TABLE OF CONTENTS
ARTICLE 1. GRANT OF DEED OF TRUST.............................................2
1.1. Grant of Deed of Trust..........................................2
1.2. Status of Title; Defense of Actions and Costs...................8
1.3. Obligations Secured.............................................8
1.4. After-Acquired Property........................................10
1.5. Security Agreement; Fixture Filing.............................10
ARTICLE 2. COVENANTS CONCERNING THE TRUST PROPERTY...........................11
2.1. Taxes and Governmental Impositions.............................11
2.2. Mechanic's and Other Liens; Subrogation........................13
2.3. Utilities......................................................14
2.4. Insurance......................................................14
2.5. Condemnation...................................................14
2.6. Restoration....................................................14
2.7. Care of the Trust Property.....................................14
2.8. Future Tenant Leases...........................................15
2.9. Further Encumbrance............................................16
2.10. Partial Releases of Trust Property.............................17
ARTICLE 3. ASSIGNMENT OF LEASES AND RENTS....................................18
3.1. Assignment of Leases and Rent..................................18
3.2. Trustor's Limited License......................................18
3.3. Limitation.....................................................19
3.4. Performance by Trustor.........................................19
3.5. No Merger of Leases............................................19
3.6. Remedies.......................................................19
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3.7. Application of Income..........................................22
3.8. Term...........................................................22
3.9. Actions of Trustee.............................................22
ARTICLE 4. DEFAULTS AND REMEDIES.............................................22
4.1. Events of Default..............................................22
4.2. Performance of Defaulted Acts..................................22
4.3. Remedies.......................................................23
4.4. Foreclosure....................................................25
4.5. Rescission of Notice of Default................................25
4.6. Appointment of Receiver........................................26
4.7. Remedies Not Exclusive; Waiver.................................26
4.8. Casino.........................................................27
4.9. Multiple Collateral............................................27
4.10. Extensions and Partial Payments................................29
4.11. Protective Advances............................................29
4.12. Environmental Matters..........................................30
4.13. Appointment as Attorney-in-Fact................................30
ARTICLE 5. GENERAL PROVISIONS................................................31
5.1. Extension; Release.............................................31
5.2. Trustor........................................................31
5.3. Additional Documents...........................................31
5.4. Statute of Limitations.........................................31
5.5. Severability...................................................32
5.6. Interaction with Indenture.....................................32
5.7. Other Collateral...............................................32
5.8. Notices........................................................33
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5.9. No Waiver of Remedies..........................................33
5.10. Trustee's Powers...............................................33
5.11. Beneficiary's Powers...........................................33
5.12. Additional Security............................................34
5.13. Captions.......................................................34
5.14. Trust Irrevocable; No Offset...................................34
5.15. Corrections....................................................34
5.16. Attorneys' Fees................................................34
5.17. Amendments.....................................................34
5.18. Acceptance by Trustee..........................................34
5.19. Authorization to Rely..........................................35
5.20. GOVERNING LAW..................................................35
5.21. Time of Essence................................................35
5.22. Future Advances................................................35
5.23. Actions by Beneficiary to Preserve.............................35
5.24. Reimbursement..................................................36
5.25. Usury Savings Clause...........................................36
5.26. Jurisdiction and Venue.........................................36
5.27. Waiver of Jury Trial...........................................37
5.28. Waiver of Homestead and Other Exemptions.......................37
5.29. Construction Deed of Trust.....................................37
5.30. Gaming Laws....................................................37
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Recording at the Request of and
when Recorded Mail Original to:
Latham & Watkins
633 W. Fifth Street, Suite 4000
Los Angeles, California 90071
Attention: Carl A. Lux, Esq.
DEED OF TRUST TO PUBLIC TRUSTEE,
SECURITY AGREEMENT, FIXTURE FILING AND
ASSIGNMENT OF RENTS, LEASES AND LEASEHOLD INTERESTS
(GILPIN COUNTY, COLORADO)
THIS DEED OF TRUST TO PUBLIC TRUSTEE, SECURITY AGREEMENT, FIXTURE
FILING AND ASSIGNMENT OF RENTS, LEASES AND LEASEHOLD INTERESTS (as the same may
be amended, supplemented or otherwise modified from time to time, this "Deed of
Trust") is made and entered into as of May 29, 1999 by RIVIERA BLACK HAWK, INC.,
a Colorado corporation (the "Company"), whose address is 444 Main Street, Black
Hawk, Colorado 80422 and whose federal taxation identification number is
86-0886265 ("Trustor"), to the PUBLIC TRUSTEE OF THE COUNTY OF GILPIN, COLORADO
("Trustee"), for the benefit of IBJ Whitehall Bank & Trust Company, having an
office at One State Street, New York, New York 10004, in its capacity as trustee
under the Indenture referred to below (together with its successors and assigns,
"Beneficiary") for its benefit and the benefit of the Holders.
RECITALS
A. Beneficiary and Trustor are the parties to that certain Indenture
dated as of June 3, 1999 (as the same may be amended, supplemented or otherwise
modified from time to time, the "Indenture"). Unless otherwise defined herein,
capitalized terms used in this Deed of Trust shall have the meanings given such
terms in Annex A attached hereto.
B. Trustor has, under the Indenture, issued its First Mortgage Notes
Due 2005 (together with any amendments, supplements, modifications, renewals or
extensions thereof and any notes issued in replacement thereof or exchange
therefor from time to time, the "Notes") in the original principal amount of
$45,000,000. The Notes, the Indenture, the Collateral Documents, the Completion
Capital Commitment, the Keep-Well Agreement and all other documents, agreements
and instruments (in each case, as amended, supplemented or otherwise modified
from time to time) now or hereafter executed and delivered in connection with
the Indenture and the transactions described therein are collectively
hereinafter referred to as the "Transaction Documents."
C. The Indenture requires that the obligations of Trustor under the
Notes, the Indenture and the other Transaction Documents be secured by liens and
security interests covering certain property of Trustor. In connection
therewith, Trustor is executing and delivering this Deed of Trust in accordance
with the Indenture.
NOW, THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Trustor agrees as follows:
ARTICLE 1.
GRANT OF DEED OF TRUST
1.1. Grant of Deed of Trust. Trustor does hereby irrevocably grant, assign,
bargain, convey, transfer, warrant and set over unto Trustee, IN TRUST, WITH
POWER OF SALE, under and subject to the terms and conditions hereof, for the
benefit and security of Beneficiary and for the ratable benefit and security of
the Holders, all of Trustor's right, title and interest in and to all of the
following property, to the extent assignable under applicable law, whether now
owned or hereafter acquired (collectively, the "Trust Property"):
(a) the real property described in Exhibit A attached hereto and by
this reference incorporated herein, including without limitation all air rights
with respect thereto (the "Land");
(b) any and all buildings, constructions, facilities and fixtures,
pipelines and all other improvements now on, or hereafter located or constructed
on or in, the Land or any portion thereof (collectively, the "Improvements"),
and all fixtures, construction materials, goods (including without limitation
consumer goods, equipment and inventory) and other articles of real and personal
property which are now or hereafter affixed to, placed upon or used in
connection with the Trust Property;
(c) any and all tenements and hereditaments of whatever kind or
description and wherever situated and all of Trustor's right, title and interest
in and to any land lying within the right of way of any street, open or
proposed, adjoining the Land, any and all sidewalks, and any land lying between
the boundaries of the Land and the center line of any adjacent street, road,
avenue or alley, whether existing, vacated or proposed;
(d) any and all furniture, fittings and fixtures (whether actually or
constructively attached, and including all trade fixtures), equipment, machinery
(including without limitation any and all equipment, machinery and apparatus
used for or in connection with maintaining and operating gaming facilities,
gaming devices including slot machines, poker tables and blackjack tables,
lodging, restaurants, bars or entertainment facilities), appliances,
construction materials, personal property, supplies, tools, paintings,
sculptures, murals, art work,
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books, now or hereafter or from time to time situated on, in or under the Land
and/or any the Improvements or used or usable in connection with any present or
future use of the Land, whether or not affixed to the realty, including, but not
limited to, power, lighting, heating, electrical, ventilating, air conditioning,
gas, electricity, water sprinkling and sprinkler protection, mechanical and
plumbing materials, waste removal, refrigeration, ventilation, freezing,
laundry, incinerating and power equipment; fixtures and supplies; fences and
fencing; water and power systems; irrigation systems and equipment; plumbing,
lifting, cleaning, fire prevention, fire extinguishing, ventilating, cooling and
communication apparatus and equipment; engines; boilers; furnaces; elevators;
escalators; pipes; pumps; tanks; switchboards; ducts; conduits; conveyor belts;
motors; refrigeration facilities plants; vacuum cleaning systems; awnings;
shrubbery, trees, vines and other plants of every kind and nature; ranges;
furnaces; ovens; burners; refrigerators; cabinets; dishwashers; disposals;
shades; awnings; blinds; drapes; attached floor coverings, including carpeting;
screens, storm doors and windows; rugs and carpets; draperies; beds, bureaus,
chests, desks, lamps, bookcases, tables, chairs and couches; radios and
television sets; china, glassware, silverware, tableware, linens, towels,
bedding and blankets; kitchen equipment and utensils; bars and bar fixtures;
uniforms; safes, vaults, cash registers, accounting and duplicating machines;
statuary, hangings, mirrors, decorations, pictures and ornaments;
(e) any and all contract rights of whatever nature, whenever acquired,
relating to the Trust Property described in this Section 1.1, including without
limitation architectural and engineering plans, plans and specifications,
drawings, tests, reports or studies relating to the construction and the
Improvements on or to the Land, contracts for goods or services and management
contracts, all warranties and guaranties under such contracts and all rights
under architects' contracts, construction contracts, supply contracts,
completion bonds, performance bonds and payment bonds, all accounts, general
intangibles, documents, instruments and chattel paper arising from or in
connection with such Trust Property, including all books and records in
connection therewith, all rights, claims, suits or demands that Trustor now has
or may hereafter acquire with respect to any damage to the Trust Property;
(f) any and all rights of Trustor under any leases or other agreements
entered into by Trustor (as a "landlord," "sublandlord," "lessor," "sublessor"
or similar capacity) now in existence or hereafter arising and providing for the
use and occupancy of all or any portion of the Trust Property (each, as amended,
supplemented or otherwise modified from time to time, a "Tenant Lease" and,
collectively, the "Tenant Leases");
(g) any and all additions, betterments and improvements hereafter
acquired or constructed upon or in connection with any other property, real or
personal, now or at any time hereafter subject to the lien of this Deed of
Trust;
(h) any and all easements, rights of way, servitudes, surface rights,
interests in land, permits, licenses, grants affecting land, and all amendments
thereof, relating or appurtenant to the Land and/or any of the Improvements,
fixtures, personal property, easements, rights, interests and/or other items
described in this Section 1.1, now or hereafter belonging or pertaining to the
Land, including without limitation all franchises, privileges, reservations,
allowances, immunities, powers, rights, ordinances, permits, licenses, grants,
leases, consents, possessory and prescriptive rights of Trustor in, on, over,
under, across and through lands, roads, highways,
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railroads, canals, channels, waterways, ditches, bridges or structures, or
elsewhere, together with Trustor's interest (now owned or hereafter acquired) in
all fixtures, the Improvements and personal property now or hereafter from time
to time situated on, in, over, under, across or through, attached to or used in
connection with such Trust Property and all rights and appurtenances incident
thereto;
(i) any and all rights, powers, franchises, privileges, immunities,
permits and licenses now or hereafter owned or possessed by Trustor that now or
at any time hereafter may be necessary or useful for, or appurtenant to, the
use, operation, management, maintenance, renewal, alteration or improvement of
any of the other Trust Property;
(j) any and all income, rents, receipts, security or similar deposits,
revenues, issues, royalties, profits, earnings, products and proceeds from any
and all of the Land or any buildings or other the Improvements, now owned or
hereafter acquired (collectively, the "Rents, Issues and Profits"), together
with the right to collect and apply the same to any indebtedness secured
hereunder, subject, however, to the right hereafter given to Trustor to collect
the Rents, Issues and Profits as long as Trustor is not in default hereunder;
(k) any and all rights and estates in reversion or remainder;
(l) any and all oil and gas or other mineral rights in or pertaining
to the Land and all royalty, leasehold and other rights of Trustor pertaining
thereto, now owned or hereafter acquired;
(m) any and all monies in the possession of Beneficiary or any Holder
(including without limitation retainages and deposits for taxes and insurance),
and all refundable utility, tenant, escrow and governmental fees and deposits,
and all refundable fees and deposits of every other nature, now owned or
hereafter acquired;
(n) any and all rights to obtain water, sewer and other services from
municipalities and service districts;
(o) any and all water and water rights, ditches and ditch rights,
reservoirs and storage rights, wells and well rights, springs and spring rights,
groundwater rights (whether tributary, nontributary or not-nontributary), water
contracts, water allotments, water taps, shares in ditch or reservoir companies,
and all other rights of any kind or nature in or to the use of water, which are
appurtenant to, historically used on or in connection with, or located on or
under the Land, including without limitation shares of stock evidencing the
foregoing and all deposits made with or other security given to utility
companies by Trustor with respect to the Land or any buildings or other the
Improvements, together with any and all easements, rights of way, fixtures,
personal property, contract rights, permits or decrees associated with or used
in connection with any such rights;
(p) any and all shrubbery, trees, vines, flowers, plants and
landscaping features of every kind and nature and all crops of every type and
nature, annual and perennial, now or hereafter located on, under or above the
Land, all harvested crops wherever stored and any
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document of title or other document representing a storage obligation,
including, but not limited to, warehouse receipts, negotiable or nonnegotiable,
which may be received for crops in which Trustor has any right, title or
interest wherever stored;
(q) any and all claims or demands relating to insurance which Trustor
now has or may hereafter acquire with respect to any Trust Property, including
without limitation all advance payments of insurance premiums made by Trustor
with respect thereto;
(r) any and all awards and payments, including without limitation
interest payments, resulting from the exercise of any right of condemnation or
eminent domain or from any other public or private taking of, injury to or
decrease in the value of, any of the Land or the Improvements, or any agreement
or conveyance in lieu of any such action;
(s) and and all goods, inventory, equipment, building and other
materials, supplies, and other tangible personal property of every nature now
owned or hereafter acquired by Trustor and used or intended for use in the
construction, development, or operation of the Land or any the Improvements
(including without limitation all opened and unopened food and liquor supplies);
(t) any and all of the records and books, computer programs, tapes,
discs, software and other like records and information now or hereafter
maintained by or on behalf of Trustor in connection with the use of the Land,
the Improvements, the Tenant Leases and Rents, Issues and Profits;
(u) any and all franchise, operating and management agreements, liquor
and gaming licenses (in each case, to the full extent legally assignable),
restaurant, occupancy, hotel, motel and other licenses, permits and
authorizations relating to the operation of the Improvements;
(v) any and all deposit accounts and other bank or similar accounts of
Trustor (together with all amounts in any such accounts), monies, accounts,
accounts receivable, contract rights and general intangibles (whether now owned
or existing or hereafter created or acquired, and including proceeds thereof)
relating in any way to, or arising in any manner from, Trustor's ownership, use,
operation, leasing, or sale of all or any part of the property, rights and
interests described in this Section 1.1 (including without limitation all
monies, rents, receipts, proceeds and compensation of every kind whatsoever
received by or on behalf of Trustor and produced from (i) the use or occupancy
of all or any part of the Improvements by the public or others, for lodging,
dwelling, office or residential purposes, (ii) gains arising from the sale or
other disposition of capital assets, including furniture, fixtures and
equipment, (iii) compensation awards, or proceeds in lieu thereof, (iv) all food
and beverage sales, (v) garage and parking rentals, (vi) meeting space rental,
(vii) telephone, telecopy and telex income, (viii) income from vending machines
and newsstands, (ix) recreational fees, (x) hotel rentals; and (xi)
entertainment revenues;
(w) any and all other real property acquired by Trustor after the date
hereof whether or not it is adjacent or contiguous to the Land, and is acquired
by Trustor as a continuation, completion, correction or supplement to the Land;
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(x) any and all other rights and interests of every name and nature in
all property, whether real, personal or mixed, tangible or intangible, now or
hereafter owned or leased by Trustor, forming a part of or used in connection
with or relating to the Land and the construction, operation and convenience of
the Improvements (including without limitation any excavation permits and other
permits issued by governmental authorities);
(y) subject to the provisions and limitations contained in the
Indenture, any and all proceeds of any sales or other dispositions of the
property or rights described in the foregoing clauses to this Section 1.1 or any
part thereof, whether voluntary or involuntary; provided, however, that the
foregoing shall not be deemed to permit such sales, transfers or other
dispositions except as specifically permitted herein;
(z) to the extent permitted by applicable law, any and all of
Trustor's right, title, and interest in and to 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 without limitation
options, option rights and contract rights) now or hereafter obtained by Trustor
from any governmental authority having or claiming jurisdiction over the Land,
the FF&E, the Project or any other element of the Trust Property or providing
access thereto, or the operation of any business on, at, or from the Land, other
than any Gaming Licenses (except for any registrations, licenses, findings of
suitability or approvals issued by the Gaming Authority or any other gaming
licenses which are non-assignable) and the Liquor License; provided that, upon
an Event of Default hereunder or under (and as defined in) the Indenture, if
Beneficiary is not qualified under the Gaming Laws (as defined below) to hold
such Gaming Licenses, then Beneficiary shall designate an appropriately
qualified third party to which an assignment of such Gaming Licenses can be made
in compliance with the Gaming Laws;
(aa) any and all monies and other property, real or personal, which
may from time to time be subjected to the lien hereof by Trustor or by anyone on
its behalf or with its consent, or which may come into the possession or be
subject to the control of Beneficiary pursuant to this Deed of Trust or any
Collateral Document, including without limitation any protective advances under
this Deed of Trust;
(bb) any and all of Trustor's rights further to assign, sell, lease,
encumber or otherwise transfer or dispose of the property described in the
foregoing clauses of this Section 1.1, for debt or otherwise, or to evidence or
secure a Permitted Lien or Permitted Disposition;
(cc) any and all after-acquired property in the same categories as any
of the foregoing clauses of this Section 1.1, and all additions and/or
accessions to, and all renewals, substitutions and replacements of, any of the
foregoing, and all other things of whatsoever kind and in any way or at any time
belonging or appurtenant to, or used in connection with, any of the Trust
Property described in this Section 1.1; and
(dd) to the extent not otherwise included in the foregoing, any and
all proceeds and products of any and all of the foregoing and, to the extent
permitted by applicable law, proceeds of any and all Gaming and Liquor Licenses
even if such Gaming and Liquor Licenses are
6
not subject to the liens granted hereunder and all collateral security and
guarantees given by any person with respect to any of the foregoing, and in any
event including without limitation any and all (i) proceeds of any insurance,
indemnity, warranty or guarantee payable to Beneficiary or to Trustor from time
to time with respect to any of the Trust Property, (ii) payments (in any form
whatsoever) made or due and payable to Trustor from time to time in connection
with any requisition, confiscation, condemnation, seizure or forfeiture of all
or any part of the Trust Property by any governmental authority (or any person
acting under color of a governmental authority), (iii) products of the Trust
Property, (iv) other amounts from time to time paid or payable under or in
connection with any of the Trust Property, and (v) subject to the provisions and
limitations contained in the Indenture, whatever is now or hereafter receivable
or received by Trustor upon the sale, exchange, collection or other disposition
of any item of Trust Property, whether voluntary or involuntary, including
without limitation the proceeds of a Permitted Disposition.
Notwithstanding the foregoing, the Trust Property shall not include
any of the following assets (the "Excluded Assets"): (i) Gaming Licenses and
Liquor Licenses, (ii) any other governmental approval or permit to the extent
that, under the terms and conditions of such approval or under applicable law,
it cannot be subjected to a Lien in favor of the Trustee without the approval of
the relevant Governmental Authority, but only to the extent that such approval
has not been obtained; (iii) any Trust Property that is exclusively subject to
any agreement with a third party that, pursuant to its terms, prohibits the
grant of a lien on such Trust Property; provided that Trustor shall use its best
efforts to obtain such third party's consent to assignment of all such
agreements; and (iv) FF&E to the extent financed or refinanced by, or the
proceeds of, an FF&E Financing to the extent that (A) the purchase or lease of
such FF&E was not financed or refinanced with the proceeds of the Notes but with
the proceeds of an FF&E Financing in place at the time of such purchase or lease
and (B) Trustor is permitted to enter into such FF&E Financing for such FF&E
under the Indenture; provided further that any such FF&E Financing shall
encumber only that FF&E specifically subject to such FF&E Financing; and
provided further that, upon the repayment, satisfaction or termination of such
FF&E Financing, all FF&E financed thereby shall no longer be deemed an Excluded
Asset and shall be subject to the lien of this Deed of Trust.
TO HAVE AND TO HOLD the Trust Property unto Trustee, its successors
and assigns forever, FOR THE PURPOSE OF SECURING, in such order of priority as
Trustee and Beneficiary may elect, the indebtedness and obligations described in
Section 1.3 hereof.
Trustor, for itself and its successors and assigns, covenants and
agrees to and with Beneficiary that, at the time or times of the execution of
and delivery of these presents or any instrument of further assurance with
respect thereto, Trustor has good right, full power and lawful authority to
assign, grant, convey, warrant, transfer, bargain or sell its interests in the
Trust Property in the manner and form as aforesaid, and that the Trust Property
is free and clear of all Liens and encumbrances whatsoever, except the Permitted
Liens, and Trustor shall warrant and forever defend the Trust Property in the
quiet and peaceable possession of Beneficiary and its successors and assigns
against all and every Person or Persons lawfully or otherwise claiming or to
claim the whole or any part thereof, except for the Permitted Liens.
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Trustor agrees that any greater title to the Trust Property hereafter acquired
by Trustor during the term hereof shall be automatically subject hereto.
1.2. Status of Title; Defense of Actions and Costs. Trustor has the right
to mortgage and convey the Trust Property to Trustee and Beneficiary and will
warrant and defend the same to Trustee and Beneficiary and their respective
successors and assigns against the lawful claims and demands of every Person or
whomsoever claiming or to claim the same. Trustor agrees to protect, preserve
and defend Trustee's and Beneficiary's interests in the Trust Property and title
thereto; to appear and defend this Deed of Trust in any action or proceeding
affecting or purporting to affect the Trust Property, the Lien or security
interest of this Deed of Trust thereon, or any of the rights of Trustee or
Beneficiary hereunder, and to pay all reasonable costs and expenses incurred by
Trustee or Beneficiary in or in connection with any such action or proceeding,
including reasonable attorneys' fees, whether or not any such action or
proceeding progresses to judgment and whether or not brought by or against
Trustee or Beneficiary. Trustee and Beneficiary shall be reimbursed for any such
reasonable costs and expenses in accordance with the provisions of this Deed of
Trust and the other Transaction Documents. Trustee or Beneficiary may, but shall
not be under any obligation to, appear or intervene in any such action or
proceeding, retain counsel therein, defend the same or otherwise take such
action therein as it be advised and may settle or compromise the same. In
connection therewith Beneficiary or Trustee, as the case may be, in that behalf
and for any of such purposes, but without obligation, may expend and advance
such sums of money as it reasonably may deem necessary, and shall be reimbursed
therefor in accordance with the provisions of this Deed of Trust and the other
Transaction Documents.
1.3. Obligations Secured. This Deed of Trust is given for the purpose of
securing the payment and performance in full when due (whether at stated
maturity, upon redemption or required repurchase, by acceleration or otherwise)
of all obligations of every type and nature of Trustor to Trustee, any other
trustee under any other Deed of Trust, Beneficiary or any Holder (including
without limitation any and all amounts which may at any time be or become due
and payable and any and all interest accruing after the maturity of the Notes
and interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
Trustor, whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding and interest, to the extent permitted by law, on the
unpaid interest), whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under, out
of, or in connection with, the Indenture, the Notes, the Completion Capital
Commitment, the Keep-Well Agreement, this Deed of Trust, the other Collateral
Documents, or any other document made, delivered or given in connection
therewith, in each case whether on account of principal, premium, interest,
fees, Liquidated Damages, indemnities, costs, expenses or otherwise (including
without limitation all fees and disbursements of counsel to Trustee or to the
Holders that are required to be paid by Trustor pursuant to the terms of the
Indenture, the Notes, the Completion Capital Commitment, the Keep-Well
Agreement, this Deed of Trust, any other Collateral Document, or any other
document entered into by Trustor, or either of them, in connection with any of
the foregoing) (the foregoing, collectively, the "Obligations"). Notwithstanding
the scope of such definition, for purposes of any provision of Title 38 of the
Colorado Revised Statutes, the only "original evidence of debt"
8
secured by this Deed of Trust is the single counterpart of the Indenture which
bears a legend in the following form:
The counterpart of the Indenture on which this legend appears is, for
purposes of Title 38 of the Colorado Revised Statutes, the "original
evidence of debt" secured by the Deed of Trust, as defined herein.
In no event shall Trustee require Beneficiary to produce any or all of the Notes
or other Transaction Documents, other than the single counterpart of the
Indenture referred to above, to support Beneficiary's written request for full
or partial release of this Deed of Trust or for the sale of the Trust Property
by Trustee, and Trustor hereby waives any defense that such single counterpart
of the Indenture is not, for purposes of Title 38 of the Colorado Revised
Statutes, the "original evidence of debt" secured by this Deed of Trust. Trustor
shall pay and perform the Obligations at the times and places and in the manner
specified in the Notes, the Indenture and the other Transaction Documents. This
Deed of Trust shall secure unpaid balances of all loans and other such
extensions of credit made to Trustor under the Transaction Documents, whether
made pursuant to an obligation of Beneficiary or any Holder to make such loans
or extensions or otherwise. Such Obligations and other extensions of credit may
or may not be evidenced by notes executed pursuant to the Indenture. All future
advances will have the same priority as the original advance. Any agreement
hereafter made by Trustor and Beneficiary pursuant to this Deed of Trust shall
be superior to the rights of the holder of any intervening Lien or encumbrance
to the extent allowed by law.
PROVIDED, HOWEVER, that if the principal and interest and all other
sums due or to become due under the Notes shall have been indefeasibly paid in
full at the time and in the manner stipulated herein and all other sums payable
hereunder and all other indebtedness secured hereby shall have been indefeasibly
paid in full, then, in such case, the estate, right, title and interest of
Trustee and Beneficiary in the Trust Property shall cease, and upon written
notice from Beneficiary that all of the indebtedness secured hereby has been
indefeasibly paid in full, cancellation of the Notes secured hereby, surrender
of this Deed of Trust and the Indenture to Trustee and payment by Trustor of
Trustee's fees and costs, all other amounts payable to Trustee hereunder and all
recording costs, Trustee shall release this Deed of Trust and the Trust Property
shall become wholly free of the liens, security interests, conveyances and
assignments created and evidenced hereby.
1.4. After-Acquired Property. If Trustor hereafter acquires (a) any
property that is of the kind or nature described in Section 1.1 hereof and is or
is intended to become a part thereof, or (b) an interest in any of the Trust
Property greater than the interest now held, then such property or interest
shall, immediately upon such acquisition, become subject to the lien of this
Deed of Trust as fully and completely and with the same effect as though now
owned by Trustor and specifically described herein, without need for the
delivery and/or recording of a supplement to this Deed of Trust or any other
instrument, all to the extent permitted by applicable law; provided, however,
Trustor shall from time to time, if requested by Beneficiary and at Trustor's
expense, execute and deliver any and all such further assurances, conveyances
and assignments
9
thereof as Beneficiary may reasonably require for the purpose of expressly and
specifically subjecting to the lien of this Deed of Trust any and all such
property or interest.
1.5. Security Agreement; Fixture Filing. As additional security for the
Obligations, Trustor grants to Beneficiary a security interest in the Trust
Property. This Deed of Trust shall also, as to any part of the Trust Property
that may or might now or hereafter be deemed to be personal property, fixtures
or other property covered by Article 9 of the Colorado Uniform Commercial Code
(the "Personal Property"), be deemed to constitute a security agreement, and
Trustor, as debtor, hereby grants to Beneficiary, as secured party, a security
interest therein pursuant to the Colorado Uniform Commercial Code. To the extent
that any Personal Property has been or may be acquired with funds advanced under
the Transaction Documents, this security interest granted hereunder is a
purchase money security interest. Trustor agrees, upon request of Beneficiary,
and at Trustor's expense, to execute any supplements to this Deed of Trust, any
separate security agreement and any financing statements and continuation
statements in order to include specifically the Personal Property or otherwise
to perfect the security interest granted hereby. Upon the occurrence and
continuance of any Event of Default, Beneficiary shall have all of the rights
and remedies therein provided or otherwise provided by law or by this Deed of
Trust, including but not limited to the right to require Trustor to assemble the
Personal Property and make it available to Beneficiary at a place to be
designated by Beneficiary which is reasonably convenient to both parties, the
right to take possession of such Personal Property with or without demand and
with or without process of law and the right to sell and dispose of such
Personal Property and distribute the proceeds according to law. The parties
hereto agree that any requirement of reasonable notice shall be met if
Beneficiary sends such notice to Trustor at least ten (10) days prior to the
date of sale, disposition or other event giving rise to the required notice, and
that the proceeds of any disposition of any such Personal Property may be
applied by Beneficiary first to the reasonable expenses in connection therewith,
including reasonable attorneys' fees and legal expenses incurred, and then to
payment of the other Obligations. The parties hereto further agree that any sale
of the Personal Property held contemporaneously with any sale of the Land or
other Trust Property and upon the same notice as required in the Colorado
Uniform Commercial Code shall be deemed to be a public sale conducted in a
commercially reasonable manner. With respect to any Personal Property that has
become so attached to the real property covered hereby that an interest therein
arises under the real property law of the State of Colorado, this Deed of Trust
shall also constitute a financing statement and a fixture filing under Sections
4-9-313 and 4-9-402(6) of the Colorado Uniform Commercial Code.
ARTICLE 2.
COVENANTS CONCERNING THE TRUST PROPERTY
2.1. Taxes and Governmental Impositions.
(a) Payment. Subject to Section 2.1(c), Trustor will pay, or cause to
be paid, prior to delinquency, all taxes, assessments, charges, fees (including
without limitation gaming and Liquor License fees), fines and impositions of
every nature whatsoever charged, imposed, levied or assessed or to be charged,
imposed, levied or assessed upon or against the Trust Property or any part
thereof, or upon the interest of Trustee or Beneficiary in the Trust Property,
including without limitation (i) all income taxes (excluding income taxes of
Trustee or Beneficiary),
10
assessments and other governmental charges lawfully levied and imposed by the
United States or any state, county, municipality or other taxing or assessing
authority in respect of the Trust Property or any part thereof, (ii) all
non-governmental levies or assessments, such as maintenance charges, owner's
association dues, charges or fees, levies or charges resulting from covenants,
conditions and restrictions affecting the Trust Property or any part thereof,
and (iii) any other charge that, if unpaid, would or could become a Lien or
charge upon the Trust Property, or any part thereof (all of which are
hereinafter collectively referred to as the "Impositions").
(b) Alternative Impositions. If at any time after the date hereof
there shall be assessed or imposed (i) a tax or assessment on Trustor's interest
in the Trust Property in lieu of or in addition to the Impositions payable by
Trustor pursuant to subparagraph (a) above, or (ii) a license fee, tax or
assessment imposed on Trustee or Beneficiary and measured by or based in whole
or in part upon the amount of the outstanding Obligations secured hereby (but
excluding any state or federal income or franchise tax), then all such taxes,
assessments, or fees shall be deemed to be included within the term
"Impositions" as defined in Section 2.1(a) above, and Trustor shall pay and
discharge the same as herein provided with respect to the payment of
Impositions.
(c) Contests. Trustor shall have the right, before the occurrence of
any delinquency of any Imposition, to contest or object to the amount or
validity of any such Imposition by appropriate legal proceedings, but such right
shall not be deemed or construed in any way as relieving, modifying or extending
Trustor's covenant to pay any such Imposition at the time and in the manner
provided in Section 2.1(a) hereof, unless Trustor has given thirty (30) days'
prior written notice to Beneficiary of Trustor's intent so to contest or object
to such Imposition, and unless: (i) the legal proceedings shall operate
conclusively to prevent the sale of the Trust Property, or any part thereof, to
satisfy such Imposition prior to final determination of such proceedings and
Trustor shall furnish a good and sufficient bond, surety or cash resources in
the amount of the Imposition that is being contested, plus any interest and
penalty that may be imposed thereon and that could become a Lien against the
Trust Property and in a manner to stay or prevent the sale of the Trust
Property, or other security satisfactory to Beneficiary; or (ii) Trustor shall
have paid such Imposition under protest and is suing to recover any refunds
thereof. Subject to the foregoing, within thirty (30) days after the date when
an Imposition is due and payable, Trustor shall deliver to Beneficiary evidence
reasonably acceptable to Beneficiary showing the payment of such Imposition. In
the event that Trustor contests or objects to an Imposition in accordance with
the foregoing, then Trustor shall promptly and diligently proceed to resolve the
dispute concerning the Imposition in a manner not prejudicial to Beneficiary or
its rights hereunder or under the other Transaction Documents.
(d) Payment by Beneficiary. Beneficiary shall have the right to pay
any Imposition after the date such Imposition shall have become delinquent if
Trustor's failure to pay such Imposition constitutes or would constitute, with
or without the giving of notice by Beneficiary or the passage of time, an Event
of Default (unless Trustor shall be contesting such Imposition pursuant to
Section 2.1(c) hereof), and to add to the Obligations the amount so paid,
together with interest thereon from the date of such payment at the then
applicable interest rate on the Notes plus 2% per annum (the "Default Rate") and
nothing herein contained shall affect such right and such remedy. Any amounts
paid by Beneficiary or Trustee in discharge of any
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Impositions shall be (i) a future advance hereunder and a lien on the Trust
Property secured hereby prior to any right or title to, interest in, or claim
upon the Trust Property subordinate to the lien of this Deed of Trust, and (ii)
payable on demand.
(e) No Credit. Trustor shall not claim, demand or be entitled to
receive any credit or credits towards the satisfaction of this Deed of Trust or
on any interest payable thereon for any taxes assessed against the Trust
Property or any part thereof, and shall not claim any deduction from the taxable
value of the Trust Property by reason of this Deed of Trust.
(f) Deposits for Impositions or Insurance Premiums.
(i) At any time after the occurrence of an Event of Default, upon
request by Beneficiary, Trustor shall deposit with Beneficiary or to such
account as Beneficiary may direct (1) on the first day of each month following
such request an amount equal to 1/12 of the annual Impositions and/or annual
insurance premiums (as required by Beneficiary) reasonably estimated by
Beneficiary to become due with respect to the Trust Property for the ensuing
year, and (2) thirty (30) days prior to the next due date of any Impositions or
insurance premiums, an additional amount equal to the aggregate amount of such
Impositions or insurance premiums (as applicable), less the sum of the amounts
on deposit and the amounts to be deposited pursuant to clause (1) of this
subsection (f)(i). If the amounts on deposit under this Section 2.1(f) shall
exceed the amounts required, the excess shall be credited to the subsequent
deposits to be made by Trustor. If the amounts on deposit under this Section
2.1(f) shall be insufficient to pay such Impositions or insurance premiums (as
applicable), upon request, Trustor shall immediately deposit an amount equal to
the deficiency with Beneficiary (or to such account as Beneficiary may direct).
Except as required under applicable law, the deposits under this Section 2.1(f)
shall be for the exclusive benefit of Beneficiary and all right, title and
interest in and to such deposits shall be subject to the exclusive dominion and
control of Beneficiary. In no event will Beneficiary be liable for any interest
on any amount so deposited. Beneficiary shall have no responsibility to ensure
the adequacy of the amounts deposited hereunder. At any time Beneficiary may
notify Trustor that it need no longer make deposits under this Section 2.1(f),
whereupon Trustor shall cease making such deposits; provided that any such
notice shall be without prejudice to Beneficiary's right to require thereafter
that Trustor make deposits under and in accordance with this Section 2.1(f).
(ii) If deposits are made under this Section 2.1(f), Beneficiary
shall make payments of the Impositions or insurance premiums for which such
deposits are made as the same become due, but only following actual receipt by
Beneficiary of the bills therefor, which Trustor shall furnish to Beneficiary
not later than ten (10) Business Days prior to the due date thereof, and only to
the extent that the amounts on deposit with Beneficiary at the time are
sufficient to make such payments. Notwithstanding the foregoing or the fact any
amounts deposited under this Section 2.1(f) may be deposited with respect to
certain Impositions or insurance premiums, Beneficiary may use any amounts on
deposit under this Section 2.1(f) to pay any Impositions or insurance premiums
as the same become due and in whatever order as Beneficiary, in its sole
discretion, may determine.
(iii) If an Event of Default or Default has occurred is
continuing,
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Beneficiary shall have the right, but not the obligation, to apply the deposits
held under this Section 2.1 toward the cure of such Event of Default or Default.
2.2. Mechanic's and Other Liens; Subrogation. Trustor will not suffer any
mechanic's, laborer's, materialmen's, statutory or other Lien or any security
interest or encumbrance (including without limitation any deed of trust or
mortgage) to be created or to remain outstanding (other than Permitted Liens) on
any of the Trust Property. Trustor will promptly pay and discharge any and all
amounts which are now or hereafter become Liens against the Trust Property,
which Liens are not Permitted Liens, whether or not superior to the lien hereof
or to any assignment of rents and leases given to Beneficiary. The lien
covenants of this Section 2.2 shall survive any foreclosure and sale of the
Trust Property and any conveyance thereof by deed in lieu of foreclosure with
respect to any such Liens in existence as of the date of transfer of title. To
the extent that proceeds of the Notes and any other advances representing the
Obligations are used to pay indebtedness secured by any outstanding Lien or
prior encumbrance against the Trust Property, such proceeds have been advanced
at Trustor's request and Beneficiary shall be subrogated to any and all rights,
security interests and Liens owned by any owner or holder of such outstanding
Liens or encumbrances, irrespective of whether such Liens or encumbrances are
released, and it is expressly understood that in consideration of the payment of
such indebtedness, Trustor, with respect to the Beneficiary, hereby waives and
releases all demands and causes of action for offsets, payments and rentals to,
upon and in connection with such indebtedness. Notwithstanding the foregoing,
Trustor will not be deemed to be in default under this Section 2.2 if and so
long as Trustor (a) promptly notifies Beneficiary in writing of Trustor's
intention to contest such Lien together with a reasonably detailed description
of the Lien, (b) contests in good faith the validity or amount of any asserted
Lien and diligently prosecutes or defends an action appropriate to obtain a
binding determination of the disputed matter, and (c) provides Beneficiary with
such security as Beneficiary may in its reasonable discretion require to protect
Beneficiary against all loss, damage and expense, including without limitation
attorneys' fees, which Beneficiary might incur if the asserted Lien is
determined to be valid.
2.3. Utilities. Trustor will pay, or cause to be paid, prior to delinquency
any charges for utilities, whether public or private, with respect to the Trust
Property or any part thereof.
2.4. Insurance.
(a) Maintenance. Trustor will obtain and maintain insurance with
respect to the Trust Property in accordance with the provisions of the
Indenture. From and after the entry of judgment of foreclosure, all rights and
powers of Beneficiary hereunder and under the Indenture to settle or participate
in the settlement of losses under policies of insurance or to hold and disburse
or otherwise control use of insurance proceeds shall continue in full force and
effect in Beneficiary as judgment creditor or mortgagee until confirmation of
sale.
(b) Proceeds. If the Trust Property is materially damaged or
destroyed, Trustor shall give prompt notice thereof to Beneficiary and all
insurance proceeds shall be paid to Trustor, subject to the terms of Section
4.28 of the Indenture.
2.5. Condemnation. Immediately upon obtaining knowledge of the institution
of any
13
proceedings for the condemnation of the Trust Property or any material portion
thereof, Trustor will notify Beneficiary of the pendency of such proceedings.
All condemnation proceeds shall be applied in accordance with the provisions of
Section 4.28 of the Indenture.
2.6. Restoration. Restoration of any of the Trust Property after partial or
complete casualty or condemnation shall be performed in accordance with the
applicable provisions of the Indenture.
2.7. Care of the Trust Property.
(a) Preservation and Maintenance.
(i) Trustor will preserve and maintain the Trust Property in
accordance with the applicable provisions of the Indenture. Further, Trustor
shall keep all of the Trust Property in good condition and repair and expressly
agrees that it will neither permit nor commit any waste upon the Trust Property,
nor do any other act or suffer or permit any act to be done, whereby the Lien
hereof may be impaired. Trustor shall comply in all material respects with all
zoning laws, building codes, subdivision laws, gaming and liquor laws (including
without limitation the Colorado Liquor Code and the Colorado Limited Gaming Act
and their respective regulations), and other applicable laws, and Trustor shall
not become involved in conduct that would cause either the Gaming or Liquor
Licenses relating to the Trust Property to be suspended or revoked. Trustor
agrees not to initiate or acquiesce in any zoning variance or reclassification
which would prohibit the use of the Trust Property for its intended purposes.
Trustor shall at all times comply in all material respects with applicable
restrictive covenants and the terms and conditions of all other Permitted Liens
relating to the Trust Property. Notwithstanding anything above to the contrary,
to the extent expressly permitted by the Indenture, Trustor may remove or sell
any fixture, equipment, machinery or appliance in or on the Trust Property
incident to the replacement of such items with replacements leased or purchased
by Trustor with the proceeds of FF&E Financing.
(ii) Without granting to Trustor any right to incur Indebtedness
or Liens not expressly permitted by the Indenture, Trustor may make alterations
or construct other improvements on the Land to the extent not prohibited by the
Indenture or under any other documents creating a Permitted Lien on the Trust
Property (any of the foregoing are called herein a "Permitted Alteration");
provided that such work shall be performed in a good and workmanlike manner and
in compliance with all laws including without limitation the Colorado Liquor
Code and the Colorado Limited Gaming Act.
(b) Notice of Damage. If the Trust Property or any part thereof is
materially damaged by fire or any other cause, Trustor shall give prompt written
notice thereof to Beneficiary.
(c) Right to Inspect. Beneficiary or its representative is hereby
authorized, with reasonable advance notice to Trustor, to enter upon and inspect
the Trust Property at any time during normal business hours and at any other
reasonable time.
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2.8. Future Tenant Leases.
(a) Any future Tenant Leases permitted by the Indenture must be
subordinate to the lien of this Deed of Trust, unless otherwise permitted by the
Indenture. Each future Tenant Lease must contain a provision that, at
Beneficiary's election, upon notice to tenant by Beneficiary, such Tenant Lease
shall become superior, in whole or in part, to the lien of this Deed of Trust.
Further, each future Tenant Lease of real property shall obligate the tenant
thereunder to attorn, at the option of the purchaser of the Trust Property, to
any purchaser at foreclosure or other successor owner of the Trust Property.
(b) Trustor shall furnish to Beneficiary a true and complete copy of
each Tenant Lease, and any amendment, modification, extension or renewal of any
Tenant Lease hereafter made by Trustor, within thirty (30) days after execution
of each such Tenant Lease, amendment, modification, extension, or renewal by the
parties thereto.
(c) Trustor shall, at Trustor's sole cost and expense, perform each
and every material covenant, condition, promise and obligation on the part of
the lessor to be performed pursuant to the terms of each and every Tenant Lease
existing on the date hereof or hereafter made with respect to the Trust Property
or any part or parts thereof.
(d) Trustor shall promptly furnish to Beneficiary any and all material
information which Beneficiary may request concerning the performance and
observance of all covenants, agreements and conditions contained in the Tenant
Leases by the lessor thereunder to be kept, observed and performed and
concerning the compliance with all terms and conditions of the Tenant Leases.
(e) In the event of any failure by Trustor to keep, observe or perform
any material covenant, agreement or condition contained in the Tenant Leases or
to comply with the terms and conditions of any Tenant Leases, any performance,
observance or compliance by Beneficiary pursuant to this Deed of Trust on behalf
of Trustor shall not remove or waive, as between Trustor and Beneficiary, the
corresponding Default or Event of Default under the terms of this Deed of Trust.
(f) Any proceedings or other steps taken by Beneficiary to foreclose
this Deed of Trust, or otherwise to protect the interests of Beneficiary
hereunder, shall not automatically operate to terminate the rights of any
present or future tenant under any Tenant Lease, notwithstanding that such
rights may be subject and subordinate to the lien of this Deed of Trust. The
failure to make any such tenant a defendant in any such foreclosure proceeding
and to foreclose such tenant's rights will not be asserted by Trustor or any
other defendant in such foreclosure proceeding as a defense to any proceeding
instituted by or on behalf of Beneficiary to foreclose this Deed of Trust or
otherwise protect the interests of Beneficiary hereunder.
2.9. Further Encumbrance.
(a) Trustor covenants that at all times prior to the discharge of the
Indenture, except for Permitted Liens, Permitted Dispositions and dispositions
permitted under Section 2.10,
15
Trustor shall neither make nor suffer to exist, nor enter into any agreement
for, any sale, assignment, exchange, mortgage, transfer, Lien, hypothecation or
encumbrance of all or any part of the Trust Property, including without
limitation the Rents, Issues and Profits. As used herein, "transfer" includes
the actual transfer or other disposition, whether voluntary or involuntary, by
law, or otherwise, except those transfers specifically permitted herein;
provided, however, that "transfer" shall not include the granting of utility or
other beneficial easements with respect to the Trust Property which have been
granted by Trustor and are reasonably necessary to the construction, maintenance
or operation of the Project.
(b) Trustor agrees that in the event the ownership of the Trust
Property or any part thereof becomes vested in a Person other than Trustor,
Beneficiary may, without notice to Trustor, deal in any way with such successor
or successors in interest with reference to this Deed of Trust, the Notes and
other Obligations hereby secured without in any way vitiating or discharging
Trustor's or any guarantor's, surety's or endorser's liability hereunder or
under the Obligations hereby secured. No sale of the Trust Property, no
forbearance to any Person with respect to this Deed of Trust and no extension to
any Person of the time for payment of the Notes and other sums secured hereby
given by Beneficiary shall operate to release, discharge, modify, change or
affect the original liability of Trustor, or such guarantor, surety or endorser,
either in whole or in part.
(c) This Deed of Trust, shall not extend to (i) FF&E to the extent the
purchase or lease thereof has been financed or refinanced by, or with the
proceeds of, an FF&E Financing permitted under the Indenture and (ii) any future
or further advances made under such FF&E Financing and to any modifications,
renewals, extensions or refinancings thereof to which the lien of this Deed of
Trust would otherwise attach, in each case to the extent such FF&E Financing is
permitted under the Indenture; provided that any such FF&E Financing shall
encumber only that FF&E specifically subject to the FF&E Financing; and provided
further that, upon the repayment, satisfaction or termination of such FF&E
Financing, all FF&E financed thereby shall no longer be deemed an Excluded Asset
and shall be subject to the lien of this Deed of Trust. The Beneficiary shall,
if requested by the Trustor, execute and deliver, at Trustor's sole expense, any
instruments reasonably necessary or appropriate to release the lien of this Deed
of Trust with respect to or otherwise confirm that the lien of this Deed of
Trust does not apply to any of such Excluded Assets; Trustor covenants and
agrees to comply with all of the terms and conditions set forth in any FF&E
Financing with respect to which Beneficiary has taken a Lien hereunder. If
Trustor shall fail to make any payment of principal of or interest on the sums
secured by such security interest or any payment in order to perform or observe
any other term, covenant, condition or agreement of any FF&E Financing on
Trustor's part to be performed or observed, except where Trustor is diligently
contesting such payment in good faith, then Beneficiary may make such payment of
the principal of or interest on the sums secured by such security interest or
may make any payment in order to perform or observe any other term, covenant,
condition or agreement of any FF&E Financing on Trustor's part to be performed
or observed, and any and all sums so expended by Beneficiary shall be part of
the Obligations and shall be secured by this Deed of Trust and shall be repaid
by Trustor upon demand, together with interest thereon at the Default Rate from
the date of advance.
16
2.10. Partial Releases of Trust Property.
(a) Trustor may from time to time (i) transfer a portion of the Trust
Property (including any temporary taking) to any Person legally empowered to
exercise the power of eminent domain, (ii) make a Permitted Disposition, or
(iii) grant utility easements reasonably necessary for the construction and
operation of the Project, which grant or transfer is for the benefit of the
Trust Property. In each such case, and at Trustor's sole expense, Beneficiary
shall execute and deliver any instruments necessary or appropriate to effectuate
or confirm any such transfer or grant, free from the lien of this Deed of Trust;
provided, however, that Beneficiary shall execute a lien release or
subordination agreement, as appropriate, for matters described in clauses (i)
and (iii) above only if:
(A) Beneficiary shall have received an Officers'
Certificate or Opinion of Counsel required or authorized by
Section 10.04 of the Indenture;
(B) No Default or Event of Default shall have
occurred and be continuing and the conditions of this Section
2.10 have been fulfilled, and such transfer, grant or release
is permitted by the Indenture;
(C) Beneficiary shall have received a counterpart of
the instrument pursuant to which such transfer, grant or
release is to be made, and each instrument which Beneficiary
is requested to execute in order to effectuate or confirm such
transfer, grant or release, and each shall be acceptable to
Beneficiary in form and substance; and
(D) Beneficiary shall have received such other
instruments, certificates (including evidence of authority)
and opinions as Beneficiary may reasonably request or as
required or authorized under the Indenture, including, but not
limited to, opinions that the proposed release is permitted by
this Section 2.10.
(b) Any consideration received for a transfer to any Person empowered
to exercise the right of eminent domain shall be subject to Section 2.5 hereof.
ARTICLE 3.
ASSIGNMENT OF LEASES AND RENTS
3.1 Assignment of Leases and Rent. As additional consideration for the
Obligations, Trustor hereby absolutely and unconditionally assigns and transfers
to Beneficiary the following:
(a) the Tenant Leases;
(b) any and all guaranties of the obligations of the tenants (the
"Tenants") under any of such Tenant Leases; and
(c) unless and until the Event of Default has occurred, the immediate
and continuing right to collect and receive all of the Rents, Issues and Profits
now due or that may
17
become due or to which Trustor may now or hereafter (whether during any
applicable period of redemption or otherwise) become entitled or may demand or
claim, arising or issuing from or out of the Tenant Leases, or from or out of
the Trust Property or any part thereof.
3.2 Trustor's Limited License. Provided that no Event of Default
hereunder exists, Trustor shall have the right under a license granted hereby
and Beneficiary hereby grants to Trustor a license to collect, but not more than
one month in advance, all of the Rents, Issues and Profits arising from or out
of the Tenant Leases or any renewals or extensions thereof, or from or out of
the Trust Property or any part thereof, but only as trustee for the benefit of
Beneficiary. Trustor shall apply the Rents, Issues and Profits so collected
first to payment of any and all amounts due and payable under the Indenture.
Thereafter, so long as no Event of Default hereunder exists, Trustor may use the
Rents, Issues and Profits in any manner not inconsistent with the Indenture. The
license granted hereby shall be revoked automatically upon the occurrence of an
Event of Default hereunder.
3.3 Limitation. The acceptance by Beneficiary of the assignment
provided in this Article 3, together with all of the rights, powers, privileges
and authority created in this Article 3 or elsewhere in this Deed of Trust,
shall not, prior to entry upon and taking possession of the Trust Property by
Beneficiary, be deemed or construed to constitute Beneficiary a "mortgagee in
possession," nor thereafter or at any time or in any event obligate Beneficiary
to appear in or defend any action or proceeding relating to the Tenant Leases,
the Rents, Issues and Profits or the Trust Property or to take any action
hereunder or to expend any money or incur any expenses or perform or discharge
any obligation or responsibility for any security deposits or other deposits
delivered to Trustor by any Tenant and not assigned and delivered to
Beneficiary, nor shall Beneficiary be liable in any way for any injury or damage
to person or property sustained by any person or persons, firm or corporation in
or about the Trust Property.
3.4 Performance by Trustor. Trustor shall perform its obligations under
the Tenant Leases in accordance with their terms. Trustor shall not default in
the performance of any obligation of Trustor under any Tenant Lease if, by
reason of such default, the Tenant or other party thereunder has the right to
cancel such Tenant Lease or to claim any diminution or offset against future
Rents, Issues or Profits.
3.5 No Merger of Leases. If the estates of all parties to any Tenant
Lease shall at any time become vested in one owner, this Deed of Trust and the
lien created hereby shall not be destroyed or terminated by application of the
doctrine of merger, and in such event, Beneficiary shall continue to have and
enjoy all of the rights and privileges of Beneficiary as to the separate
estates. In addition, upon the foreclosure of the lien created by this Deed of
Trust, any Tenant Leases then existing and affecting all or any portion of the
Trust Property shall not be destroyed or terminated by application of the law of
merger or as a matter of law or as a result of such foreclosure, unless
Beneficiary or any purchaser at any such foreclosure sale shall so elect in
writing. No act by or on behalf of Beneficiary or any such purchaser shall
constitute a termination of any Tenant Lease or sublease unless Beneficiary or
such purchaser shall give written notice thereof to the lessee or sublessee
under such Tenant Lease.
3.6 Remedies. If an Event of Default has occurred and is continuing, in
addition to all
18
other rights and remedies of Beneficiary as set forth under Article 4 hereof,
Beneficiary shall have the following rights and remedies:
(a) Possession and/or Collection of Rent. Beneficiary, without first
being required to (i) foreclose, (ii) take any actions to foreclose, (iii)
institute any legal proceedings of any kind whatsoever or (iv) exercise any
other actions or remedies hereunder or at law or in equity, shall have the
exclusive right and power (but not the obligation) (A) to enter upon and take
possession of the Trust Property or any part thereof, (B) to rent or re-rent the
same, either in the name of Beneficiary or Trustor, and/or (C) to receive all
Rents, Issues and Profits from the Trust Property. Beneficiary shall apply any
Rents, Issues and Profits received by Beneficiary first, to the costs and
expenses incurred by Beneficiary in protecting and operating the Trust Property,
and next, to the payment of the Obligations in such manner and in such order of
priority as Beneficiary shall determine consistent with the provisions of the
Indenture. Any such action by Beneficiary shall not operate as a waiver of the
Event of Default in question, or as an affirmance of any Tenant Leases or of the
rights of any Tenants in the event title to that part of the Trust Property
covered by the Tenant Leases or held by the Tenants should be acquired by
Beneficiary or other purchaser at a foreclosure sale. The right of Beneficiary
to receive all Rents, Issues and Profits from the Trust Property upon the
occurrence and during the continuance of any Event of Default shall be
applicable whether or not Beneficiary has entered upon, foreclosed, taken any
actions to foreclose or taken possession of the Trust Property, whether or not
Beneficiary has instituted any legal proceedings of any kind whatsoever, or
whether or not Beneficiary has otherwise attempted to exercise any other actions
or remedies hereunder or at law or in equity. If any such Rents, Issues and
Profits are paid to or received by Trustor, Trustor shall hold same in trust for
Beneficiary and immediately pay the same to Beneficiary (in the form received,
except for any necessary endorsement), without the necessity of any request or
demand therefor. Until receipt from Beneficiary of notice of the occurrence of
an Event of Default hereunder and during the continuance thereof, all Tenants of
the Tenant Leases and any successors to the leasehold interest of such Tenants
may pay Rents, Issues and Profits directly to Trustor, but after notice of the
occurrence of any Event of Default and during the continuance of same, Trustor
covenants to and shall hold all Rents, Issues and Profits paid to Trustor in
trust for Beneficiary. Trustor hereby authorizes and directs all Tenants of the
Tenant Leases herein described, and any successors to the leasehold interest of
such Tenants, upon receipt of any notice from Beneficiary stating that an Event
of Default hereunder has occurred, to pay to Beneficiary the Rents, Issues and
Profits due and to become due under such Tenant Leases. Trustor agrees that such
Tenants shall have the right to rely upon any such notice and request by
Beneficiary without any obligation or right to inquire as to whether an Event of
Default actually exists and notwithstanding any notice from or claim of Trustor
to the contrary, and Trustor shall have no right or claim against the Tenants
for any such Rents, Issues and Profits so paid by the Tenants to Beneficiary. In
such event, receipt by Beneficiary of Rents, Issues and Profits from such
Tenants or their successors shall be a release of such Tenants or their
successors to the extent of all amounts so received by Beneficiary.
(b) Management. Beneficiary, at its option, but subject to the
provisions of Sections 4.8 and 5.30 hereof, may take over and assume the
management, operation and maintenance of the Trust Property and perform all acts
necessary and proper and expend such sums out of the income of the Trust
Property as may be needful in connection therewith, including without limitation
applying for appropriate approvals from the Liquor License Authorities
19
and Gaming Authorities, in the same manner and to the same extent as Trustor
theretofore might do, including without limitation the right to enter into new
leases, to cancel or surrender existing Tenant Leases, to alter or amend the
terms of existing Tenant Leases, to renew existing Tenant Leases, or to make
concessions to Tenants. Trustor hereby releases all claims against Beneficiary
arising out of such management, operation and maintenance, including without
limitation such claims as may arise from the negligence of Beneficiary, but not
the gross negligence or willful misconduct of Beneficiary and not any liability
of Beneficiary to account as hereinafter set forth.
(c) Receiver. Upon or at any time after the occurrence of an Event of
Default, but subject to the provisions of Sections 4.8 and 5.30 hereof,
Beneficiary shall at once become entitled to the possession, use and enjoyment
of the Trust Property and the Rents, Issues and Profits, from the date of such
occurrence and continuing during the pendency of any proceedings for sale by the
public trustee or foreclosure proceedings, and the period of redemption, if any.
Beneficiary shall be entitled to a receiver for the Trust Property, and of the
Rents, Issues and Profits, after any such default, including without limitation
the time covered by any proceedings for sale by the public trustee or
foreclosure proceedings and the period of redemption, if any. Beneficiary shall
be entitled to such receiver as a matter of right, without regard to the
solvency or insolvency of Trustor, or of the then owner of the Trust Property,
and without regard to the value thereof, and such receiver may be appointed by
any court of competent jurisdiction upon ex parte application, and without
notice, notice being hereby expressly waived. All Rents, Issues and Profits,
income and revenue therefrom shall be applied by such receiver to the payment of
the Obligations according to the orders and directions of the court, or in the
absence of such orders or directions, in the manner set forth in Section 3.7
below.
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3.7 Application of Income. Beneficiary shall, after payment of all proper
charges and expenses, including reasonable compensation to any managing agent as
it shall select and employ, and after the accumulation of a reserve to meet
taxes, assessments and insurance as herein required in requisite amounts, credit
the net amount of income received by it from the Trust Property by virtue of
this absolute assignment to any amounts due and owing to it by Trustor under the
terms hereof, but the manner of the application of such net income and what
items shall be credited shall be determined pursuant to the Indenture, or
otherwise in the sole discretion of Beneficiary. Without impairing its rights
hereunder, Beneficiary may, at its option, at any time and from time to time,
release to Trustor Rents, Issues and Profits received by Beneficiary, or any
portion of such Rents, Issues and Profits. Beneficiary shall not be liable for
its failure to collect, or its failure to exercise diligence in the collection
of Rents, Issues and Profits, but shall be accountable only for Rents, Issues
and Profits that Beneficiary shall actually receive.
3.8 Term. This absolute assignment shall remain in full force and effect so
long as the Obligations or any part thereof to Beneficiary remains unpaid or
unsatisfied, in whole or in part.
3.9 Actions of Trustee. All provisions hereof shall inure to the benefit of
and all actions authorized hereunder shall be exercisable by Trustee or any
substitute of Trustee at Beneficiary's request.
ARTICLE 91.
DEFAULTS AND REMEDIES
4.1 Events of Default. An Event of Default shall mean the occurrence of any
Event of Default set forth in Annex A attached hereto.
4.2 Performance of Defaulted Acts. From and after the occurrence of an
Event of Default, Beneficiary may (without prejudice to its other rights and
remedies), but need not, make any payment or perform any act required of Trustor
herein, in the Indenture or in any other Transaction Document, in each case in
any form and manner deemed expedient, including without limitation making full
or partial payments of principal or interest on prior encumbrances, if any, and
purchasing, discharging, compromising or settling any tax Lien or other prior
Lien or title or claim thereof, or redeeming from any tax sale or forfeiture
affecting the Trust Property or contesting any tax or assessment. All monies
paid for any of the purposes herein authorized and all expenses paid or incurred
in connection therewith, including reasonable attorneys' fees (including
reasonable fees of in-house counsel), shall be included among the Obligations
and shall be due and payable upon demand and with interest thereon from the date
of such payment or expense at the Default Rate. Inaction of Beneficiary shall
never be considered as a waiver of any right accruing to it hereunder on account
of any default on the part of Trustor. Beneficiary, in making any payment hereby
authorized relating to taxes or assessments, may do so according to any bill,
statement or estimate procured from the appropriate public office without
inquiry into the accuracy of such bill, statement or estimate or into the
validity of any tax, assessment, sale, forfeiture, tax Lien or title or claim
thereof.
4.3 Remedies. Upon the occurrence of any Event of Default, Beneficiary may,
at its option (in each case, subject to and in accordance with any applicable
terms of the Indenture):
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(a) declare all sums secured hereby to be immediately due and payable,
and the same shall thereupon become immediately due and payable without any
presentment, demand, protest or notice of any kind;
(b) terminate Trustor's right and license to collect the Rents, Issues
and Profits and either in person or by agent, with or without bringing any
action or proceeding, or by a receiver appointed by a court, and without regard
to the adequacy of its security, enter upon and take possession of the Trust
Property, or any part thereof, in its own name or in the name of Trustee, and do
any acts which it deems necessary or desirable to preserve the value,
marketability or rentability of the Trust Property, or any part thereof or
interest therein, make, modify, enforce, cancel or accept the surrender of any
Tenant Lease, take actions which may affect the income therefrom or protect the
security hereof, and with or without taking possession of the Trust Property,
sue for or otherwise collect the Rents, Issues and Profits, including without
limitation those past due and unpaid, and apply the same, less costs and
expenses of operation and collection, including without limitation attorneys'
fees (including fees of in-house counsel), upon any Obligations secured hereby,
all in such order as Beneficiary may determine. From and after receipt of
written notice from Beneficiary to pay Rents, Issues and Profits directly to
Beneficiary or another party designated by Beneficiary, each Tenant shall pay
all such payments under its Tenant Lease in the manner instructed by
Beneficiary. The entering upon and taking possession of the Trust Property or
any portion thereof, the collection of the Rents, Issues and Profits and the
application thereof as aforesaid, or any of such acts, shall not cure or waive
any default or notice of default hereunder or invalidate any act done in
response to such default or pursuant to such notice, and notwithstanding the
continuance in possession of the Trust Property or the collection, receipt and
application of the Rents, Issues and Profits, Trustee or Beneficiary shall be
entitled to exercise every right provided for in any of the Indenture, the
Notes, the other Transaction Documents or by law upon the occurrence of any
Event of Default, including without limitation the right to exercise the power
of sale provided herein;
(c) notwithstanding the availability of legal remedies, obtain
specific performance, mandatory or prohibitory injunctive relief, or other
equitable relief requiring Trustor to cure or refrain from repeating any
default;
(d) with or without accelerating the maturity of the Obligations, sue
from time to time for any payment due under any of the Indenture, the Notes or
the other Transaction Documents, or for money damages resulting from any
Trustor's default under any of the Indenture, the Notes or the other Transaction
Documents;
(e) exercise all rights and remedies set forth in Section 1.5 and all
rights of a secured party under the Uniform Commercial Code;
(f) foreclose this Deed of Trust, insofar as it encumbers the Trust
Property, by way of a trustee's sale pursuant to the provisions of Title 38,
Article 38, Colorado Revised Statutes, as currently in effect, as amended, or in
any other manner then permitted by law. If this Deed of Trust encumbers more
than one parcel of real estate, foreclosure may be by separate parcel or en
masse, as Beneficiary may elect in its sole discretion. Foreclosure through
Trustee will be initiated by Beneficiary's filing of its notice of election and
demand for sale with Trustee.
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Upon the filing of such notice of election and demand for sale, Trustee shall
promptly comply with all notice and other requirements of the laws of the State
of Colorado then in force with respect to such sales, and shall give four weeks'
public notice of the time and place of such sale by advertisement weekly in some
newspaper of general circulation then published in the County or City and County
in which the Trust Property is located. The right to foreclose this Deed of
Trust as a mortgage by appropriate proceedings in any court of competent
jurisdiction is also hereby given;
(g) exercise all other rights and remedies provided herein, in the
Indenture, the Notes, the other Transaction Documents or in any other document
or agreement now or hereafter securing all or any portion of the Obligations, or
at law or in equity, or any combination of any such rights or remedies, to the
extent permitted by law.
Upon request by Beneficiary, Trustor shall assemble and make available
to Beneficiary at the Land any of the Trust Property which is not located on the
Land or which has been removed therefrom.
4.4 Foreclosure.
(a) All fees, costs and expenses of any kind incurred by Beneficiary
in connection with foreclosure of this Deed of Trust, including without
limitation the costs of any appraisals of the Trust Property obtained by
Beneficiary, all costs of any receivership for the Trust Property advanced by
Beneficiary, and all reasonable attorneys' fees and consultants' fees incurred
by Beneficiary (including charges of in-house counsel), appraisers' fees,
outlays for documentary and expert evidence, stenographers' charges, publication
costs and costs (which may be estimates as to items to be expended after entry
of the decree) of procuring all such abstracts of title, title searches and
examination, title insurance policies and similar data and assurances with
respect to title, as Trustee or Beneficiary may reasonably deem necessary either
to prosecute such suit or to evidence to bidders at the sales that may be had
pursuant to such proceedings the true conditions of the title to or the value of
the Trust Property, together with and including a reasonable compensation to
Trustee, shall constitute a part of the Obligations and may be included as part
of the amount owing from Trustor to Beneficiary at any foreclosure sale.
(b) The proceeds of foreclosure sale of the Trust Property shall be
distributed and applied in the following order of priority: first, on account of
all costs and expenses incident to the foreclosure proceedings, including
without limitation all such items as are mentioned in Section 4.4(a) hereof;
second, to the payment of all sums expended under the terms hereof not then
repaid, with accrued interest at the Default Rate; third, to the payment of all
other Obligations; and lastly, the remainder, if any, to the person or persons
legally entitled thereto.
(c) In case of an insured loss after judicial foreclosure or Trustee's
sale proceedings have been instituted, the proceeds of any insurance policy or
policies, if not applied to rebuilding or restoring the buildings or
improvements, shall be used to pay the amount due upon the Obligations. In the
event of judicial foreclosure or Trustee's sale, Beneficiary or Trustee is
hereby authorized, without the consent of Trustor, to assign any and all
insurance policies to the purchaser at the sale, or to take such other steps as
Beneficiary or Trustee may deem
23
advisable to cause the interest of such purchaser to be protected by any of the
such insurance policies.
(d) To the fullest extent allowable by law, Trustor hereby expressly
waives any right which it may have to direct the order in which any Trust
Property shall be sold in the event of any sale or sales pursuant to this Deed
of Trust.
(e) Nothing in this
4.4 dealing with foreclosure procedures or specifying particular
actions to be taken by Beneficiary or by Trustee or any similar officer shall be
deemed to contradict or add to the requirements and procedures now or hereafter
specified by Colorado law, and any such inconsistency shall be resolved in favor
of Colorado law applicable at the time of foreclosure.
4.5 Rescission of Notice of Default. Beneficiary may from time to time
withdraw any notice of election and demand for sale in accordance with Section
38-38-101(11) of the Colorado Revised Statutes. The exercise by Beneficiary of
such right shall not constitute a waiver of any breach or default then existing
or subsequently occurring, or impair the right of Beneficiary to execute and
deliver to Trustee, as above provided, other declarations or notices of default
to satisfy the Obligations under this Deed of Trust or the other Obligations,
nor otherwise affect any provision, covenant or condition of any of the
Indenture, the Notes or the other Transaction Documents or any of the rights,
obligations or remedies of Trustee or Beneficiary hereunder or thereunder.
4.6 Appointment of Receiver. Trustor waives any right to any hearing or
notice of hearing prior to the appointment of a receiver. Such receiver and its
agents shall be empowered (a) to take possession of the Trust Property and any
businesses conducted by Trustor or any other person (excluding the business of
tenants of Trustor) thereon and any business assets used in connection therewith
and, if the receiver deems it appropriate, to operate the same, (b) to exclude
Trustor and Trustor's agents, servants, and employees from the Trust Property,
(c) to collect the rents, issues, profits, and income therefrom, (d) to complete
any construction which may be in progress, (e) to do such maintenance and make
such repairs and alterations as the receiver deems reasonably necessary, (f) to
use all stores of materials, supplies and maintenance equipment on the Trust
Property, (g) to pay all taxes and assessments against the Trust Property and
all premiums for insurance thereon, (h) to pay all utility and other operating
expenses, and all sums due under any prior or subsequent encumbrance, and (i)
generally to do anything which Trustor could legally do if Trustor were in
possession of the Trust Property. All expenses incurred by the receiver or his
agents shall constitute a part of the Obligations, including without limitation
reasonable attorneys' fees. Any revenues collected by the receiver shall be
applied first to the expenses of the receivership, including reasonable
attorneys' fees incurred by the receiver and by Beneficiary (including charges
of in-house counsel), together with interest thereon at the Default Rate from
the date incurred until repaid, and the balance shall be applied toward the
Obligations or in such other manner as the court may direct. Unless sooner
terminated with the express consent of Beneficiary, any such receivership will
continue until the Obligations have been discharged in full, or until title to
the Trust Property has passed after foreclosure sale and all applicable periods
of redemption have expired.
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4.7 Remedies Not Exclusive; Waiver. Trustee and Beneficiary, and each of
them, shall be entitled to enforce the payment and performance of any
Obligations and to exercise all rights and powers under this Deed of Trust or
under any other Transaction Document or other agreement or any laws now or
hereafter in force, notwithstanding the fact that some or all of the Obligations
may now or hereafter be otherwise secured, whether by mortgage, deed of trust,
pledge, Lien, assignment or otherwise. Neither the acceptance of this Deed of
Trust nor its enforcement, whether by court action or pursuant to the power of
sale or other powers contained herein, shall prejudice or in any manner affect
Trustee's or Beneficiary's right to realize upon or enforce any other rights or
security now or hereafter held by Trustee or Beneficiary. Trustee and
Beneficiary, and each of them, shall be entitled to enforce this Deed of Trust
and any other rights or security now or hereafter held by Beneficiary or Trustee
in such order and manner as they or either of them may in their absolute
discretion determine. No remedy herein or by law provided or permitted shall be
exclusive of any other remedy, but each shall be cumulative and in addition to
every other remedy given hereunder or now or hereafter existing at law or in
equity. Every power or remedy given by any of the Transaction Documents to
Trustee or Beneficiary, or to which either of them may be otherwise entitled,
may be exercised, concurrently or independently, from time to time and as often
as may be deemed expedient by Trustee or Beneficiary, and either of them may
pursue inconsistent remedies. By exercising or by failing to exercise any right,
option or election hereunder, Beneficiary shall not be deemed to have waived any
provision hereof or to have released Trustor from any of the Obligations secured
hereby unless such waiver or release is in writing and signed by Beneficiary.
The waiver by Beneficiary of Trustor's failure to perform or observe any term,
covenant or condition referred to or contained herein to be performed or
observed by Trustor shall not be deemed to be a waiver of such term, covenant or
condition on any other occasion or any subsequent failure of Trustor to perform
or observe the same or any other such term, covenant or condition referred to or
contained herein, and no custom or practice which may develop between Trustor
and Beneficiary during the term hereof shall be deemed a waiver of or in any way
affect the right of Beneficiary to insist upon the performance by Trustor of the
Obligations secured hereby in strict accordance with the terms hereof or any
other Transaction Document.
4.8 Casino. Trustor acknowledges that part of the Trust Property consists
of a casino and gaming property (the "Casino") which is subject to Gaming Laws
and the jurisdiction of the Gaming Authorities and that, under the applicable
Gaming Laws, the operation of the Casino by a person other than a person
properly licensed by the Gaming Authorities to operate a casino and gaming
business (a "Licensee") is prohibited and may result in the closing of the
Casino, the loss of customers, employees, revenues and good will, and the severe
diminution in the value of the Trust Property, all to the economic jeopardy and
extreme detriment of Beneficiary. In order to mitigate such adverse
consequences, Trustor agrees that, if an Event of Default has occurred, either
before or after seeking an appointment of a receiver, in addition to any other
right or remedy available to Beneficiary hereunder or under applicable law (but
subject to any applicable requirements of the applicable Gaming Laws), (a)
Beneficiary shall have the right (but not the obligation) to solicit any
Licensee or other person with the capacity to become a Licensee to purchase,
lease and/or operate the Casino as a receiver of the Trust Property, as a
supervisor of the Casino, as a purchaser of the Trust Property or Casino at any
foreclosure sale, or in any other appropriate capacity permitted under the
applicable Gaming Laws; (b) any such Licensee or other
25
person and Beneficiary may, to the extent permitted under the applicable Gaming
Laws, apply to and appear before the Gaming Authorities and any other
appropriate authority for a license or a finding of suitability to permit such
Licensee or other person to operate the Casino; and (c) Trustor shall cooperate
fully with any action taken by Beneficiary and any such Licensee or other person
pursuant to this Section 4.8.
4.9 Multiple Collateral.
(a) No recovery of any judgment by Trustee or Beneficiary and no levy
of an execution under any judgment upon the Trust Property or upon any property
of Trustor encumbered by any other Collateral Document shall affect in any
manner or to any extent the lien of this Deed of Trust upon the Trust Property
or any part thereof, and any Liens, rights, powers and remedies of Trustee or
Beneficiary shall continue unimpaired until all of the Obligations have been
satisfied and indefeasibly paid in full.
(b) Trustor agrees that it shall not at any time insist upon, plead,
seek or in any manner whatever claim or take any benefit or advantage of a
judgment, declaration or a determination that:
(i) the Trust Property or any other property of Trustor
encumbered by a Transaction Document represents, on an individual basis, an
allocable portion of the then outstanding aggregate principal amount of the
Notes or the Obligations;
(ii) the lien of this Deed of Trust or of any other
Transaction Document has been released, unless the Obligations have been
satisfied and indefeasibly paid in full;
(iii) a deficiency judgment with respect to any action taken
by Trustee or Beneficiary against the Trust Property or any other property of
Trustor encumbered by a Transaction Document extinguishes all or any portion of
the remaining Obligations, or precludes Trustee or Beneficiary from proceeding
against the Trust Property or to satisfy such remaining Obligations; or
(iv) Trustee's or Beneficiary's commencement, prosecution,
or taking to judgment of any action (including without limitation Trustee's or
Beneficiary's acceptance of a deed in lieu of foreclosure) or Trustee's or
Beneficiary's application for or use of any remedy (including without limitation
the appointment of a receiver for the Trust Property or any other property of
Trustor encumbered by a Transaction Document) against the Trust Property or any
other property of Trustor encumbered by a Transaction Document precludes or bars
Trustee or Beneficiary (under a "single action" rule, "security first" rule or
similar rule) from commencing, prosecuting or taking to judgment any other
action or applying for or using any remedy against the Trust Property or any
other property of Trustor encumbered by a Transaction Document.
(c) Beneficiary may, at its option, in such order, and utilizing such
combinations of remedies with respect to the Trust Property and/or any other
property of Trustor
26
encumbered by a Transaction Document as Beneficiary shall so elect, pursue its
remedies against (i) the Trust Property, individually, or any other property of
Trustor encumbered by a Transaction Document, individually; (ii) the Trust
Property and any combination of any other property of Trustor encumbered by a
Transaction Document; (iii) the Trust Property and all of the other property of
Trustor encumbered by a Transaction Document; or (iv) all or any combination of
any other property of Trustor encumbered by a Transaction Document, in separate
proceedings or in one proceeding in any order which Beneficiary deems
appropriate.
4.10 Extensions and Partial Payments. Trustor agrees that, without
affecting the liability of any person for payment of the Obligations or
affecting the lien of this Deed of Trust upon the Trust Property or any part
thereof, Beneficiary may at any time and from time to time, on request of
Trustor, without notice to any person liable for payment of any Obligations,
extend the time or agree to alter the terms of payment of all or any part of
such Obligations. Acceptance by Beneficiary of any payment in an amount less
than the amount then due on the Obligations shall be deemed an acceptance on
account only, and the failure to pay the entire amount then due shall continue
to be an Event of Default hereunder. At any time thereafter and until the entire
amount then due on the Obligations has been paid, Beneficiary shall be entitled
to exercise all rights conferred upon it in this Deed of Trust upon the
occurrence of an Event of Default hereunder.
4.11 Protective Advances. All advances, disbursements and expenditures made
or incurred by Beneficiary before and during a foreclosure, and before and after
judgment of foreclosure, and at any time prior to sale and, where applicable,
after sale, and during the pendency of any related proceedings, for the
following purposes, in addition to those otherwise authorized by this Deed of
Trust or by applicable law (collectively "Protective Advances"), shall have the
benefit of all applicable provisions of law, including without limitation those
referred to below:
(a) all advances by Beneficiary in accordance with the terms of this
Deed of Trust to: (i) preserve, maintain or repair any Trust Property, or
restore or rebuild the improvements upon the Trust Property; (ii) preserve the
lien of this Deed of Trust or the priority hereof; or (iii) enforce this Deed of
Trust;
(b) payments by Beneficiary of: (i) principal, interest or other
obligations in accordance with the terms of any prior Lien or encumbrance on the
Trust Property; (ii) real estate taxes and assessments, general and special and
other taxes and assessments of any kind or nature whatsoever that are assessed
or imposed upon the Trust Property or any part thereof; (iii) amounts in
connection with any Tenant Lease pursuant to Section 4.3 hereof; (iv) other
obligations authorized by this Deed of Trust; or (v) any other amounts in
connection with other Liens, encumbrances or interests reasonably necessary to
preserve the status of title to the Trust Property;
(c) advances by Beneficiary in settlement or compromise of any claims
asserted by claimants under any prior Liens;
(d) reasonable attorneys' fees and other costs incurred (including
charges for
27
in-house counsel): (i) in connection with a judicial foreclosure or trustee's
sale; (ii) in connection with any action, suit or proceeding brought by or
against Beneficiary for the enforcement of this Deed of Trust or arising from
the interest of Beneficiary hereunder; or (iii) in preparation for or in
connection with the commencement, prosecution or defense of any other action
that could materially adversely affect the lien of this Deed of Trust or the
Trust Property;
(e) expenses deductible from proceeds of sale; and
(f) expenses incurred and expenditures made by Beneficiary for any one
or more of the following: (i) premiums for casualty and liability insurance paid
by Beneficiary (whether or not Beneficiary or a receiver is in possession) and
all renewals thereof; (ii) repair or restoration of damage or destruction in
excess of available insurance proceeds or condemnation awards; (iii) payments
deemed by Beneficiary to be required for the benefit of the Trust Property or
required to be made by the owner of the Trust Property under any grant or
declaration of easement, easement agreement, agreement with any adjoining land
owners or instruments creating covenants or restrictions for the benefit of or
affecting the Trust Property; (iv) shared or common expense assessments payable
to any association or corporation in which the owner of the Trust Property is a
member in any way affecting the Trust Property; and (v) any costs incurred in
connection with obtaining approvals and licenses from Gaming Authorities
including investigation costs.
All Protective Advances shall be additional Obligations secured by
this Deed of Trust and shall become immediately due and payable upon demand and
with interest thereon from the date of the advance until paid at the Default
Rate. This Deed of Trust shall be a lien for all Protective Advances as to
subsequent purchasers and judgment creditors from the time this Deed of Trust is
recorded.
All Protective Advances shall, except to the extent, if any, that any
of the same is clearly contrary to or inconsistent with the applicable
provisions of law, apply to and be included in: (a) any determination of the
amount of indebtedness secured by this Deed of Trust at any time; (b) the
indebtedness found due and owing to Beneficiary in the judgment of foreclosure
and any subsequent supplemental judgments, orders, adjudications or findings by
the court of any additional indebtedness becoming due after such entry of
judgment, it being agreed that in any foreclosure judgment, the court may
reserve jurisdiction for such purpose; and (c) application of income in the
hands of any receiver or mortgagee in possession.
4.12 Environmental Matters. The provisions of that certain Environmental
Indemnity, dated as of the date hereof, by Trustor in favor of Beneficiary are
hereby incorporated by reference herein with the same force and effect as if set
forth herein.
4.13 Appointment as Attorney-in-Fact. Trustor constitutes and appoints
Beneficiary as Trustor's attorney-in-fact, at Beneficiary's election, with full
authority in the place and stead of Trustor and in the name of Trustor,
Beneficiary or otherwise, from time to time after the occurrence of an Event of
Default, to perform any action and to execute and record any instrument deemed
necessary, advisable or incidental to accomplish the purposes of this Deed of
Trust, including without limitation in connection with exercising remedies and
effectuating the
28
actions described in this Article 4, in each instance only to the extent Trustor
has failed to comply with the provisions of this Deed of Trust. Such appointment
is irrevocable and coupled with an interest until payment in full and complete
performance of all the Obligations. Beneficiary may appoint a substitute
attorney-in-fact. Trustor ratifies all actions taken by the attorney-in-fact
but, nevertheless, if Beneficiary requests, Trustor will specifically ratify any
action taken by the attorney-in-fact by executing and delivering to the
attorney-in-fact or to any entity designated by the attorney-in-fact all
documents necessary to effect such ratification.
ARTICLE 5.
GENERAL PROVISIONS
5.1 Extension; Release. The lien hereof shall remain in full force and
effect during any postponement or extension of the time of payment of the
Obligations, or of any part thereof, and any number of extensions or
modifications hereof, or any renewals, modifications, extensions, replacements
or substitutions of the Notes or any additional notes taken by Beneficiary or
any Holder, shall not affect the lien hereof or the liability of Trustor or of
any subsequent obligor to pay the Obligations, unless and until such lien or
liability shall have been expressly released in writing by Beneficiary by proper
instrument in accordance with the terms of the Indenture. Upon written request
from Beneficiary, Trustee shall fully reconvey, without warranty, this Deed of
Trust and the lien hereof by proper instrument in accordance with the terms of
the Indenture. The recitals in any such reconveyance of any matters or facts
shall be conclusive proof of the truthfulness thereof. The grantee in such
reconveyance may be described as "the person or persons legally entitled
thereto." Beneficiary shall have no obligation to record any release instrument.
5.2 Trustor. This Deed of Trust and all provisions hereof, shall extend to
and be binding upon Trustor and all persons claiming under or through Trustor.
Whenever in this Deed of Trust there is reference made to any of the parties
hereto, such reference shall be deemed to include, wherever applicable, a
reference to the heirs, executors and administrators or successors and assigns
(as the case may be) of Trustor, Trustee and Beneficiary. Trustor's successors
and assigns shall include, without limitation, a receiver, trustee or
debtor-in-possession of or for such Trustor.
5.3 Additional Documents. Trustor agrees that upon request of Beneficiary
it will from time to time and at its expense execute, acknowledge and deliver
all such additional instruments and further assurances of title and will do or
cause to be done all such further acts and things as may be reasonably necessary
or desirable to fully protect, preserve, perfect and maintain the security of
Beneficiary hereunder and otherwise effectuate the intent of this Deed of Trust.
5.4 Statute of Limitations. To the fullest extent allowed by law, the right
to plead, use or assert any statute of limitations as a plea or defense or bar
of any kind, or for any purpose, to any debt, demand or obligation secured or to
be secured hereby, or to any complaint or other pleading or proceeding filed,
instituted or maintained for the purpose of enforcing this Deed of Trust or any
rights hereunder, is hereby waived by Trustor.
5.5 Severability. The invalidity of any one or more covenants, phrases,
clauses,
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sentences or paragraphs of this Deed of Trust shall not affect the remaining
portions of this Deed of Trust or any part thereof, and the same shall be
construed as if such invalid covenants, phrases, clauses, sentences or
paragraphs, if any, had not been inserted herein. If the lien of this Deed of
Trust is invalid or unenforceable as to any part of the Obligations secured
hereby, or if the lien is invalid or unenforceable as to any part of the Trust
Property, the unsecured or partially secured portion of such Obligations shall
be completely paid prior to the payment of the remaining and secured or
partially secured portion of such Obligations, and all payments made on such
Obligations, whether voluntary or under foreclosure, trustee's sale, or other
enforcement action or procedure, shall be considered to have been first paid on
and applied to the full payment of that portion of such indebtedness which is
not secured or fully secured by the lien of this Deed of Trust.
5.6 Interaction with Indenture.
(a) Incorporation by Reference. Any capitalized term used in this Deed
of Trust without definition, but defined in the Indenture, shall have the same
meaning here as in the Indenture.
(b) Conflicts. Notwithstanding any other provision of this Deed of
Trust to the contrary, the terms and provisions of this Deed of Trust shall be
subject and subordinate to the terms of the Indenture. To the extent that the
Indenture provides Trustor with a particular cure or notice period, or
establishes any limitations or conditions on Beneficiary's actions with regard
to a particular set of facts, Trustor shall be entitled to the same cure periods
and notice periods, and Beneficiary shall be subject to the same limitations and
conditions, under this Deed of Trust, as under the Indenture, in place of the
cure periods, notice periods, limitations and conditions provided for under this
Deed of Trust; provided, however, that such cure periods, notice periods,
limitations and conditions shall not be cumulative as between the Indenture and
this Deed of Trust. In the event of any conflict or inconsistency between the
provisions of this Deed of Trust and those of the Indenture, including without
limitation any conflicts or inconsistencies in any definitions herein or
therein, the provisions or definitions of the Indenture shall govern.
5.7 Other Collateral. This Deed of Trust is one of a number of security
agreements to secure the debt delivered by or on behalf of Trustor pursuant to
the Indenture and the other Collateral Documents and securing the Obligations
secured hereunder. All potential junior Lien claimants are placed on notice
that, under any of the Collateral Documents or otherwise (such as by any
separate future unrecorded agreement between Trustor and Beneficiary), other
collateral for the Obligations secured hereunder (i.e., collateral other than
the Trust Property) may, under certain circumstances, be released without a
corresponding reduction in the total principal amount secured by this Deed of
Trust. Such a release would decrease the amount of collateral securing the same
indebtedness, thereby increasing the burden on the remaining Trust Property
created and continued by this Deed of Trust. No such release shall impair the
priority of the lien of this Deed of Trust. By accepting its interest in the
Trust Property, each and every junior Lien claimant shall be deemed to have
acknowledged the possibility of, and consented to, any such release. Nothing in
this paragraph shall impose any obligation upon Beneficiary.
5.8 Notices. All notices and other communications under this Deed of Trust
shall be
30
in writing, except as otherwise provided in this Deed of Trust. A notice, if in
writing, shall be considered as properly given if given in accordance with the
provisions of Annex B attached hereto.
5.9 No Waiver of Remedies. By accepting payment of any amount secured
hereby after its due date, or an amount which is less than the amount then due,
or performance of any obligation required hereunder after the date required for
such performance, Beneficiary does not waive its right to require prompt payment
or performance when due of all other amounts or obligations so secured or to
declare a default by reason of the failure to so pay or perform.
5.10 Trustee's Powers. At any time or from time to time without liability
therefor and without notice to Trustor, upon written request of Beneficiary and
presentation of the original or certified copies of this Deed of Trust, and
without affecting the personal liability of any person for payment of the
Obligations secured hereby or the effect of this Deed of Trust upon the
remainder of the Trust Property, Trustee may (a) release any part of the Trust
Property, (b) consent in writing to the making of any map or plat of all or any
part of the Property, (c) join in granting any easement on any part of the Trust
Property, or (d) join in any extension agreement or any agreement subordinating
the lien or charge of this Deed of Trust.
5.11 Beneficiary's Powers. Without affecting the liability of Trustor or
any other person liable for the payment of any Obligation secured hereby, and
without affecting the lien or charge of this Deed of Trust upon any portion of
the Trust Property not then or theretofore released as security for the full
amount of all unpaid Obligations, Beneficiary may, from time to time and without
notice (a) release any person so liable, (b) extend the maturity or alter any of
the terms of any such obligation, or join in any agreement modifying the terms
of the Indenture or any Transaction Document, (c) waive any provision hereof or
grant other indulgences, (d) release or reconvey, or cause to be released or
reconveyed, at any time at Beneficiary's option, all or any part of the Trust
Property, (e) take or release any other or additional security for any
obligation herein mentioned, (f) make compositions or other arrangements with
debtors in relation thereto, or (g) subordinate the lien or charge of this Deed
of Trust.
5.12 Additional Security. If Beneficiary at any time holds additional
security for any of the Obligations secured hereby, all such security shall be
taken, considered and held as cumulative, and Beneficiary may enforce the sale
thereof or otherwise realize upon the same, at its option, either before or
concurrently with the exercise of any of its rights or remedies hereunder or
after a sale is made hereunder. The taking of additional security, execution of
partial releases of the security, or any extension of the time of payment of the
indebtedness secured hereby shall not diminish the force, effect or impair the
liability of any maker, surety or endorser for the payment of any such
indebtedness.
5.13 Captions. The captions or headings at the beginning of each Section
hereof are for the convenience of the parties and are not to be construed as a
part of this Deed of Trust.
5.14 Trust Irrevocable; No Offset. The Trust created hereby is irrevocable
by Trustor. No offset or claim that Trustor now has or may in the future have
against Beneficiary or Trustee shall relieve Trustor from paying the amounts or
performing the Obligations contained herein or
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secured hereby.
5.15 Corrections. Trustor shall, upon request of Trustee, promptly correct
any defect, error or omission which may be discovered in the contents of this
Deed of Trust or in the execution or acknowledgment hereof, and will execute,
acknowledge and deliver such further instruments and do such further acts as may
be necessary or as may be reasonably requested by Trustee to carry out more
effectively the purposes of this Deed of Trust, to subject to the lien and
security interest hereby created any of Trustor's properties, rights or interest
covered or intended to be covered hereby, and to perfect and maintain such lien
and security interest.
5.16 Attorneys' Fees. All references to "attorneys' fees" in this Deed of
Trust shall include, without limitation, such reasonable amounts as may then be
charged by Beneficiary for legal services furnished by attorneys in the employ
of Beneficiary (including reasonable charges for in-house counsel).
5.17 Amendments. This Deed of Trust cannot be waived, changed, discharged
or terminated orally, but only by an instrument in writing signed by the party
against whom enforcement of any waiver, change, discharge or termination is
sought.
5.18 Acceptance by Trustee. Trustee accepts this Trust when this Deed of
Trust, duly executed and acknowledged, is made a public record as provided by
law.
5.19 Authorization to Rely. Trustee, upon presentation to it of an
affidavit signed by or on behalf of Beneficiary setting forth any fact or facts
showing a default by Trustor under any of the terms or conditions of this Deed
of Trust, is authorized to accept as true and conclusive all facts and
statements in such affidavit and to act hereunder in complete reliance thereon.
5.20 GOVERNING LAW. THIS DEED OF TRUST, THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HERETO, AND ANY CLAIMS OR DISPUTES RELATING THERETO, SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK EXCEPT
THAT, FOR PURPOSES OF DETERMINING THE CREATION, VALIDITY, PRIORITY AND
ENFORCEMENT OF THE LIEN CREATED HEREBY AND THE EXERCISE OF REMEDIES HEREUNDER IN
CONNECTION WITH SUCH LIEN, THE LAWS OF THE STATE OF COLORADO SHALL GOVERN.
5.21 Time of Essence. Time is of the essence of this Deed of Trust and of
every part hereof of which time is an element.
5.22 Future Advances. To the extent Beneficiary may make advances pursuant
hereto or to the terms of the Indenture, the parties hereto acknowledge and
intend that all such advances, if any, whenever hereafter made, shall be secured
by this Deed of Trust with the same priority as the initial amounts advanced and
secured by this Deed of Trust.
5.23 Actions by Beneficiary to Preserve. Should an Event of Default occur,
Beneficiary, in its own discretion, without obligation so to do and without
further notice to or demand upon Trustor and without releasing Trustor from any
Obligation, may make or do the
32
same in such manner and to such extent as it may deem necessary or desirable to
protect the security hereof. In connection therewith (without limiting
Beneficiary's general powers), Beneficiary shall have and is hereby given the
right, but not the obligation (a) to enter upon and take possession of the Trust
Property, (b) to make additions, alterations, repairs and improvements to the
Trust Property which it may consider necessary, desirable or proper to keep the
Trust Property in good condition and repair the same as needed, (c) to appear
and participate in any action or proceeding affecting or which may affect the
security hereof or the rights or powers of Beneficiary hereunder, (d) to pay,
purchase, contest or compromise any encumbrance, claim, charge, Lien or debt
which in the judgment of Beneficiary may affect or appear to affect the security
of this Deed of Trust or be or appear to be prior or superior hereto, and (e) in
exercising such powers, to pay necessary expenses and employ necessary or
desirable consultants including without limitation in connection with applying
for gaming approvals under applicable Gaming Laws and approvals for transfers of
ownership for any Liquor License.
5.24 Reimbursement. Trustor shall pay immediately upon demand all sums
expended for expenses paid or incurred by Beneficiary, including without
limitation court costs, expenses for evidence of title, appraisals and surveys,
license fees, trustees' fees and reasonable attorneys' fees (including charges
for in-house counsel), under any of the terms of this Deed of Trust, including
without limitation the provisions of Section 5.22 hereof, together with interest
on the amount of each expenditure from the date of such expenditure at the
Default Rate.
5.25 Usury Savings Clause. It is the intention of the parties to conform
strictly to the usury laws, whether state or federal, that are applicable to the
transaction of which this Deed of Trust is a part. All agreements between
Trustor, or either of them, and Beneficiary, whether now existing or hereafter
arising and whether oral or written, are hereby expressly limited so that in no
contingency or event whatsoever shall the amount paid or agreed to be paid by
Trustor for the use, forbearance or detention of the money to be loaned or
advanced under the Indenture, the Notes, the Completion Capital Commitment, the
Keep-Well Agreement, this Deed of Trust, any other Collateral Document, or any
other agreement or instrument relating thereto, or for the payment or
performance of any covenant or obligation contained herein or therein, exceed
the maximum amount permissible under applicable federal or state usury laws. If
under any circumstances whatsoever fulfillment of any such provision, at the
time performance of such provision shall be due, shall involve exceeding the
limit of validity prescribed by law, then the obligation to be fulfilled shall
be reduced to the limit of such validity. If under any circumstances Trustor
shall have paid an amount deemed interest by applicable law, which would exceed
the highest lawful rate, such amount that would be excessive interest under
applicable usury laws shall be applied to the reduction of the principal amount
owing in respect of the Obligations and not to the payment of interest, or if
such excessive interest exceeds the unpaid balance of principal and any other
amounts due hereunder, the excess shall be refunded to Trustor. All sums paid or
agreed to be paid for the use, forbearance or detention of the principal under
any extension of credit or advancement of funds by Beneficiary or any Holder
shall, to the extent permitted by applicable law, and to the extent necessary to
preclude exceeding the limit of validity prescribed by law, be amortized,
prorated, allocated and spread from the date of the Indenture until payment in
full of the Obligations so that the actual rate of interest on account of such
principal amounts is uniform throughout the term hereof.
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5.26 Jurisdiction and Venue. At the sole option of Beneficiary, any action
concerning this Deed of Trust or any other Transaction Document may be brought
in the Colorado District Court for the County in which the Beneficiary is
located or in the United States District Court for the District of Colorado, and
Trustor consents to venue and personal jurisdiction with respect thereto.
5.27 Waiver of Jury Trial. Trustor hereby waives any right to jury trial of
any claim, cross-claim or counter-claim relating to or arising out of or in
connection with this Deed of Trust and/or any of the other Transaction
Documents.
5.28 Waiver of Homestead and Other Exemptions. To the extent permitted by
law, Trustor hereby waives all rights to any homestead or other exemption to
which Trustor would otherwise be entitled under any present or future
constitutional, statutory, or other provision of applicable state or federal
law.
5.29 Construction Deed of Trust. This Deed of Trust secures indebtedness
for construction purposes as described in Section 4-9-313, Colorado Revised
Statutes (1973), as amended.
5.30 Gaming Laws. The grant of, and terms and provisions of, this Deed of
Trust, including, but not limited to, all rights and remedies of Beneficiary and
powers of attorney and appointment, are expressly subject to all laws, statutes,
regulations and orders affecting limited gaming or the sale of liquor
(collectively, the "Gaming Laws"), in the State of Colorado, which may include,
but not be limited to, the necessity for Beneficiary to obtain the prior
approval of the regulatory agencies enforcing the Gaming Laws before taking any
action hereunder and to be licensed by such regulatory agencies before
exercising certain rights and remedies hereunder.
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IN WITNESS WHEREOF, Trustor has duly executed and delivered this Deed
of Trust to Public Trustee, Security Agreement, Fixture Filing and Assignment of
Rents, Leases and Leasehold Interests (Gilpin County, Colorado) as of the day
and year first written above.
RIVIERA BLACK HAWK, INC.,
a Colorado corporation
By:______________________________
Name: Duane Krohn
Title: Executive Vice President of Finance and
Treasurer
[Signature Page to Deed of Trust]
35
ACKNOWLEDGMENT
STATE OF ______________ )
) ss.
COUNTY OF _____________ )
The foregoing instrument was acknowledged before me this __
day of ________, 1999, by _______________ and _______________ as _______________
and _______________, respectively, of _______________, a _______________.
WITNESS my hand and official seal.
My commission expires _________________________________.
Exhibit A
(Attached to and forming a part of the Deed of Trust to
Public Trustee, Security Agreement, Fixture Filing and Assignment
of Rents, Leases and Leasehold Interests, dated May 29,1999 to the
Public Trustee of the County of Gilpin, Colorado, from
Riviera Black Hawk, Inc., for the benefit of
IBJ Whitehall Bank & Trust Company)
LEGAL DESCRIPTION
ANNEX A
(Attached to and forming a part of the Deed of Trust to Public
Trustee, Security Agreement, Financing Statement and Assignment
of Rents and Leases, dated May 29, 1999 to the Public Trustee of
the County of Gilpin, Colorado, from
Riviera Black Hawk, Inc.
for the benefit of IBJ Whitehall Bank & Trust Company)
DEFINED TERMS
"Business Day" means any day other than Saturday, Sunday or any other day
on which banks in Denver, Colorado are permitted or required to be closed by law
or any Governmental Authority.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at that time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however
designated) of corporate stock;
(3) in the case of a partnership or limited liability company, partnership
or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a Person the right
to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cash Collateral and Disbursement Agreement" means the Cash Collateral and
Disbursement Agreement among the Company, the Trustee, the Independent
Construction Consultant and the Disbursement Agent in connection with the
Riviera Black Hawk.
"Collateral Documents" means, collectively, the Deed of Trust to Public
Trustee, Security Agreement, Fixture Filing and Assignment of Rents, Leases and
Leasehold Interests by the Company to the Public Trustee of Gilpin, Colorado,
the Security Agreement by the Company in favor of the Trustee, the Assignments
of Patent, Trademark and Copyright made by the Company in favor of the Trustee,
the Collateral Assignments by the Company in favor of the Trustee, the Cash
Collateral and Disbursement Agreement, the Pledge Agreement by the Company in
favor of the Trustee, the Pledge and Assignment by the Company in favor of the
Trustee, the Manager Subordination Agreement, Uniform Commercial Code financing
statements and fixture filings, and any other agreements, instruments,
documents, pledges or filings that evidence, set forth or limit the Lien of the
Trustee in the Collateral (as such terms are defined in the Indenture).
"Completion Capital Commitment" means the Completion Capital Commitment
dated as of the date of the Indenture executed by Riviera Holdings in favor of
the Trustee for the benefit of the Holders.
"Construction Disbursement Account" means the account to be maintained by
the Disbursement Agent and pledged to the Trustee pursuant to the terms of the
Cash Collateral and Disbursement Agreement, into which approximately $31.4
million of the net proceeds of the Offering will be deposited.
"Construction Disbursement Budget" means itemized schedules setting forth
on a line item basis all of the costs (including financing costs) estimated to
be incurred in connection with the financing, design, development, construction
and equipping of the Riviera Black Hawk, as such schedules are delivered to the
Disbursement Agent on the Closing Date and as amended from time to time in
accordance with the terms of the Cash Collateral and Disbursement Agreement.
"Deed of Trust" has the meaning given in the introductory paragraph.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Disbursement Agent" means IBJ Whitehall Bank & Trust Company, as
disbursement agent.
"Environmental Indemnity" means the Environmental Indemnity, dated as of
the date of the Indenture, by the Trustors in favor of the Beneficiary.
"Event of Default" shall have the meaning given in the Indenture.
"FF&E" means furniture, fixtures or equipment used in the ordinary course
of the business of the Company and its Subsidiaries.
"FF&E Financing" means the incurrence of Indebtedness, the proceeds of
which are utilized solely to finance or refinance the acquisition of (or entry
into a capital lease by the Company or a Subsidiary with respect to) FF&E.
"Final Plans" with respect to any particular work or improvement means
Plans which (i) have received final approval from all governmental authorities
required to approve such Plans prior to completion of the work or improvements
and (ii) contain sufficient specificity to permit the completion of the work or
improvement.
"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 have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
"Gaming Authority" means any agency, authority, board, bureau, commission,
department, office or instrumentality of any nature whatsoever of the United
States federal government, any foreign government, any state, province or city
or other political subdivision or otherwise, whether now or hereafter in
existence, including the Colorado Limited Gaming Commission and the Colorado
Division of Gaming, and any other applicable gaming regulatory authority with
authority to regulate any gaming operation (or proposed gaming operation) owned,
managed or operated by the Company, Riviera Holdings, Riviera Management or any
of their respective Subsidiaries.
"Gaming License" means any license, permit, franchise or other
authorization from any Gaming Authority necessary on the date of the Indenture
or at any time thereafter to own, lease, operate or otherwise conduct the
business of the Company or any of its Wholly Owned Restricted Subsidiaries.
"Governmental Authority" means any nation or government, any state,
municipality or other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, including without limitation the Colorado Division of
Gaming and the Colorado Limited Gaming Control Commission.
"Guarantee" means a 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 by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"Holders" means the record holders from time to time of the Notes.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent, in respect of:
(1) borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement agreements in respect thereof);
(3) banker's acceptances;
(4) representing Capital Lease Obligations; or
(5) the balance deferred and unpaid of the purchase price of any property,
except any such balance that constitutes an accrued expense or trade
payable,
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the Guarantee
by the specified Person of any indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date shall be:
(1) the accreted value thereof, in the case of any Indebtedness issued
with original issue discount; and
(2) the principal amount thereof, together with any interest thereon that
is more than 30 days past due, in the case of any other Indebtedness.
"Independent Construction Consultant" means the independent construction
consultant retained in connection with the construction of the Riviera Black
Hawk, or any successor independent construction consultant appointed by the
Trustee pursuant to the terms of the Cash Collateral and Disbursement Agreement.
"Keep-Well Agreement" means the Keep-Well Agreement dated as of the date of
the Indenture executed by Riviera Holdings in favor of the Trustee for the
benefit of the Holders.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
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" means all liquidated damages then owing pursuant to
Section 5 of the Registration Rights Agreement.
"Liquor License" means any license, permit, franchise or other
authorization from any Liquor Licensing Authority necessary on the date of the
Indenture or at any time thereafter to own, lease, operate or otherwise conduct
the retail, restaurant or other entertainment facilities of the Company or any
of its Wholly Owned Restricted Subsidiaries in the manner described in the
Offering Circular.
"Liquor Licensing Authority" means any agency, authority, board, bureau,
commission, department, office or instrumentality of any nature whatsoever of
the United States federal government, any foreign government, any state,
province or city or other political subdivision or otherwise, whether now or
hereafter in existence, including the Colorado Liquor Enforcement Division and
the City of Black Hawk Liquor Licensing Authority and any other applicable
liquor licensing regulatory authority with authority to regulate any Liquor
Licensed operation (or proposed Liquor Licensed operation) owned, managed or
operated by the Company, Riviera Holdings, Riviera Management or any of their
respective Subsidiaries.
"Manager Subordination Agreement" means the Manager Subordination Agreement
dated as of the date of the Indenture among the Company, Riviera Management and
the Trustee.
"Minimum Facilities" means, with respect to the Riviera Black Hawk, a
casino which has in operation at least 900 slot machines and 12 table games,
related amenities (including a restaurant, a bar and an entertainment area) and
has parking for at least 442 vehicles.
"Obligations" shall have the meaning attributed to it in Section 1.3.
"Offering Circular" means the Offering Circular of Jefferies & Company,
Inc. dated May 27, 1999.
"Operating" means, with respect to the Riviera Black Hawk, the first time
that:
(1) all Gaming Licenses have been granted and have not been revoked or
suspended;
(2) all Liens (other than Liens created by the Collateral Documents or
Permitted Liens) related to the development, construction and
equipping of, and beginning operations at, the Riviera Black Hawk have
been discharged or, if payment is not yet due or if such payment is
contested in good faith by the Company, sufficient funds remain in the
Construction Disbursement Account to discharge such Liens and the
Company has taken any action (including the institution of legal
proceedings) necessary to prevent the sale of any or all of the
Riviera Black Hawk or the real property on which the Riviera Black
Hawk will be constructed;
(3) the Independent Construction Consultant, the general contractor and
the architect of the Riviera Black Hawk shall deliver a certificate to
the Trustee certifying that the Riviera Black Hawk is substantially
complete in all material respects in accordance with the Final Plans
with respect to the Minimum Facilities and all applicable building and
other laws, ordinances and regulations;
(4) the Riviera Black Hawk is in a condition (including installation of
furnishings, fixtures and equipment) to receive customers in the
ordinary course of business;
(5) the Minimum Facilities are open to the general public and operating in
accordance with applicable law;
(6) a permanent or temporary certificate of occupancy has been issued for
the Riviera Black Hawk by the appropriate governmental authorities;
and
(7) a notice of completion of the Riviera Black Hawk has been recorded.
"Operating Deadline" means May 31, 2000.
"Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Section 10.04 of the
Indenture. The counsel may be an employee of or counsel to either the Issuers or
the Trustee.
"Permitted Dispositions" means the sale, transfer, lease or other
disposition of assets in the Trust Property, in the ordinary course of business,
of inventory held in the ordinary course of business and other sales, transfers,
or other dispositions of assets in the Trust Property in the ordinary course of
business; provided that all provisions of the Indenture are complied with,
including, without limitation, Sections 4.10 and 4.16.
"Permitted Liens" means:
(1) Liens on property of a Person existing at the time such Person is
merged into or consolidated with the Company or any Wholly Owned
Restricted Subsidiary of the Company; provided that such Liens were in
existence prior to the contemplation of such merger or consolidation
and do not extend to any assets other than those of the Person merged
into or consolidated with the Company or any Wholly Owned Restricted
Subsidiary;
(2) Liens on property existing at the time of acquisition thereof by the
Company or any Wholly Owned Restricted Subsidiary of the Company
(other than materials, supplies or FF&E acquired in connection with
developing, constructing or equipping of, or commencing operations at,
the Riviera Black Hawk), provided that such Liens were in existence
prior to the contemplation of such acquisition;
(3) Liens existing on the date of the Indenture and previously disclosed
to the Trustee in writing;
(4) statutory Liens of landlords and carriers, warehousemen, mechanics,
suppliers, materialmen, repairmen or other like Liens arising in the
ordinary course of business and with respect to amounts not yet
delinquent or being contested in good faith by an appropriate process
of law; provided that (a) a reserve or other appropriate provision as
shall be required by GAAP shall have been made therefor and (b) with
respect to such Liens arising in connection with the Riviera Black
Hawk, the Company has obtained any title insurance endorsements
required by, and has otherwise complied with the provisions relating
thereto contained in, the Cash Collateral and Disbursement Agreement;
(5) Liens for taxes, assessments or governmental charges or claims that
are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently concluded;
provided that any reserve or other appropriate provision as shall be
required in conformity with GAAP shall have been made therefor;
(6) Liens securing obligations in respect of the Indenture or the Notes;
(7) Liens on FF&E to secure Indebtedness permitted by clause (6) of the
second paragraph of the covenant described under "--Certain
Covenants--Incurrence of Indebtedness and Issuance of Preferred Stock"
in the Offering Circular;
(8) pledges or deposits in the ordinary course of business to secure lease
obligations or nondelinquent obligations under workers' compensation,
unemployment insurance or similar legislation; and
(9) easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances not
interfering in any material respect with the business or assets of the
Company or any Subsidiary incurred in the ordinary course of business.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"Plans" means the plans, specifications, working drawings, change orders,
correspondence and related items that collectively:
(1) provide for and detail the manner of development, construction and
equipping of the Riviera Black Hawk;
(2) call for construction which will permit the Riviera Black Hawk to be
Operating on or prior to the Operating Deadline;
(3) call for construction which will cause the Riviera Black Hawk to be
Operating for a total cost consistent with its Construction
Disbursement Budget (as defined in the Cash Collateral and
Disbursement Agreement) and the line items set forth therein;
(4) to the extent such Plans are amended, in the reasonable, professional
judgment of the Independent Construction Consultant, continue to
represent a logical evolution consistent with previous Plans; and
(5) together with any amendments, are consistent with the description of
the Riviera Black Hawk contained in the Offering Circular, and are
consistent with all governmental approvals and requirements, including
without limitation the Black Hawk Building Department, Historical
Architecture Review Commission and Gaming Authorities.
"Project" means the Riviera Black Hawk as described in the Offering
Circular, as the Plans may be amended pursuant to the Collateral Documents and
the Indenture, but excluding the Excluded Assets defined in Section 1.
"Riviera Black Hawk" means the project to develop, construct, equip and
operate the Riviera Black Hawk and related amenities as described in the
Offering Circular.
"Riviera Holdings" means Riviera Holdings Corporation, a Nevada
corporation.
"Riviera Management" means Riviera Gaming Management of Colorado, Inc., a
Colorado corporation.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity of which more
than 50% of the total voting power of shares of Capital Stock entitled
(without regard to the
occurrence of any contingency) to vote in the election of directors,
managers or trustees 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
(2) any partnership (a) the sole general partner or the managing general
partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or one or more
Subsidiaries of such Person (or any combination thereof).
"Wholly Owned Restricted Subsidiary" of any specified Person means a
Restricted Subsidiary of such Person all of the outstanding Capital Stock or
other ownership interests of which (other than directors' qualifying shares)
shall at the time be owned by such Person or by one or more Wholly Owned
Subsidiaries of such Person and one or more Wholly Owned Restricted Subsidiaries
of such Person.
ANNEX B
(Attached to and forming a part of the Deed of Trust to Public
Trustee, Security Agreement, Fixture Filing and Assignment
of Rents, Leases and Leasehold Interests, dated May 29,1999 to the
Public Trustee of the County of Gilpin, Colorado, from
Riviera Black Hawk, Inc., and
for the benefit of IBJ Whitehall Bank & Trust Company)
NOTICE PROVISION
Any notice or communication by any party 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), telex, telecopier or nationally recognized
overnight air courier guaranteeing next day delivery, to the others' address:
If to Trustor:
Riviera Black Hawk, Inc.
444 Main Street
Black Hawk, Colorado 80422
Telecopier No.: (702) 794-9277
Attention: Duane Krohn
With a copy to:
Dechert, Price & Rhodes
4000 Bell Atlantic Tower
Philadelphia, PA 19103-2793
Telecopier No.: (215) 884-2222
Attention: Marc Friedman
If to Beneficiary:
IBJ WHITEHALL BANK & TRUST COMPANY,
One State Street, 10th Floor
New York, New York 10004
Telecopier No.: (212) 858-2956
Attention: Thomas S. Moser
Any party, by notice to the others, may designate additional or different
addresses for subsequent notices or communications.
All notices and communications shall be deemed to have been duly given: at
the time delivered by hand, if personally delivered; five (5) Business Days
after being deposited in the mail, postage prepaid, if mailed; when answered
back, if telexed; when receipt acknowledged, if telecopied; and the next
Business Day after timely delivery to the courier, if sent by nationally
recognized overnight air courier guaranteeing next day delivery.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is deemed duly given, whether or not the addressee
receives it.