1997 of such Securities to Consent to Waiver Two [ ] or to Withhold Consent
to Waiver Two [ ]:
$_________ principal amount of 13% Senior Secured Notes due
2002 With Contingent Interest of the Company
_________ Common Stock Purchase Warrants of the Company
(Note Warrants and Preferred Stock Warrants)
$_________ principal amount of 13% Priority Secured Notes
due December 31, 1998 of the Company
$_________ principal amount of 13% First Mortgage Notes due
2000 of 101 Main Street Limited Liability Company
Beneficial Holder: ______________________
By: ______________________
Name:
Title:
Date: December , 1997
<PAGE> 2
FITZGERALDS GAMING CORPORATION
301 FREMONT STREET
LAS VEGAS, NEVADA 89101
------------------
SOLICITATION OF CONSENTS OF
HOLDERS OF 13% SENIOR SECURED
NOTES DUE 2002 WITH CONTINGENT INTEREST
AND
COMMON STOCK PURCHASE WARRANTS
------------------
December 12, 1997
To Holders of 13% Senior Secured Notes due 2002 With Contingent Interest and
Common Stock Purchase Warrants:
This consent solicitation statement is being furnished to registered
holders of record as of December 12, 1997 (the "Holders") of (i) 13% Senior
Secured Notes due 2002 With Contingent Interest (the "Existing Notes") and (ii)
Common Stock Purchase Warrants (the "Warrants") of Fitzgeralds Gaming
Corporation (the "Company") in connection with the solicitation by the Company
of the consents of the Holders (a) to waive (on a one-time basis) one provision
of the Indenture, dated as of December 19, 1995, among the Company, as issuer,
Fitzgeralds South, Inc., Fitzgeralds Reno, Inc., Fitzgeralds Incorporated,
Fitzgeralds Las Vegas, Inc., Fitzgeralds Fremont Experience Corporation,
Fitzgeralds Mississippi, Inc. (formerly named Polk Landing Entertainment
Corporation), and Fitzgeralds Black Hawk, Inc., as subsidiary guarantors, and
The Bank of New York (as successor in interest to First Interstate Bank of
Nevada, N.A., and Wells Fargo Bank, N.A.), as trustee (the "Indenture") and (b)
to amend one provision of the Warrant Agreement, dated as of December 19, 1995,
among the Company and The Bank of New York, as warrant agent (as successor in
interest to First Interstate Bank of Nevada, N.A., and Wells Fargo Bank, N.A.)
(the "Warrant Agreement"). The consent solicitation is being undertaken in
connection with the proposed issuance of new senior secured notes by the
Company, as more fully described below. Capitalized terms not otherwise defined
herein shall have the meanings ascribed to them in the Indenture or the Warrant
Agreement, as applicable.
Introduction - Existing Notes
The Company intends to offer and sell, in a private placement (the
"Offering"), Senior Secured Notes due 2004 (the "New Notes"). A copy of the
Offering Circular dated December 12, 1997 (the "Offering Circular") relating to
the New Notes accompanies this consent solicitation statement. Among other uses,
the net proceeds from the Offering will be used to repay, pursuant to the
optional redemption provisions governing the Existing Notes (as contained in
Article Eleven of the Indenture and paragraphs 6 and 8 of the Existing Notes),
all of the outstanding Existing Notes, which would otherwise be due and payable
in full on December 31, 2002. The redemption price, as required, will equal 100%
of the principal amount of the Existing Notes plus accrued and unpaid interest
to the date of redemption.
In order to consummate an optional redemption of the Existing Notes, the
Indenture and the Existing Notes require the Company to give notice thereof at
least 45 days in advance to the trustee and at least 30 days in advance to the
Holders. (As it may do under the Indenture, the trustee has indicated that it
will agree to a shorter notice period.) Because the New Notes will be granted a
first priority security interest in collateral now securing the Existing Notes,
the New Notes will only be issued once the Existing Notes have been redeemed.
Thus, delivery of the redemption notice to the Holders would be required not
less than 30 days in advance of the closing of the Offering. However, because
the redemption notice would be irrevocable, the Company cannot give such notice
until it is assured that the Offering will be consummated. As a result, the
30-day advance notice requirement cannot be satisfied without undue and
unacceptable risk.
<PAGE> 3
As a result of the foregoing, the Company is requesting relief from the
30-day advance notice requirement to redeem the Existing Notes.
Introduction - Warrants
As part of the financing wherein the Company issued the Existing Notes,
the Company also issued the Warrants, a portion of which were Restricted Note
Warrants attached to Existing Notes and not transferable separately from such
Existing Notes prior to the Final Separation Date. The Warrant Agreement
currently provides that the Final Separation Date, the date upon which any then
outstanding Restricted Note Warrants become separated and freely transferable
apart from the Existing Notes (and no longer subject to redemption or
cancellation under Section 18 of the Warrant Agreement), is December 31, 1997;
provided, however, that upon the occurrence of a redemption of the Existing
Notes, including as contemplated by the Offering, the Final Separation Date will
automatically accelerate (the "Acceleration") to the date immediately preceding
the date of such redemption.
In connection with the Offering, the Company is requesting that the
Warrant Agreement be amended to eliminate the Acceleration, such that the Final
Separation Date with respect to any outstanding Restricted Note Warrants would
be fixed at December 31, 1997. The effect of such amendment will be that a
redemption of the Existing Notes by December 31, 1997 will result in a
redemption of the Restricted Note Warrants.
Proposed Waiver
In connection with the Offering, we hereby request your consent to the
waiver (the "Waiver"), on a one-time basis, of the Company's obligation to
provide advance written notice to the Holders in connection with a redemption of
the Existing Notes, pursuant to the optional redemption provisions of Article
Eleven of the Indenture and paragraphs 6 and 8 of the Existing Notes, so that
such redemption may be effected concurrently with the consummation of the
Offering.
Required Approval of Waiver and Revocation of Consents
The Indenture requires that Holders of a majority of the principal
amount of the Existing Notes then outstanding consent to the Waiver in order for
the Waiver to become effective. As of the date hereof, the aggregate principal
amount of the Existing Notes outstanding is $123 million. Accordingly, the
consent of Holders of at least $61,501,000 principal amount of the Existing
Notes will be required in order for the Waiver to be approved (the "Requisite
Consents").
Effective Date of Waiver
The effective date of the Waiver will be the date the Requisite Consents
have been received. On or before such date, the Company will deliver to the
trustee any board resolutions and other documents that may be required under the
Indenture. Upon receipt of such consents and materials, the trustee shall
execute such documents as are necessary to record the Waiver. Promptly after the
effective date, the Company will mail the notice required by the Indenture to
the Holders announcing the effectiveness of the Waiver. The Company and the
trustee do not intend to issue new forms of Existing Notes after the effective
date of the Waiver.
Proposed Amendment
We hereby request your consent to the Amendment (the "Amendment") of the
Warrant Agreement to eliminate the Acceleration and to provide that the Final
Separation Date for any outstanding Restricted Note Warrant would be December
31, 1997.
Required Approval of Amendment
The Warrant Agreement requires that Holders of a majority of the
Warrants then outstanding consent to the Amendment in order for the Amendment to
become effective. As of the date hereof, 2,675,237 Warrants are
-2-
<PAGE> 4
outstanding. Accordingly, the consent of Holders of at least 1,337,619 Warrants
will be required in order for the Amendment to be approved (the "Requisite
Consents").
Effective Date of Amendment
The effective date of the Amendment will be the date the Requisite
Consents have been received. On or before such date, the Company will deliver to
the warrant agent any board resolutions and other documents that may be required
under the Warrant Agreement. Upon receipt of such consents and materials, the
warrant agent and the Company shall execute such documents, including an
Amendment to the Warrant Agreement, as are necessary to record the Amendment.
Promptly after the effective date, the warrant agent will mail such documents as
are required by the Warrant Agreement to the Holders announcing the
effectiveness of the Amendment. The Company and the warrant agent do not intend
to issue new forms of Warrants after the effective date of the Amendment.
DELIVERY OF CONSENT
TO INDICATE YOUR CONSENT TO THE WAIVER AND AMENDMENT, PLEASE SIGN THIS
LETTER (OR A COPY HEREOF) IN THE SPACE(S) PROVIDED BELOW, AND RETURN TO THE
TRUSTEE VIA FACSIMILE AND U.S. MAIL NOT LATER THAN THURSDAY, DECEMBER 18, 1997:
BANK OF NEW YORK
101 BARCLAY STREET, FLOOR 21W
NEW YORK, NEW YORK 10286
ATTENTION: CORPORATE TRUST ADMINISTRATION
TEL: (212) 815-5375
FAX: (212) 815-5915
The undersigned also consents to such other amendments to the Indenture
(including the form of Existing Note) and the Warrant Agreement (including the
form of Warrant) necessary to implement the purpose and effect of the foregoing
amendments (including, without limitation, such other amendments or waivers
necessary to permit the Company to repurchase the Existing Notes).
The undersigned Holder giving the foregoing consent represents that (a)
at the close of business on December 12, 1997 (the record date for the purpose
of determining the Holders entitled to consent to the foregoing amendments), it
was the registered owner of the aggregate principal amount of Existing Notes and
number of Warrants set forth under its name on the execution page hereof (or
such Holder's duly designated proxy), (b) this consent has been duly authorized,
executed and delivered by such Holder and (c) it has been provided a copy of the
Offering Circular.
-3-
<PAGE> 5
This consent solicitation statement is being delivered to the registered
Holders on the books of the trustee and warrant agent as of December 12, 1997.
BY ORDER OF THE BOARD OF DIRECTORS
Philip Griffith, Chief Executive Officer
The undersigned, as the Holder of $__________ principal amount of 13%
Senior Secured Notes due 2002 with Contingent Interest and ________ Common Stock
Purchase Warrants (both Restricted and Unrestricted Note and Preferred Stock
Warrants) of Fitzgeralds Gaming Corporation (or such Holder's duly designated
proxy), hereby consents to the Waiver and the Amendment, as described in the
foregoing consent solicitation statement, as of the date indicated below.
Holder: _____________________
By: _____________________
Name:
Title:
Date: December , 1997
- ------------------
* Signatures need not be guaranteed if the person executing the consent form
is a member firm of a registered national securities exchange or of the
National Association of Securities Dealers, Inc., or a commercial bank or
trust company having an office or correspondent in the United States (each
being hereinafter referred to as an "Eligible Institution"). In all other
cases, all signatures must be guaranteed by an Eligible Institution.
-4-
<PAGE> 6
FITZGERALDS GAMING CORPORATION
301 FREMONT STREET
LAS VEGAS, NEVADA 89101
------------------
SOLICITATION OF CONSENTS OF
HOLDERS OF 13% PRIORITY SECURED
NOTES DUE DECEMBER 31, 1998
------------------
December 12, 1997
To Holders of 13% Priority Secured Notes due December 31, 1998:
This consent solicitation statement is being furnished to registered
holders of record as of December 12, 1997 (the "Holders") of the 13% Priority
Secured Notes due December 31, 1998 (the "Priority Notes") of Fitzgeralds Gaming
Corporation (the "Company") in connection with the solicitation by the Company
of the consents of the holders to waive (on a one-time basis) one provision of
the Note Purchase Agreement, dated as of December 30, 1996, among the Company,
as issuer, Fitzgeralds South, Inc., Fitzgeralds Reno, Inc., Fitzgeralds
Incorporated, Fitzgeralds Las Vegas, Inc., Fitzgeralds Fremont Experience
Corporation, Fitzgeralds Mississippi, Inc. (formerly named Polk Landing
Entertainment Corporation), and Fitzgeralds Black Hawk, Inc., as subsidiary
guarantors, and the purchasers listed on the signature pages thereto (the "Note
Purchase Agreement"). The consent solicitation is being undertaken in connection
with the proposed issuance of new senior secured notes by the Company, as more
fully described below. Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Note Purchase Agreement.
Introduction
The Company intends to offer and sell, in a private placement (the
"Offering"), Senior Secured Notes due 2004 (the "New Notes"). A copy of the
Offering Circular dated December 12, 1997 (the "Offering Circular") relating to
the New Notes accompanies this consent solicitation statement. Among other uses,
the net proceeds from the Offering will be used to repay, pursuant to the
optional prepayment provisions governing the Priority Notes (as contained in
Section 2.5 of the Note Purchase Agreement and paragraphs 5 and 7 of the
Priority Notes), all of the outstanding Priority Notes, which would otherwise be
due and payable in full on December 31, 1998. The prepayment price, as required
thereby, will equal the Accreted Value of the outstanding Priority Notes, as of
the date of prepayment, plus accrued and unpaid interest as of the date of
prepayment.
In order to consummate an optional redemption of the Priority Notes, the
Note Purchase Agreement and the Priority Notes require the Company to give
notice thereof at least 10 Business Days in advance to the Holders of the
Priority Notes. Because the New Notes will be granted a first priority security
interest in collateral now securing the Priority Notes, the New Notes will only
be issued once the Priority Notes have been redeemed. Thus, delivery of the
redemption notice to the Holders would be required not less than 10 Business
Days in advance of the closing of the Offering. However, because the redemption
notice would be irrevocable, the Company cannot give such notice until it is
assured that the Offering will be consummated. As a result, the 10 Business Day
advance notice requirement cannot be satisfied without undue and unacceptable
risk.
As a result of the foregoing, the Company is requesting relief from the
10 Business Day advance notice requirement to redeem the Priority Notes.
Proposed Waiver
In connection with the Offering, we hereby request your consent to the
waiver (the "Waiver"), on a one-time basis, of the Company's obligation to
provide advance written notice to the Holders in connection with a redemption of
the Priority Notes so that such redemption may be effected concurrently with the
consummation of the Offering pursuant to the optional redemption provisions of
Section 2.5 of the Note Purchase Agreement and paragraphs 5 and 7 of the
Priority Notes.
<PAGE> 7
Required Approval of Waiver and Revocation of Consents
The Note Purchase Agreement requires that the consent of the Holders of
a majority of the principal amount of the Priority Notes then outstanding
consent to the Waiver in order for the Waiver to become effective. As of the
date hereof, the aggregate principal amount of the Priority Notes outstanding is
$5,298,217 million. Accordingly, the consent of Holders of at least $2,650,000
principal amount of the Priority Notes will be required in order for the Waiver
to be approved (the "Requisite Consents").
The Note Purchase Agreement provides that a waiver does not become
effective until the Requisite Consents have been obtained, and accordingly, any
Holder may revoke its consent to the Waiver by a written notice to the Company,
by sending such notice to the Company before the date on which the Waiver
becomes effective.
Effective Date of Waiver
The effective date of the Waiver will be the date the Requisite Consents
have been received. On or before such date, the Company will deliver to the
Holders any board resolutions and other documents that may be required under the
Note Purchase Agreement. Promptly after the effective date, the Company will
mail any notices required by the Note Purchase Agreement to the Holders
announcing the effectiveness of the Waiver. The Company does not intend to issue
new forms of Priority Notes after the effective date of the Waiver.
DELIVERY OF CONSENT
TO INDICATE YOUR CONSENT TO THE WAIVER, PLEASE SIGN THIS LETTER (OR A
COPY HEREOF) IN THE SPACE(S) PROVIDED BELOW, AND RETURN TO THE COMPANY VIA
FACSIMILE AND U.S. MAIL NOT LATER THAN THURSDAY, DECEMBER 18, 1997:
FITZGERALDS GAMING CORPORATION
301 FREMONT STREET
LAS VEGAS, NEVADA 89101
ATTENTION: CHIEF FINANCIAL OFFICER
TEL: (702) 388-2444
FAX: (702) 382-5562
The undersigned also consents to such other amendments to the Note
Purchase Agreement and the Indenture referred to therein (including the form of
Priority Note) necessary to implement the purpose and effect of the foregoing
amendments (including, without limitation, such other amendments or waivers
necessary to permit the Company to repurchase the Priority Notes).
The undersigned Holder giving the foregoing consent represents that (a)
at the close of business on December 12, 1997 (the record date for the purpose
of determining the Holders entitled to consent to the foregoing amendments), it
was the registered owner of the aggregate principal amount of Priority Notes set
forth under its name on the execution page hereof (or such Holder's duly
designated proxy), (b) this consent has been duly authorized, executed and
delivered by such Holder and (c) it has been provided a copy of the Offering
Circular.
This consent solicitation statement is being delivered to the Holders on
the books of the Company as of December 12, 1997.
BY ORDER OF THE BOARD OF DIRECTORS
Philip Griffith, Chief Executive Officer
-2-
<PAGE> 8
The undersigned, as the Holder of $__________ principal amount of 13%
Priority Secured Notes due December 31, 1998 of Fitzgeralds Gaming Corporation
(or such Holder's duly designated proxy), hereby consents to the Waiver, as
described in the foregoing consent solicitation statement, as of the date
indicated below.
Holder: ________________________
By: ________________________
Name:
Title:
Date: December , 1997
- --------------------------
* Signatures need not be guaranteed if the person executing the consent form
is a member firm of a registered national securities exchange or of the
National Association of Securities Dealers, Inc., or a commercial bank or
trust company having an office or correspondent in the United States (each
being hereinafter referred to as an "Eligible Institution"). In all other
cases, all signatures must be guaranteed by an Eligible Institution.
-3-
<PAGE> 9
101 MAIN STREET LIMITED LIABILITY COMPANY
301 FREMONT STREET
LAS VEGAS, NEVADA 89101
------------------
SOLICITATION OF CONSENTS OF
HOLDERS OF 13% FIRST MORTGAGE
NOTES DUE 2000
------------------
December 12, 1997
To Holders of 13% First Mortgage Notes due 2000:
This consent solicitation statement is being furnished to registered
holders of record as of December 12, 1997 (the "Holders") of the 13% First
Mortgage Notes due 2000 (the "First Mortgage Notes") of 101 Main Street Limited
Liability Company (the "Company") in connection with the solicitation by the
Company of the consents of the Holders to waive (on a one-time basis) two
provisions of the Indenture, dated as of August 13, 1997, among the Company, as
issuer, Fitzgeralds Black Hawk II, Inc., as guarantor, and The Bank of New York,
as trustee (the "Indenture"). The consent solicitation is being undertaken in
connection with the proposed issuance of senior secured notes by Fitzgeralds
Gaming Corporation ("FGC"), of which the Company is an indirect wholly owned
subsidiary, as more fully described below. Capitalized terms not otherwise
defined herein shall have the meanings ascribed to them in the Indenture.
Introduction
FGC intends to offer and sell, in a private placement (the "FGC
Offering"), Senior Secured Notes due 2004 (the "FGC Notes"). A copy of the
Offering Circular dated December 12, 1997 (the "Offering Circular") relating to
the New Notes accompanies this consent solicitation statement. Among other uses,
the net proceeds from the FGC Offering will be used to repay, pursuant to the
optional redemption provisions governing the First Mortgage Notes (as contained
in Article III of the Indenture and paragraphs 5 and 6 of the First Mortgage
Notes), all of the outstanding First Mortgage Notes, which would otherwise be
due and payable in full on August 15, 2000. The redemption price, if Waiver Two
(as defined below) is approved, will equal 103.0% of principal plus accrued and
unpaid interest to the date of redemption. If Waiver Two is not approved, the
redemption price will equal 104.5% of principal plus accrued and unpaid interest
to the date of redemption.
In order to consummate an optional redemption of the First Mortgage
Notes, the Indenture and the First Mortgage Notes require the Company to give
notice thereof at least 30 days in advance to the trustee and at least 15 days
in advance to the Holders. (As it may do under the Indenture, the trustee has
indicated that it will agree to a shorter notice period.) Because the FGC Notes
will be granted a first priority security interest in collateral now securing
the First Mortgage Notes, the FGC Notes will only be issued once the First
Mortgage Notes have been redeemed. Thus, delivery of the redemption notice to
the Holders would be required not less than 15 days in advance of the closing of
the FGC Offering. However, because the redemption notice would be irrevocable,
the Company cannot give such notice until it is assured that the FGC Offering
will be consummated. As a result, the 15-day advance notice requirement cannot
be satisfied without undue and unacceptable risk.
Additionally, the redemption price of the 101 Notes increases, effective
December 16, 1997, from an amount equal to 103.0% of the then outstanding
principal, plus accrued and unpaid interest to the date of redemption, to 104.5%
of the then outstanding principal, plus accrued and unpaid interest to the date
of redemption. Because it is anticipated that the Offering will be consummated
on or before December 31, 1997, the Company is also seeking a waiver of its
obligation to pay the 1.5% increase in the redemption price.
Proposed Waivers
In connection with the FGC Offering, we hereby request your separate
consent to each of the following (the "Waivers"):
1. Waive, on a one-time basis, the Company's obligation to
provide advance written notice to the Holders in
connection with a redemption of the First Mortgage Notes
so that such redemption
<PAGE> 10
may be effected concurrently with the consummation of
the FGC Offering pursuant to the optional redemption
provisions of Article III of the Indenture and
paragraphs 5 and 6 of the First Mortgage Notes ("Waiver
One").
2. Waive, on a one-time basis, with such waiver to be
effective through December 31, 1997, the Company's
obligation to pay that portion of the redemption price, as
set forth in paragraph 5 of the First Mortgage Notes,
representing the 1.5% increase in the redemption price
effective December 16, 1997 ("Waiver Two").
If Waiver One is obtained, whether or not Waiver Two is obtained, the
Company will redeem the First Mortgage Notes concurrently with the consummation
of the FGC Offering.
Required Approval of Waivers and Revocation of Consents
The Indenture requires that Holders of at least a majority of the
principal amount of the First Mortgage Notes then outstanding consent to Waiver
One in order for such Waiver to become effective. As of the date hereof, the
aggregate principal amount of the First Mortgage Notes outstanding is $38
million. Accordingly, the consent of Holders of at least $19,001,000 principal
amount of the First Mortgage Notes will be required in order for the Waiver to
be approved (the "Waiver One Requisite Consents"). The Indenture requires the
consent of each Holder of First Mortgage Notes then outstanding in order for
such Waiver to become effective (the "Waiver Two Requisite Consents"); provided,
however, that holders who consent to Waiver Two, whether or not the holders of
all First Mortgage Notes so consent, will waive their right to receive the
increase in the redemption price through December 31, 1997.
The Indenture provides that until a waiver becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Note or a portion of a Note that evidences the same debt as the
consenting Holder's Note, even if notation of the consent is not made on the
Note. Any Holder, however, may revoke the consent as to its Note by a written
notice to the trustee, if such notice is received by the trustee before such
date on which the Waiver becomes effective.
Effective Date(s) of Waiver(s)
The effective date of each Waiver will be the date the applicable
Requisite Consents have been received. On or before such date, the Company will
deliver to the trustee any board resolutions and other documents that may be
required under the Indenture. Upon receipt of such consents and materials, the
trustee shall execute such documents as are necessary to record each Waiver.
Promptly after the effective date, the Company will mail the notice required by
the Indenture to the Holders announcing the effectiveness of such Waiver. The
Company and the trustee do not intend to issue new forms of First Mortgage Notes
after the effective date of the Waiver.
DELIVERY OF CONSENT
TO INDICATE YOUR CONSENT TO EITHER OR BOTH OF THE WAIVERS, PLEASE CHECK
THE APPROPRIATE BOX(ES) AND SIGN THIS LETTER (OR A COPY HEREOF) IN THE SPACE(S)
PROVIDED BELOW, AND RETURN TO THE TRUSTEE VIA FACSIMILE AND U.S. MAIL NOT LATER
THAN THURSDAY, DECEMBER 18, 1997:
BANK OF NEW YORK
101 BARCLAY STREET, FLOOR 21W
NEW YORK, NEW YORK 10286
ATTENTION: CORPORATE TRUST ADMINISTRATION
TEL: (212) 815-5375
FAX: (212) 815-5915
The undersigned also consents to such other amendments to the Indenture
(including the form of First Mortgage Note) necessary to implement the purpose
and effect of the foregoing amendments (including, without limitation, such
other amendments or waivers necessary to permit the Company to repurchase the
First Mortgage Notes).
-2-
<PAGE> 11
The undersigned Holder giving the foregoing consent represents that (a)
at the close of business on December 12, 1997 (the record date for the purpose
of determining the Holders entitled to consent to the foregoing amendments), it
was the registered owner of the aggregate principal amount of First Mortgage
Notes set forth under its name on the execution page hereof (or such Holder's
duly designated proxy), (b) this consent has been duly authorized, executed and
delivered by such Holder and (c) it has been provided a copy of the Offering
Circular.
This consent solicitation statement is being delivered to the registered
Holders on the books of the trustee as of December 12, 1997.
BY ORDER OF THE BOARD OF DIRECTORS
Philip Griffith, Chief Executive Officer
The undersigned, as the Holder of $__________ principal amount of 13%
First Mortgage Notes due 2000 of 101 Main Street Limited Liability Company (or
such Holder's duly authorized proxy), hereby consents to Waiver One and/or
Waiver Two, as indicated, as such are described in the foregoing consent
solicitation statement, as of the date indicated below.
[ ] Consent to Waiver One [ ] Withheld Consent to Waiver One
[ ] Consent to Waiver Two [ ] Withheld Consent to Waiver Two
Holder: __________________________
By: __________________________
Name:
Title:
Date: December , 1997
- --------------------------
* Signatures need not be guaranteed if the person executing the consent form
is a member firm of a registered national securities exchange or of the
National Association of Securities Dealers, Inc., or a commercial bank or
trust company having an office or correspondent in the United States (each
being hereinafter referred to as an "Eligible Institution"). In all other
cases, all signatures must be guaranteed by an Eligible Institution.
3
