EXHIBIT 4.4
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AMENDED AND RESTATED LOAN AGREEMENT
Dated as of July 31, 1996
among
ELDORADO RESORTS LLC
as Borrower,
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
as sole initial Bank, Issuing Bank and Administrative Agent
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TABLE OF CONTENTS
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Page
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ARTICLE 1.
DEFINITIONS AND ACCOUNTING TERMS............... 1
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1.1 Defined Terms....................................... 1
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1.2 Use of Defined Terms................................ 27
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1.3 Accounting Terms.................................... 27
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1.4 Rounding............................................ 27
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1.5 Exhibits and Schedules.............................. 27
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1.6 Miscellaneous Terms................................. 28
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ARTICLE 2.
LOANS AND LETTERS OF CREDIT............... 29
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2.1 Loans-General....................................... 29
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2.2 Base Rate Loans..................................... 30
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2.3 Eurodollar Rate Loans............................... 31
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2.4 Letters of Credit................................... 31
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2.5 Automatic Reduction of Commitment................... 35
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2.6 Voluntary Reduction of Commitment................... 35
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2.7 Administrative Agent's Right to Assume Funds
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Available for Advances.............................. 35
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2.8 Collateral.......................................... 36
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2.9 Senior Indebtedness................................. 36
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ARTICLE 3.
PAYMENTS AND FEES...................... 37
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3.1 Principal and Interest.............................. 37
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3.2 Annual Agency Fees.................................. 38
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3.3 Facility Fees....................................... 38
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3.4 Commitment Fees..................................... 38
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3.5 Standby Letter of Credit Fees....................... 39
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3.6 Increased Commitment Costs.......................... 39
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3.7 Eurodollar Fees and Costs........................... 39
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3.8 Default Rate........................................ 43
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3.9 Computation of Interest and Fees.................... 43
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3.10 Non-Banking Days................................... 43
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3.11 Manner and Treatment of Payments................... 44
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3.12 Funding Source..................................... 44
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3.13 Failure to Charge Not Subsequent Waiver............ 44
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3.14 Administrative Agent's Right to Assume Payments
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Will be Made by Borrower............................ 45
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3.15 Authority to Charge Account........................ 45
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3.16 Fee Determination Detail........................... 45
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ARTICLE 4.
REPRESENTATIONS AND WARRANTIES............ 46
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4.1 Existence and Qualification; Power; Compliance
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With Laws........................................... 46
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4.2 Authority; Compliance With Other Agreements and
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Instruments and Government Regulations............................ 46
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4.3 No Governmental Approvals Required................................ 47
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4.4 Subsidiaries...................................................... 48
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4.5 Financial Statements.............................................. 48
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4.6 No Other Liabilities; No Material Adverse Effect.................. 49
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4.7 Title to and Location of Property................................. 49
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4.8 Real Property..................................................... 49
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4.9 Intangible Assets................................................. 49
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4.10 Governmental Regulation.......................................... 49
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4.11 Litigation....................................................... 50
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4.12 Binding Obligations.............................................. 50
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4.13 No Default....................................................... 50
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4.14 ERISA............................................................ 50
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4.15 Regulations G. U and X; Investment Company Act................... 50
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4.16 Disclosure....................................................... 51
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4.17 Tax Liability.................................................... 51
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4.18 Projections...................................................... 51
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4.19 Employee Matters................................................. 51
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4.20 Gaming Laws...................................................... 51
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4.21 Security Interests............................................... 51
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4.22 Hazardous Materials.............................................. 52
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4.23 Silver Legacy.................................................... 52
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4.24 Certain Leases................................................... 52
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ARTICLE 5.
AFFIRMATIVE COVENANTS
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(OTHER THAN INFORMATION AND
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REPORTING REQUIREMENTS)......................... 54
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5.1 Payment of Taxes and Other Potent................................. 54
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5.2 Preservation of Existence......................................... 54
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5.3 Maintenance of Properties......................................... 54
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5.4 Maintenance of Insurance.......................................... 55
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5.5 Compliance With Laws.............................................. 55
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5.6 Inspection Rights................................................. 55
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5.7 Keeping of Records and Books of A................................. 55
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5.8 Compliance With Agreements........................................ 55
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5.9 Use of Proceeds................................................... 56
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5.10 Hazardous Materials Laws......................................... 56
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5.11 Additional Collateral............................................ 56
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5.12 New Significant Subsidiaries..................................... 57
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ARTICLE 6.
NEGATIVE COVENANTS................................ 58
6.1 Payment of Subordinated Obligation................................ 58
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6.2 Disposition of property........................................... 58
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6.3 Investments and Acquisitions...................................... 58
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6.4 Hostile Tender Offers............................................. 59
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6.5 Distributions..................................................... 59
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6.6 ERISA............................................................. 59
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6.7 Change in Nature of Business........................ 60
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6.8 Liens; Negative Pledges; Sales and Leasebacks....... 60
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6.9 Indebtedness and Contingent Obligations............. 60
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6.10 Transactions with Affiliates....................... 61
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6.11 Capital Expenditures............................... 61
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6.12 Members' Equity.................................... 62
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6.13 Total Debt to EBITDA Ratio......................... 62
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6.14 Senior Debt to EBITDA Ratio........................ 62
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6.15 Fixed Charge Ratio................................. 62
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6.16 Amendments to Subordinated Obligations............. 62
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ARTICLE 7.
INFORMATION AND REPORTING REQUIREMENTS....... 63
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7.1 Financial and Business Information.................. 63
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7.2 Compliance Certificates............................. 66
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ARTICLE 8.
CONDITIONS....................... 67
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8.1 Initial Advances.................................... 67
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8.2 Any Increasing Advance.............................. 70
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ARTICLE 9.
EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT..... 71
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9.1 Events of Default................................... 71
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9.2 Remedies Upon Event of Default...................... 73
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ARTICLE 10.
THE ADMINISTRATIVE AGENT................. 77
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10.1 Appointment and Authorization...................... 77
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10.2 Business Activities with the Borrower.............. 77
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10.3 Proportionate Interest of the Banks in any
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Collateral......................................... 77
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10.4 Banks' Credit Decisions............................ 78
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10.5 Action by Administrative Agent..................... 78
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10.6 Liability of Administrative Agent.................. 79
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10.7 Indemnification.................................... 81
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10.8 Successor Administrative Agent..................... 81
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10.9 Performance of Condition........................... 82
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ARTICLE 11.
MISCELLANEOUS..................... 84
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11.1 Cumulative Remedies: No Waiver..................... 84
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11.2 Amendments; Consents............................... 84
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11.3 Costs. Expenses and Taxes.......................... 85
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11.4 Nature of Banks' Obligations....................... 86
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11.5 Survival of Representations and Warranties......... 86
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11.6 Notices............................................ 86
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11.7 Execution of Loan Documents........................ 87
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11.8 Binding Effect: Assignment......................... 87
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11.9 Lien on Deposits and Property in Possession of
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any Bank........................................... 90
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11.10 Sharing of Setoffs................................ 90
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11.11 Indemnity by Borrower............................. 91
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11.12 Nonliability of the Banks......................... 92
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11.13 No Third Parties Benefited........................ 94
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11.14 Confidentiality................................... 94
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11.15 Hazardous Materials Indemnity..................... 94
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11.16 Further Assurances................................ 95
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11.17 Integration....................................... 96
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11.18 Governing Law..................................... 96
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11.19 Severability of Provisions........................ 96
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11.20 Independent Covenants............................. 96
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11.21 Headings.......................................... 96
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11.22 Time of the Essence............................... 97
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11.23 Tax Withholding Exemption Certificates............ 97
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11.24 Arbitration Reference............................. 97
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11.25 Purported Oral Amendments......................... 98
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Exhibits
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A - Compliance Certificate
B - Commitment Assignment and Acceptance
C - Deed of Trust
D - Guaranty
E - Note
F - Opinion
G - Pricing Certificate
H - Request for Letter of Credit
I - Request for Loan
J - Security Agreement
K - Subsidiary Security Agreement
Schedules
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l.1A Eldorado Hotel Property Description
l.lB Daniel's Expansion Property Description
4.1 Ownership of Borrower
4.3 Governmental Approvals
4.4 Subsidiaries
4.7 Real Property
4.10 Governmental Regulation
4.11 Litigation
4.18 Projections
4.22 Hazardous Materials
5.4 Real Property Insurance
6.3 Investments
6.8 Existing Liens and Rights of Others
6.9 Existing Indebtedness and Contingent Obligations
6.11 Remaining Southside Capital Expenditures
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AMENDED AND RESTATED LOAN AGREEMENT
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Dated as of July 31, 1996
This AMENDED AND RESTATED LOAN AGREEMENT ("Agreement")
is entered into among Eldorado Resorts LLC, a Nevada limited liability company
("Borrower"), Bank of America National Trust and Savings Association, as sole
initial Bank, Issuing Bank and Administrative Agent. From time to time, other
lenders may become parties to this Agreement by means of a Commitment Assignment
and Acceptance executed in accordance with Section 11.8 (each such Lender and
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Bank of America National Trust and Savings Association are collectively, the
"Banks" and individually, a "Bank"). Borrower and Bank of America National
Trust and Savings Association hereby agree with reference to the following
facts:
A. Eldorado Hotel Associates Limited Partnership, a Nevada limited
partnership (the "Eldorado Partnership"), entered into a Loan
Agreement dated as of March 25, 1994 with Bank of America National
Trust and Savings Association, as Administrative Agent and the Banks
referred to therein (the "Existing Loan Agreement").
B. As of June 28, the Eldorado Partnership and Borrower entered into an
Agreement and Plan of Merger of even date therewith, pursuant to
which the Eldorado Partnership and Borrower merged, with Borrower the
survivor.
C. Borrower entered into an Assumption Agreement dated as of July 1,
1996 pursuant to which Borrower expressly assumed the obligations of
the Eldorado Partnership under the Existing Loan Agreement and the
Loan Documents referred to therein.
D. Borrower, the Administrative Agent and the Banks desire to amend and
restate the Loan Agreement in its entirety as set forth herein.
In consideration of the foregoing and of the mutual covenants and
agreements herein contained, the parties hereto covenant and agree as follows:
ARTICLE 1.
DEFINITIONS AND ACCOUNTING TERMS
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1.1 Defined Terms. As used in this Agreement, the following terms shall
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have the meanings set forth below :
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"Acquisition" means any transaction, or any series of related
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transactions, by which Borrower directly or indirectly (i) acquires any going
business or all or substantially all of the assets of any firm, partnership,
joint venture, corporation or division thereof, whether through purchase of
assets, merger or otherwise, or (ii) acquires (in one transaction or as the most
recent transaction in a series of transactions) control of at least a majority
in ordinary voting power of the securities of a corporation which have ordinary
voting power for the election of directors, or (iii) acquires control of a 50%
or more ownership interest in any partnership or joint venture.
"Advance" means any Advance made or to be made by any Bank to
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Borrower as provided in Article 2.
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"Administrative Agent" means Bank of America National Trust
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and Savings Association, when acting in its capacity as the Administrative Agent
under any of the Loan Documents, and any successor Administrative Agent.
"Administrative Agent's Office" means the Administrative
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Agent's address as set forth on the signature pages of this Agreement, or such
other address as the Administrative Agent hereafter may designate by written
notice to Borrower and the Banks.
"Affiliate" means, as to any Person, any other Person which
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directly or indirectly controls, or is under common control with, or is
controlled by, such Person. As used in this definition, "control" (and the
correlative terms, "controlled by" and "under common control with") shall mean
possession, directly or indirectly, of power to direct or cause the direction of
management or policies (whether through ownership of securities or partnership
or other ownership interests, by contract or otherwise) .
"Agreement" means this Amended and Restated Loan Agreement,
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either as originally executed or as it may from time to time be supplemented,
modified, amended, restated or extended .
"Applicable Percentage" means, during each calendar month, the
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per annum percentage set forth below opposite the Pricing Leverage Ratio set
forth in the then most recently delivered Pricing Certificate (a) with respect
to each Base Rate Loan, in the column headed "Base Rate", (b) with respect to
each Eurodollar Rate Loan, in the column headed "Eurodollar Rate", (c) for each
Letter of Credit, in the column headed "Letters of Credit", and (d) with respect
to
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Commitment Fees, in the column headed "Commitment Fees":
Pricing Leverage Base Eurodollar Letters Commitment
Ratio Rate Rate of Credit Fees
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Less than 0% 1.0000% 1.0000% 0.2500%
1.50:1.00
Greater than or 0.2500% 1.2500% 1.2500% 0.3125%
equal to 1.50:1.00
but less than 2.00:1.00
Greater than or 0.5000% 1.5000% 1.5000% 0.3750%
equal to 2.00:1.00
but less than 2.50:1.00
Greater than or 0.7500% 1.7500% 1.7500% 0.4375%
equal to 2.50:1.00
but less than 3.00:1.00
Greater than or 1.0000% 2.0000% 2.0000% 0.5000%
equal to 3.00:1.00
"Approved Swan Agreements" means one or more Swap Agreements
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with respect to the Indebtedness evidenced by the Notes between Borrower and one
or more of the Banks, on terms mutually acceptable to Borrower and that Bank or
Banks. Each Approved Swap Agreement shall be a Loan Document and shall be
secured by the Liens created by the Collateral Documents to the extent set forth
in Section 2.8.
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"Arranger" means BA Securities, Inc.
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"Bank of America" means Bank of America National Trust and
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Savings Association, its successors and assigns.
"Banking Day" means any Monday, Tuesday, Wednesday, Thursday
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or Friday, other than a day on which banks are authorized or required to be
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closed in California, Nevada or New York.
"Base Rate" means, as of any date of determination, the
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greater of (a) the Reference Rate or (b) the Federal Funds Rate plus .50%.
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"Base Rate Advance" means an Advance made hereunder and
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designated as a Base Rate Advance in accordance with Article 2.
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"Base Rate Loan" means a Loan made hereunder and designated as
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a Base Rate Loan in accordance with Article 2.
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"Borrower" means Eldorado Resorts LLC, a Nevada limited
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liability company, and its successors and permitted assigns.
"Capital Expenditure" means any expenditure that is considered
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a capital expenditure under Generally Accepted Accounting Principles,
consistently applied, including any amount that is required to be treated as an
asset subject to a Capital Lease.
"Capital Lease" means, as to any Person, a lease of any
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Property by that Person as lessee that is, or should be in accordance with
Financial Accounting Standards Board Statement No. 13, as amended from time to
time, or if such Statement is not then in effect, such other statement of
Generally Accepted Accounting Principles as may be applicable, recorded as a
"capital lease" on the balance sheet of that Person prepared in accordance with
Generally Accepted Accounting Principles.
"Cash" means, when used in connection with any Person, all
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monetary and non-monetary items owned by that Person that are treated as cash in
accordance with Generally Accepted Accounting Principles.
"Cash Equivalents" means, when used in connection with any
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Person, that Person's Investments in:
(a) Government Securities due within one year after the date of the
making of the Investment;
(b) readily marketable direct obligations of any State of the United
States of America or any political subdivision of any such State
given on the date of such investment a credit rating of at least Aa
by Moody's Investors Service, Inc. or AA by Standard & Poor's
Corporation, in each case due within one year after the date of the
making of the Investment;
(c) certificates of deposit issued by, bank deposits in, eurodollar
deposits through, bankers' acceptances of, and reverse repurchase
agreements covering Government Securities executed by, any Bank or
any other bank, savings and loan or savings bank doing business in
and incorporated under the Laws of the United States of America or
any State thereof and having on the date of such Investment combined
capital, surplus and undivided profits of at least $250,000,000, in
each case due within one
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year after the date of the making of the Investment;
(d) certificates of deposit issued by, bank deposits in, eurodollar
deposits through, bankers' acceptances of, and reverse repurchase
agreements covering Government Securities executed by, any branch or
office located in the United States of America of a bank
incorporated under the Laws of any jurisdiction outside the United
States of America having on the date of such Investment combined
capital, surplus and undivided profits of at least $500,000,000, in
each case due within one year after the date of the making of the
Investment; and
(e) readily marketable commercial paper of corporations doing business
in and incorporated under the Laws of the United States of America
or any State thereof given on the date of such Investment the
highest credit rating by Moody's Investors Service, Inc. and
Standard & Poor's Corporation, in each case due within 270 days
after the date of the making of the Investment.
"Cash Interest Charges" means, with respect to any Person and
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for any fiscal period, Interest Charges of that Person to the extent payable in
Cash during that period.
"Certificate of a Responsible Official" means a certificate
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signed by a Responsible Official of the Person providing the certificate.
"Change in Control" means (i) the failure of Donald Carano,
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members of his immediate family, or trusts of which Donald Carano or members of
his immediate family are the sole beneficiaries, to own, directly or indirectly,
and control the power to vote, a majority of the equity ownership interests in
Borrower or (ii) the failure of Donald Carano to be actively involved in the
management of Borrower as the chief executive officer of Borrower for a period
in excess of 90 days unless, during that period, a successor chief executive
officer reasonably acceptable to the Majority Banks is appointed.
"Circus and Eldorado Joint Venture" means Circus and Eldorado
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Joint Venture, a Nevada general partnership which is the joint venture of ELLC
and Galleon which owns, manages and operates Silver Legacy.
"Circus and Eldorado Joint Venture Agreement" means
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the final written joint venture agreement among Circus Circus Enterprises, Inc.,
Galleon, Borrower and ELLC governing the formation of the Circus and Eldorado
Joint Venture and the construction, management and operation of Silver Legacy.
"Closing Date" means March 25, 1994.
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"Co-Agent" means Wells Fargo Bank, N.A. In its capacity as such, the
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Co-Agent shall have no rights or obligations under this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended or
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replaced and as in effect from time to time.
"Collateral" means, collectively, all of the collateral
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subject to the Liens, or intended to be subject to the Liens, created by the
Collateral Documents.
"Collateral Documents" means, collectively, the Security
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Agreement, the Subsidiary Security Agreement, the Deed of Trust, any deed of
trust hereafter executed with respect to the Daniel's Expansion and any other
pledge agreement, hypothecation agreement, security agreement, assignment, deed
of trust, mortgage or similar instrument executed by Borrower or by CS&Y in
favor of the Banks to secure the Obligations .
"Commission" means the Securities and Exchange Commission .
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"Commitment Assignment and Acceptance" means a commitment assignment
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and acceptance substantially in the form of Exhibit A.
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"Commitment Fees" means the fees referred to in Section 3.4.
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"Commitment" means, subject to Sections 2.5 and 2.6, $50,000,000.
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As of the Restatement Date, Bank of America holds the entire Commitment.
"Compliance Certificate" means a certificate in the form of
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Exhibit B, properly completed and signed by a Senior Officer of Borrower.
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"Contingent Obligation" means, as to any Person, any (a)
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direct or indirect guarantee of Indebtedness of, or other obligation performable
by, any other Person, including any endorsement (other than for collection or
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deposit in the ordinary course of business), co-making or sale with recourse of
the obligations of any other Person or (b) contractual
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assurance (not arising solely by operation of Law) given to an obligee with
respect to the performance of an obligation by, or the financial condition of,
any other Person, whether direct, indirect or contingent, including any purchase
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or repurchase agreement covering such obligation or any collateral security
therefor, any agreement to provide funds (by means of loans, capital
contributions or otherwise) to such other Person, any agreement to support the
solvency or level of any balance sheet item to such other Person, or any other
arrangement of whatever nature having the effect of assuring or holding harmless
any obligee against loss with respect to any obligation of such other Person
including without limitation any "keep-well", "take-or-pay" or "through put"
agreement or arrangement. As of each date of determination, the amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the related primary obligation (unless the Contingent
Obligation is limited by its terms to a lesser amount, in which case to the
extent of such amount) or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by the Person in good
faith.
"Contractual Obligation" means, as to any Person, any
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provision of any outstanding Securities issued by that Person or of any material
agreement, instrument or undertaking to which that Person is a party or by which
it or any of its Property is bound.
"CS&Y" means CS&Y Associates, a Nevada general partnership
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consisting of Donald L. Carano, The Sonya Carano Trust under Trust Agreement
dated January 16, 1979, The George Yori and Genevieve Yori Family Trust under
Agreement dated September 28, 1981, The Siri Family Trust, under Agreement dated
December 13, 1991, The William and Lena Carano Family Trust - Exemption Trust,
under Trust Agreement dated April 10, 1984, the William and Lena Carano Family
Trust, - Survivors Trust, under Trust Agreement dated April 10, 1984, The Caryl
Stringham Trust, under Trust Agreement dated January 28, 1992, The Lawrence Yori
Trust, under Trust Agreement dated November 2, 1992, and the Siri 1993
Irrevocable Trust, under Trust Agreement dated June 18, 1993.
"Daniels Expansion" means the proposed expansion of the
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Eldorado Hotel to be constructed on the real property described on
Schedule 1.1B, which real property is the site of the existing Daniel's Motel.
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"Debtor Relief Laws" means the Bankruptcy Code of the United
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States of America, as amended from time to time, and all other applicable
liquidation, conservatorship, bankruptcy, moratorium, rearrangement,
receivership,
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insolvency, reorganization, or similar debtor relief Laws from
time to time in effect affecting the rights of creditors generally.
"Deed of Trust" means the Amended and Restated Deed of Trust
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executed by Borrower and CS&Y covering the real property described on
Schedule 1.lA and the related improvements and fixtures used in connection with
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the Eldorado Hotel, substantially in the form of Exhibit C, either as originally
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executed or as the same may from time to time be supplemented, modified,
amended, renewed, extended on supplanted .
"Default" means any event that, with the giving of any
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applicable notice or passage of time specified in Section 9.1, or both, would be
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an Event of Default.
"Default Rate" means the interest rate set forth in Section 3.8.
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"Designated Deposit Account" means a deposit account to be
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maintained by Borrower with the Administrative Agent, as from time to time
designated by Borrower by written notification to the Administrative Agent.
"Designated Eurodollar Market" means, for any Eurodollar Rate
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Loan, the London Eurodollar Market or such other Eurodollar Market as may be
acceptable to the Administrative Agent .
"Disposition" means the sale, transfer or other disposition in
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any single transaction or series of related transactions of any individual
asset, or group of related assets, of Borrower (but not of assets of ELLC or of
the Circus and Eldorado Joint Venture) that has or have at the date of the
Disposition a book value or fair market value (which shall be deemed to be equal
to the sales price for such asset or assets upon a sale to a Person that is not
an Affiliate of Borrower) of $1,000,000 on more, other than (i) the sale or
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other disposition of inventory in the ordinary course of business and (ii) the
sale or other disposition of equipment or other personal property that is
replaced by equipment or personal property, as the case may be, performing
substantially the same function not later than ninety (90) days after such sale
or disposition.
"Distribution" means, with respect to any membership interest,
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partnership interest or capital stock, or any warrant or option to acquire any
membership interest, partnership interests, capital stock or other equity
securities issued by a Person, (a) the retirement,
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redemption, purchase on other acquisition for value by such Person of any such
security or interest, (b) the declaration or payment by such Person of any
dividend in Cash or in Property (other than Property which is in the form of
like securities or interests of that Person) with respect to any such security
or interest, and (c) any Investment by such Person in any holder of 5% or more
of the equity securities of such Person, if a purpose of such Investment is to
avoid the characterization of the transaction between such Person and such
holder as a Distribution under clause (a) or (b) above.
"dollars" or "$" means United States dollars.
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"EBITDA" means, for any period, (a) Net Income for that
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period, plus (b) consolidated Interest Charges of Borrower and its Subsidiaries
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for that period, plus (c) the aggregate amount of federal and state taxes on
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measured by income of Borrower and its Subsidiaries for that period (whether or
not payable during that period), plus (d) depreciation, amortization and all
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other non-cash expenses of Borrower and its Subsidiaries for that period, in
each case as determined in accordance with Generally Accepted Accounting
Principles.
"Eldorado Capital" means Eldorado Capital Corp., a Nevada
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corporation, its successors and permitted assigns.
"Eldorado Hotel" means the Borrower's hotel and casino complex
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located at 295 North Virginia Street, Reno, Nevada 89501, the adjacent parking
structure located at Sierra and Third Streets, Reno, Nevada 89501 and the
related interests in real property described in the Deed of Trust and includes
(i) the Southside Expansion and (ii) following the acquisition thereof, the
Daniel's Expansion.
"Eligible Assignee" means (a) with respect to any Bank,
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another Bank (b) with respect to any Bank, any Affiliate of that Bank and (c)
any commercial bank having a combined capital and surplus of $100,000,000 or
more that is (i) organized under the Laws of the United States of America or any
State thereof or (ii) organized under the Laws of any other country which is a
member of the Organization for Economic Cooperation and Development, or a
political subdivision of such a country, provided that (A) such bank is acting
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through a branch or agency located in the United States of America and (B) is
otherwise exempt from withholding of tax on interest and delivers Form 1001 or
Form 4224 pursuant to Section 11.23 at the time of any assignment pursuant to
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Section 11.8.
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"ELLC" means Eldorado Limited Liability Company, a Nevada
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limited liability company, its successors and permitted assigns.
"ERISA" means the Employee Retirement Income Security Act of
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1974, and any regulations issued pursuant thereto, as amended or replaced and as
in effect from time to time .
"ERISA Affiliate" means, with respect to any Person, any
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Person (or any trade or business, whether or not incorporated) that is under
common control with that Person within the meaning of Section 414 of the Code.
"Eurodollar Banking Day" means any Banking Day on which
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dealings in dollar deposits are conducted by and among banks in the Designated
Eurodollar Market.
"Eurodollar Base Rate" means, with respect to any Eurodollar
--------------------
Rate Loan, the interest rate per annum (determined solely by the Administrative
Agent and rounded upward to the next 1/16 of 1%) at which deposits in dollars
are of offered by Bank of America to prime banks in the Designated Eurodollar
Market at or about ll:00 a.m. local time in the Designated Eurodollar Market,
two (2) Eurodollar Banking Days before the first day of the applicable
Eurodollar Period in an aggregate amount approximately equal to the amount of
such Eurodollar Rate Loan and for a period of time comparable to the number of
days in the applicable Eurodollar Period. The determination of the Eurodollar
Base Rate by the Administrative Agent shall be conclusive in the absence of
manifest error.
"Eurodollar Lending Office" means, as to each Bank, its office
-------------------------
or branch so designated by written notice to Borrower and the Administrative
Agent as its Eurodollar Rate Lending Office. If no Eurodollar Rate Lending
Office is designated by a Bank, its Eurodollar Lending Office shall be its
office at its address for purposes of notices hereunder.
"Eurodollar Obligations" means eurocurrency liabilities, as defined
----------------------
in Regulation D.
"Eurodollar Period" means, as to each Eurodollar Rate Loan,
-----------------
the period commencing on the date specified by Borrower pursuant to
Section 2.1(b) and ending 1, 2, 3 or 6 months thereafter, as specified by
------
Borrower in the applicable Request for Loan; Provided that:
(a) The first day of any Eurodollar Period shall be a Eurodollar
Banking Day;
-10-
(b) Any Eurodollar Period that would otherwise end on a day that is not
a Eurodollar Banking Day shall be extended to the next succeeding
Eurodollar Banking Day unless such Eurodollar Banking Day falls in
another calendar month, in which case such Eurodollar Period shall
end on the next preceding Eurodollar Banking Day;
(c) No Eurodollar Period shall extend beyond the Maturity Date.
"Eurodollar Rate" means, with respect to any Eurodollar Rate
---------------
Loan, the interest rate (rounded upward to the next 1/100 of 1%) determined to
be equal to the Eurodollar Base Rate divided by [1 minus the Eurodollar Reserve
------- -- -----
Percentage].
"Eurodollar Rate Advance" means an Advance made hereunder and
-----------------------
designated as a Eurodollar Rate Advance in accordance with Article 2.
---------
"Eurodollar Rate Loan" means a Loan made hereunder and
--------------------
designated as a Eurodollar Rate Loan in accordance with Article 2.
---------
"Eurodollar Reserve Percentage" means, with respect to any
-----------------------------
Eurodollar Rate Loan, the percentage applicable as of the date of determination
of the Eurodollar Base Rate representing the aggregate reserve requirements of
the Administrative Agent (disregarding any offsetting amounts that may be
available to the Administrative Agent to decrease such requirements to the
extent that such offsetting amounts arose out of transactions other than those
contemplated by this Agreement) under Regulation D and any other applicable Laws
with respect to Eurodollar Obligations in an aggregate amount equal to the
amount of such Eurodollar Rate Loan and for a time period comparable to the
number of months in the applicable Eurodollar Period. The determination by the
Administrative Agent of any applicable Eurodollar Reserve Percentage shall be
presumed connect in the absence of manifest error.
"Event of Default" shall have the meaning provided in Section 9.1.
----------------
"Federal Funds Rate" means, as of any date of determination, a
------------------
fluctuating interest rate per annum equal to the federal funds effective rate
for the previous Banking Day as quoted by the Federal Reserve Bank of New York
or, if such
-11-
rate is not so published for any day which is a Banking Day, the average of the
quotations for such day on such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by the
Administrative Agent.
"Fiscal Quarter" means the fiscal quarter of Borrower
--------------
consisting of a three month fiscal period ending on each March 31, June 30,
September 30 and December 31.
"Fiscal Year" means the fiscal year of Borrower consisting of
-----------
a twelve month fiscal period ending on each December 31.
"Fixed Change Ratio" means, as of the last day of each Fiscal
------------------
Quarter, the ratio of:
--------
(a) the sum of (i) EBITDA for the twelve month period ending on that
---
date plus (ii) Distributions made in Cash received by Borrower from
----
the Circus and Eldorado Joint Venture during that period; to
--
(b) the sum of (i) Cash Interest Charges payable by Borrower and its
---
Subsidiaries during that period, plus (ii) Scheduled Debt Amortization
----
for twelve month period beginning on the day following the last day of
such Fiscal Quarter (prospectively), plus (iii) 2% of the net revenues
----
of Borrower for the twelve month period ending on such date, plus (iv)
----
Distributions made by Borrower in Cash to its members during the same
period in accordance with Section 6.5, provided that any Distributions
--- --------
made in that fiscal period in excess of 50% of Net Income for that
fiscal period shall be disregarded for this purpose.
"Funded Debt" means, as of each date of determination, without
-----------
duplication, the sum of (a) all principal Indebtedness of Borrower and its
---
Subsidiaries (excluding in any event, the Circus and Eldorado Joint Venture) for
---------
borrowed money (including debt securities issued by Borrower and such
Subsidiaries) on that date, plus (b) the aggregate amount of all Capital Lease
----
Obligations of Borrower and such Subsidiaries on that date, plus (c) the
----
aggregate amount available for drawing under all letters of credit (including
the Letters of Credit) for which Borrower or any such Subsidiary is the account
party, outstanding on that date, plus (d) the aggregate amount drawn under all
----
letters of credit (including the Letters of Credit) for which Borrower or any
such Subsidiary is the account party and for which the issuer of such letters of
credit has not been reimbursed on that date.
-12-
"Galleon" means Galleon, Inc., a Nevada corporation which is
-------
a wholly-owned subsidiary (directly or indirectly) of Circus Circus Enterprises,
Inc.
"Gaming Board" means, collectively, (a) the Nevada Gaming Commission,
------------
(b) the Nevada State Gaming Control Board and (c) any other Governmental Agency
that holds licensing or permit authority over gambling, gaming or casino
activities conducted by Borrower within its jurisdiction.
"Gaming Laws" means all Laws pursuant to which any Gaming Board
-----------
possesses licensing or permit authority over gambling, gaming, or casino
activities conducted by Borrower within its jurisdiction.
"Generally Accepted Accounting Principles" means, as of any date of
----------------------------------------
determination, accounting principles set forth as generally accepted in then
currently effective Statements of the Auditing Standards Board of the American
Institute of Certified Public Accountants, or if such statements are not then in
effect, accounting principles that are then approved by a significant segment of
the accounting profession in the United States of America. The term
"consistently applied," as used in connection therewith, means that the
--------------------
accounting principles applied are consistent in all material respects to those
applied at prior dates or for prior periods.
"Government Securities" means readily marketable direct full faith
---------------------
and credit obligations of the United States of America or obligations
unconditionally guaranteed by the full faith and credit of the United States of
America.
"Governmental Agency" means (a) any international, foreign, federal,
-------------------
state, county or municipal government, or political subdivision thereof, (b) any
governmental or quasi-governmental agency, authority, board, bureau, commission,
department, instrumentality or public body, (c) any court, administrative
tribunal or public utility, or (d) any arbitration tribunal or other non-
governmental authority to whose jurisdiction a Person has consented.
"Guaranty" means the continuing Guaranty of the Obligations executed
--------
by Eldorado Capital on the Restatement Date, substantially in the form of
Exhibit D, either as originally executed or as it may from time to time be
- ---------
supplemented, modified, amended, restated or extended, and as modified by any
instrument of Joinder executed by new Subsidiaries pursuant to Section 5.12.
----
13
"Hazardous Materials" means substances defined as hazardous
-------------------
substances pursuant to the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, 42 USC ss.9601 et seq., or as hazardous, toxic or
pollutant pursuant to the Hazardous Materials Transportation Act, 49 USC
ss.1801, et seq., the Resource Conservation and Recovery Act, 42 USC ss.6901, et
seq., the Hazardous Waste Control Law, Chapter 459 of Nevada Revised Statutes,
or in any other applicable Hazardous Materials Law, in each case as such laws
are amended from time to time.
"Hazardous Materials Claims" means the matters described in clauses
--------------------------
(a) and (b) of Section 5.10.
- --- --- ----
"Hazardous Materials Laws" means all federal, Nevada state or local
------------------------
laws, ordinances, rules or regulations governing the disposal of Hazardous
Materials.
"Indebtedness" means, as to any Person, (a) all indebtedness of such
------------
Person for borrowed money, (b) that portion of the obligations of such Person
under Capital Leases which is properly recorded as a liability on a balance
sheet of that Person prepared in accordance with Generally Accepted Accounting
Principles, (c) any obligation of such Person that is evidenced by a promissory
note or other instrument representing an extension of credit to such Person,
whether or not for borrowed money, (d) any obligation of such Person for the
deferred purchase price of Property or services (other than trade or other
----------
accounts payable in the ordinary course of business in accordance with customary
terms), (e) any obligation of such Person that is secured by a Lien on assets of
such Person, whether or not that Person has assumed such obligation or whether
or not such obligation is non-recourse to the credit of such Person, but only to
the extent of the fair market value of the assets so subject to the Lien, (f)
obligations of such Person arising under acceptance facilities or under
facilities for the discount of accounts receivable of such Person, (g)
obligations of such Person for unreimbursed draws under letters of credit issued
for the account of such Person and (h) any obligations of such Person under a
Swap Agreement.
"Intangible Assets" means assets that are considered intangible
-----------------
assets under Generally Accepted Accounting Principles, including customer lists,
---------
goodwill, computer software and capitalized research and development costs .
"Interest Charges" means, as of the last day of any fiscal period,
----------------
the sum of (a) all interest, fees, charges and related expenses payable with
------
respect to that fiscal period
-14-
to a lender in connection with borrowed money or the deferred purchase price of
assets that is treated as interest in accordance with Generally Accepted
Accounting Principles, plus (b) the portion of rent payable with respect to that
----
fiscal period under Capital Leases that should be treated as interest in
accordance with Generally Accepted Accounting Principles.
"Interest Differential" means, with respect to any prepayment of a
---------------------
Eurodollar Rate Loan on a day other than the last day of the applicable
Eurodollar Period and with respect to the failure to borrow a Eurodollar Rate
Loan on the date or in the amount specified in a Request for Loan, (a) the per
annum interest rate payable pursuant to Section 3.1(c) with respect to that
------
Eurodollar Rate Loan as of the date of the prepayment or failure to borrow,
minus (b) the Eurodollar Rate on or as near as practicable to the date of the
- -----
prepayment or failure to borrow for a Eurodollar Rate Loan commencing on such
date and ending on the last day of the applicable Eurodollar Period; provided
--------
that if the Eurodollar Rate so prescribed is equal to or within 1/8% less than
the Eurodollar Rate for the Eurodollar Rate Loan that was prepaid or not
borrowed, then 1/8 of 1% shall be subtracted from the Eurodollar Rate so
prescribed. The determination of the Interest Differential by the Administrative
Agent shall be conclusive in the absence of manifest error.
"Investment" means, when used in connection with any Person, any
----------
investment by or of that Person, whether by means of purchase or other
acquisition of capital stock or other Securities of any other Person or by means
of loan, advance, capital contribution, guaranty or other debt or equity
participation or interest, or otherwise, in any other Person, including any
---------
membership, partnership and joint venture interests of such Person in any other
Person. The amount of any Investment shall be the amount actually invested,
without adjustment for increases or decreases in the value of such Investment.
"Issuing Bank" means Bank of America.
------------
"Laws" means, collectively, all international, foreign, federal,
----
state and local statutes, treaties, rules, regulations, ordinances, codes and
administrative or judicial precedents.
"Letters of Credit" means any of the standby letters of credit issued
-----------------
by the Issuing Bank under the Commitment pursuant to Section 2.4, either as
---
originally issued or as the same may be supplemented, modified, amended,
renewed, extended or supplemented.
-15-
"License Revocation" means the revocation of, or failure to renew,
------------------
any casino, gambling or gaming license issued by any Gaming Board to Borrower
that could constitute a Material Adverse Effect.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
----
assignment for security, security interest, encumbrance, lien or charge of any
kind, whether voluntarily incurred or arising by operation of Law or otherwise,
affecting any Property, including any agreement to grant any of the foregoing,
---------
any conditional sale or other title retention agreement, any lease in the nature
of a security interest, and/or the filing of or agreement to give any financing
statement under the Uniform Commercial Code or comparable Law of any
jurisdiction with respect to any Property .
"Loan" means the group of Advances made at any one time by the Banks
----
pursuant to Article 2.
---------
"Loan Documents" means, collectively, this Agreement, the Notes, the
--------------
Guaranty, each Letter of Credit, the Collateral Documents, any Request for Loan,
any Request for Letter of Credit and any other agreements of any type or nature
heretofore or hereafter executed and delivered by Borrower or any of its
Affiliates to the Administrative Agent or to any Bank in any way relating to or
in furtherance of this Agreement, including any Approved Swap Agreement, in each
---------
case either as originally executed or as the same may from time to time be
supplemented, modified, amended, restated, extended or supplanted, provided that
--------
the foregoing shall not be deemed to include any agreement evidencing the
obligations of ELLC or the Circus and Eldorado Joint Venture to a direct lender
to the Circus and Eldorado Joint Venture.
"Maintenance Capital Expenditure" means a Capital Expenditure for the
-------------------------------
maintenance, repair, restoration or refurbishment of the Eldorado Hotel, but
excluding any Capital Expenditure (including any Capital Expenditure made in
- ---------
connection with the Southside Expansion or the Daniels Expansion) which adds
permanent improvements, areas or structures to the Eldorado Hotel.
"Majority Banks" means, as of any date of determination, Banks whose
--------------
aggregate Pro Rata Share is at least 51% of the Commitment then in effect or, if
the Commitment is not then in effect, Banks holding Notes evidencing at least
51% of the aggregate Indebtedness evidenced by the Notes.
-16-
"Material Adverse Effect" means any set of circumstances or events
-----------------------
which (a) has or could reasonably be expected to have any material adverse
effect whatsoever upon the validity or enforceability of any Loan Document, (b)
is or could reasonably be expected to be material and adverse to the condition
(financial or otherwise) or business operations or to the prospects of Borrower,
(c) materially impairs or could reasonably be expected to materially impair the
ability of Borrower to perform its Obligations or (d) materially impairs or
could reasonably be expected to materially impair the ability of the Banks to
enforce their legal remedies pursuant to the Loan Documents.
"Maturity Date" means July 31, 2001.
-------------
"Members' Equity" means, as of any date of determination, the members
---------------
equity of Borrower and its Subsidiaries on that date, determined in accordance
with Generally Accepted Accounting Principles, provided that there shall be
--------
excluded from Members' Equity (i) any amount attributable to membership shares
or interests that are, directly or indirectly, required to be redeemed or
repurchased by Borrower or its Subsidiaries at a specified date or upon the
occurrence of specified events or at the election of the holder thereof, and
(ii) that portion of Member's Equity which is attributable to the interests of
Recreational Enterprises, Inc. and other minority members in ELLC, minus
-----
Intangible Assets of Borrower and its Subsidiaries on that date.
"Multiemployer Plan" means any employee benefit plan of the type
------------------
described in Section 4001(a) (3) of ERISA.
"Negative Pledge" means any covenant binding on Borrower that
---------------
prohibits the creation of Liens on any Property thereof, except a covenant
------
contained in an instrument creating a Permitted Encumbrance or Permitted Right
of Others on Property that prohibits the creation of other Liens on that
Property and no other Property of Borrower.
"Net Cash Proceeds" means the gross Cash proceeds received by
-----------------
Borrower or any of its Subsidiaries upon the issuance and sale of any equity
Securities of Borrower, minus, the actual expenses of such sale paid or payable
-----
by Borrower or any of its Subsidiaries in connection with such issuance and
sale.
"Net Income" means, with respect to any fiscal period, the net after-
----------
tax income (or loss) from continuing operations before extraordinary or non-
recurring items of Borrower and its Subsidiaries for that period, excluding any
---------
-17-
income (or loss) attributable to or received from the Circus and Eldorado Joint
Venture, determined in accordance with Generally Accepted Accounting Principles,
consistently applied .
"Note" means any of the promissory notes made by Borrower to a Bank
----
evidencing Advances under that Bank's Pro Rata Share, substantially in the form
of Exhibit E, either as originally executed or as the same may from time to time
---------
be supplemented, modified, amended, renewed, extended or supplanted.
"Obligations" means all present and future obligations of every kind
-----------
or nature of Borrower or any Party at any time and from time to time owed to the
Administrative Agent, the Issuing Bank or the Banks or any one or more of them
under any one or more of the Loan Documents, whether due or to become due,
matured or unmatured, liquidated or unliquidated, or contingent or
noncontingent, including obligations of performance as well as obligations of
---------
payment, and including interest that accrues after the commencement of any
---------
proceeding under any Debtor Relief Law by or against Borrower or any Affiliate
of Borrower.
"Opinion of Counsel" means the favorable written legal opinion of
------------------
Messrs. McDonald, Carano, Wilson, McCune, Bergin, Frankovich & Hicks, counsel to
Borrower, substantially in the form of Exhibit F, together with copies of all
---------
factual certificates and legal opinions upon which such counsel have relied.
"Party" means any Person other than the Administrative Agent, the
-----
Issuing Bank and the Banks, which now or hereafter is a party to any of the Loan
Documents.
"PBGC" means the Pension Benefit Guaranty Corporation at any
----
successor thereof established under ERISA.
"Pension Plan" means any "employee pension benefit plan" that is
------------
subject to Title IV of ERISA and which is maintained for employees of Borrower
or any of its ERISA Affiliates, other than a Multiemployer Plan.
----------
"Permitted Dispositions" means Dispositions of Property made during
----------------------
the term of this Agreement which have, as of each date of determination, an
aggregate book value not in excess of 5% of the consolidated total assets of
Borrower and its Subsidiaries determined, as of each such date, with reference
to Borrower's then most recent audited financial statements, provided that no
--------
Disposition of Property which is an operationally integral part of the Eldorado
Hotel shall be
-18-
a treated as a Permitted Disposition without the prior written consent of all of
the Banks.
"Permitted Encumbrances" means:
----------------------
(a) inchoate Liens incident to construction or maintenance of real
property, or Liens incident to construction or maintenance of
real property, now or hereafter filed of record for which
adequate accounting reserves have been set aside and which are
being contested in good faith by appropriate proceedings and
have not proceeded to judgment, provided that, by reason of
nonpayment of the obligations secured by such Liens, no such
real property is subject to a material risk of loss or
forfeiture;
(b) Liens for taxes and assessments on real property which are not
yet past due, or Liens for taxes and assessments on real
property for which adequate reserves have been set aside and
are being contested in good faith by appropriate proceedings
and have not proceeded to judgment, provided that, by reason
--------
of nonpayment of the obligations secured by such Liens, no
such real property is subject to a material risk of loss or
forfeiture;
(c) minor defects and irregularities in title to any real property
which in the aggregate do not materially impair the fair
market value or use of the real property for the purposes for
which it is or may reasonably be expected to be held;
(d) easements, exceptions, reservations, or other agreements
granted or entered into after the date hereof for the purpose
of pipelines, conduits, cables, wire communication lines,
power lines and substations, streets, trails, walkways,
drainage, irrigation, water, and sewerage purposes, dikes,
canals, ditches, the removal of oil, gas, coal, or other
minerals, and other like purposes affecting real property
which in the aggregate do not materially burden or impair the
fair market value or use of such real property for the
purposes for which it is or may reasonably be expected to be
held;
(e) rights reserved to or vested in any Governmental Agency by Law
to control or regulate, or obligations or duties under Law to
any Governmental Agency with respect to, the use of any real
-19-
property;
(f) rights reserved to or vested in any Governmental Agency by Law to
control or regulate, or obligations or duties under Law to any
Governmental Agency with respect to, any right, power, franchise,
grant, license, or permit;
(g) present or future zoning laws and ordinances or other laws and
ordinances restricting the occupancy, use, or enjoyment of real
property;
(h) statutory Liens, other than those described in clauses (a) or (b)
above, arising in the ordinary course of business with respect to
obligations which are not delinquent or are being contested in good
faith by appropriate proceedings, provided that, if delinquent,
--------
adequate reserves have been set aside with respect thereto and, by
reason of nonpayment, no Property is subject to a material risk of loss
or forfeiture;
(i) Liens consisting of pledges or deposits made in connection with
obligations under workers' compensation laws or similar legislation,
including Liens of judgments thereunder which are not currently
dischargeable;
(j) Liens consisting of pledges or deposits of Property to secure
performance in connection with operating leases made in the ordinary
course of business to which Borrower is a party as lessee, provided the
--------
aggregate value of all such pledges and deposits in connection with any
such lease does not at any time exceed 10% of the annual fixed rentals
payable under such lease;
(k) Liens consisting of deposits of Property to secure statutory
obligations of Borrower in the ordinary course of its business;
(1) Liens consisting of deposits of Property to secure (or in lieu of)
surety, appeal or customs bonds in proceedings to which Borrower is a
party in the ordinary course of its business; and
(m) Liens created by or resulting from any litigation or legal proceeding
involving Borrower in the ordinary course of its business which is
currently being contested in good faith by appropriate proceedings,
provided that adequate reserves have been
--------
-20-
set aside with respect thereto, and such Liens are discharged
or stayed within 60 days of creation and no Property is
subject to a material risk of loss or forfeiture.
"Permitted Right of Others" means a Right of Others consisting
-------------------------
of (a) an interest (other than a legal or equitable co-ownership interest, an
option or right to acquire a legal or equitable co-ownership interest and any
interest of a ground lessor under a ground lease) that does not materially
impair the value or use of property for the purposes for which it is or may
reasonably be expected to be held, (b) an option or right to acquire a Lien that
would be a Permitted Encumbrance, and (c) the reversionary interest of a
landlord under a lease of Property.
"Permitted Tax Distribution" means Distributions made by
--------------------------
Borrower to the Members in an amount not to exceed the actual combined federal
and state income tax then payable in Cash (including estimated income taxes then
---------
payable) under then applicable Laws by the ultimate tax-paying individuals or
entities who are directly or indirectly owners of the Members with respect to
their respective distributive shares of the taxable income of Borrower
(including their distributive shares of any components or tax attributes
---------
thereof), assuming that such ultimate tax-paying individuals or entities had no
other taxable income, loss, deductions or other tax attributes and that any net
operating loss carryforward attributable to Borrower if it were a tax-paying
entity would be available in such Fiscal Year to such individuals or entities,
all as set forth in calculations in reasonable detail attached to a letter from
independent public accountants of recognized standing selected by Borrower and
satisfactory to the Majority Banks) furnished to the Agent not later than five
(5) days prior to any such Distribution.
"Person" means any entity, whether an individual, trustee,
------
corporation, general partnership, limited liability company, limited
partnership, joint stock company, trust, estate, unincorporated organization,
business association, tribe, firm, joint venture, Governmental Agency, or
otherwise.
"Pricing Certificate" means each Pricing Certificate, substantially
-------------------
in the form of Exhibit G, signed by a Responsible Official of Borrower and
---------
properly completed to provide all information required to be included therein.
"Pricing Leverage Ratio" means, as of the last day of each
----------------------
Fiscal Quarter, the ratio of (a) the average daily
-21-
outstanding principal amount of Funded Debt for the Fiscal Quarter ended on that
date to (b) EBITDA for the twelve month fiscal period ended on that date.
"Projections" means the financial projections heretofore furnished by
-----------
Borrower to the Banks, true and correct copies of which are attached hereto as
Schedule 4.18.
- -------------
"Property" means any interest in any kind of property or asset,
--------
whether real, personal or mixed, or tangible or intangible.
"Pro Rata Share" means, with respect to each Bank, the percentage of
--------------
the Commitment held by that Bank from time to time. The Administrative Agent
shall inform the Borrower and the Banks of each change to the Pro Rata Share of
any Bank.
"Quarterly Payment Date" means each March 31, June 30, September 30,
----------------------
and December 31, commencing September 30, 1997.
"Real Property" means, collectively, the real property and
-------------
improvements described in the Deed of Trust.
"Reduction Date" means each Quarterly Payment Date beginning with the
--------------
Quarterly Payment Date occurring on September 30, 1997.
"Reference Rate" means the rate of interest publicly announced from
--------------
time to time by Bank of America in San Francisco, California, as its "Reference
Rate." The Reference Rate is a rate set by Bank of America based upon various
factors, including the Bank of America's costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans. Bank of America may price loans at, above or below the
Reference Rate. Any change in the Reference Rate shall take effect on the day
specified in the public announcement of such change.
"Regulation D" means Regulation D, as at any time amended, of the
------------
Board of Governors of the Federal Reserve System, or any other regulation in
substance substituted therefor.
"Regulation G" means Regulation G, as at any time amended, of
------------
the Board of Governors of the Federal Reserve System, or any other regulation in
substance substituted therefor.
-22-
"Regulation U" means Regulation U, as at any time amended, of
------------
the Board of Governors of the Federal Reserve System, or any other regulation in
substance substituted therefor.
"Regulation X" means Regulation X, as at any time amended, of
------------
the Board of Governors of the Federal Reserve System, or any other regulation in
substance substituted therefor.
"Request for Letter of Credit" means a written request for
----------------------------
letter of credit substantially in the form of Exhibit H, together with the
---------
standard form of application for standby letters of credit, as applicable, used
by the Issuing Bank, signed by a Responsible Official of Borrower and properly
completed to provide all information required to be included therein.
"Request for Loan" means a written request for a Loan substantially
----------------
in the form of Exhibit I, signed by a Responsible Official of Borrower and
---------
properly completed to provide all information required to be included therein.
"Requirement of Law" means, as to any Person, the certificate of
------------------
organization, articles or certificate of incorporation and bylaws, the
partnership agreement and any related certificate of partnership, or other
organizational or governing documents of such Person, and any Law, or judgment,
award, decree, writ or determination of a Governmental Agency, in each case
applicable to or binding upon such Person or any of its Property or to which
such Person or any of its Property is subject.
"Responsible Official" means (a) when used with reference to a
--------------------
Person other than an individual, any officer of such Person, general partner of
such Person, corporate officer of a corporate general partner of such Person,
or, corporate officer of a corporate general partner of a partnership that is a
general partner of such Person, or any other responsible official thereof duly
acting on behalf thereof, and (b) when used with reference to a Person who is an
individual, such Person. Any document or certificate hereunder that is signed or
executed by a Responsible Official of a Person shall be conclusively presumed to
have been authorized by all necessary corporate, partnership, membership and/or
other action on the part of that Person.
"Restatement Date" means the date upon which the conditions precedent
----------------
set forth in Section 8.1 are fulfilled or waived by the Banks.
---
-23-
"Right of Others" means, as to any Property in which a Person
---------------
has an interest, (a) any legal or equitable right, title or other interest
(other than a Lien) held by any other Person in or with respect to that
----------
Property, and (b) any option or right held by any other Person to acquire any
right, title or other interest in or with respect to that Property, including
---------
any option or right to acquire a Lien.
"Scheduled Debt Amortization" means, with respect to any fiscal
---------------------------
period, that portion of the principal of Funded Debt which is scheduled by its
terms to be repaid or prepaid during that period; provided that, in the case of
--------
a revolving credit facility (such as the Commitment) which will terminate or
reduce during that period, a scheduled principal payment shall be deemed to
exist only to the extent required by application of such termination or
reduction to the average daily principal amount outstanding thereunder during
the one calendar month period immediately preceding such fiscal period.
"Securities" means any capital stock, share, voting trust
----------
certificate, bonds, debentures, notes or other evidences of indebtedness,
membership interests, limited partnership interests, or any warrant, option or
other right to purchase or acquire any of the foregoing.
"Security Agreement" means the Amended and Restated Security
------------------
Agreement executed by Borrower on the Restatement Date, substantially in the
form of Exhibit J, either as originally executed or as the same may from time to
---------
time be supplemented, modified, amended, renewed, extended or supplanted.
"Senior Debt to EBITDA Ratio" means, as of the last day of each
---------------------------
Fiscal Quarter, the ratio of (a) the sum of (i) Funded Debt, plus without
--- ----
duplication, all obligations of Borrower and its Subsidiaries with respect to
Swap Agreements, plus (iii) all Contingent Obligations of Borrower and its
----
Subsidiaries with respect to indebtedness for borrowed money, minus (iii) all
-----
Subordinated Obligations, in each case as of such date, to (b) EBITDA for the
twelve month fiscal period ended on such date.
"Senior Officer" means the (a) chief executive officer, (b) chief
--------------
financial officer, (c) director of administration, or (d) general manager of the
Person designated.
"Senior Subordinated Notes" means the 10 1/2% Senior Subordinated
-------------------------
Notes due 2006 issued by Borrower and Eldorado Capital pursuant to the Indenture
dated as of July
-24-
31, 1996 among Borrower, Eldorado Capital and Fleet National Bank, as Trustee,
as in effect on the Restatement Date.
"Silver Legacy" means the Silver Legacy Resort and Casino hotel
-------------
casino complex in Reno, Nevada owned by the Circus and Eldorado Joint Venture
and situated on the real property immediately adjacent to the Eldorado Hotel on
its north and northwest.
"Southside Expansion" means that portion of the Eldorado Hotel
-------------------
constructed during 1994 through 1996 commonly known as the Southside Expansion.
"Special Eurodollar Circumstance" means (a) the adoption of any Law
-------------------------------
by any Governmental Agency, central branch or comparable authority with respect
to activities in the Designated Eurodollar Market, or (b) any change in the
interpretation or administration of any existing Law by any Governmental Agency,
central bank or comparable authority charged with the interpretation or
administration thereof, or (c) compliance by any Bank or its Eurodollar Lending
Office with any request or directive (whether or not having the force of Law) of
any such Governmental Agency, central bank or comparable authority, or (d) the
existence or occurrence of circumstances affecting the Designated Eurodollar
Market generally that are beyond the reasonable control of the Banks.
"Subordinated Obligations" means the Senior Subordinated Notes and
------------------------
all other Indebtedness of Borrower hereafter approved in writing by the Banks
which is subordinated to the Obligations in a manner which is solely acceptable
to the Banks, provided that it is understood that the Banks shall be under no
--------
obligation to consent to the incurrence of Subordinated Obligations other than
the Senior Subordinated Notes.
"Subsidiary" means, as of any date of determination and with respect
----------
to any Person, any corporation, limited liability company or partnership
(whether or not, in either case, characterized as such or as a "joint venture"),
whether now existing or hereafter organized or acquired: (a) in the case of a
corporation, of which a majority of the securities having ordinary voting power
for the election of directors or other governing body (other than securities
having such power only by reason of the happening of a contingency) are at the
time beneficially owned by such Person and/or one or more Subsidiaries of such
Person, or (b) in the case of a partnership, of which such Person or a
Subsidiary of such Person is a general partner or of which a majority of the
partnership or other ownership interests are at the time
-25-
beneficially owned by such Person and/or one or more of its Subsidiaries, or (c)
in the case of a limited liability or other entity, of which the majority of the
membership or other ownership interests having ordinary voting power are at the
time owned by such Person and/or one or more Subsidiaries of such Person,
provided that the Circus and Eldorado Joint Venture shall not be deemed to be a
- --------
Subsidiary of Borrower or of ELLC.
"Subsidiary Security Agreement" means the Security Agreement executed
-----------------------------
by Eldorado Capital on the Restatement Date, substantially in the form of
Exhibit K, either as originally executed or as the same may from time to time be
- ---------
supplemented, modified, amended, renewed, extended or supplanted, and as
modified by any instrument of Joinder executed by new Subsidiaries pursuant to
Section 5.12.
----
"Swap Agreements" means one or more written agreements between
---------------
Borrower and one or more financial institutions providing for "swap," "cap,"
"collar" or other interest rate protection with respect to any Indebtedness.
"Termination Event" means (a) a "reportable event" as defined in
-----------------
Section 4043 of ERISA (other than a reportable event that is not subject to the
----------
provision for 30 day notice to the PBGC), (b) the withdrawal of Borrower or any
of its ERISA Affiliates from a Pension Plan during any plan year in which it was
a "substantial employer" as defined in Section 4001(a) (2) of ERISA, (c) the
filing of a notice of intent to terminate a Pension Plan or the treatment of an
amendment to a Pension Plan as a termination thereof pursuant to Section 4041 of
ERISA, (d) the institution of proceedings to terminate a Pension Plan by the
PBGC or (e) any other event or condition which might reasonably be expected to
constitute grounds under ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan.
"Title Company" means First American Title Insurance Company, Inc. or
-------------
such other title insurance company as may be satisfactory to Administrative
Agent.
"Total Debt to EBITDA Ratio". means, as of the last day of each
--------------------------
Fiscal Quarter, the ratio of (a) the sum of (i) Funded Debt, plus (ii) without
--- ----
duplication, all obligations of Borrower and its Subsidiaries with respect to
Swap Agreements, plus (iii) all Contingent Obligations of Borrower and its
----
Subsidiaries with respect to indebtedness for borrowed money, in each case as of
such date, to (b) EBITDA for the twelve month fiscal period ended on such date.
"type", when used with respect to any Loan or
----
-26-
Advance, means the designation of whether such Loan or Advance is a
Base Rate Loan or Advance or a Eurodollar Rate Loan or Advance.
"Unused Commitment" means, as of each date of determination, the
-----------------
difference between (a) the Commitment on that date and (b) the sum of
---
(i) the principal Indebtedness then evidenced by the Notes, (ii) the
amount available for drawing under outstanding Letters of Credit, and
(iii) the aggregate amount of all unreimbursed draws with respect to
letters of credit.
1.2 Use of Defined Terms. Any defined term used in the plural shall
--------------------
refer to all members of the relevant class, and any defined term used in the
singular shall refer to any one or more of the members of the relevant class.
1.3 Accounting Terms. All accounting terms not specifically defined
----------------
in this Agreement shall be construed in conformity with, and all financial data
required to be submitted by this Agreement shall be prepared in conformity with,
Generally Accepted Accounting Principles applied on a consistent basis, except
------
as otherwise specifically prescribed herein. In the event that Generally
Accepted Accounting Principles change during the term of this Agreement such
that the financial covenants contained in Sections 6.12 through 6.15, inclusive,
---- ----
would then be calculated in a different manner or with different components,
(a) Borrower and the Banks agree to amend this Agreement in such respects as are
necessary to conform those covenants as criteria for evaluating Borrower's
financial condition to substantially the same criteria as were effective prior
to such change in Generally Accepted Accounting Principles and (b) Borrower
shall be deemed to be in compliance with the financial covenants contained in
such Sections during the 60 day period following any such change in Generally
Accepted Accounting Principles if and to the extent that Borrower would have
been in compliance therewith under Generally Accepted Accounting Principles as
in effect immediately prior to such change.
1.4 Rounding. Any financial ratios required to be maintained by
--------
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed in this
Agreement and rounding the result up or down to the nearest number (with a round
up if there is no nearest number) to the number of places by which such ratio is
expressed in this Agreement.
1.5 Exhibits and Schedules. All Exhibits and Schedules to this
----------------------
Agreement, either as originally existing or as the same may from time to time be
supplemented, modified or amended, are
-27-
incorporated herein by this reference. A matter disclosed on any Schedule shall
be deemed disclosed on all Schedules.
1.6 Miscellaneous Terms. The term "or" is disjunctive; the term "and"
-------------------
is conjunctive. The term "shall" is mandatory; the term "may" is permissive.
Masculine terms also apply to females; feminine terms also apply to males. The
term "including" is, by way of example and not limitation.
-28-
ARTICLE 2.
LOANS AND LETTERS OF CREDIT
---------------------------
2.1 Loans-General.
-------------
(a) Subject to the terms and conditions set forth in this
Agreement, from and after the Restatement Date each Bank shall, pro rata
according to its Pro Rata Share, make Advances to Borrower under the
Commitment in such amounts as Borrower may request that do not exceed in
the aggregate at any one time outstanding the amount of that Bank's Pro
Rata Share; provided that, giving effect to the Loan of which such Advance
--------
is a part, the sum of (i) the aggregate principal amount outstanding under
---
the Notes plus (ii) the aggregate amount available for drawing under the
----
outstanding Letters of Credit plus (iii) the aggregate amount of all
----
unreimbursed draws with respect to all Letters of Credit, shall not exceed
the then applicable Commitment. Subject to the limitations set forth
herein, Borrower may borrow, repay and reborrow under this Section 2.1(a)
------
without premium or penalty.
(b) Subject to the next sentence, each Loan shall be made
pursuant to a Request for Loan which shall specify the requested (i) date
of such Loan, which shall be a Banking Day in the case of a Base Rate Loan
and a Eurodollar Banking Day in the case of a Eurodollar Rate Loan, (ii)
amount of such Loan, (iii) type of such Loan, and (iv) in the case of
Eurodollar Rate Loans, the Eurodollar Period for such Loan. Unless the
Administrative Agent has notified, in its sole and absolute discretion,
Borrower to the contrary, a loan may be requested by telephone, telecopier
or telex by a Responsible Official of Borrower. Borrower shall immediately
confirm each requested Loan by submitting a Request for Loan conforming
with the requirements of the preceding sentence to the Administrative Agent
by telecopier, with the original thereof to follow by mail. In the case of
the initial Loans to be made on the Restatement Date, the Request for Loan
to be delivered by the Borrower shall be delivered to the Administrative
Agent no later than 12:00 noon (California time), one day before the
Closing Date, and such Loans shall be Base Rate Loans only and,
notwithstanding Section 2.1(d) may be in any amount which does not exceed
------
the Commitment. The Administrative Agent will net settle Advances to be
made by Banks which are banks under the Existing Loan Agreement to fund
such initial Loans against payments to be made to those Banks in order to
refinance the Loans outstanding under the Existing Loan Agreement.
-29-
(c) Promptly following receipt of a Request for Loan, the
Administrative Agent shall notify each Bank by telephone, telecopier or
telex of the date of the Loan and that Bank's Pro Rata Share of the Loan.
Not later than 12:00 noon, California time, in the case where a Base Rate
Loan is requested, and 10:00 a.m. California time, in the case where a
Eurodollar Rate Loan is requested, on the date specified for any Loan, each
Bank shall make its Pro Rata Share of the Loan in immediately available
funds available to the Administrative Agent at the Administrative Agent's
Office. Upon fulfillment of the applicable conditions set forth in Article
-------
8, all Advances shall be credited in immediately available funds to the
-
Designated Deposit Account.
(d) Unless the Majority Banks otherwise consent, each Loan under
the Commitment shall be in an integral multiple of $250,000 which is equal
to or greater than $1,000,000.
(e) The Advances made by each Bank under the Commitment shall
be evidenced by that Bank's Note.
(f) Unless the Administrative Agent otherwise consents, no
Request for Loan may be revoked by Borrower after its submission to the
Administrative Agent. In the event that the Administrative Agent consents
to the revocation of any Request for Loan submitted by the Borrower,
Borrower agrees that it shall reimburse the Administrative Agent and each
Bank for any loss, cost, damage or expense associated with any redeployment
of funds caused by such revocation.
(g) If, as of the end of the Eurodollar Period with respect to
any Eurodollar Rate Loan, Borrower has not submitted a Request for Loan or
orally requested a Base Rate Loan in accordance with Section 2.1(b), or if
------
any Request for Loan submitted by Borrower for a Eurodollar Rate Loan fails
to satisfy the notice periods specified in Section 2.3,then, in the
---
absence of notice from Borrower to the contrary, Borrower shall be deemed
to have requested a Base Rate Loan in an amount equal to the maturing
Eurodollar Rate Loan, and the Banks shall make the Advances necessary to
make such Loan notwithstanding Sections 2.1(b) and 2.2.
------ ---
2.2 Base Rate Loans. Each request by Borrower for a Base Rate Loan
---------------
shall be made pursuant to a Request for Loan or an oral request for loan
submitted in accordance with Section 2.1(b), in each case received by the
Administrative Agent, at the Administrative Agent's Office, not later than 10:00
a.m. California time, on the Banking Day immediately preceding the
-30-
Banking Day upon which the requested Loan is to be made.
2.3 Eurodollar Rate Loans.
---------------------
(a) Each request by Borrower for a Eurodollar Rate Loan
shall be made pursuant to a Request for Loan or an oral request submitted
in accordance with Section 2.1 (b), in each case received by the
-------
Administrative Agent, at the Administrative Agent's Office, not later than
9:00 a.m., California time, at least three (3) Eurodollar Banking Days
before the first day of the applicable Eurodollar Period.
(b) Prior to the first day of the applicable Eurodollar
Period, the Administrative Agent shall determine the applicable Eurodollar
Rate (which determination shall be conclusive in the absence of manifest
error) and promptly shall give notice of the same to Borrower and the Banks
by telephone, telecopier or telex.
(c) Unless all of the Banks otherwise consent in writing,
no Eurodollar Rate Loan may be requested during the continuance of a
Default or Event of Default.
(d) Nothing contained herein shall require any Bank to fund
any Eurodollar Rate Advance in the Designated Eurodollar Market.
(e) Unless the Administrative Agent otherwise consents, no
more than ten Eurodollar Rate Loans shall be outstanding at any one time.
2.4 Letters of Credit.
-----------------
(a) Subject to the terms and conditions hereof, at any time
and from time to time from the Closing Date through the Maturity Date, the
Issuing Bank shall issue such Letters of Credit under the Commitment as
Borrower may request by a Request for Letter of Credit; provided that (i)
--------
giving effect to all such Letters of Credit, the sum of (A) the aggregate
---
principal amount outstanding under the Notes plus (B) the aggregate amount
----
available for drawing under the outstanding Letters of Credit plus (C) the
----
aggregate amount of all unreimbursed draws with respect to all Letters of
Credit, does not exceed the then applicable Commitment, and (ii) the
aggregate amount available for drawing under all outstanding Letters of
Credit plus the amount of all unreimbursed draws under Letters of Credit
----
shall not exceed $3,000,000. Each Letter of Credit shall be in a form
reasonably acceptable to the Issuing Bank. Unless all the Banks otherwise
consent in a writing delivered to the Administrative Agent, the terms of
the Letters of Credit shall not exceed 24 months from the
-31-
date of issuance thereof, and shall not extend beyond the Maturity Date. No
Letter of Credit shall be issued except to the extent reasonably necessary in
the ordinary course of business of Borrower.
(b) Each Request for Letter of Credit shall be submitted to
the Issuing Bank, with a copy to the Administrative Agent, at least ten (10)
Banking Days prior to the date upon which the related Letter of Credit is
proposed to be issued. The Administrative Agent shall promptly notify the
Issuing Bank whether such Request for Letter of Credit, and the issuance of a
Letter of Credit pursuant thereto, conforms to the requirements of this
Agreement. Upon issuance of a Letter of Credit, the Issuing Bank shall promptly
notify the Administrative Agent, and the Administrative Agent shall promptly
notify the Banks, of the amount and terms thereof.
(c) Upon the issuance of a Letter of Credit, each Bank shall be
deemed to have purchased a pro rata participation from the Issuing Bank in an
amount equal to that Bank's Pro Rata Share, of such Letter of Credit. Without
limiting the scope and nature of each Bank's participation in any Letter of
Credit, to the extent that the Issuing Bank has not been reimbursed by Borrower
for any payment required to be made by the Issuing Bank under any Letter of
Credit, each Bank shall, pro rata according to its Pro Rata Share, reimburse the
Issuing Bank promptly upon demand for the amount of such payment through the
Administrative Agent. The obligation of each Bank to so reimburse the Issuing
Bank shall be absolute and unconditional and shall not be affected by the
occurrence of an Event of Default or any other occurrence or event. Any such
reimbursement shall not relieve or otherwise impair the obligation of Borrower
to reimburse the Issuing Bank for the amount of any payment made by the Issuing
Bank under any Letter of Credit together with interest as hereinafter provided.
(d) Borrower agrees to pay to the Issuing Bank through the
Administrative Agent an amount equal to any payment made by the Issuing Bank
with respect to each Letter of Credit within one (1) Banking Day after demand
made by the Issuing Bank therefor, together with interest on such amount from
the date of any payment made by the Issuing Bank at the Default Rate. The
principal amount of any such payment shall be used to reimburse the Issuing Bank
for the payment made by it under the Letter of Credit. Each Bank that has
reimbursed the Issuing Bank pursuant to Section 2.4(c) and for its Pro-Rata
------
Share of any payment made by the Issuing Bank under a Letter of Credit shall
thereupon acquire a pro-rata participation, to the extent of such reimbursement,
in the claim of the
-32-
Issuing Bank against Borrower under this Section 2.4 (d) and shall share, in
-------
accordance with that pro-rata participation, in any payment made by Borrower
with respect to such claim.
(e) If Borrower fails to make the payment required by Section 2.4(d)
------
within the time period therein set forth, in lieu of the reimbursement to the
Issuing Bank under Section 2.4(c) the Issuing Bank may (but is not required to)
------
without notice to or the consent of Borrower, instruct the Administrative Agent
to cause Advances to be made by the Banks under the Commitment in an aggregate
amount equal to the amount paid by the Issuing Bank with respect to that Letter
of Credit and, for this purpose, the conditions precedent set forth in Article 8
---------
shall not apply. The proceeds of such Advances shall be paid to the Issuing Bank
to reimburse it for the payment made by it under the Letter of Credit. Such
Advances shall be payable upon demand and shall bear interest at the Default
Rate.
(f) The issuance of any supplement, modification, amendment, renewal,
or extension to or of any Letter of Credit shall be treated in all respects the
same as the issuance of a new Letter of Credit.
(g) The obligation of Borrower to pay to the Issuing Bank the amount
of any payment made by the Issuing Bank under any Letter of Credit shall be
absolute, unconditional, and irrevocable, subject only to performance by the
Issuing Bank of its obligations to Borrower under Nevada Revised Statutes
Section 104.5109. Without limiting the foregoing, Borrower's obligations shall
not be affected by any of the following circumstances:
(i) any lack of validity or enforceability of the Letter of
Credit, this Agreement, or any other agreement or instrument relating
thereto;
(ii) any amendment or waiver of or any consent to departure from
the Letter of Credit, this Agreement, or any other agreement or
instrument relating thereto, with the consent of Borrower;
(iii) the existence of any claim, setoff, defense, or other
rights which Borrower may have at any time against the Issuing Bank,
the Administrative Agent or any Bank, any beneficiary of the Letter of
Credit (or any persons or entities for whom any such beneficiary may be
acting) or any other Person, whether in connection with the Letter of
Credit, this Agreement, or any other agreement or instrument relating
thereto, or any unrelated transactions;
-33-
(iv) any demand, statement, or any other document presented
under the Letter of Credit proving to be forged, fraudulent, invalid, or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect whatsoever so long as any such document appeared to comply with
the terms of the Letter of Credit;
(v) payment by the Issuing Bank in good faith under the Letter
of Credit against presentation of a draft or any accompanying document which
does not strictly comply with the terms of the Letter of Credit;
(vi) the existence, character, quality, quantity, condition,
packing, value or delivery of any property purported to be represented by
documents presented in connection with any Letter of Credit or for any
difference between any such property and the character, quality, quantity,
condition, or value of such property as described in such documents;
(vii) the time, place, manner, order or contents of shipments or
deliveries of property as described in documents presented in connection with
any Letter of Credit or the existence, nature and extent of any insurance
relative thereto;
(viii) the solvency or financial responsibility of any party
issuing any documents in connection with a Letter of Credit;
(ix) any failure or delay in notice of shipments or arrival of
any property;
(x) any error in the transmission of any message relating to a
Letter of Credit not caused by the Issuing Bank, or any delay or interruption in
any such message;
(xi) any error, neglect or default of any correspondent of the
Issuing Bank in connection with a Letter of Credit;
(xii) any consequence arising from acts of God, war,
insurrection, civil unrest, disturbances, labor disputes, emergency conditions
or other causes beyond the control of the Issuing Bank;
(xiii) so long as the Issuing Bank in good
-34-
faith determines that the contract or document appears to
comply with the terms of the Letter of Credit, the form,
accuracy, genuineness or legal effect of any contract or
document referred to in any document submitted to the Issuing
Bank in connection with a Letter of Credit; and
(xiv) where the Issuing Bank has acted in good
faith and observed general banking usage, any other
circumstances whatsoever.
(h) The Issuing Bank shall be entitled to the protection
accorded to the Administrative Agent pursuant to Section 10.6, mutatis
-------------
mutandis.
--------
2.5 Automatic Reduction of Commitment. The Commitment shall
---------------------------------
automatically reduce by the amount of $1,562,500 on each Reduction Date.
2.6 Voluntary Reduction of Commitment. Borrower shall have the
---------------------------------
right, at any time and from time to time, without penalty or charge, upon at
least four (4) Banking Days prior written notice to the Administrative Agent, to
voluntarily, permanently and irrevocably reduce, in amounts which are integral
multiples of $2,500,000, or to terminate, the then undisbursed portion of the
Commitment, provided that (i) any such reduction or termination shall be
--------
accompanied by all accrued and unpaid commitment fees with respect to any
portion of the Commitment being reduced or terminated, and (ii) no such
reduction or termination shall affect the reduction of the Commitment as set
forth in Section 2.5.
2.7 Administrative Agent's Right to Assume Funds Available for
----------------------------------------------------------
Advances. Unless the Administrative Agent shall have been notified by any Bank
- --------
prior to the funding by the Administrative Agent of any Loan that such Bank does
not intend to make available to the Administrative Agent such Bank's Pro Rata
Share of the total amount of such Loan, the Administrative' Agent may
assume that such Bank has made such amount available to the Administrative Agent
on the date of the Loan and the Administrative Agent may, in reliance upon such
assumption, make available to Borrower a corresponding amount. If the
Administrative Agent has made funds available to Borrower based on such
assumption and such corresponding amount is not in fact made available to the
Administrative Agent by such Bank, the Administrative Agent shall be entitled to
recover such corresponding amount on demand from such Bank, which demand shall
be made in a reasonably prompt manner. If such Bank does not pay such
corresponding amount forthwith upon the Administrative Agent's demand therefor,
the Administrative Agent promptly shall notify Borrower and Borrower shall pay
such
-35-
corresponding amount to the Administrative Agent. The Administrative Agent
also shall be entitled to recover from such Bank interest on such corresponding
amount in respect of each day from the date such corresponding amount was made
available by the Administrative Agent to Borrower to the date such corresponding
amount is recovered by the Administrative Agent, at a rate per annum equal to
the Federal Funds Rate. Nothing herein shall be deemed to relieve any Bank from
its obligation to fulfill its Pro Rata Share or to prejudice any rights which
the Administrative Agent or Borrower may have against any Bank as a result of
any default by such Bank hereunder.
2.8 Collateral. The Loans, together with all other Obligations,
----------
shall be secured by the Liens created by the Collateral Documents. Each Approved
Swap Agreement shall be secured by the Lien of the Collateral Documents (a) on a
pari passu basis to the extent of the Bank of America's risk assessment factor
- ----------
times the notional amount thereof, and (b) to the extent of any excess, on a
- -----
basis which is in all respects subordinated to all other Obligations.
2.9 Senior Indebtedness. The Obligations are "Designated Senior
-------------------
Debt" within the meaning for that term described in the Senior Subordinated
Notes and shall be "Senior Indebtedness" with respect to all other Subordinated
Obligations.
-36-
ARTICLE 3.
PAYMENTS AND FEES
-----------------
3.1 Principal and Interest.
----------------------
(a) Interest shall be payable on the outstanding daily unpaid
principal amount of each Loan from the date thereof until payment in full is
made and shall accrue and be payable at the rates set forth herein before and
after default, before and after maturity, before and after judgment, and before
and after the commencement of any proceeding under any Debtor Relief Law, with
interest on overdue interest to bear interest at the Default Rate to the fullest
extent permitted by applicable Laws.
(b) Interest accrued on each Base Rate Loan on each Quarterly
Payment Date shall be due and payable on that Quarterly Payment Date. Except as
------
otherwise provided in Section 3.8, the unpaid principal amount of any Base Rate
---
Loan shall bear interest at a fluctuating rate per annum equal to the Base Rate
plus the Applicable Percentage for Base Rate Loans. Each change in the interest
- ----
rate hereunder shall take effect simultaneously with the corresponding change in
the Base Rate or the Applicable Percentage .
(c) Interest on each Eurodollar Rate Loan which is for a term
of three months or less shall be due and payable on the last day of the related
Eurodollar Period. Interest accrued on each other Eurodollar Rate Loan shall be
due and payable on the date which is three months after the date such Eurodollar
Rate Loan was made, every three months thereafter and, in any event, on the last
day of the related Eurodollar Period. Except as otherwise provided in
Section 3.8, the unpaid principal amount of any Eurodollar Rate Loan shall bear
---
interest at a rate per annum equal to the Eurodollar Rate for that Eurodollar
Rate Loan plus the Applicable Percentage for Eurodollar Rate Loans. While the
----
Eurodollar Rate for each Eurodollar Rate Loan shall remain fixed for the entire
related Eurodollar Period, the Applicable Percentage for each Eurodollar Rate
Loan shall change simultaneously with the corresponding change in Applicable
Percentages generally.
(d) If not sooner paid, the principal Indebtedness evidenced
by the Notes shall be payable as follows:
(i) the principal amount of each Eurodollar Rate Loan shall be
payable on the last day of the
-37-
Eurodollar Period for such Loan;
(ii) the amount, if any, by which the aggregate
principal Indebtedness evidenced by the Notes plus the
----
aggregate amount available for drawing under outstanding
Letters of Credit plus the aggregate amount of all
----
unreimbursed draws with respect to Letters of Credit at any
time exceeds the Commitment shall be payable immediately; and
(iv) the principal Indebtedness evidenced by the
Notes shall in any event be payable on the Maturity Date.
(e) Subject to Section 3.7 the Notes may, at any time and from
---
time to time, voluntarily be paid or prepaid in whole or in part without premium
or penalty, provided that with respect to any voluntary prepayment of the Notes
--------
under this Section 3.1(e), (i) any partial prepayment shall be in an integral
------
multiple of $250,000 which is not less than $500,000, (ii) the Administrative
Agent shall have received written notice of any prepayment prior to 9:00 a.m.
California time one Banking Day (or, in the case of any prepayment of any
Eurodollar Rate Loan, three Eurodollar Banking Days) before the date of
prepayment, which notice shall identify the date and amount of the prepayment
and (iii) each repayment of principal shall be accompanied by payment of
interest accrued through the date of payment on the amount of principal paid.
3.2 Annual Agency Fees. On the Restatement Date and on each
------------------
anniversary of the Restatement Date, Borrower shall pay to the Administrative
Agent agency fees in the amounts set forth in a letter agreement between the
Administrative Agent and Borrower. These agency fees are fully earned as of the
date when due, are solely for the account of Administrative Agent and are non-
refundable.
3.3 Facility Fees. On the Restatement Date, Borrower shall pay
-------------
to the Administrative Agent, for the account of each Bank, a non-refundable
facility fee in amount equal to 0.25% of that Bank's allocated Pro Rata Share.
3.4 Commitment Fees. From the Restatement Date, Borrower shall
---------------
pay to the Administrative Agent, for the account of the Banks according to their
Pro Rata Shares, commitment fees equal to the product of (a) the Applicable
Percentage times (b) the average daily Unused Commitment. The commitment fees
-----
shall be payable quarterly in arrears on each Quarterly Payment Date, upon
termination of the Commitment under Section 2.6 and on the Maturity Date.
---
-38-
3.5 Standby Letter of Credit Fees. Concurrently with the
-----------------------------
issuance of each Letter of Credit, Borrower shall pay standby letter of credit
fees (a) to the Issuing Bank, for the sole account of the Issuing Bank, in an
amount set forth in a letter agreement between the Issuing Bank and Borrower,
and (b) to the Administrative Agent, for the ratable account of the Banks in
accordance with their Pro Rata Shares, in an amount equal to the Applicable
Percentage times the maximum amount available for drawing under such Letter of
-----
Credit, in each case for the term of such Letter of Credit. The Administrative
Agent shall promptly make available to the Banks in immediately available funds,
pro-rata according to their Pro Rata Share, the standby letter of credit fees
which are for the account of the Banks. Borrower shall also pay transfer,
issuance, check fees and such other fees as the Issuing Bank normally charges
(not to include origination fees) in connection with standby letters of credit
and activity pursuant thereto, which fees shall be solely for the account of the
Issuing Bank.
3.6 Increased Commitment Costs. If any Bank shall have determined
--------------------------
that the introduction of any applicable law, rule, regulation or guideline
regarding capital adequacy, or any change therein or any change in the
interpretation or administration thereof by any central bank or other
Governmental Agency charged with the interpretation or administration thereof,
or compliance by that Bank (or its Eurodollar Lending Office) or any corporation
controlling that Bank, with any request, guidelines or directive regarding
capital adequacy (whether or not having the force of law) of any such central
bank or other authority, affects or would affect the amount of capital required
or expected to be maintained by that Bank or any corporation controlling that
Bank and (taking into consideration such Bank's or such corporation's policies
with respect to capital adequacy and such Bank's desired return on capital)
determines that the amount of such capital is increased as a consequence of its
obligations under this Agreement, then, upon demand of such Bank, Borrower shall
immediately pay to that Bank, from time to time as specified by that Bank,
additional amounts sufficient to compensate that Bank for such increase.
3.7 Eurodollar Fees and Costs.
-------------------------
(a) If, after the date hereof, the existence or occurrence of
any Special Eurodollar Circumstance:
(i) shall subject any Bank or its Eurodollar Lending Office
to any tax, duty or other charge or cost with respect to any
Eurodollar Rate Advance, its Note or its obligation to make
Eurodollar Rate Advances, or shall change the basis of taxation of
payments to any Bank of the principal of or
-39-
interest on any Eurodollar Rate Advance or any other amounts due under
this Agreement in respect of any Eurodollar Rate Advance, its Note or
its obligation to make Eurodollar Rate Advances (except for changes in
------
any tax on the overall net income, gross income or gross receipts of
such Bank or its Eurodollar Lending Office);
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any reserve imposed by the Board of
---------
Governors of the Federal Reserve System), special deposit or similar
requirements against assets of, deposits with or for the account of, or
credit extended by, any Bank or its Eurodollar Lending Office; or
(iii) shall impose on any Bank or its Eurodollar Lending Office
or the Designated Eurodollar Market any other condition affecting any
Eurodollar Rate Advance, its Note, its obligation to make Eurodollar
Rate Advances or this Agreement, or shall otherwise affect any of the
same;
and the result of any of the foregoing, as determined by such Bank, increases
the cost to such Bank or its Eurodollar Lending Office of making or maintaining
any Eurodollar Rate Advance or in respect of any Eurodollar Rate Advance, its
Note or its obligation to make Eurodollar Rate Advances or reduces the amount of
any sum received or receivable by such Bank or its Eurodollar Lending Office
with respect to any Eurodollar Rate Advance, its Note or its obligation to make
Eurodollar Rate Advances (assuming such Bank's Eurodollar Lending Office had
funded 100% of its Eurodollar Rate Advance in the Designated Eurodollar Market),
then, upon demand by such Bank (with a copy to the Administrative Agent),
Borrower shall pay to such Bank such additional amount or amounts as will
compensate such Bank for such increased cost or reduction (determined as though
such Bank's Eurodollar Lending Office had funded 100% of its Eurodollar Rate
Advance in the Designated Eurodollar Market). A statement of any Bank claiming
compensation under this subsection and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. Each Bank agrees to endeavor promptly to notify Borrower of any
event of which it has actual knowledge occurring after the Closing Date, which
will entitle such Bank to compensation pursuant to this Section, and agrees to
designate a different Eurodollar Lending Office promptly if such designation
will avoid the need for or reduce the amount of such compensation and will not,
in the judgment of such
-40-
Bank, otherwise be disadvantageous to such Bank. If any Bank claims compensation
under this Section, Borrower may at any time, upon at least four (4) Eurodollar
Banking Days' prior notice to the Administrative Agent and such Bank and upon
payment in full of the amounts provided for in this Section through the date of
such payment plus any prepayment fee required by Section 3.7(d), pay in full the
---- ------
affected Eurodollar Rate Advances of such Bank or request that such Eurodollar
Rate Advances be converted to Base Rate Advances.
(b) If, after the date hereof, the existence or occurrence of any
Special Eurodollar Circumstance shall, in the opinion of any Bank, make it
unlawful, impossible or impracticable for such Bank or its Eurodollar Lending
Office to make, maintain or fund its portion of any Eurodollar Rate Loan, or
materially restrict the authority of such Bank to purchase or sell, or to take
deposits of, dollars in the Designated Eurodollar Market, or to determine or
charge interest rates based upon the Eurodollar Rate, and such Bank shall so
notify the Administrative Agent, then such Bank's obligation to make Eurodollar
Rate Advances shall be suspended for the duration of such illegality,
impossibility or impracticability and the Administrative Agent forthwith shall
give notice thereof to the other Banks and Borrower. Upon receipt of such
notice, the outstanding principal amount of such Bank's Eurodollar Rate
Advances, together with accrued interest thereon, automatically shall be
converted to Base Rate Advances on either (1) the last day of the Eurodollar
Period(s) applicable to such Eurodollar Rate Advances if such Bank may lawfully
continue to maintain and fund such Eurodollar Rate Advances to such day(s) or
(2) immediately if such Bank may not lawfully continue to fund and maintain such
Eurodollar Rate Advances to such day(s), provided that in such event the
--------
conversion shall not be subject to payment of a prepayment fee under
Section 3.7(d). In the event that any Bank is unable, for the reasons set forth
------
above, to make, maintain or fund its portion of any Eurodollar Rate Loan, such
Bank shall fund such amount as a Base Rate Advance for the same period of time,
and such amount shall be treated in all respects as a Base Rate Advance.
(c) If, with respect to any proposed Eurodollar Rate Loan:
(i) the Administrative Agent reasonably determines
that, by reason of circumstances affecting the Designated Eurodollar
Market generally that are beyond the reasonable control of the Banks,
deposits
-41-
in dollars (in the applicable amounts) are not being offered to each of the
Banks in the Designated Eurodollar Market for the applicable Eurodollar
Period; or
(ii) the Majority Banks advise the Administrative Agent that the
Eurodollar Rate as determined by the Administrative Agent (A) does not
represent the effective pricing to such Banks for deposits in dollars in
the Designated Eurodollar Market in the relevant amount for the applicable
Eurodollar Period, or (B) will not adequately and fairly reflect the cost
to such Banks of making the applicable Eurodollar Rate Advances;
then the Administrative Agent forthwith shall give notice thereof to Borrower
and the Banks, whereupon until the Administrative Agent notifies Borrower that
the circumstances giving rise to such suspension no longer exist, the obligation
of the Banks to make any future Eurodollar Rate Advances shall be suspended. If
at the time of such notice there is then pending a Request for Loan that
specifies a Eurodollar Rate Loan, such Request for Loan shall be deemed to
specify a Base Rate Loan.
(d) Upon payment or prepayment of any Eurodollar Rate Advance, (other
than as the result of a conversion required under Section 3.7(b)), on a day
-------
other than the last day in the applicable Eurodollar Period (whether
voluntarily, involuntarily, by reason of acceleration, or otherwise), or upon
the failure of Borrower to borrow on the date or in the amount specified for a
Eurodollar Rate Loan in any Request for Loan, Borrower shall pay to the
appropriate Bank a prepayment fee or failure to borrow fee, as the case may be,
calculated as follows (and determined as though 100% of the Eurodollar Rate
Advance had been funded in the Designated Eurodollar Market):
(i) principal amount of the Eurodollar Rate Advance, times
-----
[number of days between the date of prepayment and the last day in the
applicable Eurodollar Period], divided by 360, times the applicable
---------- -----
Interest Differential; plus
----
(ii) all actual out-of-pocket expenses (other than those taken
into account in the calculation of the Interest Differential) incurred by
the Bank (excluding allocations of any expense internal to that Bank) and
---------
reasonably attributable to such payment or prepayment;
-42-
provided that no prepayment fee or failure to borrow fee shall be payable
--------
(and no credit or rebate shall be required) if the product of the foregoing
formula is not a positive number. Each Bank's determination of the amount
of any prepayment fee or failure to borrow fee payable under this Section
3.7(d) shall be based upon the Administrative Agent's determination of the
-----
applicable Interest Differential but shall otherwise be conclusive in the
absence of manifest error.
3.8 Default Rate. Upon the occurrence of any Event of Default, the
------------
outstanding principal amount of the Loans shall, at the option of the Majority
Banks, thereafter bear interest at a fluctuating interest rate per annum at all
times equal to the sum of the Base Rate plus the Applicable Percentage for Base
----
Rate Loans plus 2% per annum, to the fullest extent permitted by applicable
----
Laws. Accrued and unpaid interest on past due amounts (including, without
---------
limitation, interest on past due interest) shall be compounded quarterly, on the
last day of each calendar quarter, to the fullest extent permitted by applicable
Laws.
3.9 Computation of Interest and Fees. Computation of interest on
--------------------------------
Base Rate Loans shall be calculated on the basis of a year of 365 or 366 days,
as the case may be, and the actual number of days elapsed. Computation of
interest on Eurodollar Rate Loans and on fees under this Agreement shall be
calculated on the basis of a year of 360 days and the actual number of days
elapsed. Borrower acknowledges that such latter calculation method will result
in a higher yield to the Banks than a method based on a year of 365 or 366 days.
Any Loan that is repaid on the same day on which it is made shall bear interest
for one day. For the purpose of complying with Nevada Revised Statutes Section
99.050, Borrower hereby declares that it understands that to the extent
principal sums are advanced by the Banks for the purpose of funding the payments
of interest due on each Quarterly Payment Date, as set forth in this Article 3
---------
or in any other obligation owing by Borrower to Administrative Agent or to the
Banks under any Loan Document, a compounding of interest results, which
compounding is agreed to by Borrower as part of the terms of this Agreement and
of the Notes.
3.10 Non-Banking Days. If any payment to be made by Borrower or any
----------------
other Party under any Loan Document shall come due on a day other than a Banking
Day, payment shall instead be considered due on the next succeeding Banking Day
and the extension of time shall be reflected in computing interest.
-43-
3.11 Manner and Treatment of Payments.
--------------------------------
(a) Each payment hereunder or on the Notes or under any other
Loan Document shall be made to the Administrative Agent for the account of
each of the Banks or the Administrative Agent, as the case may be, in
immediately available funds not later than 11:00 a.m., California time, on
the day of payment (which must be a Banking Day). Each such payment shall
be made to the Administrative Agent at the Administrative Agent's Office.
All payments received after 11:00 a.m., California time, on any particular
Banking Day, shall be deemed received on the next succeeding Banking Day.
The amount of all payments received by the Administrative Agent for the
account of each Bank shall be promptly paid (and, in any event, on the same
Banking Day when deemed received) by the Administrative Agent to that Bank
in immediately available funds. All payments shall be made in lawful money
of the United States of America.
(b) Each payment or prepayment on account of any Loan shall be
made and applied pro rata according to the outstanding Advances made by
each Bank comprising such Loan.
(c) Each Bank shall use its best efforts to keep a record of
Advances made by it and payments received by it with respect to each of its
Note and such record shall be presumptive evidence of the amounts owing.
Notwithstanding the foregoing sentence, no Bank shall be liable to any
Party for any failure to keep such a record, and no such failure shall
affect the amount of the Obligations hereunder.
3.12 Funding Source. Nothing in this Agreement shall be deemed to
--------------
obligate any Bank to obtain the funds for any Loan or Advance in any particular
place or manner or to constitute a representation by any Bank that it has
obtained or will obtain the funds for any Loan or Advance in any particular
place or manner.
3.13 Failure to Charge Not Subsequent Waiver. Any decision by the
---------------------------------------
Administrative Agent or any Bank not to require payment of any interest
(including interest at the Default Rate), fee, cost or other amount payable
---------
under any Loan Document, or to calculate any amount payable by a particular
method, on any occasion shall in no way limit or be deemed a waiver of the
Administrative Agent's or such Bank's right to require full payment of any
interest (including interest at the Default Rate), fee, cost or other amount
---------
payable under any Loan Document, or to calculate an amount payable by another
method,
-44-
on any other or subsequent occasion.
3.14 Administrative Agent's Right to Assume Payments Will be Made by
---------------------------------------------------------------
Borrower. Unless the Administrative Agent shall have been notified by Borrower
- --------
prior to the date on which any payment to be made by Borrower hereunder is due
that Borrower does not intend to remit such payment, the Administrative Agent
may, in its discretion, assume that Borrower has remitted such payment when so
due and the Administrative Agent may, in its discretion and in reliance upon
such assumption, make available to each Bank on such payment date an amount
equal to such Bank's share of such assumed payment. If Borrower has not in fact
remitted such payment to the Administrative Agent, each Bank shall forthwith on
demand repay to the Administrative Agent the amount of such assumed payment made
available to such Bank, together with interest thereon in respect of each day
from and including the date such amount was made available by the Administrative
Agent to such Bank to the date such amount is repaid to the Administrative Agent
at the Federal Funds Rate.
3.15 Authority to Charge Account. Borrower hereby authorizes Bank of
---------------------------
America to charge the Designated Deposit Account, or any other demand deposit
account maintained by Borrower with Bank of America, in such amounts as may from
time to time be necessary to cause timely payment of principal, interest, fees
and other charges payable by Borrower under the Loan Documents. Nothing herein
shall obligate Bank of America to charge the Designated Deposit Account, or any
other account, in this manner or to charge any account at a time when there are
not sufficient good funds in such account.
3.16 Fee Determination Detail. The Administrative Agent, and any
------------------------
Bank, shall provide reasonable detail to Borrower regarding the manner in which
the amount of any payment to the Banks, or that Bank, under Article 3 has been
---------
determined.
-45-
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES
------------------------------
Borrower represents and warrants to the Banks that:
4.1 Existence and Qualification; Power; Compliance With Laws.
--------------------------------------------------------
Borrower is a limited liability company duly formed, validly existing and in
good standing under the Laws of the State of Nevada. Borrower is duly qualified
to transact business, and is in good standing, in Nevada and each other
jurisdiction in which the conduct of its business or the ownership or leasing of
its Properties makes such qualification or registration necessary, except where
------
the failure so to qualify or register and to be in good standing would not
constitute a Material Adverse Effect. Borrower has all requisite power and
authority to conduct its business, to own and lease its Properties and to
execute and deliver each Loan Document to which it is a Party and to perform the
Obligations to be performed by it. As of the Restatement Date, the chief
executive offices of Borrower are located in Reno, Nevada. The chief executive
off ices of Borrower are located at the address set forth for notices in the
signature pages to this Agreement. All outstanding membership shares of Borrower
are duly authorized, validly issued, fully paid and issued in compliance with
all applicable state and federal securities Laws, Gaming Laws and other Laws.
Schedule 4.1 accurately describes the Persons owning membership interests in
- ------------
Borrower, and the nature and extent of the interests held by each such Person,
and there are not other holders of equity interests in Borrower. Except as set
forth on Schedule 4.1, no Person holds any option, warrant or other right to
------------
acquire any equity interests in Borrower. Borrower is in compliance with all
Laws and other legal requirements applicable to its business, has obtained all
authorizations, consents, approvals, orders, licenses and-permits from, and have
accomplished all filings, registrations and qualifications with, or obtained
exemptions from any of the foregoing from, any Governmental Agency that are
necessary for the transaction of its businesses, except where the failure so to
-------
comply, file, register, qualify or obtain exemptions does not constitute a
Material Adverse Effect.
4.2 Authority; Compliance With Other Agreements and Instruments and
---------------------------------------------------------------
Government Regulations. The execution, delivery and performance by Borrower and
- ----------------------
its Subsidiaries of the Loan Documents and the execution of the Loan Documents
have been duly authorized by all necessary limited liability company and
corporate action, and do not:
(a) require any consent or approval not here-
-46-
tofore obtained of any member, director, stockholder, security holder or
creditor of such Party;
(b) violate or conflict with any provision of such Party's
limited liability company agreement, charter, partnership agreement,
articles of incorporation or bylaws, as applicable;
(c) result in or require the creation or imposition of any Lien
or Right of Others (other than pursuant to the Collateral Documents) upon
or with respect to any Property now owned or leased or hereafter acquired
by such Party;
(d) violate any Requirement of Law, including any Gaming Law,
applicable to such Party;
(e) constitute a "transfer of an interest" or an "obligation
incurred" that is avoidable by a trustee under Section 548 of the
Bankruptcy Code of 1978, as amended, or constitute a "fraudulent
conveyance," "fraudulent obligation" or "fraudulent transfer" within the
meanings of the Uniform Fraudulent Conveyances Act or Uniform Fraudulent
Transfer Act, as enacted in any applicable jurisdiction;
(f) result in a breach of or default under, or would, with the
giving of notice or the lapse of time or both, constitute a breach of or
default under, or cause or permit the acceleration of any obligation owed
under, any indenture or loan or credit agreement or any other Contractual
Obligation to which such Party is a party or by which such Party or any of
its Property is bound or affected;
and Borrower and its Subsidiaries are not in violation of, or default under, any
Requirement of Law or Contractual Obligation, or any indenture, loan or credit
agreement described in Section 4.2(f), in any respect that constitutes a
------
Material Adverse Effect.
4.3 No Governmental Approvals Required. Except as set forth in
----------------------------------- ------
Schedule 4.3, no authorization, consent, approval, order, license or permit
- ------------
from, or filing, registration or qualification with, any Governmental Agency is
required to authorize or permit under applicable Laws the execution, delivery
and performance by Borrower and its Subsidiaries of the Loan Documents. All
authorizations from, or filings with, any Governmental Agency described in
Schedule 4.3 will be accomplished as of the Restatement Date.
- ------------
-47-
4.4 Subsidiaries.
------------
(i) Schedule 4.4 hereto correctly sets forth the names, form of
------------
legal entity, number of shares of capital stock issued and outstanding,
number of shares owned by Borrower or a Subsidiary of Borrower (specifying
such owner) and jurisdictions of organization of all Subsidiaries of
Borrower. Except as described in Schedule 4.4, Borrower does not own any
------------
capital stock, equity interest or debt security which is convertible, or
exchangeable, for capital stock or equity interests in any Person.
(ii) Each Subsidiary of Borrower is duly formed, validly existing
and in good standing under the Laws of its jurisdiction of organization, is
duly qualified to do business as a foreign organization and is in good
standing as such in each jurisdiction in which the conduct of its business
or the ownership or leasing of its Properties makes such qualification
necessary (except where the failure to be so duly qualified and in good
------
standing does not constitute a Material Adverse Effect), and has all
requisite power and authority to conduct its business and to own and lease
its Properties.
(iii) Each Subsidiary of Borrower is in compliance with all Laws
and other requirements applicable to its business and has obtained all
authorizations, consents, approvals, orders, licenses, and permits from,
and each such Subsidiary has accomplished all filings, registrations, and
qualifications with, or obtained exemptions from any of the foregoing from,
any Governmental Agency that are necessary for the transaction of its
business, except where the failure to be in such compliance, obtain such
------
authorizations, consents, approvals, orders, licenses, and permits,
accomplish such filings, registrations, and qualifications, or obtain such
exemptions, does not constitute a Material Adverse Effect.
4.5 Financial Statements. Borrower has furnished to the Banks (a)
--------------------
the audited financial statements of Borrower as at December 31, 1992 and for the
fiscal year then ended, (b) the unaudited financial statements of Borrower as at
September 30, 1993 and for the nine month fiscal period then ended. The
financial statements described above fairly present the financial condition and
the results of operations of Borrower as at such dates and for such periods in
accordance with Generally Accepted Accounting Principles consistently applied,
except (x) as otherwise specifically described in the notes to any such
- ------
financial statements and (y) in the case of the financial
-48-
statements described in clause (b) above, for any requirement for footnote
---
disclosures.
4.6 No Other Liabilities: No Material Adverse Effect. As of the
------------------------------------------------
Restatement Date, Borrower and its Subsidiaries do not have any material
liability or material contingent liability not reflected or disclosed in the
financial statements described in Section 4.5(b) or the notes to the financial
-----
statements described in Section 4.5(a). There has been no event or circumstance
------
occur that constitutes a Material Adverse Effect since December 31, 1995 or the
Restatement Date.
4.7 Title to and Location of Property. As of the Restatement Date,
---------------------------------
Borrower and its Subsidiaries have good and valid title to all the Property
reflected in the financial statements described in Section 4.5(b) other than
------ -----
immaterial items of Property subsequently sold or disposed of in the ordinary
course of business, free and clear of all Liens and Rights of Others, other than
as set forth in Schedule 6.8.
------------
4.8 Real Property. Schedule 4.7 sets forth a summary description of
-------------- ------------
all real property owned by Borrower and its Subsidiaries, and of all real
property leasehold estates held by Borrower and its Subsidiaries, which summary
is accurate and complete in all material respects. Except as set forth in
Schedule 4.7, the leases creating such real property leasehold estates are in
- ------------
full force and effect and create a valid leasehold estate on the terms of such
lease, Borrower and its Subsidiaries are not in default or breach of any thereof
and, to the best knowledge of Borrower, no other party thereto is in default or
breach thereof. The copies of such real property leases heretofore furnished to
the Administrative Agent are true copies and there are no amendments thereto
copies of which have not been furnished to the Administrative Agent.
4.9 Intangible Assets. Borrower and its Subsidiaries own, or possess
-----------------
the right to use to the extent necessary in their business, all trademarks,
trade names, copyrights, patents, patent rights, computer software, licenses and
other Intangible Assets that are used in the conduct of their business as now
operated and which are material to the condition (financial or otherwise),
business or operations of Borrower, and no such Intangible Asset, to the best
knowledge of Borrower, conflicts with the valid trademark, trade name,
copyright, patent, patent right or Intangible Asset of any other Person to the
extent that such conflict constitutes a Material Adverse Effect.
4.10 Governmental Regulation. Except as specifically described in
-----------------------
Schedule 4.10, Borrower and its Subsidiaries are not subject to regulation under
- -------------
any Law limiting or regulating
-49-
its ability to incur Indebtedness for money borrowed.
4.11 Litigation. Except for (a) any matter fully covered (subject to
---------- ------
applicable deductibles and retentions) by insurance and with respect to which
the insurance carrier has not denied coverage, nor issued any denial of claim,
nor any other statement that the claim is in excess of coverage, (b) any matter,
or series of related matters, not fully covered by insurance (subject to
applicable deductibles and retentions) involving a claim against Borrower and
its Subsidiaries which is, in the reasonable opinion of their independent legal
counsel, in an amount less than $1,000,000, and (c) matters set forth in
Schedule 4.11, as of the Restatement Date there are no actions, suits,
- -------------
proceedings or investigations pending as to which Borrower or its Subsidiaries
has been served or have received notice or, to the best knowledge of Borrower,
threatened against or affecting Borrower or its Subsidiaries or their Property
before any Governmental Agency. Except for matters set forth in Schedule 4.11,
------ -------------
as of the Restatement Date there is no reasonable basis for any action, suit,
proceeding or investigation against or affecting Borrower, its Subsidiaries or
any of their Property before any Governmental Agency which would constitute a
Material Adverse Effect.
4.12 Binding Obligations. Each of the Loan Documents will, when
-------------------
executed and delivered by Borrower and its Subsidiaries, constitute the legal,
valid and binding obligation of such Party, enforceable against such Party in
accordance with its terms, except as enforcement may be limited by Debtor Relief
------
Laws or equitable principles relating to the granting of specific performance
and other equitable remedies as a matter of judicial discretion.
4.13 No Default. No event has occurred and is continuing that is a
----------
Default or an Event of Default.
4.14 ERISA. As of the Restatement Date neither Borrower nor any
-----
ERISA Affiliate maintains, contributes to or is required to contribute to any
"employee pension benefit plan" that is subject to Title IV of ERISA.
4.15 Regulations G, U and X; Investment Company Act. No part of the
----------------------------------------------
proceeds of any Loan or other extension of credit hereunder will be used to
purchase or carry, or to extend credit to others for the purpose of purchasing
or carrying, any "margin stock" (as such term is defined in Regulations G, U and
X) in violation of Regulations G, U and X. Borrower and its Subsidiaries are
not engaged principally, or as one of their important activities, in the
business of extending credit for the purpose of purchasing or carrying any such
"margin stock." Borrower and its Subsidiaries are not required to be registered
-50-
as an "investment company" under the Investment Company Act of 1940.
4.16 Disclosure. No written statement made by a Responsible Official
----------
of Borrower to the Administrative Agent or any Bank in connection with this
Agreement, or in connection with any Loan, contains any untrue statement of a
material fact or omits a material fact necessary in order to make the statement
made not misleading in light of all the circumstances existing at the date the
statement was made. There is no fact known to Borrower (other than matters of a
general economic nature or matters generally applicable to businesses of the
types engaged in by Borrower) which would constitute a Material Adverse Effect
that has not been disclosed in writing to the Administrative Agent and the
Banks.
4.17 Tax Liability. Borrower and its Subsidiaries have filed all
-------------
material tax returns which are required to be filed, and have paid, or made
provision for the payment of, all taxes with respect to the periods, Property or
transactions covered by said returns, or pursuant to any assessment received by
Borrower or its Subsidiaries, except such taxes, if any, as are being contested
------
in good faith by appropriate proceedings and as to which adequate reserves have
been established and maintained.
4.18 Projections. As of the Restatement Date, to the best knowledge
-----------
of Borrower, the assumptions( set forth in the Projections are reasonable and
consistent with each other and with all facts known to Borrower and no material
assumption is omitted as a basis for the Projections, and the Projections are
reasonably based on such assumptions. Nothing in this Section shall be
construed as a representation or covenant that the Projections in fact will be
achieved.
4.19 Employee Matters. There is no strike or work stoppage in
----------------
existence or threatened involving Borrower or its Subsidiaries that would
constitute a Material Adverse Effect.
4.20 Gaming Laws. Borrower and each of its Affiliates are in
-----------
compliance with all Gaming Laws that are applicable to them, except for any
------
violations that would not constitute a Material Adverse Effect.
4.21 Security Interests. Upon the execution and delivery of the
------------------
Security Agreement and the Subsidiary Security Agreement, such agreements will
create valid first priority security interests in the Collateral described
therein securing the Obligations (subject only to then existing Permitted
Encumbrances, Permitted Rights of Others and matters disclosed in Schedule 6.8
------------
and to such qualifications and exceptions as are
-51-
contained in the Uniform Commercial Code with respect to the priority of
security interests perfected by means other than the filing of a financing
statement or with respect to the creation of security interests in Property to
which Division 9 of said Code does not apply) and all action necessary to
perfect the security interests so created, other than filing of the UCC-1
financing statements delivered to the Administrative Agent pursuant to Section
8.1 and with the appropriate Governmental Agency have been taken and completed.
- ---
Upon the execution and delivery of the Deed of Trust (and any deed of trust
hereafter delivered with respect to the Daniels Expansion), such deeds of trust
will create valid Liens in the Collateral described therein securing the
Obligations (subject only to Permitted Encumbrances, Permitted Rights of Others
and matters described in Schedule 6.8) and all action necessary to perfect the
------------
Lien so created, other than recordation thereof with the appropriate
Governmental Agency, will have been taken and completed.
4.22 Hazardous Materials. Except as specifically described in
-------------------
Schedule 4.22, neither Borrower or its Subsidiaries nor, to the best knowledge
- -------------
of Borrower, any predecessor in title or any third person at any time occupying
or present on the Real Property at any time, has disposed of, discharged,
released or threatened the release of any material amount of Hazardous Materials
on, from or under such real property in any manner that violates any Hazardous
Materials Law. Except as specifically described in Schedule 4.22,. to the best
-------------
knowledge of Borrower no condition exists that violates any Hazardous Material
Law affecting the Real Property except for such violations that would not
individually or in the aggregate have a Material Adverse Effect. Except as
specifically described in Schedule 4.22, the Real Property and each portion
-------------
thereof is not and has not been utilized by Borrower or its Subsidiaries as a
site for the manufacture of any Hazardous Materials and is in compliance in all
material respects with all Hazardous Materials Laws. To the extent that any
Hazardous Materials have been, or are, used, generated or stored by Borrower or
its Subsidiaries on any Real Property, or transported to or from such Real
Property by Borrower or its Subsidiaries, such use, generation, storage and
transportation have been and are, in compliance in all material respects with
all Hazardous Materials Laws.
4.23 Silver Legacy. None of the creditors of the Circus and Eldorado
-------------
Joint Venture, Galleon or ELLC has any recourse to Borrower or its Subsidiaries,
other than recourse to ELLC.
- -----
4.24 Certain Leases. The Certificate of a Responsible Official of
--------------
Borrower and CS&Y dated as of March 25, 1994 and delivered to the Administrative
Agent certifying that the attached copy of the Lease dated July 21, 1972, as
amended,
-52-
between Borrower and CS&Y is true, correct and complete, remains accurate as of
the Restatement Date. Borrower is in possession of all of the Real Property
underlying the Eldorado Hotel and Casino and has not entered into any lease with
respect to any material portion of the Real Property, except for that portion of
the Real Property covered by the leases and subleases (the "Leases") described
on the Lessor Estoppel Certificate delivered in connection with the Original
Loan Agreement. To the best of Borrower's knowledge, there are no defaults
presently existing or continuing under any of the terms and provisions of any of
the Leases referred to in this Section.
-53-
ARTICLE 5.
AFFIRMATIVE COVENANTS
---------------------
(OTHER THAN INFORMATION AND
--------------------------
REPORTING REQUIREMENTS)
----------------------
So long as any Advance remains unpaid, or any other Obligation remains
unpaid or unperformed, or any portion of the Commitment remains in force,
Borrower shall, and shall cause each of its Subsidiaries to, unless the
Administrative Agent (with the approval of the Majority Banks) otherwise
consents:
5.1 Payment of Taxes and Other Potential Liens. Pay and discharge
------------------------------------------
promptly all taxes, assessments and governmental charges or levies imposed upon
Borrower and its Subsidiaries or their Property or any part thereof, upon its
income or profits or any part thereof or upon any right or interest of the
Administrative Agent or any Bank under any Loan Document, except that Borrower
------
and its Subsidiaries shall not be required to pay or cause to be paid (a) any
income or gross receipts tax or any other tax on or measured by income generally
applicable to banks, and (b) any tax, assessment, charge or levy that is not yet
delinquent, or is being contested in good faith by appropriate proceedings, so
long as Borrower has established and maintained adequate reserves for the
payment of the same and by reason of such nonpayment and contest no material
item or portion of Property of Borrower or its Subsidiaries is in jeopardy of
being seized, levied upon or forfeited.
5.2 Preservation of Existence. Preserve and maintain its existence
-------------------------
in Nevada and all authorizations, rights, franchises, privileges, consents,
approvals, orders, licenses, permits, or registrations from any Governmental
Agency that are necessary for the transaction of its business, and qualify and
remain qualified to transact business in each jurisdiction in which such
qualification is necessary in view of its business or the ownership or leasing
of its Properties except where the failure to preserve and maintain any such
------
authorizations, rights, franchises, privileges, consents, approvals, orders,
licenses, permits or registrations or to so qualify or remain qualified would
not constitute a Material Adverse Effect.
5.3 Maintenance of Properties. Maintain, preserve and protect all of
-------------------------
its depreciable Properties in good order and condition, subject to wear and tear
in the ordinary course of business, and not permit any waste of its Properties,
except that the failure to maintain, preserve and protect a particular item of
- ------
depreciable Property that is not of significant value, either intrinsically or
to the operations of the Eldorado Hotel or of Borrower and its Subsidiaries
shall not constitute a
-54-
violation of this covenant.
5.4 Maintenance of Insurance. Maintain liability, casualty and other
------------------------
insurance (subject to customary deductibles and retention) with responsible
insurance companies in such amounts and against such risks as is carried by
responsible companies engaged in similar businesses and owning similar assets in
the general areas in which Borrower and its Subsidiaries operate and, in any
event, (a) public liability insurance with limits of not less than $75,000,000
per occurrence (subject to deductibles or self-insurance retentions not in
excess of $500,000 per occurrence) and (b) such insurance with respect to the
Real Property as is maintained as of the Restatement Date as described in
Schedule 5.4.
- ------------
5.5 Compliance With Laws. Comply with all Requirements of Laws
--------------------
noncompliance with which would constitute a Material Adverse Effect, except that
------
Borrower and its Subsidiaries need not comply with a Requirement of Law then
being contested by it in good faith by appropriate proceedings.
5.6 Inspection Rights. Upon reasonable notice, at any time during
-----------------
regular business hours and as often as requested (but not so as to materially
interfere with the business of Borrower and its Subsidiaries), permit the
Administrative Agent or any Bank, or any authorized employee, agent or
representative thereof, to examine, audit and make copies and abstracts from the
records and books of account of, and to visit and inspect the Properties of,
Borrower and its Subsidiaries and to discuss the affairs, finances and accounts
of Borrower and its Subsidiaries with any of its officers, key employees,
accountants, customers or vendors, and, upon request, furnish promptly to the
Administrative Agent or any Bank true copies of all financial information made
available to the senior management of Borrower and its Subsidiaries.
5.7 Keeping of Records and Books of Account. Keep adequate records
---------------------------------------
and books of account reflecting all financial transactions in conformity with
Generally Accepted Accounting Principles and in material conformity with all
applicable requirements of any Governmental Agency having regulatory
jurisdiction over Borrower and its Subsidiaries.
5.8 Compliance With Agreements. Promptly and fully comply with all
--------------------------
Contractual Obligations under all material agreements, indentures, leases and/or
instruments to which it is a party, whether such material agreements,
indentures, leases or instruments are with a Bank or another Person, except that
------
Borrower and its Subsidiaries need not comply with Contractual Obligations under
any such agreements, indentures, leases or instruments then being contested by
it in good faith by
-55-
appropriate proceedings or if the failure to comply with such agreements,
indentures, leases or instruments does not constitute a Material Adverse Effect.
5.9 Use of Proceeds. Use the proceeds of the Loans and Letters of
---------------
Credit, (a) for completion of anticipated remaining Southside Capital
Expenditures described on Schedule 6.11, (b) to purchase the land for the
-------------
Daniels Expansion and, subject to Section 6.11, to construct the proposed room
----
tower to be located there and related enhancements to the parking garage, (c)
for working capital and general business purposes.
5.10 Hazardous Materials Laws. Keep and maintain the Real Property
------------------------
and each portion thereof in compliance in all material respects with all
Hazardous Materials Laws and promptly advise Administrative Agent in writing of
(a) any and all enforcement, cleanup, removal or other governmental or
regulatory actions instituted, completed or threatened in writing pursuant to
any applicable Hazardous Materials Laws,
(b) any and all claims made or threatened in writing by any third party against
Borrower or any of its Subsidiaries or the Real Property relating to damage,
contribution, cost recovery, compensation, loss or injury resulting from any
Hazardous Materials and (c) discovery by any Senior Officer of Borrower or its
Subsidiaries of any occurrence or condition on any real property adjoining or in
the vicinity of the Real Property that could reasonably be expected to cause the
Real Property or any part thereof to be subject to any restrictions on the
ownership, occupancy, transferability or use of the Real Property under any
Hazardous Materials Laws.
5.11 Additional Collateral. Execute and deliver to the Banks deeds
---------------------
of trust or leasehold deeds of trust, as appropriate, containing restrictions
and granting Liens in a manner similar to the Deed of Trust and in any event
reasonably acceptable to the Majority Banks, with respect to each fee and
leasehold interest in real property acquired by Borrower or any of its
Subsidiaries, including without limitation the Daniels Expansion (but, in the
case of real property or leasehold interests other than the Daniels Expansion,
only if such real property or any improvements thereon are then, or subsequently
become, an operationally integral part of the Eldorado Hotel), and cause the
issuance of policies of title insurance reasonably acceptable to the
Administrative Agent with respect thereto. In connection therewith, Borrower
shall provide to the Administrative Agent, at Borrower's sole expense, any and
all environmental reviews and other assurances as the Administrative Agent may
reasonably request. Without limitation on the foregoing, the deed of trust
delivered by Borrower with respect to the Daniels Expansion shall be delivered
substantially concurrently with the acquisition by Borrower of the Daniels
-56-
Expansion, and shall contain customary provisions which will render the same a
"Construction Deed of Trust" within the meaning of the Nevada Revised Statutes.
The policy of title insurance delivered with respect thereto shall be in the
amount of $75,000,000, but shall contain a pro tanto reduction clause with
--- -----
respect to the policy of title insurance described in Section 8.1.
---
5.12 New Significant Subsidiaries. Cause each of its Subsidiaries
----------------------------
(other than ELLC) which hereafter becomes a Significant Subsidiary (within the
meaning of Article 1, Rule 1-02 of Regulation S-X, promulgated under the
Securities Act of 1933, as in effect on the date hereof) to execute and deliver
to the Administrative Agent an instrument of joinder of the Subsidiary Guaranty
and the Subsidiary Security Agreement.
-57-
ARTICLE 6.
NEGATIVE COVENANTS
------------------
So long as any Advance remains unpaid, or any other Obligation remains
unpaid or unperformed, or any portion of the Commitment remains in force,
Borrower shall not, and shall not permit any of its Subsidiaries to, unless the
Administrative Agent (with the approval of the Majority Banks) otherwise
consents:
6.1 Payment of Subordinated Obligations. Pay any (a) principal
-----------------------------------
(including sinking fund payments) or any other amount (other than scheduled
--------- ----- ----
interest payments) with respect to any Subordinated Obligation, or purchase or
redeem (or offer to purchase or redeem) any Subordinated Obligation, or deposit
any monies, securities or other Property with any trustee or other Person to
provide assurance that the principal or any portion thereof of any Subordinated
Obligation will be paid when due or otherwise to provide for the defeasance of
any Subordinated Obligation or (b) scheduled interest on any Subordinated
Obligation unless the payment thereof is then permitted pursuant to the terms of
------
the Indenture governing such Subordinated Obligation;
6.2 Disposition of Property. Make any Disposition of its Property,
-----------------------
whether now owned or hereafter acquired, except for Permitted Dispositions made
------
when no Default or Event of Default exists.
6.3 Investments and Acquisitions. Make any Acquisition or enter into
----------------------------
any agreement to make any Acquisition, or make or suffer to exist any
Investment, except:
------
(a) Investments consisting of Cash Equivalents;;
(b) Borrower's investments in ELLC and the
Circus and Eldorado Joint Venture existing as of the
Restatement Date, provided that Borrower may convert its
--------
Investment of $23,000,000 of Indebtedness of ELLC to
Borrower to equity in ELLC;
(c) Investments existing on the Restatement Date and disclosed in
Schedule 6.3;
------------
(d) Investments consisting of loans and advances to employees for
travel and relocation expenses in the ordinary course of business; and
(e) other Acquisitions and Investments made when
-58-
no Default or Event of Default exists which do not exceed $5,000,000 in the
aggregate in any Fiscal Year, provided that, giving effect to the making of
--------
any such Investment, the aggregate principal amount of Investments
consisting of direct or indirect loans or advances to Persons who are
officers, directors or Affiliates of Borrower or its Subsidiaries does not
exceed $5,000,000 at any time.
6.4 Hostile Tender Offers. Make any offer to purchase or acquire, or
---------------------
consummate a purchase or acquisition of, 5% or more of the capital stock of any
corporation or other business entity if the board of directors or management of
such corporation or business entity has notified Borrower that it opposes such
offer or purchase.
6.5 Distributions. Make any Distribution, whether from capital,
-------------
income or otherwise, and whether in Cash or other Property, if (a) any Default
under the covenants contained in Sections 6.12, 6.13, 6.14 or 6.15 has occurred
---- ---- ---- ----
and remains continuing or would, giving pro forma effect to the making of such
Distribution, occur as of the next date upon which compliance with such
covenants is tested, or (b) any other Event of Default has then occurred and
remains continuing or if the making of such Distribution would result in the
occurrence of a Default or an Event of Default, provided that Borrower shall be
--------
entitled to make Permitted Tax Distributions for so long as no Event of Default
of the types described in Sections 9.1(a) which has resulted in an acceleration
------
or 9.1(j) occurs.
------
6.6 ERISA.
-----
(a) At any time, permit any Pension Plan which is maintained by
Borrower or its ERISA Affiliates or to which Borrower or itS ERISA
Affiliates is obligated to contribute on behalf of its employees, in such
case if to do so would constitute a Material Adverse Effect, to:
(i) engage in any non-exempt "prohibited transaction",
as such term is defined in Section 4975 of the Code;
(ii) incur any material "accumulated funding deficiency",
as that term is defined in Section 302 of ERISA; or
(iii) suffer a Termination Event to occur which may
reasonably be expected to result in liability of Borrower or any of
its ERISA Affiliate to the Pension Plan or to the PBGC or the
imposition of a Lien on the Property of Borrower or any of its ERISA
Affiliates pursuant to Section 4068 of ERISA.
-59-
(b) Fail, upon a Responsible Official of Borrower becoming aware
thereof, promptly to notify the Administrative Agent of the occurrence of
any "reportable event" (as defined in Section 4043 of ERISA) or of any non-
exempt "prohibited transaction" (as defined in Section 4975 of the Code)
with respect to any Pension Plan which is maintained by Borrower or to
which Borrower is obligated to contribute on behalf of its employees or any
trust created thereunder.
(c) At any time, permit any Pension Plan which is maintained by
Borrower or to which Borrower is obligated to contribute on behalf of its
employees to fail to comply with ERISA or other applicable Laws in any
respect that would result in a Material Adverse Effect.
6.7 Change in Nature of Business. Make any material change in the
----------------------------
nature of the business of Borrower and its Subsidiaries as at present conducted.
6.8 Liens; Negative Pledges; Sales and Leasebacks. Create, incur,
---------------------------------------------
assume or suffer to exist any Lien or Right of Others of any nature upon or with
respect to any of its Property, whether now owned or hereafter acquired; or
suffer to exist any Negative Pledge with respect to any of its Property; or
engage in any sale and leaseback transaction with respect to any of its
Property; except:
------
(a) Permitted Encumbrances and Permitted Rights of Others;
(b) Liens and Negative Pledges in favor of the Administrative
Agent or the Banks under the Loan Documents;
(c) Existing Liens disclosed in Schedule 6.8; provided that the
------------ --------
obligations secured thereby are not increased;
(d) Existing Rights of Others and Negative Pledges disclosed in
Schedule 6.8; and
------------
(e) Liens securing Indebtedness permitted by Section 6.9(e) which
-----
qualify as "purchase money security interests" as defined in Section 9107
of the Nevada Uniform Commercial Code, and Negative Pledges with respect to
the assets purchased with the proceeds of such Indebtedness that benefit
the creditor holding such Indebtedness.
6.9 Indebtedness and Contingent Obligations. Create, incur, assume
---------------------------------------
or suffer to exist any Indebtedness or Contingent
-60-
Obligation, except:
------
(a) Existing Indebtedness and Contingent Obligations disclosed
on Schedule 6.9;
------------
(b) Indebtedness and Contingent Obligations in favor of the Banks
or the Administrative Agent under the Loan Documents;
(c) Indebtedness and Contingent Obligations consisting of
Approved Swap Agreements;
(d) the Indebtedness evidenced by the Senior Subordinated Notes
in an aggregate principal amount not to exceed $100,000,000 at any time;
and
(e) Indebtedness and Contingent Obligations not otherwise
permitted by this Section in an aggregate outstanding principal amount
which does not exceed $10,000,000 at any time.
6.10 Transactions with Affiliates. Enter into any transaction of any
----------------------------
kind with any Affiliate of Borrower other than transactions on terms at least as
----------
favorable to Borrower as would be the case in an arm's-length transaction
between unrelated parties of equal bargaining power, the terms of which are
disclosed to the Banks in writing (except that the terms of Investments
permitted by 6.2(e) consisting of loans and advances to officers, directors and
------
employees need not be so disclosed).
6.11 Capital Expenditures.
--------------------
(a) Make any Maintenance Capital Expenditure in any Fiscal Year,
or commit to make any Maintenance Capital Expenditure in any Fiscal Year,
which, when added to the Maintenance Capital Expenditures theretofore made
or committed to be made in that Fiscal Year would exceed $6,500,000; or
(b) Make any other Capital Expenditure in any Fiscal Year, or
commit to make any such Capital Expenditure in any Fiscal Year other than:
----- ----
(i) Remaining scheduled expenditures for completion of Southside
amenities described on Schedule 6.11 in an aggregate amount not
-------------
to exceed $22,000,000;
(ii) to acquire the real property underlying the Daniels Expansion for
a purchase price not in excess of $5,000,000 of which not more
than $3,000,000 may be a note to the sellers thereof
-61-
and to construct the proposed tower to be located on the Daniels
Expansion and related parking enhancements for not more than an
additional $40,000,000; and
(iii) Up to $10,000,000 in each fiscal year for other Capital
Expenditures (other than Maintenance Capital Expenditures).
6.12 Members' Equity. Permit Members' Equity, as of the last day of
---------------
any Fiscal Quarter, to be less than the sum of (a) $70,000,000, plus (b) 30% of
--- ----
Net Income for each Fiscal Quarter having then ended since the Restatement Date
(without reduction for any net loss having occurred in any such Fiscal Quarter),
plus (c) 75% of any Net Cash Proceeds received by Borrower or its Subsidiaries
- ----
since the Restatement Date.
6.13 Total Debt to EBITDA Ratio. Permit the Total Debt to EBITDA
--------------------------
Ratio to exceed 4.00 to 1.00 as of the last day of any Fiscal Quarter.
6.14 Senior Debt to EBITDA Ratio. Permit the Senior Debt to EBITDA
---------------------------
Ratio to exceed 2.00 to 1.00 as of the last day of any Fiscal Quarter.
6.15 Fixed Charge Ratio. Permit the Fixed Charge Ratio, as of the
------------------
last day of any Fiscal Quarter, to be less than 1.25:1.00.
6.16 Amendments to Subordinated Obligations. Amend or modify any
--------------------------------------
term or provision of any indenture, agreement or instrument evidencing or
governing any Subordinated Obligation in any respect that will or may adversely
affect the interests of the Banks.
-62-
ARTICLE 7.
INFORMATION AND REPORTING REQUIREMENTS
--------------------------------------
7.1 Financial and Business Information. So long as any Advance
----------------------------------
remains unpaid, or any other Obligation remains unpaid or unperformed, or any
portion of the Commitment remains in force, Borrower shall, unless the
Administrative Agent (with the approval of the Majority Banks) otherwise
consents, deliver to the Administrative Agent and the Banks, at Borrower's sole
expense:
(a) As soon as practicable, and in any event within 45 days after
the end of each Fiscal Quarter (other than the fourth Fiscal Quarter in any
Fiscal Year), (i) the consolidated and consolidating balance sheets of
Borrower as at the end of such Fiscal Quarter, and (ii) consolidated and
consolidating statements of income and cash flow of Borrower for such
Fiscal Quarter and for the portion of the Fiscal Year ended with such
Fiscal Quarter, all in reasonable detail. Such financial statements shall
be certified by a Senior Officer of Borrower as fairly presenting the
financial condition, results of operations and changes in financial
position or cash flows of Borrower and its Subsidiaries in accordance with
Generally Accepted Accounting Principles (other than any requirement for
footnote disclosures) consistently applied, as at such date and for such
periods, subject only to normal year-end accruals and audit adjustments;
(b) As soon as practicable, and in any event within 120 days
after the end of each Fiscal Year, (i) the consolidated and consolidating
balance sheets of Borrower and its Subsidiaries as at the end of such
Fiscal Year, (ii) consolidated and consolidating statements of income of
Borrower and its Subsidiaries for such Fiscal Year, and (iii) consolidated
and consolidating statements of cash flow of Borrower and its Subsidiaries
for such Fiscal Year, all in reasonable detail. Such financial statements
shall be prepared in accordance with Generally Accepted Accounting
Principles, consistently applied (except for any inconsistency concurred
with by Borrower's independent public accountants), and such balance sheet
and statements shall be accompanied by a report and opinion of Arthur
Andersen & Co. or other independent public accountants of recognized
standing selected by Borrower and reasonably satisfactory to the Majority
Banks, which report shall be based on an audit conducted in accordance with
generally accepted auditing standards as at such date, and which opinion
shall be an unqualified opinion without additional
-63-
explanatory or non-standard wording which the Majority Banks determine is
unacceptable;
(c) Concurrently with the delivery of the financial statements
referred to in Sections 7.1(a) and 7.1(b), a written discussion and analysis of
----- ------
the financial condition and results of operations of Borrower and its
Subsidiaries in reasonable detail, including in the case of any such report
---------
delivered in connection with the financial statements referred to in Section
7.1(b), an explanation of any material variance from operational results or
- ------
balance sheet items contained in projections previously delivered to the Banks;
(d) Not sooner than one month following the end of each Fiscal
Quarter, but not later than 45 days following the end of each Fiscal Quarter, a
Pricing Certificate as of the last day of such Fiscal Quarter;
(e) As soon as practicable, and in any event within 60 days after the
commencement of each Fiscal Year, projected financial statements by Fiscal Year
for each of the four Fiscal Years immediately subsequent to that Fiscal Year,
including, in each case, projected balance sheets, statements of income and
- ---------
statements of cash flow of Borrower and its Subsidiaries, all in reasonable
detail and in any event to include (i) projected Distributions to be made to the
members of Borrower and (ii) projected Capital Expenditures;
(f) Promptly after the same are available, copies of the Nevada
"Regulation 6.090 Report" and Nevada "6-A Report" and copies of any written
communication to Borrower or any of its Subsidiaries from any Gaming Board
relating to a License Revocation with respect to Borrower or any of its
Subsidiaries;
(g) Promptly after request by any Bank, copies of any detailed audit
reports or recommendations submitted to Borrower and its Subsidiaries by
independent accountants in connection with the accounts or books of Borrower and
its Subsidiaries, or any audit of Borrower or its Subsidiaries;
(h) Promptly after request by any Bank, copies of any other specific
report or other document that was filed by Borrower or any of its Subsidiaries
with any Governmental Agency;
(i) Promptly after the same are available, a copy of the Form 5500
series report of each Pension Plan
-64-
maintained by Borrower or its Subsidiaries as filed with the Internal Revenue
Service for each Fiscal Year;
(j) Promptly upon a Senior Officer of Borrower becoming aware, and in
any event within ten Banking Days after becoming aware, of the occurrence of any
(i) "reportable event" (as such term is defined in Section 4043 of ERISA) or
(ii) "prohibited transaction" (as such term is defined in Section 406 of ERISA
or Section 4975 of the Code) in connection with any Pension Plan or any trust
created thereunder, written notice specifying the nature thereof and specifying
what action Borrower and its Subsidiaries are taking or proposes to take with
respect thereto, and, when known, any action taken by the Internal Revenue
Service with respect thereto;
(k) As soon as practicable, and in any event within five Banking Days
after a Senior Officer of Borrower becomes aware of the existence of any
condition or event which constitutes a Default or Event of Default, written
notice specifying the nature and period of existence thereof and specifying what
action Borrower and its Subsidiaries are taking or propose to take with respect
thereto;
(1) Promptly upon a Senior Officer of Borrower becoming aware that (i)
any Person has commenced a legal proceeding with respect to a claim against
Borrower or its Subsidiaries that is, in the reasonable opinion of their
independent legal counsel, $1,000,000 or more in excess of the amount thereof
that is fully covered by insurance (subject to applicable deductibles and
retentions), (ii) any creditor or lessor under a written credit agreement with
respect to Indebtedness in excess of $1,000,000 or lease involving unpaid rent
in excess of $1,000,000 has asserted a default thereunder on the part of
Borrower or its Subsidiaries, (iii) any Person commenced a legal proceeding with
respect to a claim against Borrower or its Subsidiaries under a contract that is
not a credit agreement or material lease in excess of $1,000,000, (iv) any labor
union has notified Borrower or its Subsidiaries of its intent to strike Borrower
or its Subsidiaries on a date certain, which strike could reasonably be expected
to have a Material Adverse Effect, or (v) any other event or circumstance occurs
or exists (other than matters of a general economic nature) that would
constitute a Material Adverse Effect, in each case a written notice describing
the pertinent facts relating thereto and what action Borrower and its
Subsidiaries are taking or proposes to take with respect thereto; and
-65-
(m) Such other data and information regarding the Borrower and
its Subsidiaries and their businesses as from time to time may be
reasonably requested by the Administrative Agent or the Majority Banks.
7.2 Compliance Certificates. So long as any Advance remains unpaid,
-----------------------
or any other Obligation remains unpaid or unperformed, or any portion of the
Commitment remains outstanding, Borrower shall, unless the Majority Banks
otherwise consent, deliver to the Administrative Agent, at Borrower's sole
expense, concurrently with the financial statements required pursuant to
Sections 7.1(a), and 7.1(b), a Compliance Certificate signed by the chief
------ ------
financial officer, chief executive officer or director of administration of
Borrower.
-66-
ARTICLE 8.
CONDITIONS
----------
8.1 Initial Advances. The obligation of each Bank to make the
----------------
initial Advance to be made by it, and the obligation of the Issuing Bank to
issue the initial Letter of Credit, is subject to the following conditions
precedent, each of which shall be satisfied prior to the making of the initial
Advances (unless the Majority Banks, in their sole and absolute discretion,
shall agree otherwise):
(a) The Administrative Agent shall have received all of the
following, each of which shall be originals unless otherwise specified,
each properly executed by a Responsible Official of each party thereto,
each dated as of the Restatement Date and each in form and substance
satisfactory to the Administrative Agent and its legal counsel (unless
otherwise specified or, in the case of the date of any of the following,
unless the Administrative Agent otherwise agrees or directs):
(i) executed counterparts of this Agreement, sufficient in
number for distribution to the Banks and Borrower;
(ii) Notes executed by Borrower in favor of each Bank, each
in a Principal amount equal to that Bank's Pro Rata Share of the
Commitment;
(iii) with respect to Borrower and its Subsidiaries, such
documentation as the Administrative Agent may reasonably require to
establish the due organization, valid existence and good standing of
the Borrower and its Subsidiaries, their qualification to engage in
business in each jurisdiction in which they are engaged in business or
required to be so qualified, their authority to execute, deliver and
perform any Loan Documents to which each is a Party, and the identity,
authority and capacity of each Responsible Official thereof authorized
to act on its behalf, organizational documents and amendments thereto,
including, without limitation, certified copies of limited liability
---------
company agreements and amendments thereto, articles of incorporation
and amendments thereto, and amendments thereto, bylaws and amendments
thereto, certificates of good standing and/or qualification to engage
in business, tax clearance certificates, certificates of corporate
resolutions, incumbency certificates, Certificates of
-67-
Responsible Officials, and the like;
(iv) the Security Agreement executed by Borrower, together with
sufficient copies of financing statements on Form UCC-1 (including such fixture
filings as may be appropriate) for filing in every jurisdiction in which
Borrower owns Property;
(v) the Amended and Restated Deed of Trust executed and acknowledged
by Borrower and CS&Y in form acceptable for recordation with the appropriate
Governmental Agency;
(vi) assurance from the Title Company that it is committed to cause
the Amended and Restated Deed of Trust to be recorded and, upon recordation
thereof, to re-issue through First American Title Insurance Company the ALTA
1970 form lenders title insurance policy issued on the Closing Date in the
amount of $75,000,000, and having reinsurance issued by title companies and in
amounts acceptable to the Agent showing the Deed of Trust as the "insured
mortgage" and insuring the validity and priority of the Lien of the Deed of
Trust with respect to the Eldorado Hotel, subject only to such exceptions as may
be acceptable to Administrative Agent; and
(vii) evidence that the Title Company has obtained the commitment of
insurers acceptable to the Administrative Agent to provide appropriate
reinsurance with rights of direct access with respect to the policy of title
insurance referred to in the preceding paragraph;
(viii) an Amended and Restated Assignment of Rents and Revenues and
an Assignment of Subleases and Rents with respect to the Eldorado Hotel, in form
and substance satisfactory to the Administrative Agent;
(ix) an Amended and Restated Assignment of Equipment Leases and an
Equipment Lease Estoppel Certificate with respect to leased equipment used on
the Real Property, in form and substance satisfactory to the Administrative
Agent;
(x) the Guaranty and Subsidiary Security Agreement executed by
Eldorado Capital, together with any and all related uniform commercial code
financing statements requested by the Administrative Agent;
-68-
(xi) the Opinion of Counsel;
(xii) a Certificate of a Responsible Official signed by a
Senior Officer of Borrower certifying that the conditions specified in
Sections 8.1(c), 8.1(d) and 8.1(e) have been satisfied;
------ ------ ------
(xiii) written consents to the execution and delivery by
Borrower of the Loan Documents and to the transactions contemplated thereby
executed by the required members of the executive committee of Borrower;
(xiv) evidence that insurance, of the types and in the amounts
specified in the Loan Documents, is maintained in force by Borrower,
together with an executed form 438 BFU with respect thereto;
(xv) evidence that all actions necessary or, in the opinion of
the Administrative Agent or the Banks, desirable to perfect and protect the
Liens of the Collateral Documents have been taken;
(xvi) a completed Pricing Certificate;
(xvii) a certified copy of each of the Senior Subordinated Notes
and each of the material instruments, documents agreements executed by
Borrower, Eldorado Capital and their Affiliates in connection therewith;
(xviii) a certified copy of the Circus and Eldorado Joint
Venture Agreement; and
(xix) such other assurances, certificates, documents, consents
or opinions as the Administrative Agent reasonably may require.
(b) The fees payable on the Restatement Date pursuant to Article 3
---------
shall be paid concurrently.
(c) The representations and warranties of Borrower contained in
Article 4 shall be true and correct.
- ---------
(d) Borrower and any other Parties shall be in compliance with all the
terms and provisions of the Loan Documents, and no Default or Event of Default
shall have occurred and be continuing.
-69-
(e) Borrower shall have received the net cash proceeds of Senior
Subordinated Notes in an amount which is not less than $96,000,000, and all
the provisions of the Senior Subordinated Notes (including without
limitation the subordination provisions thereof) and all related
transactions, shall be solely acceptable to the Banks;
8.2 Any Increasing Advance. In addition to any applicable conditions
----------------------
precedent set forth elsewhere in this Article 8, and after giving effect to the
---------
requested Advances, the obligation of each Bank to make any Advance which would
increase the principal amount outstanding under the Notes, and the obligation of
the Issuing Bank to issue each Letter of Credit, is subject to the following
conditions precedent (un1ess the Majority Banks, in their sole and absolute
discretion, agree otherwise):
(a) except as disclosed by Borrower and approved in writing by
the Majority Banks, the representations and warranties contained in Article
-------
4 (other than Sections 4.5 (first sentence), 4.6, 4.7, 4.11, and 4.18)
- ----- ---- --- --- --- ---- ---
shall be true and correct on and as of the date of the Advance as though
made on that date;
(b) other than matters described in Schedule 4.11 or not required
-------------
as of the Restatement Date to be therein described, there shall not be then
pending or threatened any action, suit, proceeding or investigation against
or affecting Borrower, its Subsidiaries or any of their Property before any
Governmental Agency that constitutes a Material Adverse Effect;
(c) no Default or Event of Default shall then exist;
(d) the Administrative Agent shall have timely received a Request
for Loan in compliance with Article 2 (or telephonic or other request for
---------
loan referred to in the second sentence of Section 2.1(b), if applicable)
------
in compliance with Article 2, or the Issuing Bank and the Administrative
---------
Agent shall have timely received a Request for Letter of Credit in
compliance with Article 2, as applicable; and
---------
(e) the Administrative Agent shall have received, in form and
substance reasonably satisfactory to the Administrative Agent, such other
assurances, certificates, documents or consents related to the foregoing as
the Administrative Agent reasonably may require.
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ARTICLE 9.
EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT
----------------------------------------------------
9.1 Events of Default. The existence or occurrence of any one or
-----------------
more of the following events, whatever the reason therefor and under any
circumstances whatsoever, shall constitute an Event of Default:
(a) Borrower fails to pay any principal or interest on any of
the Notes, or any portion thereof, when due; or
(b) Borrower fails to pay any fees payable under Article 3, or
---------
any portion thereof, any other fee or amount payable to the Banks under any
Loan Document, or any portion thereof, within three (3) Banking Days after
demand therefor; or
(c) Any failure to comply with Section 7.1(k) that is materially
------
adverse to the interests of the Administrative Agent or the Banks; or
(d) Borrower fails to perform or observe any of the covenants
contained in Sections 6.1, 6.2, 6.3, 6.4, 6.5, 6.8, 6.5, 6.11, 6.12, 6.13,
--- --- --- --- --- --- --- ---- ---- ----
6.14, 6.15 or 6.16; or
----- ---- ----
(e) Borrower or any other Party fails to perform or observe any
other covenant or agreement contained in any Loan Document on its part to
be performed or observed within thirty (30) days after the giving of notice
by the Administrative Agent at the request of the Majority Banks of such
Default; or
(f) Any representation or warranty made in any Loan Document, or
in any certificate delivered pursuant to any Loan Document, proves to have
been incorrect when made or reaffirmed in any respect that is materially
adverse to the interests of the Administrative Agent or the Banks; or
(g) Borrower or any of its Subsidiaries (i) fails to pay the
principal, or any principal installment, of any present or future
indebtedness for borrowed money of $1,000,000 or more, or any guaranty of
present or future indebtedness for borrowed money of $1,000,000 or more, on
its part to be paid, when due (or within any stated grace period), whether
at the stated maturity, upon acceleration, by reason of required prepayment
or otherwise or (ii) fails to perform or observe any other term, covenant or
agreement on its part to be performed or
-71-
observed, or suffers any event to occur, in connection with any present or
future indebtedness for borrowed money of $1,000,000 or more, or of any guaranty
of present or future indebtedness for borrowed money of $1,000,000 or more, if
as a result of such failure or sufferance any holder or holders thereof (Or an
agent or trustee on its or their behalf) has the right to declare such
indebtedness due before the date on which it otherwise would become due; or
(h) Any Loan Document, at any time after its execution and delivery
and for any reason other than the agreement of the Banks or satisfaction in full
of all the Obligations, ceases to be in full force and effect or is declared by
a court of competent jurisdiction to be null and void, invalid or unenforceable
in any respect which, in any such event in the reasonable opinion of the
Majority Banks, is materially adverse to the interests of the Banks; or any
Party thereto denies that it has any or further liability or obligation under
any Loan Document, or purports to revoke, terminate or rescind same; or
(i) A judgment against Borrower or any of its Subsidiaries is entered
for the payment of money in excess of $500,000 and, absent procurement of a stay
of execution, such judgment remains unbonded or unsatisfied for thirty (30)
calendar days after the date of entry of judgment, or in any event later than
five (5) days prior to the date of any proposed sale thereunder; or
(j) Borrower or any of its Subsidiaries institutes or consents to any
proceeding under a Debtor Relief Law relating to it or to all or any part of its
Property; or is unable or admits in writing its inability to pay its debts as
they mature, or makes an assignment for the benefit it of creditors; or applies
for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all or
any part of its Property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without the
application or consent of Borrower or such Subsidiary and the appointment
continues undischarged or unstayed for sixty (60) calendar days; or any
proceeding under a Debtor Relief Law relating to Borrower or any of its
Subsidiaries or to all or any part of its Property is instituted without the
consent of Borrower or such Subsidiary and continues undismissed or unstayed for
sixty (60) calendar days; or any judgment, writ, warrant of attachment or
execution or similar process is issued or levied against all or any material
part of the Property of Borrower and its Subsidiaries and is not released,
vacated or fully bonded
-72-
within sixty (60) calendar days after its issue or levy; or
(k) The occurrence of a Termination Event with respect to any
Pension Plan if the aggregate liability of Borrower and its ERISA
Affiliates under ERISA as a result thereof exceeds $5,000,000; or the
complete or partial withdrawal by Borrower or any of its ERISA Affiliates
from any Multiemployer Plan if the aggregate liability of Borrower and its
ERISA affiliates as a result thereof exceeds $5,000,000; or
(1) The occurrence of an Event Of Default (as such term is or may
hereafter be specifically defined in any other Loan Document) under any
other Loan Document; or
(m) The occurrence of any Change in Control; or
(n) The occurrence of any License Revocation; or
(o) Any event occurs which gives the holder or holders of any
Subordinated Obligation (or an agent or trustee on its or their behalf) the
right to declare such Subordinated Obligation due before the date on which
it otherwise would become due, or the right to require the issuer thereof
to redeem or purchase, or offer to redeem or purchase, all or any portion
of any Subordinated Obligation; or the trustee for, or any holder of, a
Subordinated Obligation breaches any subordination provision applicable to
such Subordinated Obligation; or
(p) A final judgment is entered by a court of competent
jurisdiction that any Subordinated Obligation is not subordinated in
accordance with its terms to the Obligations.
9.2 Remedies Upon Event of Default. Without limiting any other
------------------------------
rights or remedies of the Administrative Agent or the Banks provided for
elsewhere in this Agreement, or the Loan Documents, or by applicable Law, or in
equity, or otherwise:
(a) Upon the occurrence, and during the continuance, of any Event
of Default other than an Event of Default described in Section 9.1(j):
------
(i) the commitment to make Advances and issue Letters of
Credit and all other obligations of the Administrative Agent, the
Issuing Bank and the Banks and all rights of Borrower and any other
Parties under the Loan Documents shall be suspended without notice to
or demand upon Borrower, which are expressly waived by Borrower,
except that the Majority Banks
------
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(or, in the case of any Event of Default which arises under a provision of
the Loan Documents the amendment of which requires the consent of all the
Banks under Section 11.2, all of the Banks) may waive the Event of Default
----
or, without waiving, determine, upon terms and conditions satisfactory to
such Banks, to reinstate the Commitment and make further Advances and issue
further Letters of Credit, which waiver or determination shall apply
equally to, and shall be binding upon, all the Banks;
(ii) the Issuing Bank may, with the approval of the
Administrative Agent on behalf of the Majority Banks, demand immediate
payment by Borrower of an amount equal to the aggregate amount of all
outstanding Letters of Credit to be held by the Issuing Bank as cash
collateral for the Obligations in non-interest bearing accounts with the
Issuing Bank; and
(iii) the Majority Banks may request the Administrative Agent
to, and the Administrative Agent thereupon shall, terminate the Commitment
and declare all or any part of the unpaid principal of all Notes, all
interest accrued and unpaid thereon and all other amounts payable under the
Loan Documents to be forthwith due and payable, whereupon the same shall
become and be forthwith due and payable, without protest, presentment,
notice of dishonor, demand or further notice of any kind, all of which are
expressly waived by Borrower.
(b) Upon the occurrence of any Event of Default described in Section
9.1(j):
- ------
(i) the commitment to make Advances and issue Letters of Credit
and all other obligations of the Administrative Agent, the Issuing Bank and
the Banks and all rights of Borrower and any other Parties under the Loan
Documents shall terminate without notice to or demand upon Borrower, which
are expressly waived by Borrower, except that all the Banks may waive the
------
Event of Default or, without waiving, determine, upon terms and conditions
satisfactory to all the Banks, to reinstate the Commitment, make further
Advances and issue further Letters of Credit;
(ii) an amount equal to the aggregate amount available for
drawing under outstanding Letters of Credit shall forthwith become due and
payable to the Issuing Bank without protest, presentment, notice
-74-
of dishonor demand or further notice of any kind, all of which are waived
by Borrower; and
(iii) the unpaid principal of all Notes, all interest accrued
and unpaid thereon and all other amounts payable under the Loan Documents
shall be forthwith due and payable, without protest, presentment, notice of
dishonor, demand or further notice of any kind, all of which are expressly
waived by Borrower.
(c) Upon the occurrence of any Event of Default, the Administrative
Agent (but only with the consent of the Majority Banks), without notice to
(except as expressly provided for in any Loan Document) or demand upon Borrower,
- -------
which are expressly waived by Borrower (except as to notices expressly provided
------
for in any Loan Document), may proceed in accordance with applicable Laws (but
only with the consent of the Majority Banks) to protect, exercise and enforce
their rights and remedies under the Loan Documents (including the Collateral
Documents) against Borrower and any other Party and such other rights and
remedies as are provided by Law or equity.
(d) The order and manner in which the Banks' rights and remedies are
to be exercised shall be determined by the Majority Banks in their sole
discretion, and all payments received by the Administrative Agent and the Banks,
or any of them, shall be applied first to the costs and expenses (including
attorneys' fees and disbursements payable pursuant to Section 11.3) of the
Administrative Agent, acting as Administrative Agent, and of the Banks, and
thereafter paid pro rata to the Banks in the same proportions that the aggregate
Obligations owed to each Bank under the Loan Documents bear to the aggregate
Obligations owed under the Loan Documents to all the Banks, without priority or
preference among the Banks. Regardless of how each Bank may treat payments for
the purpose of its own accounting, for the purpose of computing Borrower's
Obligations hereunder and under the Notes, payments shall be applied first, to
-----
the costs and expenses of the Administrative Agent, acting as the Administrative
Agent, and the Banks, as set forth above, second, to the payment of accrued and
------
unpaid interest due under any Loan Documents to and including the date of such
application (ratably, and without duplication, according to the accrued and
unpaid interest due under each of the Loan Documents), and third, to the payment
-----
of all other amounts (including principal and fees) then owing to the
Administrative Agent or the Banks under the Loan Documents. No application of
payments will cure any Event of Default, or prevent acceleration, or
-75-
continued acceleration, of amounts payable under the Loan Documents, or prevent
the exercise, or continued exercise, of rights or remedies of the Banks
hereunder or thereunder or at law or in equity.
-76-
ARTICLE 10.
THE ADMINISTRATIVE AGENT
------------------------
10.1 Appointment and Authorization. Each Bank hereby irrevocably
-----------------------------
appoints and authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise such powers under the Loan Documents as are delegated
to the Administrative Agent by the terms thereof or are reasonably incidental,
as determined by the Administrative Agent, thereto. This appointment and
authorization is intended solely for the purpose of facilitating the servicing
of the Loans and does not constitute appointment of the Administrative Agent as
trustee for any Bank or as representative of any Bank for any other purpose and,
except as specifically set forth in the Loan Documents to the contrary, the
- ------
Administrative Agent shall take such action and exercise such powers only in an
administrative and ministerial capacity. The Administrative Agent is the agent
of the Banks only and does not assume any agency relationship with Borrower,
express or implied.
10.2 Business Activities with the Borrower. Bank of America (and
-------------------------------------
each successor Administrative Agent) has the same rights and powers under the
Loan Documents as any other Bank and may exercise the same as though it was not
the Administrative Agent, and the term "Bank" or "Banks" includes Bank of
America in its individual capacity. Each Bank (including Bank of America and
each successor Administrative Agent) and its Affiliates may accept deposits
from, lend money to and generally engage in any kind of banking, trust or other
business with Borrower or any Affiliate of Borrower. Bank of America may engage
in these activities in the same manner as the other Banks as if it was not the
Administrative Agent and without any duty to account therefor to the Banks. Bank
of America (and each successor Administrative Agent) need not account to any
other Bank for any monies received by it for reimbursement of its costs and
expenses as Administrative Agent here under, or for any monies received by it in
its capacity as a Bank hereunder. The Administrative Agent shall not be deemed
to hold a fiduciary relationship with any Bank and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or otherwise exist against the Administrative Agent.
10.3 Proportionate Interest of the Banks in any Collateral. The
-----------------------------------------------------
Administrative Agent, on behalf of all the Banks, shall hold in accordance with
the Loan Documents all items of any collateral or interests therein received
or held by the Administrative Agent. Subject to the Administrative Agent's and
the Banks' rights to reimbursement for their costs and
-77-
expenses hereunder (including attorneys' fees and disbursements and other
---------
professional services), each Bank shall have an interest in any collateral or
interests therein in the same proportions that the aggregate Obligations owed
such Bank under the Loan Documents (other than an Approved Swap Agreement) bear
to the aggregate Obligations owed under the Loan Documents to all the Banks,
without priority or preference among the Banks. Any obligation owed to a Bank
under an Approved Swap Agreement shall rank par passu with the Obligations
--- -----
under the Loan Documents up to an amount equal to the risk assessment factor
then generally utilized by the Administrative Agent in assessing similar
interest rate protection agreements times the national amount of Indebtedness
-----
covered by that Approved Swap Agreement, and shall be subordinate to the
Obligations under other Loan Documents to the extent of any excess over such
amount.
10.4 Banks' Credit Decisions. Each Bank agrees that it has,
-----------------------
independently and without reliance upon the Administrative Agent, any other Bank
or the directors, officers, agents, employees or attorneys of the Administrative
Agent or of any other Bank, and instead in reliance upon information supplied to
it by or on behalf of Borrower and upon such other information as it has deemed
appropriate, made its own independent credit analysis and decision to enter into
this Agreement. Each Bank also agrees that it shall, independently and without
reliance upon the Administrative Agent, any other Bank or the directors,
officers, agents, employees or attorneys of the Administrative Agent or of any
other Bank, continue to make its own independent credit analyses and decisions
in acting or not acting under the Loan Documents.
10.5 Action by Administrative Agent.
------------------------------
(a) The Administrative Agent may assume that no Default has
occurred and is continuing, unless the Administrative Agent has received
notice from Borrower stating the nature of the Default or has received
notice from a Bank stating the nature of the Default and that such Bank
considers the Default to have occurred and to be continuing.
(b) The Administrative Agent has only those obligations under the
Loan Documents as are expressly set forth therein.
(c) Except for any obligation expressly set forth in the Loan
------
Documents and as long as the Administrative Agent may assume that no Event
of Default has occurred and is continuing, the Administrative Agent may,
but shall not be required to, exercise its discretion to act or not act,
except that the Administrative Agent
------
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shall be required to act or not act upon the instructions of the Majority
Banks (or of all the Banks, to the extent required by Section 11.2) and
----
those instructions shall be binding upon the Administrative Agent and all
the Banks, provided that the Administrative Agent shall not be required to
--------
act or not act if to do so would be contrary to any Loan Document or to
applicable Law or would result, in the reasonable judgment of the
Administrative Agent, in substantial risk of liability to the
Administrative Agent.
(d) If the Administrative Agent has received a notice specified
in clause (a), the Administrative Agent shall give notice thereof to the
Banks and shall act or not act upon the instructions of the Majority Banks
(or of all the Banks, to the extent required by Section 11.2), provided
---- --------
that the Administrative Agent shall not be required to act or not act if to
do so would be contrary to any Loan Document or to applicable Law or would
result, in the reasonable judgment of the Administrative Agent, in
substantial risk of liability to the Administrative Agent, and except that
------
if the Majority Banks (or all the Banks, if required under Section 11.2)
----
fail, for five (5) Banking Days after the receipt of notice from the
Administrative Agent, to instruct the Administrative Agent, then the
Administrative Agent, in its sole discretion, may act or not act as it
deems advisable for the protection of the interests of the Banks, until
such time as it receives such a notice from the Majority Banks.
(e) The Administrative Agent shall have no liability to any Bank
for acting as instructed by the Majority Banks, or for refraining from
acting, if so instructed by the Majority Bank (or, in each case, all the
Banks, if required under Section 11.2), notwithstanding any other provision
hereof. ----
10.6 Liability of Administrative Agent. Neither the Administrative
---------------------------------
Agent nor any of its directors, officers, agents, employees or attorneys shall
be liable for any action taken or not taken by them under or in connection with
the Loan Documents, except for their own gross negligence or willful misconduct.
------
Without limitation on the foregoing, the Administrative Agent and its directors,
officers, agents, employees and attorneys:
(a) May treat the payee of any Note as the holder thereof until
the Administrative Agent receives notice of the assignment or transfer
thereof, in form satisfactory to the Administrative Agent, signed by the
payee, and may treat each Bank as the owner of that Bank's interest in the
Obligations for all purposes of this
-79-
Agreement until the Administrative Agent receives notice of the
assignment or transfer thereof, in form satisfactory to the Administrative
Agent, signed by that Bank.
(b) May consult with legal counsel (including in-house legal counsel),
---------
accountants (including in-house accountants) and other professionals or experts
---------
selected by it, or with legal counsel, accountants or other professionals or
experts for Borrower and its Subsidiaries or the Banks, and shall not be liable
for any action taken or not taken by it in good faith in accordance with any
advice of such legal counsel, accountants or other professionals or experts.
(c) Shall not be responsible to any Bank for any statement, warranty
or representation made in any of the Loan Documents or in any notice,
certificate, report, request or other statement (written or oral) given or made
in connection with any of the Loan Documents.
(d) Except to the extent expressly set forth in the Loan Documents,
------
shall have no duty to ask or inquire as to the performance or observance by
Borrower or its Affiliates of any of the terms, conditions or covenants of any
of the Loan Documents or to inspect any collateral or the Property, books or
records of Borrower or its Affiliates.
(e) Will not be responsible to any Bank for the due execution,
legality, validity, enforceability, genuineness, effectiveness, sufficiency or
value of any Loan Document, any other instrument or writing furnished pursuant
thereto or in connection therewith, or any collateral.
(f) Will not incur any liability by acting or not acting in reliance
upon any Loan Document, notice, consent, certificate, statement, request or
other instrument or writing believed by it to be genuine and signed or sent by
the proper party or parties.
(g) Will not incur any liability for any arithmetical error in
computing any amount paid or payable by the Borrower or any Affiliate thereof or
paid or payable to or received or receivable from any Bank under any Loan
Document, including, without limitation, principal, interest, commitment fees,
---------
Advances and other amounts; provided that, promptly upon discovery of such an
--------
error in computation, the Administrative Agent, the Banks and (to the extent
applicable) Borrower and/or its Affiliates shall make such adjustments as are
necessary to correct such
-80-
error and to restore the parties to the position that they would have
occupied had the error not occurred.
10.7 Indemnification. Each Bank shall, ratably in accordance with
---------------
its Pro Rata Share, indemnify and hold the Administrative Agent and its
directors, officers, agents, employees and attorneys harmless against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
(including, without limitation, attorneys' fees and disbursements) that may be
---------
imposed on, incurred by or asserted against it or them in any way relating to or
arising out of the Loan Documents (other than losses incurred by reason of the
failure of Borrower and its Subsidiaries to pay the indebtedness represented by
the Notes) or any action taken or not taken by it as Administrative Agent
thereunder, except such as result from its own gross negligence or willful
------
misconduct. Without limitation on the foregoing, each Bank shall reimburse the
Administrative Agent upon demand for that Bank's ratable share of any cost or
expense incurred by the Administrative Agent in connection with the negotiation,
preparation, execution, delivery, amendment, waiver, restructuring,
reorganization (including a bankruptcy reorganization), enforcement or attempted
---------
enforcement of the Loan Documents, to the extent that Borrower or any other
Party is required by Section 11.3 to pay that cost or expense but fails to do so
----
upon demand. Nothing in this Section shall entitle the Administrative Agent to
recover any amount from the Banks if and to the extent that such amount has
theretofore been recovered from Borrower, and the Administrative Agent shall
promptly refund amounts recovered from Borrower to Banks which have reimbursed
expenses under this Section.
10.8 Successor Administrative Agent. The Administrative Agent may,
------------------------------
and at the request of the Majority Banks shall, resign as Administrative Agent
(i) upon 30 days' notice to the Borrower and the Banks or (ii) if the
Administrative Agent determines that for it to continue as Administrative Agent
would result in a conflict of interest affecting the Administrative Agent, or
would create an unacceptable risk of significant liability of the Administrative
Agent to a third party, or would otherwise be inadvisable under prevailing
standards of banking prudence, at any time, and effective immediately upon
written notice to Borrower and the Banks. If the Administrative Agent so
resigns, (a) the Majority Banks shall appoint a successor Administrative Agent,
who must be from among the Banks and be reasonably acceptable to Borrower,
provided that any resigning Administrative Agent shall be entitled to appoint a
- --------
successor Administrative Agent from among the Banks, subject to acceptance of
appointment by that successor Administrative Agent, if the Majority Banks have
not
-81-
appointed a successor Administrative Agent within thirty (30) days after the
date the resigning Administrative Agent gave notice of resignation; (b) upon a
successor's acceptance of appointment as Administrative Agent, the successor
will thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the resigning Administrative Agent or the removed
Administrative Agent; and (c) upon the effectiveness of any resignation, the
resigning Administrative Agent thereupon will be discharged from its duties and
obligations thereafter arising under the Loan Documents other than obligations
arising as a result of any action or inaction of the resigning Administrative
Agent prior to the effectiveness of such resignation. Upon any resignation of
the Bank of America (or any successor Administrative Agent) as Administrative
Agent, Bank of America (or such successor) shall be deemed to have concurrently
resigned as Issuing Bank.
10.9 Performance of Conditions. For the purpose of determining
-------------------------
fulfillment by Borrower and its Subsidiaries of conditions precedent specified
in Article 8, each Bank shall be deemed to have consented to, and approved or
---------
accepted, or to be satisfied with each document or other matter sent by the
Administrative Agent to such Bank for consent, approval, acceptance or
satisfaction, or required under Article 8 to be consented to, or approved by or
---------
acceptable or satisfactory to, that Bank, unless an officer of the
Administrative Agent who is responsible for the transactions contemplated by the
Loan Documents shall have received written notice from that Bank prior to the
making of the requested Loan or the issuance of the requested Letter of Credit
specifying its objection thereto and either (i) such objection shall not have
been withdrawn by written notice to the Administrative Agent or (ii) in the case
of any condition to the making of a Loan, that Bank shall not have made
available to the Administrative Agent that Bank's Pro Rata Share of such Loan.
10.10 Collateral Matters.
------------------
(a) The Administrative Agent is authorized by each Bank, without the
necessity of any notice to or further consent from any Bank, and without
the obligation to take any such action, to take any action with respect to
any Collateral or any Collateral Document which may from time to time be
necessary to perfect and maintain perfected the Liens of the Collateral
Documents.
(b) The Banks irrevocably authorize the Administrative Agent, at its option
and in its discretion, to release any Lien granted to or held by the
Administrative Agent upon any Collateral (i) upon termination of the
Commitment and the payment in full of all Loans and all other Obligations
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payable under this Agreement and under the other Loan Documents; (ii)
constituting Property of Borrower or its Affiliates which is sold,
transferred or otherwise disposed of in connection with any transaction not
prohibited by this Agreement; (iii) constituting Property leased to
Borrower or its Subsidiaries under a lease which has expired or been
terminated in a transaction not prohibited by this Agreement or which will
concurrently expire and which has not been and is not intended by Borrower
or its Subsidiaries to be, renewed or extended; (iv) consisting of an
instrument, if the Indebtedness evidenced thereby has been paid in full; or
(v) if approved or consented to by those of the Banks required by Section
11.2. Upon request by the Administrative Agent, the Banks will confirm in
----
writing the Administrative Agent's authority to release particular types or
items of Collateral pursuant to this Section.
10.11 No Obligations of Borrower. Nothing contained in this
--------------------------
Article 10 shall be deemed to impose upon Borrower any obligation in respect of
- ----------
the due and punctual performance by the Administrative Agent of its obligations
to the Banks under any provision of this Agreement, and Borrower shall have no
liability to the Administrative Agent or any of the Banks in respect of any
failure by the Administrative Agent or any Bank to perform any of its
obligations to the Administrative Agent or the Banks under this Agreement.
Without limiting the generality of the foregoing, where any provision of this
Agreement relating to the payment of any amounts due and owing under the Loan
Documents provides that such payments shall be made by Borrower to the
Administrative Agent for the account of the Banks, Borrower's obligations to the
Banks in respect of such payments shall be deemed to be satisfied upon the
making of such payments to the Administrative Agent in the manner provided by
this Agreement.
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ARTICLE 11.
MISCELLANEOUS
-------------
11.1 Cumulative Remedies; No Waiver. The rights, powers, privileges
------------------------------
and remedies of the Administrative Agent, the Issuing Bank and the Banks
provided herein or in any Note or other Loan Document are cumulative and not
exclusive of any right, power, privilege or remedy provided by Law or equity.
No failure or delay on the part of the Administrative Agent, the Issuing Bank
or any Bank in exercising any right, power, privilege or remedy may be, or may
be deemed to be, a waiver thereof; nor may any single or partial exercise of any
right, power, privilege or remedy preclude any other or further exercise of the
same or any other right, power, privilege or remedy. The terms and conditions
of Article 8 hereof are inserted for the sole benefit of the Administrative
---------
Agent, the Issuing Bank and the Banks; the same may be waived in whole or in
part, with or without terms or conditions, in respect of any Loan or Letter of
Credit without prejudicing the Administrative Agent's, the Issuing Bank's or the
Banks' rights to assert them in whole or in part in respect of any other Loan or
Letter of Credit.
11.2 Amendments; Consents. No amendment, modification, supplement,
--------------------
extension, termination or waiver of any provision of this Agreement or any other
Loan Document, no approval or consent thereunder, and no consent to any
departure by Borrower or any other Party therefrom, may in any event be
effective unless in writing signed by the Administrative Agent with the approval
in writing of the Majority Banks (and, in the case of amendments, modifications
or supplements of or to any Loan Document to which Borrower is a Party, the
approval in writing of Borrower), and then only in the specific instance and for
the specific purpose given; and, without the approval in writing of all the
Banks, no amendment, modification, supplement, termination, waiver or consent
may be effective:
(a) To amend or modify the principal of, or the amount of
principal, principal prepayments or the rate of interest payable on, any
Note, or the amount of the Commitment or of any commitment fee payable to
any Bank, or any other fee or amount payable to any Bank under the Loan
Documents;
(b) To postpone any date fixed for any payment of principal of,
prepayment of principal of or any installment of interest on, any Note or
any installment of any commitment fee, or to extend the term of the
Commitment, or to release any Collateral (except as specifically provided
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for in any Loan Document);
(c) To amend or modify the provisions of the definition of
"Majority Banks", Articles 9 or 10; or this Section 11.2;
-------------- ---------------- ----
(d) To amend or modify any provision of this Agreement in a
manner which materially and adversely affects the Issuing Bank without the
written consent of the Issuing Bank; or
(e) To amend or modify any provision of this Agreement that
expressly requires the consent or approval of all the Banks.
Any amendment, modification, supplement, termination, waiver or consent pursuant
to this Section 11.2 shall apply equally to, and shall be binding upon, all the
----
Banks, the Issuing Bank and the Administrative Agent.
11.3 Costs, Expenses and Taxes. Borrower shall pay on demand the
-------------------------
reasonable costs and expenses of the Administrative Agent and the Arranger in
connection with the negotiation, preparation, execution and delivery of the Loan
Documents, and of the Administrative Agent, the Issuing Bank and the Banks in
connection with the amendment, waiver, refinancing, restructuring,
reorganization (including a bankruptcy reorganization) and enforcement or
---------
attempted enforcement of the Loan Documents, and any matter related thereto,
including, without limitation, filing fees, recording fees, title insurance
- ---------
fees, appraisal fees, search fees and other out-of-pocket expenses and the
reasonable fees and out-of-pocket expenses of any legal counsel (including the
allocated fees and all disbursements and other expenses of any internal legal
counsel), independent public accountants and other outside experts retained by
the Administrative Agent or any Bank, and including, without limitation, any
---------
costs, expenses or fees incurred or suffered by the Administrative Agent or any
Bank in connection with or during the course of any bankruptcy or insolvency
proceedings of Borrower; provided that (a) Administrative Agent and the Banks
--------
shall, in connection with any such amendment, waiver, refinancing,
restructuring, reorganization, enforcement or attempted enforcement of the Loan
Documents shall use their best efforts to avoid duplicative efforts by legal
counsel on behalf of Administrative Agent and one or more Banks, and (b) in the
event that Borrower is the prevailing party in any proceeding referred to above
(other than any proceeding commenced or maintained after any bankruptcy or
insolvency proceeding with respect to Borrower), Borrower shall be entitled to
reimbursement of its reasonable attorneys fees and costs. Borrower shall pay any
and all documentary and other taxes
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(other than income or gross receipts taxes generally applicable to banks) and
all costs, expenses, fees and charges payable or determined to be payable in
connection with the filing or recording of this Agreement, any other Loan
Document or any other instrument or writing to be delivered hereunder or
thereunder, or in connection with any transaction pursuant hereto or thereto,
and shall reimburse, hold harmless and indemnify the Administrative Agent and
the Banks from and against any and all loss, liability or legal or other expense
with respect to or resulting from any delay in paying or failure to pay any tax,
cost, expense, fee or charge or that any of them may suffer or incur by reason
of the failure of any Party to perform any of its Obligations. Any amount
payable to the Administrative Agent or any Bank under this Section shall bear
interest at the Default Rate from the second Banking Day of a demand for
payment.
11.4 Nature of Banks' Obligations. The obligations of the Banks
----------------------------
hereunder are several and not joint or joint and several. Nothing contained in
this Agreement or any other Loan Document and no action taken by the
Administrative Agent or the Banks or any of them pursuant hereto or thereto may,
or may be deemed to, make the Banks a partnership, an association, a joint
venture or other entity, either among themselves or with the Borrower or any
Affiliate of the Borrower. Each Bank's obligation to make any Advance pursuant
hereto is several and not joint or joint and several. A default by any Bank
will not increase the percentage of the Commitment attributable to any other
Bank. Any Bank not in default may, if it desires, assume in such proportion as
the nondefaulting Banks agree the obligations of any Bank in default, but is not
obligated to do so. The Administrative Agent agrees that it will use its best
efforts either to induce the other Banks to assume the obligations of a Bank in
default or to obtain another Bank, reasonably satisfactory to Borrower, to
replace such a Bank in default.
11.5 Survival of Representations and Warranties. All representations
------------------------------------------
and warranties contained herein or in any other Loan Document, or in any
certificate or other writing delivered by or on behalf of any one or more of the
Parties to any Loan Document, will survive the making of the Loans hereunder and
the execution and delivery of the Notes, and have been or will be relied upon by
the Administrative Agent and each Bank, notwithstanding any investigation made
by the Administrative Agent or any Bank or on their behalf.
11.6 Notices. Except as otherwise expressly provided in the Loan
------- ------
Documents: (a) All notices, requests, demands, directions and other
communications provided for hereunder or under any other Loan Document must be
in writing and
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must be mailed, telegraphed, telecopied, delivered or sent by telex or cable to
the appropriate party at the address set forth on the signature pages of this
Agreement or other applicable Loan Document or, as to any party to any Loan
Document, at any other address as may be designated by it in a written notice
sent to all other parties to such Loan Document in accordance with this Section;
and (b) Any notice, request, demand direction or other communication given by
telegram, telecopier, telex or cable must be confirmed within 48 hours by letter
mailed or delivered to the appropriate party at its respective address. Except
------
as otherwise expressly provided in any Loan Document, if any notice, request,
demand, direction or other communication required or permitted by any Loan
Document is given by mail it will be effective on the earlier of receipt or the
third Banking Day after deposit in the United States mail with first class or
airmail postage prepaid; if given by telegraph or cable, when delivered to the
telegraph company with charges prepaid; if given by telex or telecopier, when
sent; or if given by personal delivery, when delivered. Notices given by the
Borrower under Articles 2 and 3 shall be deemed given on actual receipt by the
---------- -
Administrative Agent.
11.7 Execution of Loan Documents. Unless the Administrative Agent
---------------------------
otherwise specifies with respect to any Loan Document, this Agreement and any
other Loan Document may be executed in any number of counterparts and any party
hereto or thereto may execute any counterpart, each of which when executed and
delivered will be deemed to be an original and all of which counterparts of this
Agreement or any other Loan Document, as the case may be, when taken together
will be deemed to be but one and the same instrument. The execution of this
Agreement or any other Loan Document by any party hereto or thereto will not
become effective until counterparts hereof or thereof, as the case may be, have
been executed by all the parties hereto or thereto.
11.8 Binding Effect; Assignment.
--------------------------
(a) This Agreement and the other Loan Documents shall be binding
upon and shall inure to the benefit of the parties hereto and thereto and
their respective successors and assigns, except that Borrower and/or its
------
Affiliates may not assign their rights hereunder or thereunder or any
interest herein or therein without the prior written consent of all the
Banks. Any assignment by the Borrower or its Affiliates without the prior
written consent of the Banks shall be void, provided that no Person other
--------
than the Banks shall have any rights under this sentence. Each Bank
represents that it is not acquiring its Note with a view to the
distribution thereof within the meaning of the Securities Act of 1933, as
amended (subject to any
-87-
requirement that disposition of its Note must be within the control of such
Bank). Any Bank may at any time pledge its Note or any other instrument
evidencing its rights as a Bank under this Agreement to a Federal Reserve Bank,
but no such pledge shall release that Bank from its obligations hereunder or
grant to such Federal Reserve Bank the rights of a Bank hereunder absent
foreclosure of such pledge.
(b) From time to time following the Restatement Date each Bank may
assign to one or more Eligible Assignees all or any portion of its Pro Rata
Share; provided that (i) such Eligible Assignee, if not then a Bank or an
--------
Affiliate of the assigning Bank, shall be approved by each of the Administrative
Agent (which approval shall not be unreasonably withheld or delayed) and
Borrower (which approval shall not be unreasonably withheld or delayed or, if an
Event of Default has occurred and remains continuing, required), (ii) such
assignment shall be evidenced by a Commitment Assignment and Acceptance, a copy
of which shall be furnished to the Administrative Agent, (iii) except in the
case of an assignment to an Affiliate of the assigning Bank, to another Bank or
of the entire remaining Commitment of the assigning Bank, the assignment shall
be of a Pro Rata Share not less than $5,000,000, and (iv) the effective date of
any such assignment shall be as specified in the Commitment Assignment and
Acceptance, but not earlier than the date which is five (5) Banking Days after
the date the Administrative Agent has received the Commitment Assignment and
Acceptance. Upon the effective date of such Commitment Assignment and
Acceptance, the Eligible Assignee named therein shall be a Bank for all purposes
of this Agreement, with the Pro Rata Share set forth therein and, to the extent
of such Pro Rata Share, the assigning Bank shall be released from its further
obligations under this Agreement. Borrower agrees that it shall execute and
deliver (against delivery by the assigning Bank to Borrower of its Note) to such
assignee Bank, a Note evidencing that assignee Bank's Pro Rata Share, and to the
assigning Bank, a Note evidencing the remaining balance Pro Rata Share retained
by the assigning Bank.
(c) By executing and delivering a Commitment Assignment and Accep-
tance, the Eligible Assignee thereunder acknowledges and agrees that: (i) other
than the representation and warranty that it is the legal and beneficial owner
of the Pro Rata Share being assigned thereby free and clear of any adverse
claim, the assigning Bank has made no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this
-88-
Agreement or the execution, legality, validity, enforceability, genuineness or
sufficiency of this Agreement or any other Loan Document; (ii) the assigning
Bank has made no representation or warranty and assumes no responsibility with
respect to the financial condition of Borrower or the performance by Borrower of
the Obligations; (iii) it has received a copy of this Agreement, together with
copies of the most recent financial statements delivered pursuant to Section 7.1
-----------
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such Commitment Assignment
and Acceptance; (iv) it will, independently and without reliance upon the
Administrative Agent or any Bank and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement; (v) it appoints and
authorizes the Administrative Agent to take such action and to exercise such
powers under this Agreement as are delegated to the Administrative Agent by this
Agreement; and (vi) it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Bank.
(d) The Administrative Agent shall maintain at the Administrative
Agent's Office a copy of each Commitment Assignment and Acceptance delivered to
it. After receipt of a completed Commitment Assignment and Acceptance executed
by any Bank and an Eligible Assignee, and receipt of an assignment fee of $2,000
from such Eligible Assignee, Administrative Agent shall provide notice thereof
to Borrower and the Banks.
(e) Each Bank may grant participations from time to time in a portion
of its Pro Rata Share to one or more banks or other financial institutions
(including another Bank); provided; however, that (i) such Bank's obligations
--------- -------- -------
under this Agreement shall remain unchanged, (ii) such Bank shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) the participating banks or other financial institutions shall not be a
Bank hereunder for any purpose except, if the participation agreement so
------
provides, for the purposes of Sections 3.6, 3.7, 11.11 and 11.25, (iv) Borrower,
--- --- ----- -----
the Administrative Agent, the Issuing Bank and the other Banks shall continue to
deal solely and directly with such Bank in connection with such Bank's rights
and obligations under this Agreement, (v) the participation interest shall be
expressed as a percentage of the granting Bank's Pro Rata Share as they then
exist and shall not restrict an increase in the Commitment, or in the granting
Bank's Pro Rata
-89-
Share, so long as the amount of the participation interest is not affected
thereby and (vi) the consent of the holder of such participation interest
shall not be required for amendments or waivers of provisions of the Loan
Documents other than those which (A) extend the Maturity Date, any
----------
Reduction Date or any date upon which any payment of any principal, fees or
interest are due to the Banks, (B) reduce any installment of principal due
with respect to the Notes, the rate of interest on the Notes, or any fee
payable to the Banks, (C) reduce the amount of any installment of principal
due under the Notes, or (D) release any material portion of the Collateral.
(f) Notwithstanding anything in this Section to the contrary, the
rights of the Banks to make assignments of, and grant participations in,
their Pro Rata Shares of the Commitment shall be subject to the approval of
any Gaming Board, to the extent required by applicable Gaming Laws.
11.9 Lien on Deposits and Property in Possession of any Bank. As
-------------------------------------------------------
security for the prompt payment and performance of all Obligations, Borrower
hereby grants to the Administrative Agent; the Issuing Bank and the Banks and
each of them a Lien on and a security interest in all its right, title, and
interest in and to any and all deposit accounts now or hereafter maintained with
the Administrative Agent, the Issuing Bank or any Bank and in and to any and all
of its Property and the proceeds thereof now or hereafter in the possession of
the Administrative Agent, the Issuing Bank or any Bank. If an Event of Default
has occurred and is continuing, any Bank (but only with the consent of the
Majority Banks) may, to the extent permitted by applicable Laws, exercise its
rights under Article 9 of the Uniform Commercial Code and other applicable Laws
and apply any funds in any deposit account maintained with it by Borrower and/or
any Property of Borrower in its possession against the Obligations.
11.10 Sharing of Setoffs. Each Bank severally agrees that if it,
------------------
through the exercise of any right of setoff, banker's lien or counterclaim
against Borrower or its Subsidiaries, or otherwise, receives payment of the
Obligations held by it that is ratably more than any other Bank, through any
means, receives in payment of the Obligations held by that Bank, then; (a) The
Bank exercising the right of setoff, banker's lien or counterclaim or otherwise
receiving such payment shall notify the Administrative Agent and thereafter
shall purchase, and shall be deemed to have simultaneously purchased, from the
other Bank a participation in the Obligations held by the other Bank and shall
pay to the other Bank a purchase price in an amount so that the share of the
Obligations held by each Bank
-90-
after the exercise of the right of setoff, banker's lien or counterclaim or
receipt of payment shall be in the same proportion that existed prior to the
exercise of the right of setoff, banker's lien or counterclaim or receipt of
payment; and (b) Such other adjustments and purchases of participations shall be
made from time to time as shall be equitable to ensure that all of the Banks
share any payment obtained in respect of the obligations ratably in accordance
with each Bank's share of the obligations immediately prior to, and without
taking into account, the payment; provided that, if all or any portion of a
--------
disproportionate payment obtained as a result of the exercise of the right of
setoff, banker's lien, counterclaim or otherwise is thereafter recovered from
the purchasing Bank by Borrower or its Subsidiaries or any Person claiming
through or succeeding to the rights of Borrower or its Subsidiaries, the
purchase of a participation shall be rescinded and the purchase price thereof
shall be restored to the extent of the recovery. Each Bank that purchases a
participation in the Obligations pursuant to this Section shall from and after
the purchase have the right to give all notices, requests, demands, directions
and other communications under this Agreement with respect to the portion of the
obligations purchased to the same extent as though the purchasing Bank were the
original owner of the Obligations purchased. Borrower expressly consents to the
foregoing arrangements and agrees that any Bank holding a participation in an
Obligation so purchased may exercise any and all rights of setoff, banker's lien
or counterclaim with respect to the participation as fully as if the Bank were
the original owner of the obligation purchased; provided, however, that each
--------
Bank agrees that it shall not exercise any right of setoff, banker's lien or
counterclaim without first obtaining the consent of the Majority Banks.
11.11 Indemnity by Borrower. Borrower agrees to indemnify, save and
---------------------
hold harmless the Administrative Agent, the Issuing Bank, the Arranger, the Co-
Agent and each Bank and their Affiliates, directors, officers, agents, attorneys
and employees (collectively the "Indemnitees") from and against: (a) any and
-----------
all claims, demands, actions or causes of action that are asserted against any
Indemnitee by any Person (other than the Administrative Agent, the Issuing Bank,
the Arranger, the Co-Agent or a Bank) if the claim, demand, action or cause of
action directly or indirectly relates to a claim, demand, action or cause of
action that such Person asserts or may assert against Borrower, any Affiliate of
Borrower or any officer, director or shareholder of Borrower; (b) any and all
claims, demands, actions or causes of action if the claim, demand, action or
cause of action arises out of or relates to the Commitment, the use or
contemplated use of proceeds of any Loan, the relationship of Borrower and the
Banks under this Agreement or any transaction contemplated by this Agreement,
including
- ---------
-91-
without limitation any claim, demand, action or cause of action arising out of
or related to the Southside Expansion or the Daniels Expansion; (c) any
administrative or investigative proceeding by any Governmental Agency arising
out of or related to a claim, demand, action or cause of action described in
clauses (a) or (b) above; and (d) any and all liabilities, losses, costs or
expenses (including attorneys' fees and disbursements and other professional
---------
services) that any Indemnitee suffers or incurs as a result of the assertion of
any foregoing claim, demand, action or cause of action; provided that no
--------
Indemnitee shall be entitled to indemnification for any loss caused by its own
gross negligence or willful misconduct. If any claim, demand, action or cause of
action is asserted against any Indemnitee, such Indemnitee shall promptly notify
Borrower, but the failure to so promptly notify Borrower shall not affect
Borrower's obligations under this Section unless such failure materially
prejudices Borrower's right to participate in the contest of such claim, demand,
action or cause of action, as hereinafter provided. Each Indemnitee may, and if
requested by Borrower in writing shall, in good faith contest the validity,
applicability and amount of such claim, demand, action or cause of action with
counsel selected by such Indemnitee and reasonably acceptable to Borrower, and
shall permit Borrower to participate in such contest. Any Indemnitee that
proposes to settle or compromise any claim or proceeding for which Borrower may
be liable for payment of indemnity hereunder shall give Borrower written notice
of the terms of such proposed settlement or compromise reasonably in advance of
settling or compromising such claim or proceeding and shall obtain Borrower's
prior consent, which consent shall not unreasonably be withheld. Each
Indemnitee is authorized to employ counsel in enforcing its rights hereunder and
in defending any claim, demand, action or cause of action covered by this
Section; provided that each Indemnitee shall endeavor, but shall not be
--------
obligated, in connection with any matter covered by this Section which also
involves other Indemnitees, to use reasonable efforts to avoid unnecessary
duplication of effort by counsel for all Indemnitees. Any obligation or
liability of Borrower to any Indemnitee under this Section shall survive the
expiration or termination of this Agreement and the repayment of all Loans and
the payment and performance of all other Obligations owed to the Banks;
provided, however, that such obligations or liabilities shall not, from and
- --------
after the date on which the Notes are fully paid and the Commitment is
terminated, be deemed Obligations for any purpose under the Loan Documents.
11.12 Nonliability of the Banks. Borrower acknowledges and agrees
-------------------------
that;
(a) Any inspections of any Property of Borrower made by or
through the Administrative Agent, the Arranger,
-92-
the Issuing Bank or the Banks are for purposes of administration of the Loan
Documents only and Borrower is not entitled to rely upon the same;
(b) By accepting or approving anything required to be observed,
performed, fulfilled or given to the Administrative Agent, the Issuing Bank or
the Banks pursuant to the Loan Documents, neither the Administrative Agent, the
Issuing Bank nor the Banks shall be deemed to have warranted or represented the
sufficiency, legality, effectiveness or legal effect of the same, or of any
term, provision or condition thereof, and such acceptance or approval thereof
shall not constitute a warranty or representation to anyone with respect thereto
by the Administrative Agent, the Issuing Bank or the Banks;
(c) The relationship between Borrower and the Administrative Agent,
the Issuing Bank and the Banks is, and shall at all times remain, solely that of
a borrower and lenders; neither the Administrative Agent, the Issuing Bank nor
the Banks shall under any circumstance be construed to be partners or joint
venturers of Borrower or its Affiliates; neither the Administrative Agent, the
Issuing Bank nor the Banks shall under any circumstance be deemed to be in a
relationship of confidence or trust or a fiduciary relationship with Borrower or
its Affiliates, or to owe any fiduciary duty to Borrower or its Affiliates;
neither the Administrative Agent, the Issuing Bank nor the Banks undertake or
assume any responsibility or duty to Borrower or its Affiliates to select,
review, inspect, supervise, pass judgment upon or inform Borrower or its
Affiliates of any matter in connection with their Property or the operations of
Borrower or its Affiliates; Borrower and its Affiliates shall rely entirely upon
their own judgment with respect to such matters; and any review, inspection,
supervision, exercise of judgment or supply of information undertaken or assumed
by the Administrative Agent, the Issuing Bank or the Banks in connection with
such matters is solely for the protection of the Administrative Agent, the
Issuing Bank and the Banks and neither Borrower nor any other Person is entitled
to rely thereon; and
(d) The Administrative Agent, the Issuing Bank and the Banks shall not
be responsible or liable to any Person for any loss, damage, liability or claim
of any kind relating to injury or death to Persons or damage to Property or
other loss, damage, liability or claim caused by the actions, inaction or
negligence of Borrower and/or its Affiliates and Borrower hereby indemnifies and
holds the Administrative Agent, the Issuing Bank and the Banks
-93-
harmless from any such loss, damage, liability or claim.
11.13 No Third Parties Benefited. This Agreement is made for the
--------------------------
purpose of defining and setting forth certain obligations, rights and duties of
Borrower, the Administrative Agent, the Issuing Bank and the Banks in connection
with the Loans and Letters of Credit, and is made for the sole benefit of
Borrower, the Administrative Agent and the Banks, and the Administrative Agent's
and the Banks' successors and assigns. Except as provided in Sections 3.3, 11.8,
------ --- ----
11.11, and 11.25 no other Person shall have any rights of any nature hereunder
- ----- -----
or by reason hereof.
11.14 Confidentiality. Each Bank, the Issuing Bank and Administrative
---------------
Agent agrees to hold any confidential information that it may receive from
Borrower pursuant to this Agreement in confidence, except for disclosure: (a) To
------
other Banks; (b) To legal counsel, accountants and other professional advisors
to Borrower or any Bank; (c) To regulatory officials having jurisdiction over
that Bank; (d) As required by Law or legal process (provided that in the event
---------
any Bank is so required to disclose any such confidential information, such Bank
shall endeavor promptly to notify Borrower, so that Borrower may seek a
protective order or other appropriate remedy) or in connection with any legal
proceeding to which that Bank and Borrower are adverse parties; (e) To another
financial institution in connection with a disposition or proposed disposition
to that financial institution of all or part of that Bank's interests hereunder
or a participation interest in its Note, provided that such disclosure is made
subject to an appropriate confidentiality agreement on terms substantially
similar to this Section; and (f) To prospective purchasers of any Collateral in
connection with any disposition thereof, provided that such disclosure is made
subject to an appropriate confidentiality agreement on terms substantially
similar to this Section. For purposes of the foregoing, "confidential
information" shall mean all information respecting Borrower, other than (i)
----------
information previously filed with any Governmental Agency and available to the
public, (ii) information previously published in any public medium from a source
other than, directly or indirectly, that Bank, and (iii) information previously
disclosed by Borrower to any Person not associated with Borrower without a
written confidentiality agreement. Nothing in this Section shall be construed to
create or give rise to any fiduciary duty on the part of the Administrative
Agent, the Issuing Bank or the Banks to Borrower.
11.15 Hazardous Materials Indemnity. Borrower hereby agrees to
-----------------------------
indemnify, hold harmless and defend (by counsel reasonably satisfactory to the
Administrative Agent) each of the Administrative Agent, the Issuing Bank, the
Banks and their
-94-
respective directors, officers, employees, agents, successors and assigns from
and against any and all claims, losses, damages, liabilities, fines, penalties,
charges, administrative and judicial proceedings and orders, judgments, remedial
action requirements, enforcement actions of any kind, and all costs and expenses
incurred in connection therewith (including but not limited to reasonable
attorneys' fees and expenses to the extent that the defense of any such action
has not been assumed by Borrower), arising directly or indirectly, in whole or
in part, out of (i) the presence on or under the Real Property of any Hazardous
Materials, or any releases or discharges of any Hazardous Materials on, under or
from the Real Property and (ii) any activity carried on or undertaken on or off
the Real Property by Borrower or any of its predecessors in title, whether prior
to or during the term of this Agreement, and whether by Borrower or any
predecessor in title or any employees, agents, contractors or subcontractors of
Borrower or any predecessor in title, or any third persons at any time occupying
or present on the Real Property, in connection with the handling, treatment,
removal, storage, decontamination, clean-up, transport or disposal of any
Hazardous Materials at any time located or present on or under the Real
Property. The foregoing indemnity shall further apply to any residual
contamination on or under the Real Property, or affecting any natural resources,
and to any contamination of any property or natural resources arising in
connection with the generation, use, handling, storage, transport or disposal of
any such Hazardous Materials, and irrespective of whether any of such activities
were or will be undertaken in accordance with applicable Laws, but the foregoing
indemnity shall not apply to (I) Hazardous Materials on the Real Property, the
presence of which is caused by the Administrative Agent, the Issuing Bank or the
Banks or (ii) activities carried on or undertaken by the Administrative Agent,
the Issuing Bank or the Banks, in each case subsequent to its or their entry
into the Real Property pursuant to foreclosure under the Deed of Trust (but only
to the extent that the same are not attributable to the Borrower). Borrower
hereby acknowledges and agrees that, notwithstanding any other provision of this
Agreement or any of the other Loan Documents to the contrary, the obligations of
Borrower under this Section shall be unlimited personal corporate obligations of
Borrower and shall not be secured by any Deed of Trust on the Real Property.
---
Borrower acknowledges that the Banks' appraisal of the Real Property is such
that the Banks are not willing to accept the consequences of inclusion of the
obligations under this Section among the obligations secured by any Deed of
Trust and that the Banks would not enter into this Agreement and the
transactions contemplated hereby but for the personal corporate liability
undertaken by Borrower for such obligations.
11.16 Further Assurances. Borrower shall (and shall
------------------
-95-
cause its Subsidiaries to), at its sole expense and without expense to the
Banks, the Issuing Bank or the Administrative Agent, do, execute and deliver
such further acts and documents as any Bank or the Administrative Agent from
time to time reasonably requires for the assuring and confirming unto the Banks,
the Issuing Bank or the Administrative Agent of the rights hereby created or
intended now or hereafter so to be, or for carrying out the intention or
facilitating the performance of the terms of any Loan Document.
11.17 Integration. This Agreement, together with the other Loan
-----------
Documents, comprises the complete and integrated agreement of the parties on the
subject matter hereof and supersedes all prior agreements, written or oral, on
the subject matter hereof, provided that Borrower and the Administrative Agent
--------
have entered into a letter agreement of even date herewith regarding certain of
the Schedules delivered in connection with this Agreement and the Deed of Trust.
In the event of any conflict between the provisions of this Agreement and those
of any other Loan Document, the provisions of this Agreement shall control and
govern; provided that the inclusion of supplemental rights or remedies in favor
--------
of the Administrative Agent, the Issuing Bank or the Banks in any other Loan
Document shall not be deemed a conflict with this Agreement. Each Loan Document
was drafted with the joint participation of the respective parties thereto and
shall be construed neither against nor in favor of any party, but rather in
accordance with the fair meaning thereof.
11.18 Governing Law. Except to the extent otherwise expressly
------------- ------
provided therein, each Loan Document shall be governed by, and construed and
enforced in accordance with, the local Laws of Nevada.
11.19 Severability of Provisions. Any provision in any Loan Document
--------------------------
that is held to be inoperative, unenforceable or invalid as to any party or in
any jurisdiction shall, as to that party or jurisdiction, be inoperative,
unenforceable or invalid without affecting the remaining provisions or the
operation, enforceability or validity of that provision as to any other party or
in any other jurisdiction, and to this end the provisions of all Loan Documents
are declared to be severable.
11.20 Independent Covenants. Each covenant in Articles 5, 6 and 7 is
--------------------- ---------- - -
independent of the other covenants in those Articles; the breach of any such
covenant shall not be excused by the fact that the circumstances underlying such
breach would be permitted by another such covenant.
11.21 Headings. Article and Section headings in this
--------
-96-
Agreement and the other Loan Documents are included for convenience of reference
only and are not part of this Agreement or the other Loan Documents for any
other purpose.
11.22 Time of the Essence. Time is of the essence of the Loan
-------------------
Documents.
11.23 Tax Withholding Exemption Certificates. On or before the
--------------------------------------
Restatement Date, each Bank which is organized outside the United States of
America shall deliver to Borrower. a properly completed and duly executed
Internal Revenue Service Form 4224 or Form 1001 and any other certificate or
statement required by applicable Laws to establish that payments due to such
Bank under the Loan Documents are (a) not subject to withholding under the Code
because such payments are effectively connected with the conduct of a trade or
business in the United States of America or (b) totally exempt from United
States tax under the provisions of an applicable tax treaty.
11.24 Arbitration Reference.
---------------------
(a) Mandatory Arbitration. Any controversy or claim between or
---------------------
among the parties, including but not limited to those arising out of or
relating to this Agreement or any agreements or instruments relating hereto
or delivered in connection herewith and any claim based on or arising from
an alleged tort, shall at the request of any party be determined by
arbitration. The arbitration shall be conducted in accordance with the
United States Arbitration Act (Title 9, U.S. Code), notwithstanding any
choice of law provision in this Agreement, and under the Commercial Rules
of the American Arbitration Association ("AAA"). The arbitrators shall give
effect to statutes of limitation in determining any claim. Any controversy
concerning whether an issue is arbitrable shall be determined by the
arbitrators. Judgment upon the arbitration award may be entered in any
court having jurisdiction. The institution and maintenance of an action
for judicial relief or pursuit of a provisional or ancillary remedy shall
not constitute a waiver of the right of any party, including the plaintiff,
to submit the controversy or claim to arbitration if any other party
contests such action for judicial relief.
(b) Real Property Collateral. Notwithstanding the provisions of
------------------------
subparagraph (a), no controversy or claim shall be submitted to arbitration
without the consent of xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx,
obligation to the Administrative Agent, the Issuing Bank or any Bank which
is secured by real property collateral.
-97-
(c) Provisional Remedies. Self-Help and Foreclosure. No
-----------------------------------------------
provision of this section shall limit the right of any party to this
Agreement to exercise self-help remedies such as setoff, to foreclose
against or sell any real or personal property collateral or security or to
obtain provisional or ancillary remedies from a court of competent
jurisdiction before, after, or during the pendency of any arbitration or
other proceeding. The exercise of a remedy does not waive the right of
either party to resort to arbitration or reference. At the Majority Banks'
option, foreclosure under a deed of trust or mortgage may be accomplished
either by exercise of power of sale under the deed of trust or mortgage or
by judicial foreclosure.
11.25 Purported Oral Amendments. BORROWER AND THE BANKS EXPRESSLY
-------------------------
ACKNOWLEDGES THAT THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY ONLY BE
AMENDED OR MODIFIED, OR THE PROVISIONS HEREOF OR THEREOF WAIVED OR SUPPLEMENTED,
BY AN INSTRUMENT IN WRITING THAT COMPLIES WITH SECTION 11.2. BORROWER AGREES
----
THAT IT WILL NOT RELY ON ANY COURSE OF DEALING, COURSE OF PERFORMANCE, OR ORAL
OR WRITTEN STATEMENTS BY ANY REPRESENTATIVE OF ADMINISTRATIVE AGENT, THE ISSUING
BANK OR ANY BANK THAT DOES NOT COMPLY WITH SECTION 11.2 TO EFFECT AN AMENDMENT,
----
MODIFICATION, WAIVER OR SUPPLEMENT TO THE AGREEMENT OF THE OTHER LOAN DOCUMENTS.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
BORROWER:
ELDORADO RESORTS LLC, a Nevada limited liability
company
By: /s/ Donald L. Carano
-----------------------------
Donald L. Carano, Chief Executive
Officer
Address for Notices:
Eldorado Resorts LLC
295 North Virginia Street
Reno, Nevada 89501
Telephone: (702} 786-5700
Telecopier; (702) 348-7513
-98-
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as a Bank, as
Issuing Bank and as Administrative
Agent
By:/s/ Scott Faber
---------------------------------
Scott Faber, Vice President
Address:
Entertainment and Media Group
555 South Flower Street, 10th Floor
Los Angeles, California 90071
Attn: Scott Faber, Vice President
Telecopier; 213/228 2641
Telephone: 213/228 2768
with a copy to:
Bank of America National Trust and
Savings Association
Entertainment and Media Group 5777
555 South Flower Street, 10th Floor
Los Angeles, California 90071
Attn: William S. Newby,
Managing Director
Telecopier: 213/228 3145
Telephone: 213/228 2438
-99-
[Exhibit A]
COMPLIANCE CERTIFICATE
----------------------
TO: BANK OF AMERICA NATIONAL TRUST AMD SAVINGS ASSOCIATION, as Administrative
Agent
Reference is made to the Amended and Restated Loan Agreement dated as of
July 31, 1996, between ELDORADO RESORTS LLC, a Nevada limited liability
company ("Borrower") and BANK OF AMERICA NATIONAL TRUST AMD SAVINGS ASSOCIATION,
as Administrative Agent and sole initial Bank (the "Loan Agreement"). Terms
defined in the Loan Agreement and not otherwise defined in this Compliance
Certificate ("Certificate") shall have the meanings defined for them in the Loan
Agreement. This Certificate is delivered in accordance with Section 7.2 of the
---
Loan Agreement, and shows computations evidencing compliance with the covenants
set forth in Sections 6.11 through 6.15 of the Loan Agreement as of the last day
---- ----
of Borrower's Fiscal Quarter ended ___________________, 199__ (the "Test Date").
Maintenance Capital Expenditures (Section 6.11(a)).
- --------------------------------
As of the Test Date, Maintenance
Capital Expenditures made or committed
to be made by Borrower during the
portion of Borrower's Fiscal Year
19 ___ ended on the Test Date were $
--------------
Maximum permitted Annual Maintenance
Capital Expenditures $6,500,000
Other Capital Expenditures (Section 6.11(b)).
- --------------------------
As of the Test Date, Capital Expenditures
which do not qualify as Maintenance
Capital Expenditures made or committed
to be made by Borrower during the
portion of Borrower's Fiscal Year
19 ___ ended on the Test Date were $
--------------
-1-
These Capital Expenditures
are detailed as follows:
Capital Expenditures for completion
of Southside amenities described on
Schedule 6.11
-------------
$
-------------------------------
Capital Expenditures to acquire the
real property underlying the Daniels
Expansion
$
-------------------------------
Capital Expenditures to construct the
tower located on the Daniels Expansion
and related parking enhancements
$
-------------------------------
Other Capital Expenditures (other than
Maintenance Capital Expenditures)
$
-------------------------------
Members' Equity (Section 6.12).
- ---------------
As of the Test Date, Members' Equity was
calculated as follows:
Members' Equity of Borrower on the
Test Date, determined in accordance
with Generally Accepted Accounting
Principles $
----------------
minus any amount attributable to
-----
membership shares or interests
that are, directly or indirectly,
required to be redeemed or
repurchased by Borrower at a
specified date or upon the
occurrence of specified events
or at the election of the holder
thereof ($ )
----------------
-2-
minus that portion of Member's Equity
-----
which is attributable to the interests
of Recreational Enterprises, Inc. and
other minority members in ELLC ($ )
-------------
minus Intangible Assets ($ )
----- -------------
Members' Equity as of Test Date $
---------------
As of the Test Date, the minimum required Members' Equity was calculated as
follows:
Restatement Date Members Equity $70,000,000
plus 30% of Net Income for
----
each Fiscal Quarter having ended
on the Test Date since the
Restatement Date (without reduction
for any net loss having occurred
in any such Fiscal Quarter) $
-------------
plus 75% of any Net Cash Proceeds
----
received by Borrower or its
Subsidiaries since the Restatement
Date. $
-------------
Minimum Required Tangible Net Worth
as of the Test Date $
-------------
Total Debt to EBITDA Ratio. (Section 6.13)
- --------------------------
As of the Test Date, the maximum permitted Total Debt to EBITDA Ratio was
4.00:1.00. As of the Test Date, the actual Total Debt to EBITDA Ratio was
___:1.00, calculated as follows:
The Ratio of the sum of:
---
Funded Debt as of the Test Date
(components shown below) $
-------------
Indebtedness for borrowed money
(excludes Circus and
Eldorado Joint Venture) $
-------------
-3-
Capital Lease obligations $______________
letters of credit $________________
Unreimbursed Draws $_____________
plus obligations under Swap Agreements $______________
----
plus all Contingent Obligations
----
of Borrower and its Subsidiaries
with respect to indebtedness for
borrowed money, as the Test Date $______________
Numerator = Total Debt $______________
to EBITDA for the twelve month fiscal period ended on the Test Date,
--
calculated as follows:
Net Income for that period $________________
plus consolidated Interest
----
Charges of Borrower and its
Subsidiaries for that period $_______________
plus the aggregate amount of
----
federal and state taxes on or
measured by income of Borrower
and its Subsidiaries for that
period (whether or not payable
during that period) $________________
plus depreciation, amortization
----
and all other non-cash expenses
of Borrower and its Subsidiaries
for that period $________________
Denominator = EBITDA = $_______________
Senior Debt to EBITDA Ratio. (Section 6.13)
- ---------------------------
As of the Test Date, the maximum permitted Senior Debt to EBITDA Ratio
was 2.00:1.00. As of the Test Date, the actual Senior Debt to EBITDA Ratio
was____:1.00, calculated as follows:
-4-
The Ratio of the difference between:
----------
Total Debt as of the Test Date
(as set forth above) $
------------------
minus Subordinated Obligations ($ )
----- ---------------
Numerator = Total Debt $
--------------
to EBITDA for the twelve month fiscal
--
period ended on the Test Date
(as set forth above) $
-------------------
Fixed Charge Ratio. (Section 6.15)
- ------------------
As of the Test Date, the minimum Fixed Charge Ratio was :1.00. As of the
----
Test Date, the actual Fixed Charge Ratio was :1.00, calculated
------------
as follows:
The ratio of the sum of:
---
EBITDA for the twelve month period
ending on the Test Date (as set forth
above) $
-----------------
plus Distributions made in Cash
----
received by Borrower from the
Circus and Eldorado Joint Venture
during that period $
----------------
Numerator = $
------------------
to the sum of:
-- ---
Cash Interest Charges payable by Borrower
and its Subsidiaries during that period $
-----------------
plus Scheduled Debt Amortization
----
for the twelve month fiscal period
beginning on the next day following
the Test Date $
-----------------
-5-
plus 2% of the net revenues of Borrower
----
for the twelve month period ending on
the Test Date $_________________
plus Distributions made by Borrower
----
in Cash to its members during the same
period in accordance with Section 6.5,
---
net of Distributions made in
------
that fiscal period in excess of 50% of
Net Income $_________________
Denominator = $____________________
A review of the activities of Borrower during the fiscal period
covered by the attached financial statements has been made under my supervision
with a view to determining whether during such fiscal period Borrower performed
and observed all of its Obligations under the Loan Documents. Except as
described in an attached document or in an earlier Certificate, to the best of
my knowledge, as of the date of this Compliance Certificate there is no Default
or Event of Default.
To the best of my knowledge, except as described in an earlier
Compliance Certificate, no Material Adverse Effect has occurred since the date
of the most recent Compliance Certificate delivered to the Banks.
Dated:________________, 19__
By
-------------------------------
-------------------------------
Printed Name and Title
-6-
[Exhibit B]
COMMITMENT ASSIGNMENT AND ACCEPTANCE AGREEMENT
----------------------------------------------
THIS COMMITMENT ASSIGNMENT AND ACCEPTANCE AGREEMENT ("Agreement") dated
as of ________________________, 19__ is made with reference to that certain
Amended and Restated Loan Agreement dated as of July 31, 1996 among Eldorado
Resorts LLC, a Nevada limited liability company ("Borrower"), the Banks therein
named and Bank of America National Trust and Savings Association, as
Administrative Agent for itself and for the Banks (as amended as of the date
hereof, the "Loan Agreement") and is entered into between the "Assignor"
described below, in its capacity as a Bank under the Loan Agreement, and the
"Assignee" described below. Assignor and Assignee hereby represent, warrant and
agree as follows:
1. Definitions. Capitalized terms defined in the Loan Agreement
-----------
are used herein with the meanings set forth for such terms in the Loan
Agreement. As used in this Agreement, the following capitalized terms shall have
the meanings set forth below:
"Assignee" means _________________________.
--------
"Assigned Pro-Rata Share" means _____% of the Commitment of the Banks
-----------------------
under the Loan Agreement, being equal to $________________________.
"Assignor" means ________________________.
--------
"Effective Date" means _____________, the effective date of this
Agreement determined in accordance with Section 11.8 of the Loan
----
Agreement.
2. Representations and Warranties of the Assignor. The Assignor
----------------------------------------------
represents and warrants as follows:
a. As of the date hereof, the Pro-Rata Share of the Assignor
is ____% of the Commitment (without giving effect to assignments thereof which
have not yet become effective). The Assignor is the legal and beneficial owner
of the Assigned Pro-Rata Share and the Assigned Pro-Rata Share is free and clear
of any adverse claim.
b. The outstanding principal balance of Advances made by
Assignor is $_______________. The aggregate effective face amount of the
Assignor's Pro-Rata Share of all outstanding Letters of Credit is $___________.
-1-
c. The Assignor has full power and authority, and has taken
all action necessary to execute and deliver this Agreement and any and all other
documents required or permitted to be executed or delivered by it in connection
with this Agreement and to fulfill its obligations under, and to consummate the
transactions contemplated by, this Agreement, and no governmental authorizations
or other authorizations are required in connection therewith;
d. This Agreement constitutes the legal, valid and binding
obligation of the Assignor.
Assignor makes no representation or warranty and assumes no responsibility with
respect to the financial condition of Borrower or the performance by Borrower of
the Obligations, and assumes no responsibility with respect to any statements,
warranties or representations made or in connection with the Loan Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Loan Agreement or any Loan Document other than as expressly set
forth above.
3. Representations and Warranties of the Assignee. The Assignee
----------------------------------------------
hereby represents and warrants to the Assignor as follows:
(a) The Assignee has full power and authority, and has taken all
action necessary to execute and deliver this Agreement, and any and all other
documents required or permitted to be executed or delivered by it in connection
with this agreement and to fulfill its obligations under, and to consummate the
transactions contemplated by, this Agreement, and no governmental authorizations
or other authorizations are required in connection therewith;
(b) This Agreement constitutes the legal, valid and binding
obligation of the Assignee;
(c) The Assignee has independently and without reliance upon the
Assignor and based on such information as the Assignee has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement. Assignee
will, independently and without reliance upon the Administrative Agent or any
Bank, and based upon such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Loan Agreement;
(d) The Assignee is an "Eligible Assignee" within the meaning of
the Loan Agreement;
(e) The Assignee has received a copy of the Loan Agreement,
together with copies of the most recent financial statements delivered pursuant
to Section 7.1 of the Loan Agreement; and
---
(f) If Assignee is organized under the Laws of a jurisdiction
outside the United States of America, attached hereto are the forms prescribed
by the Code
-2-
certifying Assignee's exemption from United States withholding taxes with
respect to all payments to be made to Assignee under the Loan Agreement.
4. Assignment. On the terms set forth herein, Assignor, as of
----------
Effective Date, hereby irrevocably sells, assigns and transfers to the Assignee
all of the rights and obligations of the Assignor under the Loan Agreement, the
other Loan Documents and Assignor's Note, in each case to the extent of the
Assigned Pro-Rata Share, and the Assignee irrevocably accepts such assignment of
rights and assumes such obligations from the Assignor on such terms and as of
the Effective Date. As of the Effective Date, Assignee shall have the rights and
obligations of a "Bank" under the Loan Documents, except to the extent of any
arrangements with respect to payments referred to in Section 5 hereof. Assignee
-
hereby appoints and authorizes the Administrative Agent to exercise such powers
under the Loan Agreement as are delegate to the Administrative Agent by Article
10 of the Loan Agreement.
- --
5. Payment. On the Effective Date, Assignee shall pay to the
-------
Assignor, in immediately available funds, an amount equal to the purchase price,
as agreed between the Assignor and Assignee, of the Assigned Pro-Rata Share.
The Assignor and the Assignee have entered into a letter agreement, of even
date herewith, which sets forth their agreement with respect to the amount of
interest, fees, and other payments with respect to the Assigned Pro-Rata Share
which are to be retained by the Assignor.
The Assignor and the Assignee hereby agree that if either receives any
payment of interest, principal, fees or any other amount under the Loan
Agreement, their respective Note and other Loan Documents which is for the
account of the other, it shall hold the same in trust for such party to the
extent of such party's interest therein and shall promptly pay the same to such
party.
6. Principal, Interest, Fees, etc. Any principal that would be
------------------------------
payable and any interest, fees and other amounts that would accrue from and
after the Effective Date to or for the account of the Assignor pursuant to the
Loan Agreement and the Note shall be payable to or for the account of the
Assignor and the Assignee, in accordance with their respective interests as
adjusted pursuant to this Agreement.
7. Notes. The Assignor and the Assignee shall make appropriate
-----
arrangements with the Borrower concurrently with the execution and delivery
hereof so that a replacement Note is issued to the Assignor and a new Note is
issued to the Assignee, in each case in principal amounts reflecting their Pro
Rata Share of the Commitment or their outstanding Advances (as adjusted pursuant
to this Agreement).
8. Further Assurances. Concurrently with the execution of this
------------------
Agreement, Assignor shall execute two counterpart original Requests for
Registration, in the form of Exhibit A to this Agreement, to be forwarded to the
Administrative Agent. The Assignor and the Assignee further agree to execute
and deliver such other instruments, and take such other action, as either party
may reasonably request
-3-
in connection with the transactions contemplated by this Agreement, and Assignor
specifically agrees to cause the delivery of (i) two original counterparts of
this Agreement and (ii) the Requests for Registration, to the Administrative
Agent for the purpose of registration of Assignee as a "Bank" pursuant to
Section 11.8 of the Loan Agreement.
----
9. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACTUAL
-------------
OBLIGATION UNDER, AND SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEVADA. FOR ANY DISPUTE ARISING IN
CONNECTION WITH THIS AGREEMENT, THE ASSIGNEE HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEVADA.
10. Notices. All communications among the parties or notices in
-------
connection herewith shall be in writing, hand delivered or sent by registered
airmail, postage prepaid, or by telex, telegram or cable, addressed to the
appropriate party at its address set forth on the signature pages hereof. All
such communications and notices shall be effective upon receipt.
11. Binding Effect. This Agreement shall be binding upon and inure to
--------------
the benefit of the parties and their respective successors and assigns;
provided, however, that Assignee shall not assign its rights or obligations
without the prior written consent of the Assignor and any purported assignment,
absent such consent, shall be void.
12. Interpretation. The headings of the various sections hereof are
--------------
for convenience of reference only and shall not affect the meaning or
construction of any provision hereof.
-4-
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective officials, officers or agents
thereunto duly authorized as of the date first above written.
"Assignor"
-------------------------------
By:
----------------------------
Title:
-------------------------
Address:
-----------------------
-------------------------------
-------------------------------
Attn:
--------------------------
-------------------------------
Telephone:
---------------------
Telecopier:
--------------------
"Assignee"
-------------------------------
By:
----------------------------
Title:
-------------------------
Address:
-----------------------
-------------------------------
-------------------------------
Attn:
--------------------------
-------------------------------
Telephone:
---------------------
Telecopier:
--------------------
-5-
Exhibit A to Commitment Assignment and Acceptance Agreement
REQUEST FOR REGISTRATION
------------------------
TO: BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Administrative Agent, and to
ELDORADO RESORTS LLC
THIS REQUEST FOR REGISTRATION OF ASSIGNEE is made as of the date of
the enclosed Commitment Assignment and Acceptance Agreement with reference
to that certain Loan Agreement, dated as of _________________, 1996 among
Eldorado Resorts LLC, a Nevada limited liability company, the Banks therein
named, and Bank of America National Trust and Savings Association, as
Administrative Agent for itself and for the Banks (as amended as of the
date hereof, the "Loan Agreement").
Assignor and Assignee hereby request that the Administrative Agent
register Assignee as a Bank pursuant to Section 11.8 of the Loan
----
Agreement effective as of the Effective Date described in the enclosed
Commitment Assignment and Acceptance and, in connection with this request
certify to the Administrative Agent that:
A. Assignee is an "Eligible Assignee" within the meaning of
that term set forth in the Loan Agreement; and
B. Schedule A to the enclosed Commitment Assignment and
Acceptance Agreement sets forth the correct Assigned Pro-Rata Share
of the Assignee.
Enclosed with this Request are:
(i) two counterpart originals of the Commitment Assignment
and Acceptance;
(ii) the original Note of Borrower in favor of Assignor; and
(iii) Assignee's check payable to the Administrative Agent
for the $2000 recordation fee required by Section 11.8(d) of the Loan
-------
Agreement.
Assignor and Assignee hereby jointly request that the Administrative Agent
cause Borrower to issue replacement Notes, dated as of the Closing Date,
pursuant to Section 11.8 of the Loan Agreement in favor of Assignor in the
----
principal amount of the remainder of its Pro-Rata Share and in favor of the
Assignee in the amount of the Assigned Pro-Rata Share.
-1-
IN WITNESS WHEREOF, Assignor and Assignee have executed this Request for
Registration by their duly authorized officers as of this ___ day of __________,
19__.
"Assignor"
-----------------------------------
By:
--------------------------------
(Printed/Typed Name of Officer)
"Assignee"
-----------------------------------
By:
--------------------------------
(Printed/Typed Name of Officer)
-2-
CONSENT OF THE ADMINISTRATIVE AGENT AND BORROWER
------------------------------------------------
TO: The Assignor and Assignee referred to in the above Request for
Registration
When countersigned by both Borrower and the Administrative Agent below,
this document shall certify that:
1. If the consent of Borrower or the Administrative Agent is
required to such assignment, Borrower has consented, pursuant to the terms of
the Loan Documents, to the assignment by Assignor to Assignee of the Assigned
Pro-Rata Share.
2. The Adminstrative Agent has registered Assignee as a Bank under
the Loan Agreement, effective as of the Effective Date described above, with a
Pro-Rata Share corresponding to the Assigned Pro-Rata Share and has adjusted the
registered Pro-Rata Share of Assignor to reflect the assignment of the Assigned
Pro-Rata Share.
Approved:
ELDORADO RESORTS LLC BANK OF AMERICA NATIONAL
TRUST AND SAVINGS
ASSOCIATION, as Administrative
Agent
By: By:
---------------------- ----------------------
Title: Title:
------------------- -------------------
-3-
EXHIBIT C
Recording requested by, and
when recorded return to:
Sheppard, Mullin, Richter & Hampton LLP
333 South Hope Street, 48th Floor
Los Angeles, California 90071
Attention: William M. Scott IV, Esquire
INSTRUCTIONS TO COUNTY RECORDER:
Index this document as
(1) a deed of trust and
(2) a fixture filing
- --------------------------------------------------------------------------------
AMENDED AND RESTATED DEED OF TRUST, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
This Amended and Restated Deed of Trust, Assignment of Rents, Security
Agreement and Fixture Filing ("Deed of Trust"), dated as of __________, 1996,
is executed by Eldorado Resorts LLC, a Nevada limited liability company, trustor
("Trustor") and C.S.& Y. Associates, a general partnership, additional trustor
("Additional Trustor"), in favor of First American Title Company of Nevada, as
trustee ("Trustee"), for the benefit of BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Administrative Agent for the Banks party to the Loan
Agreement described below, as beneficiary ("Beneficiary"), whose address is 555
South Flower Street, 10th Floor, Los Angeles, California 90017 Attn: Scott
Faber.
RECITALS
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A. On or about March 25, 1994 Eldorado Hotel Associates Limited
Partnership, a Nevada limited partnership (the "Predecessor Partnership") and
Additional Trustor executed and delivered a Deed of Trust, Assignment of Rents,
Security Agreement and Fixture Filing dated as of March 25, 1994 in favor of
Beneficiary (the "Original Deed of Trust") for the purpose inter alia, of
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securing the obligations of the Predecessor Partnership under a Loan Agreement
of even date therewith among the Predecessor Partnership, the Banks therein
named and Beneficiary, as Administrative Agent (the "Original Loan Agreement).
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B. Pursuant to an Agreement and Plan of Merger dated as of June 28,
1996 between the Predecessor Partnership and Eldorado Resorts LLC, the
Predecessor Partnership and Eldorado Resorts LLC were merged, with Eldorado
Resorts LLC the Survivor.
C. Pursuant to an Assumption Agreement dated July 1, 1996 between
Eldorado Resorts LLC and Beneficiary, Eldorado Resorts LLC (the Trustor
hereunder) expressly assumed the obligations of the Predecessor Partnership
under the Original Loan Agreement and the other Loan Documents referred to
therein, including without limitation the Original Deed of Trust. The
Assumption Agreement has been recorded in the official records of Washoe County,
Nevada, on July ___, 1996 as Instrument 2012495.
D. Trustor is entering into an Amended and Restated Loan Agreement
dated as of July 31, 1996 with Beneficiary, as Administrative Agent and sole
Bank (the "Loan Agreement") which shall amend and restate the Original Loan
Agreement in its entirety.
E. It is a condition precedent to the extension of credit
facilities under the Loan Agreement that this Deed of Trust be executed to amend
and restate the Original Deed of Trust.
NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, including the
indebtedness herein recited and the trust herein created, the receipt and
adequacy of which are hereby amend and restated the original Deed of Trust and
hereby acknowledged, Trustor and Additional Trustor hereby amend and restate the
original Deed of Trust and hereby irrevocably GRANT, BARGAIN, SELL, TRANSFER,
SET OVER, CONVEY AND ASSIGN to Trustee, IN TRUST, WITH POWER OF SALE, for the
benefit and security of Beneficiary, under and subject to the terms and
conditions hereinafter set forth, all rights, titles, interests, estates,
powers and privileges that Trustor and Additional Trustor now have or may
hereafter acquire in or to the Collateral which consists of Real Estate or Real
Property and grant a security interest to Beneficiary under Article 9 of the
Uniform Commercial Code - Secured Transactions, as enacted in the State of
Nevada, in the Collateral which consists of Personal Property, however, it is
specifically provided that any interest which is granted in the Rents, defined
by Section 1.1 below, shall be subordinate to the absolute assignment which is
granted under Article III of this Deed of Trust.
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FOR THE PURPOSE OF SECURING:
(a) the payment of the Loans and all indebtedness evidenced by, and the
performance of each and every obligation, covenant and agreement of Trustor
contained in (i) that certain Amended and Restated Loan Agreement (as defined
above, the "Loan Agreement") of even date herewith among Trustor and Beneficiary
and the Banks (the "Loan Agreement"), other than those liabilities contained in
the indemnity in favor of Beneficiary set forth in Section 11.15 of the Loan
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Agreement entitled "Hazardous Materials Indemnity", which indemnity shall be and
is unsecured and is not subject to the lien of this Deed of Trust on the
Premises; (ii) the "Loan Documents" referred to in the Loan Agreement (except to
the extent that such Loan Documents recite that they are not secured hereby);
(iii) those certain Notes in the aggregate face amount of $50,000,000, made by
Trustor payable to the order of the Banks that are party to the Loan Agreement
(the "Notes") and any renewal, extension, substitution or modification thereof,
together with interest on such indebtedness according to the terms of the Notes;
and (iv) the reimbursement obligations of trustor with respect to each Letter of
Credit issued under the Loan Agreement pursuant to a subfacility providing for
the issuance of not more than $3,000,000 in such Letter of Credit at any time
outstanding;
(b) the payment by Trustor of all sums advanced by or on behalf of
Trustee or Beneficiary to protect the Collateral, with interest thereon as
provided herein;
(c) the performance by Trustor of each and every obligation, covenant
and agreement of Trustor contained herein;
(d) the payment by Trustor of all other sums, with interest thereon,
which may hereafter be loaned to Trustor, or its successors or assigns, by
Beneficiary, or its successors or assigns, when evidenced by a promissory note
or notes or other document(s) reciting that they are secured by this Deed of
Trust;
(e) the performance by Trustor of every obligation, covenant and
agreement of Trustor contained in any agreement now or hereafter executed by
Trustor which recites that the obligations thereunder are secured by this Deed
of Trust;
(f) the payment by Trustor of all sums, with interest thereon as herein
provided, that may become due
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and payable to or for the benefit of Beneficiary or Trustee pursuant to
the terms of this Deed of Trust;
(g) The expenses and costs incurred or paid by Beneficiary
in the preservation and enforcement of the rights and remedies of
Beneficiary and the duties and liabilities of Trustor hereunder,
including, but not by way of limitation, attorneys' fees, court costs,
witness fees, expert witness fees, collection costs, and costs and
expenses paid by Beneficiary in performing for Trustor's account any
obligation of said Trustor; and
(h) the performance of each and every obligation of Trustor
now or hereafter arising out of or pertaining to any extensions,
modifications, renewals or replacements of or substitutions for any of
the documents and instruments described in clauses (a) through (g)
above.
As used above, the following terms have the meanings set forth after
each:
"Groundlease" means that certain Lease dated July 21, 1972 between
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Additional Trustor, as lessor, and Trustor, as lessee, as amended by an
Addendum dated March 20, 1973, an Amendment to Lease dated January 1,
1978, an Amendment to Lease dated January 31, 1985 and a Third Amendment
to Lease dated December 24, 1987, as in effect on the date hereof.
Beneficiary agrees that, promptly following the submission of
any written request by Trustor or Additional Trustor (with such requests limited
to not more by each of Trustor and Additional Trustor than one in any calendar
month, unless more frequent requests are provided for by applicable law),
Beneficiary shall deliver a statement to Trustor and/or Additional Trustor, as
appropriate, setting forth the amount of the principal indebtedness evidenced by
the Notes, provided that Beneficiary shall have no liability for, and the
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security of this Deed of Trust shall not be affected by, any failure to respond
to any such request or any error in any response.
TO PROTECT THE PREMISES AND THE SECURITY GRANTED BY THIS DEED OF
TRUST, TRUSTOR HEREBY COVENANTS AND AGREES AS FOLLOWS:
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ARTICLE 1.
DEFINITIONS
1.1 Collateral. For purposes of this Deed of Trust, the term
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"Collateral" means and includes all of the following:
(a) Real Estate. All of the real property which is particularly
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described by Exhibit "A", attached hereto and incorporated by reference
herein (hereinafter the "Land"), easements, hereditaments, rights of way,
privileges, liberties, appendages and appurtenances now or hereafter
belonging in anywise appertaining to the Land ( including, without
limitation, all rights relating to storm and sanitary sewer, water, gas,
electric, railway and telephone services); all gas, oil, minerals, coals and
other substances of any kind or character underlying the Land to the extent
owned by Trustor and/or Additional Trustor; all estate, claim, demand, right,
title or interest of the Trustor and/or Additional Trustor in and to any
street, road, highway, or alley (vacated or otherwise) adjoining the Land or
any part thereof; all strips and gores belonging, adjacent or pertaining to
the Land to the extent of Trustor's and/or Additional Trustor's right, title
or interest therein; and any after-acquired title to any of the foregoing
(all of the foregoing is herein referred to collectively as the "Real
Estate");
(b) Improvements and Fixtures. All of Trustor's and/or
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Additional Trustor's right, title and interest in and to all buildings,
structures, replacements, furnishings, fixtures, fittings and other
improvements and property of every kind and character now or hereafter owned
or leased by the Trustor and/or Additional Trustor, and located or erected on
the Real Estate, together with all buildings or construction materials,
equipment, appliances, machinery, plant equipment, fittings, apparatus,
fixtures and other articles of any kind or nature whatsoever now or hereafter
owned or leased by the Trustor and/or Additional Trustor and found on,
affixed to or attached to the Real Estate, including (without limitation) all
motors, boilers, engines and devices for the operation of pumps, and all
heating, electrical, lighting, power, plumbing, air conditioning,
refrigeration and ventilation equipment (all of the foregoing is herein
referred to collectively as the "Improvements");
(c) Personal Property. All gaming devices and associated
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equipment, building materials, goods, construction material, appliances
(including stoves, refrigerators, water fountains and coolers, fans, heaters,
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incinerators, compactors, dishwashers, clothes washers and dryers, water heaters
and similar equipment), supplies, blinds, window shades, carpeting, floor
coverings, elevators, office equipment, growing plants, fire sprinklers and
alarms, control devices, equipment (including motor vehicles and all window
cleaning, building cleaning, swimming pool, recreational, monitoring, garbage,
air conditioning, pest control and other equipment) tools, furnishings,
furniture, light fixtures, non-structural additions to the Real Estate, and all
other tangible property of any kind or character now or hereafter owned by the
Trustor and/or Additional Trustor and used or useful in connection with the
Real Estate, any construction undertaken on the Real Estate or any trade,
business or other activity (whether or not engaged in for profit) for which the
Real Estate is used, the maintenance of the Real Estate or the convenience of
any guests, licensees or invitees of the Trustor and/or Additional Trustor, all
regardless of whether located on the Real Estate or located elsewhere for
purposes of fabrication, storage or otherwise (all of the foregoing is herein
referred to collectively as the "Goods");
(d) Intangibles. All option rights, purchase contracts, and books and
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records of the Trustor and/or Additional Trustor relating to the Real Estate or
the Improvements, and all contract rights of the Trustor and/or Additional
Trustor with respect to the operation and/or maintenance of the Real Estate or
the Improvements (all of the foregoing is herein referred to collectively as the
"Intangibles");
(e) Rents. All rents, issues, profits, royalties, avails, and other
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benefits derived or owned by the Trustor and/or Additional Trustor or
indirectly from the Real Estate or the Improvements or any business activity
conducted thereon (all of the foregoing is herein collectively called the
"Rents");
(f) Leases. All rights of the Trustor and/or Additional Trustor under
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all leases, licenses, occupancy agreements, concessions or other arrangements,
whether written or oral, whereby any person, other than the Trustor, agrees to
pay money or any consideration for the use, possession or occupancy of, or any
estate in, the Real Estate or the Improvements or any part thereof, and all
rents, income, profits, benefits, avails, advantages and claims against
guarantors under any thereof (all of the foregoing is herein referred to
collectively as the "Leases"). The Leases include, but are not necessarily
limited that certain Lease executed by the State of Nevada, acting by and
through its Department of Highways,
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as Lessor, and Trustor, as Lessee, recorded October 3, 1978 in the Official
Records of Washoe County, Nevada, as Document No. 561788; and
(g) All the estate, interest, right, title, other claim or demand,
both law in and in equity, including claims or demands with respect to the
proceeds of insurance in effect with respect thereto, which Trustor and/or
Additional Trustor now has or may hereafter acquire in the Premises, and any
and all awards made for the taking by eminent domain, or by any proceeding
or purchase in lieu thereof, of the whole or any part of the Collateral,
including without limitation any award resulting from a change of grade of
streets and any award for severance damages.
(h) Other Property. All other property or rights of the Trustor
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and/or Additional Trustor of any kind or character related to the Real
Estate or the Improvements, including, without limitation, goodwill,
trademarks, servicemarks, tradenames, accounts, instruments, chattel paper,
money and any general intangibles not specifically included in the
Intangibles and all proceeds (including insurance proceeds, but subject to
the limitations on the use of such proceeds set forth herein) and products
of any of the foregoing (all of the foregoing is herein referred to
collectively as the "Other Property"). (All of the Real Estate, the
Improvements, the Leases and any other property which is real property under
applicable law, is sometimes referred to collectively herein as the
"Premises" and is sometimes referred to collectively herein as the "Real
Property", all of the goods, intangibles and other property which is
personal property under applicable law is sometimes collectively referred to
herein as the "Personal Property".)
1.2 Notes. All capitalized terms used herein and not otherwise defined
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herein shall have the meanings ascribed to the same in the Loan Agreement.
ARTICLE 2.
COVENANTS AND AGREEMENTS OF TRUSTOR
2.1 Payment of Secured Obligations. Trustor shall pay when due the
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principal, interest, premium, if any, and all other amounts due to Beneficiary
as provided in the Loan Agreement and the Notes; the principal of and interest
on any amount advanced in the future and secured by this Deed of Trust; and the
principal of and interest on any other amount secured by this Deed of Trust and
all charges, fees and other amounts as provided in the Loan Agreement.
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2.2 Maintenance, Repair, Alterations. Trustor shall maintain and
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preserve the Collateral in good condition and repair and in a prudent and
businesslike manner; Trustor, except upon the prior written consent of
Beneficiary, shall not remove, demolish or substantially alter any of the
Improvements, other than to make repairs in the ordinary course of business of a
non-structural nature which serve to preserve or increase the value of the
Premises; Trustor shall complete promptly and in a good and workmanlike manner
any Improvement which may be now or hereafter constructed on the Premises and
promptly restore in like manner any Improvement which may be damaged or
destroyed thereon from any cause whatsoever, and pay when due all claims for
labor performed and materials furnished therefor; Trustor shall comply with all
laws, ordinances, rules, regulations, covenants, conditions, restrictions and
orders of any governmental authority now or hereafter affecting the conduct or
operation of Trustor's business or the Collateral or any part thereof or
requiring any alteration or improvement to be made thereon; Trustor shall not
commit, suffer or permit any act to be done in, upon or to the Collateral or any
part thereof in violation of any such laws, ordinances, rules, regulations or
orders, or any covenant, condition or restriction now or hereafter affecting the
Premises; Trustor shall not commit or permit any waste or deterioration of the
Collateral, and shall keep and maintain abutting grounds, sidewalks, roads,
parking and landscape areas in good and neat order and repair; Trustor shall not
take (or fail to take) any action, which if taken (or not so taken) would
increase in any way the risk of fire or other hazard occurring to or affecting
the Premises or which otherwise would impair the security of Beneficiary in the
Collateral; Trustor shall comply with the provisions of all leases, if any,
constituting a portion of the Collateral; Trustor shall not abandon the
Collateral or any portion thereof or leave the Premises unprotected, unguarded,
vacant or deserted; except as otherwise expressly permitted under the Loan
Agreement and except for Permitted Encumbrances, Trustor shall not initiate,
join in or consent to any change in any zoning ordinance, general plan, specific
plan, private restrictive covenant or other public or private restriction
limiting the uses which may be made of the Premises by Trustor or by the owner
thereof without the prior written consent of Beneficiary; Trustor shall secure
and maintain in full force all permits necessary for the use, occupancy and
operation of the Collateral; except as otherwise prohibited or restricted by the
Loan Documents, or any of them, Trustor shall do any and all other acts which
may be reasonably necessary to protect or preserve the value of the Collateral
and the rights of Trustee and Beneficiary with respect thereto.
Trustor and Additional Trustor hereby agree that Beneficiary may conduct
from time to time, through
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representatives of its own choice, on-site inspections and observations of (1)
the maintenance and repair of the Collateral, including a review of all
maintenance and repair programs and practices and all reports and records,
including the records of expenditures, relating thereto, and (2) such other
facilities, practices and records of Trustor relating to the Premises as
Beneficiary deems to be necessary or appropriate in order to monitor Trustor's
compliance with the provisions of this Section.
2.3 Required Insurance.
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2.3.1 Trustor shall at all times provide, maintain, keep in full
force and effect or cause to be provided, maintained, and kept in full force and
effect, at no expense to Trustee or Beneficiary, policies of insurance in form,
amounts and with companies required by the Loan Agreement.
2.3.2 All policies of insurance required by the terms of this Deed
of Trust shall have attached thereto a lender's loss payable endorsement for the
benefit of Beneficiary and shall name Beneficiary as an additional insured, all
in such form and substance as required by the Loan Agreement.
2.3.3 Trustor shall also provide from time to time at the written
request of Beneficiary satisfactory evidence of the insurable value of the
Premises. Such evidence may be in the form of an insurance appraisal or
valuation report prepared by an insurance company, agent or broker, professional
appraiser, architect, engineer or contractor reasonably approved by Beneficiary.
Trustor shall bear the cost, if any, of such insurance appraisal or valuation
report. Trustor shall not be required to deliver such evidence of insurable
value more often than once in any two calendar year period.
2.4 Delivery of Policies, Payment of Premiums. At Beneficiary's option,
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Trustor shall furnish Beneficiary with an original of all policies of insurance
required under Section 2.3 and/or a certificate of insurance for each required
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policy setting forth the coverage, the limits of liability, the deductibles, if
any, the name of the carrier, the policy number, and the period of coverage,
which certificates shall be executed by authorized officials of the companies
issuing such insurance, or by agents or attorneys-in-fact authorized to issue
said certificates (in which event each such certificate shall be accompanied by
a notarized affidavit, agency agreement or power of attorney evidencing the
authority of the signatory to issue such certificate on behalf of the insurer
named therein). If Beneficiary consents, Trustor may provide any of
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the required insurance through blanket policies carried by Trustor and covering
more than one location, or by policies procured by a tenant or other party
holding under Trustor; provided, however, all such policies shall be in form,
substance and amounts and issued by companies reasonably satisfactory to
Beneficiary. As soon as practicable, but in any event prior to the expiration of
each required policy, Trustor shall deliver to Beneficiary evidence satisfactory
to Beneficiary of the payment of premium and the renewal or replacement of such
policy continuing insurance in form as required by this Deed of Trust. All such
policies shall contain a provision that, notwithstanding any contrary agreement
between Trustor and the insurance company, such policies will not be cancelled,
allowed to lapse without renewal, surrendered or materially amended (which term
shall include any reduction in the scope or limits of coverage) without at least
thirty (30) days' prior written notice to Beneficiary. If Trustor fails to
provide, maintain, keep in force or deliver to Beneficiary the policies of
insurance required by this Deed of Trust or by any of the Loan Documents,
Beneficiary may (but shall have no obligation to ) procure such insurance, or
single interest insurance for such risks covering Beneficiary's interests, and
Trustor shall pay all premiums therefor promptly upon demand by Beneficiary;
and until such payment is made by Trustor, the amount of all such premiums,
together with interest thereon at the Default Rate, as that term is defined
under the Loan Agreement, shall be secured by this Deed of Trust.
2.5 Casualties. Trustor shall give prompt written notice to Benenficiary
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upon the occurrence of any casualty to or in connection with the Collateral or
any part thereof, whether or not covered by insurance. In the event of such
casualty (which, in the case of casualties occurring prior to the occurrence of
an Event of Default, are in excess of $250,000 and thereafter, all casualties of
any size or amount), the gross insurance proceeds less all expenses (including
attorney's fees) incurred in the collection of such proceeds shall, subject to
the provisions of the Loan Agreement, be payable to Beneficiary, and Trustor and
Additional Trustor hereby authorize and direct any affected insurance company to
make payment of such proceeds in such case directly to Beneficiary. If Trustor
and/or Additional Trustor receive any proceeds of insurance resulting from such
casualty, Trustor and/or Additional Trustor shall promptly pay over such
proceeds to Beneficiary. Beneficiary is hereby authorized and empowered by
Trustor and Additional Trustor at Beneficiary's option and in Beneficiary's sole
discretion, as attorney-in-fact for Trustor and Additional Trustor, to make
proof of loss, to appear in and prosecute any action arising from any policy or
policies of insurance, and upon the occurrence of an Event of Default hereunder
the Loan Agreement, to settle,
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adjust or compromise any claim for loss, damage or destruction under any policy
or policies of insurance. Trustor and Additional Trustor shall not settle,
adjust or compromise any claim for loss, damage or destruction of the Collateral
or any part thereof under any policy or policies of insurance without the prior
written consent of Beneficiary to such settlement, adjustment or compromise
(which consent shall not be unreasonably withheld). In the event of any damage
to or destruction of the Premises, all insurance proceeds shall be applied in
accordance with the terms of the Loan Agreement. Except as provided in the Loan
Agreement, nothing herein contained shall be deemed to excuse Trustor from
repairing or maintaining the Collateral as provided in Section 2.2 hereof or
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restoring all damage or destruction to the Collateral, regardless of whether or
not there are insurance proceeds available to Trustor or whether any such
proceeds are sufficient in amount, and the application or release by Beneficiary
of any insurance proceeds shall not cure or waive any default or notice under
this Deed of Trust or invalidate any act done pursuant to such notice.
2.6 Assignment of Policies Upon Foreclosure. In the event of
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foreclosure of this Deed of Trust or other transfer of title or assignment of
the Collateral in extinguishment, in whole or in part. of the debt secured
hereby, all right, title and interest or Trustor and Additional Trustor in and
to all policies of insurance required by Section 2.3 hereof and any unearned
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premiums paid thereon shall, without further act, be assigned to and shall inure
to the benefit of and pass to the successor in interest to Trustor and
Additional Trustor or the purchaser or grantee of the Collateral, and Trustor
and Additional Trustor hereby appoint Beneficiary their lawful attorney-in-fact
to execute an assignment thereof and any other document necessary to effect such
transfer.
2.7 Indemnification; Subrogation; Waiver of Offset.
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2.7.1. If Beneficiary is made a party to any litigation concerning
this Deed of Trust, any of the Loan Documents, the Collateral or any part
thereof or interest therein, or the occupancy of the Premises by Trustor or any
tenant of Trustor, then Trustor shall indemnify, defend and hold Beneficiary
harmless from all liability to any third party by reason of said litigation,
including all reasonable attorney's fees and expenses incurred by Beneficiary as
a result of any such litigation, whether or not such litigation is prosecuted to
judgment. Beneficiary may employ an attorney or attorneys to protect its rights
hereunder, and in the event of such employment, Trustor shall pay Beneficiary
reasonable attorneys' fees and expenses incurred by such Beneficiary, whether or
not an action is actually commenced against Trustor by reason of its breach.
Neither this para-
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graph nor any other provision of this Deed of Trust shall be deemed to include
or create any obligation or liability of Trustor to Beneficiary which
constitutes an obligation or liability of Trustor to Beneficiary under the
indemnity in favor of Beneficiary set forth in Section 11.15 of the Loan
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Agreement entitled "Hazardous Materials Indemnity", which indemnity shall be and
is unsecured and is not subject to the lien of this Deed of Trust on the
Premises.
2.7.2 Trustor and Additional Trustor waive any and all right to claim
or recover against Beneficiary, its officers, employees, agents and
representatives, for loss of or damage to Trustor and/or Additional Trustor, the
Collateral, Trustor's and/or Additional Trustor's property or the property of
others under Trustor's and/or Additional Trustor's control from any cause
insured against or required to be insured against by the provisions of this Deed
of Trust; provided, however, that this waiver of subrogation shall not be
effective with respect to any policy of insurance permitted or required by this
Deed of Trust if (i) such policy prohibits such waiver of subrogation, or if
coverage thereunder would be reduced as a result of such waiver of subrogation
and (ii) Trustor is unable to obtain from a carrier issuing such insurance a
policy that, by special endorsement or otherwise, permits such a waiver of
subrogation.
2.7.3 Except as otherwise specifically provided herein, all amounts
payable by Trustor pursuant to this Deed of Trust shall be paid without notice,
demand, counterclaim, setoff, deduction or defense and without abatement,
suspension, deferment, diminution or reduction, and the obligations and
liabilities of Trustor hereunder shall in no way be released, discharged or
otherwise affected (except as expressly provided herein) by reason of: (i) any
damage to or destruction of or any condemnation or similar taking of the
Collateral or any-part thereof; (ii) any restriction or prevention of or
interference by any third party with any use of the Collateral or any part
thereof; (iii) any title defect or encumbrance or any eviction from the
Premises or any part thereof by title paramount or otherwise; (iv) any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceeding relating to Beneficiary, or any action
taken with respect to this Deed of Trust by any trustee or receiver of
Beneficiary, or by any court, in any such proceeding; (v) any claim which
Trustor has or might have against Beneficiary; (vi) any default or failure on
the part of Beneficiary to perform or comply with any of the terms hereof or of
any other agreement with Trustor; or (vii) any other occurrence whatsoever,
whether similar or dissimilar to the foregoing; whether or not Trustor shall
have notice or knowledge of any of the foregoing. Except as expressly provided
herein, Trustor waives all rights now or hereafter
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conferred by statute or otherwise to any abatement, suspension, deferment,
diminution or reduction of any sum secured hereby and payable by Trustor.
2.8 Taxes and Impositions.
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2.8.1 Subject to Trustor's rights to contest provided in
the Loan Agreement, Trustor shall pay, or cause to be paid at least ten (10)
days prior to delinquency, all real property taxes and assessments, general and
special, and all other taxes and assessments of any kind or nature whatsoever,
including without limitation non-governmental levies or assessments such as
maintenance charges, levies or charges resulting from covenants, conditions and
restrictions affecting the Collateral, which are assessed or imposed upon the
Collateral, or upon Trustor as owner or operator of the Premises, or become due
and payable, and which create, may create or appear to create a lien upon the
Collateral, or any part thereof, or upon any personal property, equipment or
other facility used in the operation or maintenance thereof (all the above
collectively hereinafter referred to as "Impositions"); provided, however, that
if, by law, any such Imposition is payable, or may at the option of the taxpayer
be paid, in installments, Trustor may pay the same or cause it to be paid,
together with any accrued interest on the unpaid balance of such Imposition, in
installments as the same become due and before any fine, penalty, interest or
cost may be added thereto for the nonpayment of any such installment and
interest.
2.8.2 Subject to Trustor's rights to contest provided in
the Loan Agreement, if at any time after the date hereof there shall be assessed
or imposed (i) a tax or assessment on the Collateral in lieu of or in addition
to the Impositions payable by Trustor pursuant to paragraph 2.8.1 hereof, or
(ii) a license fee, tax or assessment imposed on Beneficiary and measured by or
based in whole or in part upon the amount of the outstanding obligations secured
hereby, then all such taxes, assessments or fees shall be deemed to be included
within the term "Impositions" as defined in paragraph 2.8.1 hereof, and Trustor
shall pay and discharge the same as herein provided with respect to the payment
of Impositions. If Trustor fails to pay such Impositions prior to delinquency,
Beneficiary may at its option declare all obligations secured hereby together
with all accrued interest thereon, immediately due and payable. Anything to the
contrary herein notwithstanding, Trustor shall have no obligation to pay any
franchise, estate, inheritance, income, excess profits or similar tax levied on
Beneficiary or on the obligations secured hereby.
2.8.3 Subject to Trustor's rights to contest provided in
the Loan Agreement, and upon request by
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Beneficiary, Trustor shall deliver to Beneficiary, within thirty (30) days after
the date upon which any such Imposition is due and payable by Trustor or as soon
thereafter as the same becomes available, official receipts of the appropriate
taxing authority, or other proof satisfactory to Beneficiary, evidencing the
payment thereof.
2.9 Utilities. Trustor shall promptly pay all gas,
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electricity, water, sewer and other utility charges which are incurred for the
benefit of the Collateral or which may become a lien against the Collateral and
all other assessments and other charges of a similar nature, public or private,
relating to the Collateral or any portion thereof, regardless of whether or not
any such charge is or may become a lien thereon.
2.10 Defense of Actions and Costs. Trustor, at no cost or
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expense to Beneficiary or Trustee, shall appear in and defend any action or
proceeding purporting to affect the security hereof, the other Loan Documents,
any additional or other security for the obligations secured hereby, the
interest of Beneficiary, or the rights, powers or duties of Beneficiary or
Trustee hereunder. If Beneficiary and Trustee, or either of them, elects to
become a party to such action or proceeding, or is made a party thereto or to
any other action or proceeding, of whatever kind or nature, concerning the Loan
Agreement, this Deed of Trust, any of the Loan Documents, the Collateral or any
part thereof or interest therein, or the occupancy thereof, Trustor shall
indemnify, defend and hold Trustee and Beneficiary harmless from all liability,
damage, cost and expense incurred by Trustee and Beneficiary, or either of them,
by reason of said action or proceeding (including, without limitation, Trustee's
fees and expenses, the fees of attorneys for Trustee and for Beneficiary, and
other expenses, of whatever kind or nature, incurred by Trustee or Beneficiary,
or either of them, as a result of such action or proceeding), whether or not
such action or proceeding is prosecuted to judgment or decision. Immediately
upon demand therefor by Trustee or Beneficiary, Trustor shall pay thereto an
amount equal to Trustor's liability to such person under this section, together
with interest thereon from date of expenditure at the Default Rate; and until
paid, such sums shall be secured hereby.
2.11 Actions by Beneficiary to Preserve Collateral.
---------------------------------------------
If Trustor fails to make any payment or to do any act as and in the manner
provided in any of the Loan Documents, Beneficiary, and Trustee, and each of
them, each in its own discretion, without obligation so to do, without releasing
Trustor from any obligation, upon notice reasonable under the circumstances
(which notice may be written or oral), may make or do the same in such manner
and to such extent as either may reasonably deem necessary to protect the
security hereof. In connection
-14-
therewith (without limiting their general and other powers, whether conferred
herein, in another Loan Document or by law), Beneficiary and Trustee, and each
of them, each shall have and are hereby given the right, but not the obligation:
(i) to enter upon the Premises and take possession of the Collateral; (ii) to
make additions, alterations, repairs and improvements to the Collateral which
they or either of them may consider necessary or proper to keep the Collateral
in good condition and repair; (iii) to appear and participate in any action or
proceeding affecting or which may affect the security hereof or the rights or
powers of Beneficiary or Trustee; (iv) to pay, purchase, contest or compromise
any encumbrance, claim, charge, lien or debt which in the judgment of either may
affect or appears to affect the security of this Deed of Trust or to be prior or
superior hereto; and (v) in exercising such powers, to pay necessary expenses,
including employment of counsel or other necessary or desirable consultants.
Trustor shall, immediately upon demand therefor by Beneficiary, pay to
Beneficiary an amount equal to all costs and expenses incurred by it in
connection with the exercise by Beneficiary of the foregoing rights, including,
without limitation, costs of evidence of title, court costs, appraisals, surveys
and receiver's, Trustee's and attorneys' fees, costs and expenses (including,
without limitation, the fees and expenses of attorneys for Trustee), whether or
not an action is actually commenced in connection therewith, together with
interest thereon from the date of such expenditures until Beneficiary has been
repaid such amount at the Default Rate and, until paid, said sums shall be
secured hereby.
2.12 Transfer of Collateral by Trustor and/or Additional
---------------------------------------------------
Trustor. Except as otherwise provided in the Loan Agreement, Trustor shall not
- -------
sell, assign, encumber, lease as a whole or otherwise transfer or convey all or
any part of the Premises or any interest therein without the prior written
consent of Beneficiary, except for transfers or conveyances of personal property
in the ordinary course of business and otherwise permitted by the Loan
Agreement. with the prior written consent of Beneficiary (which consent shall
not be unreasonably withheld or delayed, or in any event withheld for a reason
other than the financial status of the proposed transferee or the fact that such
transferee or its affiliates has previously defaulted in any material respect in
any obligation owed to Beneficiary or any of the Banks) Additional Trustor may
sell, assign, convey or otherwise transfer its all or any part of the Premises
or any interest therein to any financially responsible person or entity,
provided that in any event (i) each sale, assignment, conveyance or transfer is
made expressly subject to this Deed of Trust, (ii) such sale, assignment,
conveyance or transfer complies with all applicable laws and regulations,
including those promulgated by any applicable gaming authorities, and (iii)
Additional Trustor
-15-
shall not enter into any transaction calling for the granting of a lien or other
encumbrance on the Premises or any portion thereof (as opposed to an outright
sale or conveyance) unless the holder of such lien or encumbrance has entered
into a subordination of such lien or encumbrance in favor of Beneficiary which
is in form and substance satisfactory to Beneficiary. Notwithstanding the
foregoing, without obtaining the prior written consent of Beneficiary, the
partners, shareholders or other constituent members of Additional Trustor shall
have the right to sell, transfer or otherwise convey their partnership interests
shares or other equity ownership interests in Additional Trustor.
2.13 Survival of Warranties. Trustor shall ful1y and
----------------------
faithfully satisfy and perform the obligations of Trustor contained in the Loan
Documents, each agreement of Trustor and Additional Trustor incorporated by
reference therein or herein and each agreement the performance of which is
secured hereby, and any modification or amendment thereof. All representations,
warranties and covenants of Trustor contained in any such agreement between
Trustor and Beneficiary shall survive the execution and delivery hereof and
shall remain continuing obligations, warranties and representations of Trustor
during any time when any portion of the obligations secured hereby remain
outstanding.
2.14 Condemnation and Other Awards. Immediately upon its
-----------------------------
obtaining knowledge of the institution or the threatened institution of any
proceeding for the condemnation or other taking for public or quasi-public use
of the Collateral or any part thereof, or if the same be taken or damaged by
reason of any public improvement or condemnation proceeding, or in any other
manner, or should Trustor and/or Additional Trustor receive any notice or other
information regarding such proceeding, action, taking or damage, Trustor and
Additional Trustor shall promptly notify Trustee and Beneficiary of such fact.
Trustor shall then, if requested by Beneficiary, file or defend its rights
thereunder and prosecute the same with due diligence to its final disposition
and shall cause any award or settlement to be paid over to Beneficiary for
disposition pursuant to the terms of this Deed of Trust. Subject to the Loan
Agreement, at Beneficiary's option, Beneficiary or Trustor may be the nominal
party in such proceeding but in any event Beneficiary shall be entitled, without
regard to the adequacy of its security, to participate in and to control the
same and to be represented therein by counsel of its choice, and Trustor will
deliver, or cause to be delivered, to Beneficiary such instruments as may be
requested by it from time to time to permit such participation. If the
Collateral or any part thereof is taken or diminished in value, or if a consent
settlement is entered, by or under threat of such proceeding, all compensation,
awards, damages, rights of
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action, proceeds and settlements payable to Trustor and/or Additional Trustor by
virtue of its interest in the Collateral shall be and hereby are assigned,
transferred and set over unto Beneficiary to be held by it, in trust, subject to
the lien and security interest of this Deed of Trust. All such proceeds shall be
first applied to reimburse Trustee and Beneficiary for all costs and expenses,
including reasonable attorneys' fees, incurred in connection with the collection
of such award or settlement. The balance of such award or settlement shall be
applied in accordance with the terms of the Loan Agreement. Application or
release of such proceeds as provided herein shall not cure or waive any default
or notice of default hereunder or invalidate any act done pursuant to such
notice.
2.15 Additional Security. No other security now existing, or
-------------------
hereafter taken, to secure the obligations secured hereby nor the liability of
any maker, surety, guarantor or endorser with respect to such obligations, or
any of them, shall be impaired or affected by the execution of this Deed of
Trust; and all additional security shall be taken, considered and held as
cumulative. The taking of additional security, execution of partial releases of
the security, or any extension of the time of payment of the indebtedness shall
not diminish the force, effect or lien of this Deed of Trust and shall not
affect or impair the liability of any maker, surety, guarantor or endorser for
the payment of said indebtedness. In the event Beneficiary at any time holds
additional security for any of the obligations secured hereby, it may enforce
the sale thereof or otherwise realize upon the same, at its option, either
before, concurrently, or after a sale is made hereunder.
2.16 Inspections. Beneficiary, Trustee and the agents,
-----------
representatives or workers of each of them, are authorized, upon notice
reasonable under the circumstances (which may be written or oral), to enter at
any reasonable time upon or in any part of the Premises for the purpose of
inspecting the same and for the purpose of performing any of the acts it is
authorized to perform hereunder or under the terms of any of the Loan Documents.
Neither Beneficiary nor Trustee shall, during the course of any such inspection,
unreasonably interfere with the construction of any work or improvement then
under construction.
2.17 Liens. Trustor shall pay and promptly discharge, at
-----
Trustor's cost and expense, all liens, encumbrances and charges upon the
Collateral, or any part thereof or interest therein other than Permitted
Encumbrances; provided that the existence of any mechanic's, laborer's,
materialman's, supplier's or vendor's lien or right thereto shall not constitute
a violation of this Section if payment is not yet due under the contract which
is the foundation thereof and if such contract does not postpone payment for
more than
-17-
forty-five (45) days after the performance thereof. Nothing contained herein
shall prohibit Trustor from exercising any right or rights Trustor may have
under the Loan Agreement to contest any such lien. Subject to Trustor's right to
contest any such lien as aforesaid, if Trustor shall fail to remove and
discharge any such lien, encumbrance or charge, then in addition to any other
right or remedy of Beneficiary, Beneficiary may, but shall not be obligated to,
discharge the same, without inquiring into the validity of such lien,
encumbrance or charge nor into the existence of any defense or offset thereto,
either by paying the amount claimed to be due, or by procuring the discharge of
such lien, encumbrance or charge by depositing in a court a bond or the amount
claimed or otherwise giving security for such claim, or in such manner as is or
may be prescribed by law. Trustor shall, immediately upon demand therefor by
Beneficiary, pay to Beneficiary an amount equal to all costs and expenses
incurred by Beneficiary in connection with the exercise by Beneficiary of the
foregoing right to discharge any such lien, encumbrance or charge, together with
interest thereon from the date of such expenditure at the Default Rate, and
until paid, such sums shall be secured hereby.
2.18 Beneficiary's Powers. Without affecting the liability of
--------------------
any other person liable for the payment of any obligation herein mentioned, and
without affecting the lien or charge of this Deed of Trust upon any portion of
the Collateral not then or therefore released as security for the full amount of
all unpaid obligations, Beneficiary may, from time to time and without notice
(i) release any person so liable, (ii) extend the maturity or alter any of the
terms of any such obligation (provided, however, that the consent of Trustor
shall be required with respect to the extension or alteration of any unpaid
obligation of Trustor to Beneficiary), (iii) grant other indulgences, (iv)
release or reconvey, or cause to be released or reconveyed at any time at
Beneficiary's option. any parcel, portion or all of the Collateral, (v) take or
release any other or additional security for any obligation herein mentioned, or
(vi) make compositions or other arrangements with debtors in relation thereto.
By accepting payment or performance of any obligation secured by this Deed of
Trust after the payment or performance thereof is due or after the filing of a
notice of default and election to sell, Beneficiary shall not have thereby
waived its right to require prompt payment or performance, when due, of all
other obligations secured hereby, or to declare a default for failure so to pay
or perform, or to proceed with the sale under any notice of default and election
to sell therefore given by Beneficiary, or with respect to any unpaid balance of
the indebtedness secured hereby. The acceptance by Beneficiary of any sum in an
amount less than the sum then due shall not constitute a waiver of the
obligation of Trustor to pay the entire sum then due.
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Trustor's failure to pay the entire sum then due shall continue to be a
default, notwithstanding the acceptance of partial payment, and, until the
entire sum then due shall have been paid, Beneficiary or Trustee shall at all
times be entitled to declare a default and to exercise all the remedies herein
conferred, and the right to proceed with a sale under any notice of default and
election to sell shall in no way be impaired, whether or not such amounts are
received prior or subsequent to such notice. No delay or omission of Trustee or
Beneficiary in the exercise of any right or power hereunder shall impair such
right or power or any other right or power nor shall the same be construed to be
a waiver of any default or any acquiescence therein.
2.19 Other Instruments. Subject to Trustor's right to contest
-----------------
as provided in the Loan Agreement, Trustor shall punctually pay all amounts due
and payable, and shall promptly and faithfully perform or observe each and every
other obligation or condition to be performed or observed under, each deed of
trust, mortgage or other lien or encumbrance, lease, sublease, declaration,
covenant, condition, restriction, license, order or other instrument or
agreement which affects or appears to affect the Collateral, whether at law or
in equity.
ARTICLE 3.
ASSIGNMENT OF RENTS, ISSUES AND PROFITS
3.1 Assignment of Rents. Issues and Profits. Trustor and
---------------------------------------
Additional Trustor hereby absolutely and irrevocably assign and transfer to
Beneficiary all of their right, title and interest in and to all rents, issues,
profits, royalties, income and other proceeds and similar benefits derived from
the Collateral (collectively, the "Rents"), and hereby give to and confer upon
Beneficiary the right, power and authority to collect such Rents. Trustor and
Additional Trustor irrevocably appoint Beneficiary their true and lawful
attorney-in-fact, at the option of Beneficiary, at any time and from time to
time, upon the occurrence of an Event of Default, to demand, receive and enforce
payment, to give receipts, releases and satisfactions, and to sue, in its name
or in the name of Trustor and Additional Trustor, for all Rents, and apply the
same to the obligations secured hereby; provided, however, Trustor and
Additional Trustor shall have the right to collect Rents (but not more than one
month in advance unless the written approval of Beneficiary has first been
obtained), and to retain and enjoy the same, so long as an Event of Default
shall not have occurred hereunder and be continuing. The assignment of the Rents
in this Article 3 is intended to be an absolute assignment from Trustor and
Additional Trustor to Beneficiary and not merely the passing of a security
interest.
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3.2 Collection Upon Default. Upon the occurrence of an
-----------------------
Event of Default hereunder, Beneficiary may, at any time without notice, either
in person, by agent or by a receiver appointed by a court, and without regard to
the adequacy of any security for the obligations hereby secured, enter upon and
take possession of the Collateral, or any part thereof, and, with or without
taking possession of the Collateral or any part thereof, in its own name sue for
or otherwise collect such Rents (including those past due and unpaid, and all
prepaid Rents and all other monies which may have been or may hereafter be
deposited with Trustor by any lessee or tenant of Trustor to secure the payment
of any Rent or for any services thereafter to be rendered by Trustor for any
other obligation of any tenant to Trustor arising under any lease, and Trust
agrees that, upon the occurrence of any Event of Default hereunder, Trustor
shall promptly deliver all Rents and other monies to Beneficiary), and
Beneficiary may apply the same, less costs and expenses of operation and
collection, including, without limitation, reasonable attorneys' fees, whether
or not suit is brought or prosecuted to judgment, upon any indebtedness or
obligation of Trustor secured hereby, and in such order as Beneficiary may
determine notwithstanding that said indebtedness or the performance of said
obligation may not then be due. The collection of Rents, or the entering upon
and taking possession of the collateral, or the application thereof as
aforesaid, 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
of default or be deemed or construed to make Beneficiary a mortgagee-in-
possession of the Collateral or any portion thereof.
3.3 Further Assignments. Upon demand of Beneficiary, Trustor
-------------------
shall, from time to time hereafter, execute and deliver to Beneficiary
recordable assignments of Trustor's interest in any or all leases, subleases,
contracts, rights, licenses and permits now or hereafter affecting the
Collateral or any portion thereof. Such assignments shall be made by instruments
in form and substance satisfactory to Beneficiary; provided, however, that no
such assignment shall be construed as imposing upon Beneficiary any obligation
with respect thereto. Beneficiary may, at its option, exercise its rights
hereunder or under any such specific assignment and such exercise shall not
constitute a waiver of any right hereunder or under any such specific
assignment.
Trustor and Additional Trustor by execution of this Deed of
Trust unconditionally covenant and agree that this Deed of Trust shall be an
encumbrance lien against the Collateral senior and paramount to all right, title
and interest of Trustor and Additional Trustor now owned or hereafter acquired
as set forth in that certain Lease wherein Additional Trustor is Lessor and
Trustor is Lessee dated July 21, 1972, as amended
-20-
by Addendum to Lease dated March 20, 1973, as further amended by Amendment to
Lease dated January 1, 1978, as further amended by amendment to Lease dated
January 31, 1985, and as further amended by Third Amendment to Lease dated
December 24, 1987, together with all further and subsequent amendments relating
thereto, including, but not limited to, all rights of reverted therein
contained.
ARTICLE 4.
REMEDIES UPON DEFAULT
4.1 Events of Default. Any of the following events shall be
-----------------
deemed an event of default ("Event of Default") hereunder:
4.1.1 Trustor shall fail to pay any amount owing under
this Deed of Trust or any of the Notes when due; or
4.1.2 Trustor shall fail to observe or perform any other
obligation contained in this Deed of Trust, and such failure is not cured within
30 days after Beneficiary gives Trustor notice of such failure; or
4.1.3 The occurrence of an "Event of Default" under the
Loan Agreement; or
4.1.4 A default under any other document or agreement
secured hereby, subject to any applicable cure period.
4.2 Acceleration Upon Default; Additional Remedies. Upon the
----------------------------------------------
occurrence of an Event of Default, Beneficiary may, at its option, declare all
indebtedness and obligations secured hereby to be immediately due and payable
without anyone presentment, demand, protest or further notice of any kind; and
whether or not Beneficiary exercises said option, Beneficiary may:
4.2.1 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 Collateral, or any part thereof, in its own name or in the name of
Trustee, and do any act which it deems necessary or desirable to preserve the
value, marketability or rentability of the Collateral, or part thereof or
interest therein, increase the income therefrom or protect the security hereof
and, with or without taking possession of the Collateral, sue for or otherwise
collect the Rents, including those past due and unpaid, and apply the same, less
costs and expenses of operation and collection including without limitation
attorneys'
-21-
fees, upon any indebtedness secured hereby, all in such order as Beneficiary may
determine. The entering upon the Premises and taking possession of the
Collateral, the collection of such Rents and the application thereof as
aforesaid, 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
of default and, notwithstanding the continuance in possession by Trustee,
Beneficiary or a receiver of all or any portion of the Premises or the
collection, receipt and application of any of the Rents, the Trustee or
Beneficiary shall be entitled to exercise every right provided for in any of the
Loan Documents or by law upon occurrence of any Event of Default, including the
right to exercise the power of sale.
4.2.2 Commence an action to foreclose this Deed of Trust
as a mortgage, appoint a receiver, or specifically enforce any of the covenants
hereof;
4.2.3 Deliver to Trustee a written declaration of default
and demand for sale, and a written notice of default and election to cause
Trustor's interest in the Collateral to be sold, which notice the Trustee or
Beneficiary shall cause to be duly filed for record in the official Records of
the County in which the Collateral is located; or
4.2.4 Exercise all other rights and remedies provided
herein, in any Loan Document or other document or agreement now or hereafter
securing all or any portion of the obligations secured hereby, or provided by
law.
4.3 Foreclosure By Power of Sale.
----------------------------
4.3.1 Upon the occurrence of an Event of Default as
defined by section 4.1 hereof, then Trustee, its successors and assigns, on
---
demand by Beneficiary, shall sell the real property in order to accomplish the
objects of this Trust in the manner set forth by Subsections 4.3.2 through 4.3.5
below.
4.3.2 Upon receipt of notice from Beneficiary, Trustee
shall cause to be recorded, published and delivered to Trustor and Additional
Trustor such Notice of Default and Election to Sell as is then required by
Chapter 107 of the Nevada Revised Statutes. Trustee shall, without demand on
Trustor or Additional Trustor, after lapse of such time as may then be required
by law and after recordation of such Notice of Default and Election to Sell
first give notice of the time and place of such sale, in the manner provided by
the laws of the State of Nevada for the sale of real property under execution,
and may from time to time postpone such sale by such advertisement as it may
deem reasonable, or without further advertisement, by proclamation made to the
persons assembled at
-22-
the time and place previously appointed and advertised for such sale, and on the
day of sale so advertised, or to which such sale may have been postponed, the
Trustee may sell the property so advertised, at public auction, at the time and
place specified in the notice, either in the county in which the property, or
any part thereof, to be sold, is situated, or at the principal office of the
Trustee located in Washoe County, in its discretion, to the highest cash bidder.
The Beneficiary or the holder or holders of the Notes and Loan Agreement secured
hereby may bid and purchase at such sale. Beneficiary may, after recording the
Notice of Default and Election to Sell, give or withdraw the same or any
proceedings thereunder, and shall thereupon be restored to their former position
and have and enjoy the same rights as though such notice had not been recorded
after Notice of Sale having been given as required by law, sell the Real
Property at the time and place of sale fixed by it in said Notice of Sale,
either as a whole, or in separate lots or parcels or items and in such order as
Beneficiary may direct Trustee so to do, at public auction to the highest bidder
for cash in lawful money of the United States payable at the time of sale.
Trustee shall deliver to such purchaser or purchasers thereof its good and
sufficient deed or deeds conveying the property so sold, but without any
covenant or warranty, express or implied. The recitals in such deed of any
matter or fact shall be conclusive proof of the truthfulness thereof. Any
person, including, without limitation, Trustor, Additional Trustor, Trustee or
Beneficiary, may purchase at such sale, and Trustor hereby covenants to warrant
and defend the title of such purchaser or purchasers.
4.3.3 After deducting all costs, fees and expenses of
Beneficiary and Trustee, including costs of evidence of title in connection with
sale, Beneficiary shall apply the proceeds of sale in the following priority, to
payment of (i) first, all amounts expended under the terms hereof, not then
repaid, with accrued interest at the Default Rate; (ii) second, all other
amounts then secured hereby; and (iii) the remainder, if any, to the person or
persons legally entitled thereto.
4.3.4 In the event of a sale of the Premises conveyed or
transferred in trust, or any part thereof, and the execution of a deed or deeds
therefor under such trust, the recital therein of default, and of the recording
notice of breach and election of sale, and of the elapsing of the 3-month
period, and of the giving of notice of sale, and of a demand by Beneficiary that
such sale should be made, shall be conclusive proof of such default, recording,
election, elapsing of time, and of the due giving of such notice and that the
sale was regularly and validly made on due and proper demand by Beneficiary; and
any such deed or deeds with such recitals
-23-
therein shall be effectual and conclusive against Trustor and Additional
Trustor, its successors and assigns, and all other persons; and the receipt for
the purchase money recited or contained in any deed executed to the purchaser as
aforesaid shall be sufficient discharge to such purchaser from all obligation to
see to the property application of the purchase money, according to the trusts
aforesaid.
4.3.5 A sale of less than the whole of the Real Property
or any defective or irregular sale made hereunder shall not exhaust the power of
sale provided for herein; and subsequent sales may be made hereunder until all
obligations secured hereby have been satisfied, or the entire Collateral sold,
without defect or irregularity.
4.4 Uniform Commercial Code Remedies. Upon the occurrence of
--------------------------------
an Event of Default, Beneficiary shall have all rights and remedies made
available to a secured party under the Uniform Commercial Code. In addition to
those rights and remedies which are generally made available to a secured party
under the Uniform Commercial Code, Beneficiary shall have the following:
(a) Beneficiary may notify the Trustor and/or Additional
Trustor, under any account which is included within the Personal
Property, to make payment under such account directly to Beneficiary.
(b) Beneficiary may require Trustor and/or Additional
Trustor to assemble the Personal Property and to make it available to
Beneficiary at the location of the Real Property, provided that
--------
Additional Trustor shall have the obligation to assemble only that
portion of the Personal Property, if any, which is its own property.
Trustor, Additional Trustor and Beneficiary agree that such location
shall be deemed to be reasonably convenient to each of them.
(c) Any other remedy provided by this Deed of Trust, with
respect to the Personal Property, which is authorized or permitted
under the Uniform Commercial Code.
Without limiting the generality of the foregoing, to the extent that this Deed
of Trust covers both real and personal property, Beneficiary may, in the sole
discretion of Beneficiary, either alternatively, concurrently, or consecutively
in any order:
(d) Proceed as to both the real and personal property in
accordance with Beneficiary's rights and remedies in respect to the
Real Property; or
-24-
(e) Proceed as to the Real Property in accordance
with Beneficiary's rights and remedies in respect to the real property
and proceed as to the personal property in accordance with
Beneficiary's rights and remedies in respect to the personal property.
Beneficiary may, in the sole discretion of Beneficiary,
appoint Trustee as the agent of Beneficiary for the purpose of disposition of
the Personal Property in accordance with the UCC.
If Beneficiary should elect to proceed as to both the Real
Property and Personal Property collateral in accordance with Beneficiary's
rights and remedies in respect to real property:
(a) All the Real Property and all the Personal
Property may be sold, in the manner and at the time and place provided
in this Deed of Trust and security Agreement, in one lot, or in
separate lots consisting of any combination or combinations of Real and
Personal Property, as the Beneficiary may elect, in the sole discretion
of Beneficiary,
(b) Trustor and Additional Trustor acknowledge and
agree that a disposition of the Personal Property Collateral in
accordance with Beneficiary's rights and remedies in respect to Real
Property, as hereinafter provided, is a commercially reasonable
disposition of the Collateral.
4.5 Appointment of Receiver. If an Event of Default in this
-----------------------
Deed of Trust shall have occurred and be continuing, Beneficiary, as a matter of
right and without notice to Trustor or Additional Trustor or anyone claiming
under Trustor, and without regard to the then value of the Collateral or the
interest of Trustor therein, shall have the right to apply to any court having
jurisdiction to appoint a receiver or receivers of the Collateral, in a manner
consistent with applicable law. Any such receiver or receivers shall have all
the usual powers and duties of receivers in like or similar cases and all the
powers and duties of Beneficiary in case of entry as provided herein and shall
continue as Beneficiary in case of entry as provided herein and shall continue
as such and exercise all such powers until the date of confirmation of sale of
the Collateral unless such receivership is sooner terminated.
4.6 Application of Funds After Default. Except as otherwise
----------------------------------
herein provided, upon the occurrence of an Event of Default hereunder,
Beneficiary may, but shall be under no obligation to, at any time without
notice, apply any or all
-25-
sums or amounts received and held by Beneficiary to pay insurance premiums,
Impositions, or either of them, or as rents or income of the Premises, or as
insurance or condemnation proceeds, and all other sums or amounts received by
Beneficiary from or on account of Trustor or Additional Trustor or the Premises,
or otherwise, upon any indebtedness or obligation of the Trustor secured hereby,
in such manner and order as Beneficiary may elect, notwithstanding that said
indebtedness of the performance of said obligation may not yet be due. The
receipt, use or application of any such sum or amount shall not be construed to
affect the maturity of any indebtedness secured by this Deed of Trust, or any of
the rights or powers of Beneficiary or Trustee under the terms of the Loan
Documents, or any of the obligations of Trustor or any guarantor under the Loan
Documents; or to cure or waive any default or notice of default under any of the
Loan Documents; or to invalidate any act of Trustee or Beneficiary.
4.7 Costs of Enforcement. If any Event of Default occurs,
--------------------
Beneficiary and Trustee, and each of them, may employ an attorney or attorneys
to protect their rights hereunder. Trustor promises to pay to Beneficiary, on
demand, the fees and expenses of such attorneys and all other costs of enforcing
the obligations secured hereby, including, without limitation, recording fees,
the expense of a trustee's sale guarantee, Trustee's fees and expenses,
receivers' fees and expenses, and all other expenses, of whatever kind or
nature, incurred by Beneficiary and Trustee, and each of them, in connection
with the enforcement of the obligations secured hereby, whether or not such
enforcement includes the filing of a lawsuit. Until paid, such sums shall be
secured hereby and shall bear interest, from date of expenditure, at the Default
Rate.
4.8 Remedies Not Exclusive. Trustee and Beneficiary, and
----------------------
each of them, shall be entitled to enforce payment and performance of any
indebtedness or obligation secured hereby and to exercise all rights and powers
under this Deed of Trust or under any Loan Document or other agreement or any
law now or hereafter in force, notwithstanding some or all of the said
indebtedness and obligations secured hereby may now or hereafter be otherwise
secured, whether by guaranty, mortgage, deed of trust, pledge, lien, assignment
or otherwise. Neither the acceptance of this Deed of Trust nor its enforcement
whether by court action or pursuant to the power of sale or other powers herein
contained, shall prejudice or in any manner affect Trustee's or Beneficiary's
right to realize upon or enforce any other security now or hereafter held by
Trustee or Beneficiary, it being agreed that Trustee and Beneficiary, and each
of them, shall be entitled to enforce this Deed of Trust and any other security
for the obligation hereby secured now or hereafter held by Beneficiary or
Trustee in such order and manner as they may in their absolute discretion
determine.
-26-
No remedy herein conferred upon or reserved to Trustee or Beneficiary is
intended to be exclusive of any other remedy herein, or granted to Beneficiary
under any other agreement, or by law provided or permitted, but each shall be
cumulative and shall be in addition to every other remedy given hereunder, or
granted to Beneficiary under any other agreement, or now or hereafter existing
at law or in equity or by statute. Every power or remedy given by any of the
Loan Documents to the 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 the Trustee or Beneficiary, and
either of them may pursue inconsistent remedies. Trustor and Additional Trustor
may be joined in any action brought by Beneficiary to foreclose under or
otherwise enforce this Deed of Trust.
4.9 Deficiency. Trustor agrees to pay any deficiency arising
----------
from any cause after application of the proceeds of the sale of the Collateral.
Additional Trustor shall have the right to cure any default hereunder within the
times and in the manner set forth herein and in the Loan Documents, but shall
not be liable for any deficiency arising hereunder.
4.10 Request for Notice. Trustor and Additional Trustor
------------------
hereby request that a copy of any notice of default and that a copy of any
notice of sale hereunder be mailed to them at 345 North Virginia Street, Reno,
Nevada 89501.
ARTICLE 5.
MISCELLANEOUS
5.1 Amendments. This instrument 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. A copy of said instrument shall be sent by said party to
all other parties in the manner specified below.
5.2 Trustor Waiver of Rights. Trustor and Additional Trustor
------------------------
waive, to the extent permitted by law, (i) the benefit of all laws now existing
or that may hereafter be enacted providing for any appraisement before sale of
any portion of the Collateral, and, whether now existing or hereafter arising or
created, (ii) all rights of valuation, appraisement, stay of execution, notice
of election to mature or declare due the whole of the secured indebtedness and
marshaling in the event of foreclosure of the liens hereby created, and (iii)
all rights and remedies which Trustor and Additional Trustor may have or be able
to assert by reason of the laws of the State of Nevada pertaining to the rights
and remedies of sureties.
-27-
5.3 Rights of Beneficiary. Additional Trustor authorizes
---------------------
Beneficiary to perform any or all of the following acts at any time in its sole
discretion, all without notice to Additional Trustor and without affecting
Additional Trustor's obligations under this Deed of Trust, and except to the
extent otherwise expressly set forth in this Deed of Trust:
(a) Beneficiary may alter any terms of the Loan Documents,
including renewing, compromising, extending or accelerating, or
otherwise changing the time for payment of, or increasing or decreasing
the rate of interest on, the Loans or Letters of Credit referred to in
the Loan Agreement.
(b) Beneficiary may take and hold security for the Loan
Documents, accept additional or substituted security for either, and
subordinate, exchange, enforce, waive, release, compromise, fail to
perfect and sell or otherwise dispose of any such security.
(c) Beneficiary may direct the order and manner of any sale
of all or any part of any security now or later to be held for the Loan
Documents, and Beneficiary may also bid at any such sale.
(d) Beneficiary may apply any payments or recoveries from
Trustor, Additional Trustor or any other source, and any proceeds of
any security, to Trustor's obligations under the Loan Documents in such
manner, order and priority as Beneficiary may elect, whether or not
those obligations are guarantied by this Deed of Trust or secured at
the time of the application.
(e) Beneficiary may release Trustor of its liability under
the Loan Documents or any part of it.
(f) Beneficiary may substitute, add or release any one or
more guarantors or endorsers.
(g) In addition to that contemplated by the Loan Documents,
Beneficiary may extend other credit to Trustor, and may take and hold
security for the credit so extended, all without affecting Additional
Trustor's liability under this Deed of Trust.
Additional Trustor expressly agrees that until all obligations and indebtedness
of Trustor under the Loan Documents are paid and performed in full and each and
every term, covenant and condition of this Deed of Trust is fully performed,
Additional Trustor shall not be released by or because of:
-28-
(h) Any act or event which might otherwise discharge, reduce,
limit or modify Additional Trustor's obligations under this Deed of
Trust;
(i) Any waiver, extension, modification, forbearance, delay
or other act or omission of Beneficiary, or its failure to proceed
promptly or otherwise as against Trustor, Additional Trustor or any
security;
(j) Any action, omission or circumstance which might increase
the likelihood that Additional Trustor may be called upon to perform
under this Deed of Trust or which might affect the rights or remedies
of Additional Trustor as against Trustor; or
(k) Any dealings occurring at any time between Trustor and
Beneficiary, whether relating to the Loan Documents or otherwise.
Additional Trustor hereby expressly waives and surrenders any defense
to its liability under this Deed of Trust based upon any of the foregoing acts,
omissions, agreements, waivers or matters. It is the purpose and intent of this
Deed of Trust that the obligations of Additional Trustor under it shall be
absolute and unconditional under any and all circumstances.
5.4 Additional Trustor's Waivers. Additional Trustor waives:
----------------------------
(a) All statutes of limitations as a defense to any action or
proceeding brought against Additional Trustor by Beneficiary, to the
fullest extent permitted by law;
(b) Any right it may have to require Beneficiary to proceed
against Trustor, proceed against or exhaust any security held from
Trustor, or pursue any other remedy in Beneficiary's power to pursue;
(c) Any defense based on any claim that Additional Trustor's
obligations exceed or are more burdensome than those of Trustor;
(d) Any defense based on: (i) any legal disability of
Trustor, (ii) any release, discharge, modification, impairment or
limitation of the liability of Trustor to Beneficiary from any cause,
whether consented to by Beneficiary or arising by operation of law or
from any bankruptcy or other voluntary or involuntary proceeding, in or
out of court, for the adjustment of debtor-creditor relationships
("Insolvency Proceeding") and (iii) any rejection or disaffirmance of
the Loan Documents, or any
-29-
part of it, or any security held for it, in any such Insolvency
Proceeding;
(e) Any defense based on any action taken or omitted by
Beneficiary in any Insolvency Proceeding involving Trustor, including
any election to have Beneficiary's claim allowed as being secured,
partially secured or unsecured, any extension of credit by Beneficiary
to Trustor in any Insolvency Proceeding, and the taking and holding by
Beneficiary of any security for any such extension of credit;
(f) All presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor,
notices of acceptance of this Deed of Trust and of the existence,
creation, or incurring of new or additional indebtedness, and demands
and notices of every kind except for any demand or notice by
Beneficiary to Additional Trustor expressly provided for herein; and
(g) Any defense based on or arising out of any defense that
Trustor may have to the payment or performance of the Loan Documents.
5.5 Waivers of subrogation and Other Rights. Upon a default by
---------------------------------------
Trustor, Beneficiary in its sole discretion, without prior notice to or consent
of Additional Trustor, may elect to: (i) foreclose either judicially or
nonjudicially against any real or personal property security it may hold for the
Loan Documents, (ii) accept a transfer of any such security in lieu of
foreclosure, (iii) compromise or adjust the obligations under the Loan Documents
or any part of thereof or make any other accommodation with Trustor or
Additional Trustor, or (iv) exercise any other remedy against Trustor or any
security. No such action by Beneficiary shall release or limit the liability of
Additional Trustor, who shall remain liable under this Deed of Trust after the
action, even if the effect of the action is to deprive Additional Trustor of any
subrogation rights, rights of indemnity, or other rights to collect
reimbursement from Trustor for any sums paid to Beneficiary, whether contractual
or arising by operation of law or otherwise. Additional Trustor expressly agrees
that under no circumstances shall it be deemed to have any right, title,
interest or claim in or to any real or personal property to be held by
Beneficiary or any third party after any foreclosure or transfer in lieu of
foreclosure of any security for the Loan Documents.
5.6 Revival and Reinstatement. If Beneficiary is required to
-------------------------
pay, return or restore to Trustor or any other person any amounts previously
paid with respect to the Loan Documents because of any Insolvency Proceeding of
Trustor, any
-30-
stop notice or any other reason, the obligations of Additional Trustor shall be
reinstated and revived and the rights of Beneficiary shall continue with regard
to such amounts, all as though they had never been paid.
5.7 Information Regarding Trustor and the Property. Before
----------------------------------------------
signing this Deed of Trust, Additional Trustor investigated the financial
condition and business operations of Trustor, the present and former condition,
uses and ownership of the Real Property, and such other matters as Additional
Trustor deemed appropriate to assure itself of Trustor's ability to discharge
its obligations under the Loan Documents. Additional Trustor assumes full
responsibility for that due diligence, as well as for keeping informed of all
matters which may affect Trustor's ability to pay and perform its obligations to
Beneficiary. Beneficiary has no duty to disclose to Additional Trustor any
information which Beneficiary may have or receive about Trustor's financial
condition or business operations, the condition or uses of the Real Property, or
any other circumstances bearing on Trustor's ability to perform.
5.8 Prepayments of Rents. Subject to the absolute assignment
--------------------
of Rents set forth in Article III, for so long as the license set forth therein
is in effect, Additional Trustor is not prohibited from receiving any payments
required to be paid by Trustor to Additional Trustor under the Groundlease,
provided that (i) no such payment shall be made more that one month prior to the
- --------
date when due and (ii) any payment made in violation of clause (i) shall be held
in trust by Additional Trustor for the benefit of Beneficiary.
5.9 Statements by Trustor. Trustor and Additional Trustor
---------------------
shall, within ten (10) days after notice thereof from Beneficiary, deliver to
Beneficiary a written statement setting forth the amounts then unpaid and
secured by this Deed of Trust and stating whether any offset or defense exists
against such amounts.
5.10 Beneficiary Statements. For any statement or accounting
----------------------
requested by Trustor or Additional Trustor or any other person or for any other
document or instrument furnished to Trustor by Beneficiary, Beneficiary may
charge the maximum amount permitted by law at the time of the request therefor,
or if there be no such maximum, then in accordance with Beneficiary's customary
charges therefor or the actual cost to Beneficiary therefor, whichever is
greater.
5.11 Reconveyance by Trustee. Upon written request of
-----------------------
Beneficiary stating that all sums and obligations secured hereby have been paid
and fully performed, and upon surrender by Beneficiary of this Deed of Trust and
the Note to Trustee for cancellation and retention and upon payment by Trustor
of
-31-
Trustee's fees and the costs and expenses of executing and recording any
requested reconveyance, Trustee shall reconvey to Trustor and Additional
Trustor, or to the person or persons legally entitled thereto, without warranty,
any portion of the Real Property then held hereunder. The recitals in any such
reconveyance of any matter or fact shall be conclusive proof of the truthfulness
thereof. The grantee in any such reconveyance may be described as "the person or
persons legally entitled thereto."
5.12 Notices. Whenever Beneficiary, Trustor, Additional
-------
Trustor or Trustee shall desire to give or serve any notice, demand, request or
other communication with respect to this Deed of Trust, each such notice,
demand, request or other communication shall be in writing (except as otherwise
expressly permitted herein) and shall be delivered by personal service or mailed
by United States mail, as certified mail, postage prepaid, return receipt
requested, addressed to the addressee at its address set forth on Exhibit B,
affixed hereto and by this reference incorporated herein and made a part hereof.
Any party may at any time change its address for such notices by delivering or
mailing to the other parties hereto, as aforesaid, a notice of such change.
Except as otherwise provided herein; if any notice, request or other
communication is given by certified mail as aforesaid, it shall be effective on
the third day after the same is deposited in the United States mails, postage
prepaid; or if given by personal delivery, when delivered (provided, however,
that nonreceipt of any notice, request or other communication as a result of a
change of address of which the sending party was not notified or as the result
of a refusal to accept delivery shall be deemed receipt of such notice, request
or other communication).
5.13 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.
5.14 Captions. The captions or headings at the beginning of
--------
Articles, Sections and Subsections hereof are for the convenience of the
parties, are not a part of this Deed of Trust, and shall not be used in
construing it.
5.15 Invalidity of Certain Provisions. Every provision of
--------------------------------
this Deed of Trust is intended to be severable. In the event any term or
provision hereof is declared to be illegal, invalid or unenforceable for any
reason whatsoever by a court of competent jurisdiction, such illegality,
invalidity or unenforceability shall not affect the balance of the terms and
provisions hereof, which terms and provisions shall remain binding and
enforceable. If the lien of this Deed of Trust is invalid or unenforceable as to
any part of the debt, or if the lien is invalid or unenforceable as to any part
of the
-32-
Collateral, the unsecured or partially secured portion of the debt shall
be completely paid prior to the payment of the remaining and secured or
partially secured portion of the debt, and all payments made on the debt,
whether voluntary or under foreclosure or other enforcement action or procedure,
shall be considered to have been first paid on and applied to the full payment
of that portion of the debt which is not secured or fully secured by the lien of
this Deed of Trust.
5.16 Subrogation. To the extent that proceeds of the Notes
-----------
are used, either directly or indirectly, to pay any outstanding lien, charge or
prior encumbrance against the Collateral, Beneficiary shall be subrogated to any
and all rights and liens held by any owner or holder of such outstanding liens,
charges and prior encumbrances, irrespective of whether said liens, charges or
encumbrances are released.
5.17 Mandatory Arbitration. Any controversy or claim by
---------------------
Trustor or Additional Trustor, including but not limited to those arising out of
or relating to this Deed of Trust and any claim based on or arising from an
alleged tort, shall at the request of Beneficiary be determined by arbitration.
The arbitration shall be conducted in accordance with the United States
Arbitration Act (Title 9, U.S. Code), notwithstanding any choice of law
provision in this Agreement, and under the Commercial Rules of the American
Arbitration Association ("AAA"). The arbitrators shall give effect to statutes
of limitation in determining any claim. Any controversy concerning whether an
issue is arbitrable shall be determined by the arbitrators. Judgment upon the
arbitration award may be entered in any court having jurisdiction. The
institution and maintenance of an action for judicial relief or pursuit of a
provisional or ancillary remedy shall not constitute a waiver of the right of
any party, including the plaintiff, to submit the controversy or claim to
arbitration if any other party contests such action for judicial relief.
5.18 Governing Law. This Deed of Trust shall be governed by
-------------
and construed in accordance with the laws of the State of Nevada.
5.19 Statute of Limitations. Except insofar as now or
----------------------
hereafter prohibited 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.
5.20 Interpretation. In this Deed of Trust the singular shall
--------------
include the plural and the masculine shall
-33-
include the feminine and neuter and vice versa, if the context so requires; and
the word "person" shall include corporation, partnership or other form of
association.
5.21 Trust Irrevocable; Not Offset. The trust created hereby
-----------------------------
is irrevocable by Trustor and Additional Trustor. No offset or claim that
Trustor and/or Additional Trustor now or may in the future have against
Beneficiary shall relieve Trustor and/or Additional Trustor from paying the
indebtedness or performing any other obligation contained herein or secured
hereby.
5.22 Corrections. Trustor and Additional Trustor shall, upon
-----------
request of Beneficiary, promptly correct any defect, error or omission which may
be discovered in the contents hereof 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
Beneficiary to carry out more effectively the purposes hereof, 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, or to perfect and maintain
such lien and security interest.
5.23 Further Assurances. Trustor, Additional Trustor,
------------------
Beneficiary and Trustee agree to do or cause to be done such further acts and
things and to execute and deliver or to caused to be executed and delivered such
additional assignments, agreements, powers and instruments, as any of them may
reasonably require or deem advisable to keep valid and effective the charges and
lien hereof, to carry into effect the purposes of this Deed of Trust or to
better assure and confirm unto any of them their rights, powers and remedies
hereunder; and, upon request by Beneficiary, shall supply evidence of
fulfillment of each of the covenants herein contained concerning which a request
for such evidence has been made.
5.24 Execution of Instruments by Trustee. At any time, and
-----------------------------------
from time to time, without liability therefor and without notice, upon written
request of Beneficiary and presentation of this Deed of Trust and the Agreement
secured hereby for endorsement, and without affecting the personal liability of
any person for payment of the indebtedness or the performance of any other
obligation secured hereby or the effect of this Deed of Trust upon the remainder
of said Collateral, Trustee may (i) reconvene any part of the Real Property,
(ii) consent in writing to the making of any map or plat thereof, (iii) join in
granting any easement thereon, or (iv) join in any extension agreement,
agreement subordinating the lien or charge hereof, or other agreement or
instrument relating hereto or to the Collateral or any portion thereof.
-34-
5.25 Appointment of Successor Trustee. Trustee or any
--------------------------------
successor acting hereunder may resign and thereupon be discharged of the trusts
hereunder upon thirty (30) days' written notice to Beneficiary. Regardless of
whether such resignation occurs, Beneficiary may, from time to time, substitute
a successor or successors to any Trustee named herein or acting hereunder in
accordance with any statutory procedure for such substitution; or if
Beneficiary, in its sole discretion, so elects, Beneficiary may substitute such
successor or successors by recording, in the office of the recorder of the
county or counties where the Property is situated, an instrument executed by
Beneficiary, and containing the name of the original Trustor, Additional
Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed of
Trust is recorded and the name and address of the new Trustee, which instrument
shall be conclusive proof of proper substitution of such successor Trustee or
Trustees, who shall, without conveyance from the predecessor Trustee, succeed to
all its title, estate, rights, powers and duties hereunder.
5.26 Successors and Assigns. This Deed of Trust applies
----------------------
to, inures to the benefit of and binds all parties hereto, their heirs,
legatees, devisees, administrators, executors, successors and assigns, except
that the provisions of Section 5.29 are personal to Additional Trustor and its
general partners, and may not be assigned. Any assignment in violation of this
Section shall be void.
5.27 Fixture Filing. This deed of trust is being
--------------
recorded as a fixture filing and covers goods which are, and goods which become,
fixtures on the Premises.
5.28 Limitation on Maturity. Notwithstanding any other
----------------------
provision of this Deed of Trust to the contrary, Beneficiary shall not enter
into any agreement providing for an extension of the maturity of the Notes to a
date which is later than June 30, 2027.
5.29 No Personal Obligations of Additional Trustor. It is
---------------------------------------------
agreed that neither Additional Trustor, nor any partners, shareholders,
directors, officers, employees, trustees, beneficiaries, or successors and
assigns of Additional Trustor as the owners of the fee interest in Parcel 2
shall have any personal liability with respect to this Deed of Trust or the
obligations secured hereby. As against Additional Trustor and such partners,
shareholders, directors, officers, employees, trustees, beneficiaries,
successors and assigns, Beneficiary's recourse under this Deed of Trust shall be
limited to the Real Estate, the Real Property and the Personal Property (if any
is owned by Additional Trustor) described herein, provided, however, that the
-------- -------
foregoing provisions of this paragraph shall not (a) constitute a waiver of any
obligation evidenced by this
-35-
Deed of Trust, (b) limit the right of Beneficiary to name Additional Trustor as
a party defendant in any action or suit for judicial foreclosure and sale under
this Deed of Trust so long as no judgment in the nature of a deficiency judgment
shall be enforced against Additional Trustor except to the extent of such Real
Estate, Real Property or Personal Property, (c) constitute a waiver by
Beneficiary of any rights to reimbursement for actual, or out-of-pocket, losses,
costs or expenses, or any other remedy at law or equity, against Additional
Trustor by reason of (i) fraudulent acts or omissions of Additional Trustor, or
(ii) willful misapplication by Additional Trustor of any insurance proceeds,
condemnation awards or tenant security deposits, or of any rental or other
income required by this Deed of Trust to be paid to the Beneficiary, or (d) in
any manner limit the recourse of Beneficiary to Trustor.
5.30 Reconveyances. By acceptance of this Deed of Trust,
-------------
Beneficiary agrees that, prior to the date upon which the principal obligations
evidenced by the Notes are due (whether at the final maturity thereof or by
acceleration), it shall not release or reconvey all or any material portion of
the real property described on Exhibit A as Parcels 1 or 3, without the prior
written consent of Trustor and Additional Trustor. Without the prior written
consent of Additional Trustor, Trustor shall not request or receive any release
or reconveyance of any portion of Parcels 1 or 3, unless Parcel 2 is also
released or reconveyed.
5.31 The Groundlease. Trustor and Additional Trustor
---------------
represent and warrant that the Groundlease has not been amended since March 25,
1994, and agree that the Beneficiary shall be entitled to continue to rely upon
the Ground Lessor Estoppel Certificate dated as March 25, 1994 and delivered in
connection with the Original Loan Agreement.
IN WITNESS WHEREOF, Trustor and Additional Trustor have caused
this Deed of Trust to be executed by their duly authorized representatives as of
the day and year first above written.
"Trustor":
ELDORADO RESORTS LLC,
a Nevada limited liability company
By________________________________________
Donald L. Carano, Chief Executive Officer
-36-
"Additional Trustor"
C.S.&Y. ASSOCIATES
a Nevada General Partnership
By
-------------------------------------------
Donald L. Carano, individually and as
Trustee of The Sonya Carano Trust under
Agreement dated January 16, 1979
General Partner
By
-------------------------------------------
George E. Yori, as Co-Trustee of The George
Yori and Genevieve Yori Family Trust under
Agreement dated September 28, 1981
General Partner
By
-------------------------------------------
Genevieve K. Yori, as Co-Trustee of The
George Yori and Genevieve Yori Family Trust
under Agreement dated September 28, 1991
General Partner
By
-------------------------------------------
George L. Siri, as Co-Trustee of The Siri
Family Trust, under Agreement dated
December 13, 1991
General Partner
By
-------------------------------------------
Susan B. Siri, as Co-Trustee of The Siri
Family Trust, under Agreement dated
December 13, 1991
General Partner
By
-------------------------------------------
Lena Carano, as Trustee of The William and
Lena Carano Family Trust - Exemption Trust,
under Trust Agreement dated April 10, 1984
General Partner
-37-
By
-------------------------------------------
Lena Carano, as Trustee of The William and
Lena Carano Family Trust - Survivors Trust,
under Trust Agreement dated April 10, 1984
General Partner
By
-------------------------------------------
Caryl Stringham, as Trustee of The Caryl
Stringham Trust, under Trust Agreement
dated January 28, 1992
General Partner
By
-------------------------------------------
Lawrence Yori, as Trustee of The Lawrence
Yori Trust, under Trust Agreement dated
November 2, 1992
General Partner
By
-------------------------------------------
Daniel E. Siri, as Co-Trustee of The Siri
1993 Irrevocable Trust, under Trust
Agreement dated June 18, 1992
General Partner
By
-------------------------------------------
Jeffrey L. Siri, as Co-Trustee of The Siri
1993 Irrevocable Trust, under Trust
Agreement dated June 18, 1992
General Partner
By
-------------------------------------------
Sally Dennison-Steinhauser, as Co-Trustee
of The Siri 1993 Irrevocable Trust, under
Trust Agreement dated June 18, 1992
General Partner
-38-
STATE OF NEVADA )
) ss.
COUNTY OF ___________________________________)
On_____________________, 1996, personally appeared before me, a
Notary Public,________________________, personally known (or proved) to me to
be the person whose name is subscribed to the above instrument who acknowledged
that __he executed the instrument.
- ----------------------------------------
Notary Public
STATE OF NEVADA )
) ss.
COUNTY OF____________________________________)
On______________________, 1996, personally appeared before me, a
Notary Public,_________________________, personally known (or proved) to me to
be the person whose name is subscribed to the above instrument who acknowledged
that __he executed the instrument.
- -----------------------------------------
Notary Public
STATE OF NEVADA )
) ss.
COUNTY OF____________________________________)
On____________________________, 1996, personally appeared before
me, a Notary Public,_________________________, personally known (or proved) to
me to be the person whose name is subscribed to the above instrument who
acknowledged that __he executed the instrument.
- -----------------------------------------
Notary Public
-39-
STATE OF NEVADA )
) ss.
COUNTY OF____________________________________)
On____________________________, 1996, personally appeared before
me, a Notary Public,_________________________, personally known (or proved) to
me to be the person whose name is subscribed to the above instrument who
acknowledged that __he executed the instrument.
- -----------------------------------------
Notary Public
STATE OF NEVADA )
) ss.
COUNTY OF____________________________________)
On____________________________,1996, personally appeared before
me, a Notary Public,________________________ , personally known (or proved) to
me to be the person whose name is subscribed to the above instrument who
acknowledged that __he executed the instrument.
- -----------------------------------------
Notary Public
STATE OF NEVADA )
) ss.
COUNTY OF____________________________________)
On___________________________ , 1996, personally appeared before
me, a Notary Public,________________________ , personally known (or proved) to
me to be the person whose name is subscribed to the above instrument who
acknowledged that __he executed the instrument.
- -----------------------------------------
Notary Public
-40-
STATE OF NEVADA )
) ss.
COUNTY OF____________________________________)
On___________________________ , 1996, personally appeared before
me, a Notary Public,________________________ , personally known (or proved) to
me to be the person whose name is subscribed to the above instrument who
acknowledged that __he executed the instrument.
- -----------------------------------------
Notary Public
STATE OF NEVADA )
) ss.
COUNTY OF WASHOE_____________________________)
On____________________________, 1996, personally appeared before
me, a Notary Public,________________________ , personally known (or proved) to
me to be the person whose name is subscribed to the above instrument who
acknowledged that __he executed the instrument.
- -----------------------------------------
Notary Public
STATE OF NEVADA )
) ss.
COUNTY OF WASHOE_____________________________)
On this ____ day of _________, in the year 1996, before me
______________, a notary public in and for said state, personally appeared
____________________, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to this
instrument, and acknowledged that she executed it.
- -----------------------------------------
Notary Public
-41-
STATE OF NEVADA )
) ss.
COUNTY OF____________________________________)
On____________________________, 1996, personally appeared before
me, a Notary Public,_________________________, personally known (or proved) to
me to be the person whose name is subscribed to the above instrument who
acknowledged that __he executed the instrument.
- -----------------------------------------
Notary Public
STATE OF NEVADA )
) ss.
COUNTY OF____________________________________)
On____________________________, 1996, personally appeared before
me, a Notary Public,________________________ , personally known (or proved) to
me to be the person whose name is subscribed to the above instrument who
acknowledged that __he executed the instrument.
- -----------------------------------------
Notary Public
STATE OF NEVADA )
) ss.
COUNTY OF____________________________________)
On____________________________, 1996, personally appeared before
me, a Notary Public,_________________________, personally known (or proved) to
me to be the person whose name is subscribed to the above instrument who
acknowledged that __he executed the instrument.
- -----------------------------------------
Notary Public
-42-
STATE OF NEVADA )
) ss.
COUNTY OF____________________________________)
On____________________________, 1996, personally appeared before
me, a Notary Public,_________________________, personally known (or proved) to
me to be the person whose name is subscribed to the above instrument who
acknowledged that __he executed the instrument.
- -----------------------------------------
Notary Public
STATE OF NEVADA )
) ss.
COUNTY OF____________________________________)
On____________________________, 1996, personally appeared before
me, a Notary Public,_________________________, personally known (or proved) to
me to be the person whose name is subscribed to the above instrument who
acknowledged that __he executed the instrument.
- -----------------------------------------
Notary Public
-43-
EXHIBIT A
---------
-44-
EXHIBIT B
---------
Notice Addresses
If to Beneficiary:
- -----------------
Bank of America National Trust and Savings Association, as
Administrative Agent
555 South Flower Street, 10th Floor
Los Angeles, California 90017
Attention: Scott Faber, Vice President
If to Trustor:
- -------------
Eldorado Resorts LLC
295 North Virginia Street
Reno, Nevada 89501
Attention: Robert Jones, Chief Financial Officer
with a copy to Additional Trustor
If to Additional Trustor:
- ------------------------
C.S.& Y. Associates
c/o Daniel E. Siri
7 Rita Way
Orinda, California 94563
with a copy to:
C.S.& Y. Associates
c/o Jeffrey L. Siri
45 Scattergun Court
Reno, Nevada 89509
-45-
[EXHIBIT D]
GUARANTY
--------
This Guaranty dated as of______________ , 1996, is made by
ELDORADO CAPITAL CORP., a Nevada corporation ("Guarantor") in favor of Bank of
America National Trust and Savings Association, as Administrative Agent for the
benefit of the Banks that are party to the Loan Agreement referred to below from
time to time (collectively with the Banks, "Lender"), with reference to the
following facts:
RECITALS
--------
A. Pursuant to the Amended and Restated Loan Agreement
dated as of July 31, 1996 among Eldorado Resorts LLC, a Nevada limited liability
corporation ("Borrower") and Bank of America National Trust and Savings
Association, as Administrative Agent and sole initial Bank (as it may hereafter
be amended, extended, renewed, supplemented, or otherwise modified from time to
time, being the "Loan Agreement"), certain credit facilities are being made
available to Borrower.
B. As a condition to the availability of such credit
facilities, Guarantor is required to enter into this Guaranty and to guaranty
the Guarantied Obligations as hereinafter provided.
C. Guarantor expects to realize direct and indirect
benefits as the result of the availability of the aforementioned credit
facilities to Borrower.
AGREEMENT
---------
NOW, THEREFORE, in order to induce Lender to continue to
extend the aforementioned credit facilities, and for other good and valuable
consideration, the receipt and adequacy of which hereby are acknowledged,
Guarantor hereby represents, warrants, covenants, agrees and guaranties as
follows:
1. Definitions. This Guaranty is the Guaranty referred to
-----------
in the Loan Agreement and is one of the Loan Documents. Terms defined in the
Loan Agreement and not otherwise defined in this Guaranty shall have the
meanings given those terms in the Loan Agreement when used herein and such
definitions are incorporated herein as though set forth in full. In addition, as
used herein, the following terms shall have the meanings respectively set forth
after each:
-1-
"Guarantied Obligations" means all Obligations of Borrower or
----------------------
any Party at any time and from time to time owed to Lender
under the Loan Agreement and the other Loan Documents, whether
due or to become due, matured or unmatured, liquidated or
unliquidated, or contingent or noncontingent, including
---------
obligations of performance as well as obligations of payment,
and including interest that accrues after the commencement of
---------
any bankruptcy or insolvency proceeding by or against
Borrower, Guarantor or any other Person.
"Lender" means the Administrative Agent (acting as the
------
Administrative Agent and/or on behalf of the Banks), and the
Banks, and each of them, and any one or more of them. Subject
to the terms of the Loan Agreement, any right, remedy,
privilege or power of Lender may be exercised by the
Administrative Agent, or by the Majority Banks, or by any Bank
acting with the consent of the Majority Banks.
"Guaranty" means this Guaranty, and any extensions,
--------
modifications, renewals, restatements, reaffirmations,
supplements or amendments hereof.
2. Guaranty of Guarantied Obligations. Guarantor hereby
----------------------------------
irrevocably, unconditionally guaranties and promises to pay and perform on
demand the Guarantied Obligations and each and every one of them, including all
---------
amendments, modifications, supplements, renewals or extensions of any of them,
whether such amendments, modifications, supplements, renewals or extensions are
evidenced by new or additional instruments, documents or agreements or change
the rate of interest on any Guarantied Obligation or the security therefor, or
otherwise.
3. Nature of Guaranty. This Guaranty is irrevocable and
------------------
continuing in nature and relates to any Guarantied Obligations now existing or
hereafter arising. This Guaranty is a guaranty of prompt and punctual payment
and performance and is not merely a guaranty of collection.
4. Relationship to Other Agreements. Nothing herein shall
--------------------------------
in any way modify or limit the effect of terms or conditions set forth in any
other document, instrument or agreement executed by Guarantor or in connection
with the Guarantied Obligations, but each and every term and condition hereof
shall be in addition thereto. All provisions contained in the Loan Agreement or
any other Loan Document that apply to
-2-
Loan Documents generally are fully applicable to this Guaranty and are
incorporated herein by this reference.
5. Subordination of Indebtedness of Borrower to Guarantor to the
-------------------------------------------------------------
Guarantied Obligations. Guarantor agrees that:
- ----------------------
(a) Any indebtedness of Borrower now or hereafter owed to
Guarantor hereby is subordinated to the Guarantied Obligations.
(b) If Lender so requests, upon the occurrence and during the
continuance of any Event of Default, any such indebtedness of Borrower now
or hereafter owed to Guarantor shall be collected, enforced and received by
Guarantor as trustee for Lender and shall be paid over to Lender in kind on
account of the Guarantied Obligations, but without reducing or affecting in
any manner the obligations of Guarantor under the other provisions of this
Guaranty.
(c) Should Guarantor fail to collect or enforce any such
indebtedness of Borrower now or hereafter owed to Guarantor and pay the
proceeds thereof to Lender in accordance with Section 5(b) hereof, Lender
---
as Guarantor's attorney-in-fact may do such acts and sign such documents in
Guarantor's name as Lender considers necessary or desirable to effect such
collection, enforcement and/or payment.
6. Statutes of Limitations and Other Laws. Until the Guarantied
--------------------------------------
Obligations shall have been paid and performed in full, all the rights,
privileges, powers and remedies granted to Lender hereunder shall continue to
exist and may be exercised by Lender at any time and from time to time
irrespective of the fact that any of the Guarantied Obligations may have become
barred by any statute of limitations. Guarantor expressly waives the benefit of
any and all statutes of limitation, and any and all Laws providing for exemption
of property from execution or for evaluation and appraisal upon foreclosure, to
the maximum extent permitted by applicable Laws.
7. Waivers and Consents. Guarantor acknowledges that the obligations
--------------------
undertaken herein involve the guaranty of obligations of Persons other than
Guarantor and, in full recognition of that fact, consents and agrees that Lender
may, at any time and from time to time, without notice or demand, and without
affecting the enforceability or continuing effectiveness hereof: (a)
supplement, modify, amend, extend, renew, accelerate or otherwise change the
time for payment or the terms of the Guarantied Obligations or any part thereof,
-3-
including any increase or decrease of the rate(s) of interest thereon;
- ---------
(b) supplement, modify, amend or waive, or enter into or give any agreement,
approval or consent with respect to, the Guarantied Obligations or any part
thereof, or any of the Loan Documents to which Guarantor is not a party or any
additional security or guaranties, or any condition, covenant, default, remedy,
right, representation or term thereof or thereunder; (c) accept new or
additional instruments, documents or agreements in exchange for or relative to
any of the Loan Documents or the Guarantied Obligations or any part thereof;
(d) accept partial payments on the Guarantied Obligations; (e) receive and hold
additional security or guaranties the Guarantied Obligations or any part
thereof; (f) release, reconvey, terminate, waive, abandon, fail to perfect,
subordinate, exchange, substitute, transfer and/or enforce any security or
guaranties, and apply any security and direct the order or manner of sale
thereof as Lender in its sole and absolute discretion may determine; (g) release
any Person from any personal liability with respect to the Guarantied
Obligations or any part thereof; (h) settle, release on terms satisfactory to
Lender or by operation of applicable Laws or otherwise liquidate or enforce any
Guarantied Obligations and any security or guaranty therefor in any manner,
consent to the transfer of any security and bid and purchase at any sale; and/or
(i) consent to the merger, change or any other restructuring or termination of
the corporate existence of Borrower, Guarantor or any other Person, and
correspondingly restructure the Guarantied Obligations, and any such merger,
change, restructuring or termination shall not affect the liability of Guarantor
or the continuing effectiveness hereof, or the enforceability hereof with
respect to all or any part of the Guarantied Obligations.
Upon the occurrence and during the continuance of any Event of
Default, Lender may enforce this Guaranty independently as to Guarantor and
independently of any other remedy or security Lender at any time may have or
hold in connection with the Guarantied Obligations. Guarantor expressly waives
any right to require Lender to marshal assets in favor of Borrower, and agrees
that Lender may proceed against Borrower, or upon or against any security or
remedy, before proceeding to enforce this Guaranty, in such order as it shall
determine in its sole and absolute discretion. Lender may file a separate
action or actions against Borrower and/or Guarantor without respect to whether
action is brought or prosecuted with respect to any security or against any
other Person, or whether any other Person is joined in any such action or
actions. Guarantor agrees that Lender and Borrower and any Affiliates of
Borrower may deal with each other in connection with the Guarantied Obligations
or otherwise, or alter any contracts or agreements now or hereafter existing
between any of them, in any manner whatsoever, all without in any way altering
or affecting the security of this Guaranty. Lender's rights
-4-
hereunder shall be reinstated and revived, and the enforceability of this
Guaranty shall continue, with respect to any amount at any time paid on account
of the Guarantied Obligations which thereafter shall be required to be restored
or returned by Lender upon the bankruptcy, insolvency or reorganization of
Borrower or any other Person, or otherwise, all as though such amount had not
been paid. The rights of Lender created or granted herein and the
enforceability of this Guaranty with respect to Guarantor at all times shall
remain effective to guaranty the full amount of all the Guarantied Obligations
even though the Guarantied Obligations, or any part thereof, or any security or
guaranty therefor, may be or hereafter may become invalid or otherwise
unenforceable as against Borrower or any other guarantor or surety and whether
or not Borrower shall have any personal liability with respect thereto.
Guarantor expressly waives any and all defenses now or hereafter arising or
asserted by reason of (a) any disability or other defense of Borrower with
respect to the Guarantied Obligations, (b) the unenforceability or invalidity of
any security or guaranty for the Guarantied Obligations or the lack of
perfection or continuing perfection or failure of priority of any security for
the Guarantied Obligations, (c) the cessation for any cause whatsoever of the
liability of Borrower (other than by reason of the full payment and performance
of all Guarantied Obligations), (d) any failure of Lender to marshal assets in
favor of Borrower or any other person, (e) except as otherwise provided in this
Guaranty, any failure of Lender to give notice of sale or other disposition of
Collateral to Guarantor or any other Person or any defect in any notice that may
be given in connection with any sale or disposition of Collateral, (f) any
failure of Lender to comply with applicable Laws in connection with the sale or
other disposition of any Collateral or other security for any Guarantied
Obligation, including without limitation, any failure of Lender to conduct a
commercially reasonable sale or other disposition of any Collateral or other
security for any Guarantied Obligation, (g) any act or omission of Lender or
others that directly or indirectly results in or aids the discharge or release
of Borrower or the Guarantied Obligations or any security or guaranty therefor
by operation of law or otherwise, (h) any Law which provides that the obligation
of a surety or guarantor must neither be larger in amount nor in other respects
more burdensome than that of the principal or which reduces a surety's or
guarantor's obligation in proportion to the principal obligation, (i) any
failure of Lender to file or enforce a claim in any bankruptcy or other
proceeding with respect to any Person, (j) the election by Lender, in any
bankruptcy proceeding of any Person, of the application or non-application of
Section llll(b)(2) of the United States Bankruptcy Code, (k) any extension of
credit or the grant of any Lien under Section 364 of the United States
Bankruptcy Code, (1) any use of cash collateral under
-5-
Section 363 of the United States Bankruptcy Code, (m) any agreement or
stipulation with respect to the provision of adequate protection in any
bankruptcy proceeding of any Person, (n) the avoidance of any Lien in favor of
Lender for any reason, (o) any bankruptcy, insolvency, reorganization,
arrangement, readjustment of debt, liquidation or dissolution proceeding
commenced by or against any Person, including any discharge of, or bar or stay
---------
against collecting, all or any of the Guarantied Obligations (or any interest
thereon) in or as a result of any such proceeding, (p) to the extent permitted
in paragraph 40.495(4) of the Nevada Revised Statutes ("NRS"), the benefits of
the one-action rule under NRS Section 40.430, or (q) any action taken by Lender
that is authorized by this Section or any other provision of any Loan Document.
Guarantor expressly waives all setoffs and counterclaims and all presentments,
demands for payment or performance, notices of nonpayment or nonperformance,
protests, notices of protest, notices of dishonor and all other notices or
demands of any kind or nature whatsoever with respect to the Guarantied
Obligations, and all notices of acceptance of this Guaranty or of the existence,
creation or incurrence of new or additional Guarantied Obligations.
8. Condition of Borrower and its Subsidiaries. Guarantor represents
------------------------------------------
and warrants to Lender that Guarantor has established adequate means of
obtaining from Borrower and its Subsidiaries, on a continuing basis, financial
and other information pertaining to the businesses, operations and condition
(financial and otherwise) of Borrower and its Subsidiaries and their Properties,
and Guarantor now is and hereafter will be completely familiar with the
businesses, operations and condition (financial and otherwise) of Borrower and
its Subsidiaries and their Properties. Guarantor hereby expressly waives and
relinquishes any duty on the part of Lender (should any such duty exist) to
disclose to Guarantor any matter, fact or thing related to the businesses,
operations or condition (financial or otherwise) of Borrower or its Subsidiaries
or their Properties, whether now known or hereafter known by Lender during the
life of this Guaranty. With respect to any of the Guarantied Obligations,
Lender need not inquire into the powers of Borrower or any Subsidiaries thereof
or the officers or employees acting or purporting to act on their behalf, and
all Guarantied Obligations made or created in good faith reliance upon the
professed exercise of such powers shall be secured hereby.
9. Liens on Real Property. In the event that all or any part of the
----------------------
Guarantied Obligations at any time are secured by any one or more deeds of trust
or mortgages or other instruments creating or granting Liens on any interests in
real Property, Guarantor authorizes Lender, upon the occurrence of and during
the continuance of any Event of Default, at its sole
-6-
option, without notice or demand and without affecting any Guarantied
Obligations of Guarantor, the enforceability of this Guaranty, or the validity
or enforceability of any Liens of Lender on any Collateral, to foreclose any or
all of such deeds of trust or mortgages or other instruments by judicial or
nonjudicial sale. Guarantor expressly waives any defenses to the enforcement of
this Guaranty or any rights of Lender created or granted hereby or to the
recovery by Lender against Borrower, Guarantor or any other Person liable
therefor of any deficiency after a judicial or nonjudicial foreclosure or sale,
even though such a foreclosure or sale may impair the subrogation rights of
Guarantor or may preclude Guarantor from obtaining reimbursement or contribution
from Borrower. Guarantor expressly waives any defenses or benefits that may be
derived from NRS Section 40.430 and judicial decisions relating thereto, any
provision of Nevada Law which is comparable to California Code of Civil
Procedure (S)(S) 580a, 580b, 580d or 726, or comparable provisions of the Laws
of any other jurisdiction, and all other suretyship defenses it otherwise might
or would have under Nevada Law or other applicable Law. Guarantor expressly
waives any right to receive notice of any judicial or nonjudicial foreclosure or
sale of any real Property or interest therein subject to any such deeds of trust
or mortgages or other instruments and Guarantor's or any other Person's failure
to receive any such notice shall not impair or affect Guarantor's Obligations or
the enforceability of this Guaranty or any rights of Lender created or granted
hereby.
10. Waive of Rights of Subrogation.
-------------------------------
Notwithstanding anything to the contrary elsewhere contained herein or in any
other Loan Document to which Guarantor is a Party, Guarantor hereby expressly
waives with respect to Borrower and its successors and assigns (including any
---------
surety) and any other Person which is directly or indirectly a creditor of
Borrower or any surety for Borrower, any and all rights at Law or in equity to
subrogation, to reimbursement, to exoneration, to contribution, to setoff or to
any other rights that could accrue to a surety against a principal, to a
guarantor against a maker or obligor, to an accommodation party against the
party accommodated, or to a holder or transferee against a maker, and which
Guarantor may have or hereafter acquire against Borrower or any other such
Person in connection with or as a result of Guarantor's execution, delivery
and/or performance of this Guaranty or any other Loan Document to which
Guarantor is a party. Guarantor agrees that it shall not have or assert any such
rights against Borrower or its successors and assigns or any other Person
(including any surety) which is directly or indirectly a creditor of Borrower or
---------
any surety for Borrower, either directly or as an attempted setoff to any action
commenced against Guarantor by Borrower (as borrower or in any other capacity),
Lender or any other such Person. Guarantor hereby acknowledges and agrees that
-7-
this waiver is intended to benefit Borrower and Lender and shall not limit or
otherwise affect Guarantor's liability hereunder, under any other Loan Document
to which Guarantor is a party, or the enforceability hereof or thereof.
11. Understandings With Respect to Waivers and Consents. Guarantor
---------------------------------------------------
warrants and agrees that each of the waivers and consents set forth herein are
made with full knowledge of their significance and consequences, with the
understanding that events giving rise to any defense or right waived may
diminish, destroy or otherwise adversely affect rights which Guarantor otherwise
may have against Borrower, Lender or others, or against any Collateral, and
that, under the circumstances, the waivers and consents herein given are
reasonable and not contrary to public policy or Law. Guarantor acknowledges that
it has either consulted with legal counsel regarding the effect of this Guaranty
and the waivers and consents set forth herein, or has made an informed decision
not to do so. If this Guaranty or any of the waivers or consents herein are
determined to be unenforceable under or in violation of applicable Law, this
Guaranty and such waivers and consents shall be effective to the maximum extent
permitted by Law.
12. Representations and Warranties. Guarantor hereby makes each and
------------------------------
every representation and warranty applicable to Guarantor set forth in Article 4
---------
of the Loan Agreement as if set forth in full herein.
13. Costs and Expenses. Guarantor agrees to pay to Lender all costs
------------------
and expenses (including, without limitation, reasonable attorneys' fees and
---------
disbursements) incurred by Lender in the enforcement or attempted enforcement of
this Guaranty, whether or not an action is filed in connection therewith, and in
connection with any waiver or amendment of any term or provision hereof. All
advances, charges, costs and expenses, including reasonable attorneys' fees and
---------
disbursements (including the reasonably allocated cost of legal counsel employed
by Lender), incurred or paid by Lender in exercising any right, privilege, power
or remedy conferred by this Guaranty, or in the enforcement or attempted
enforcement thereof, shall be subject hereto and shall become a part of the
Guarantied Obligations and shall be paid to Lender by Guarantor, immediately
upon demand, together with interest thereon at the rate(s) provided for under
the Loan Agreement.
14. Construction of this Guaranty. This Guaranty is intended to give
-----------------------------
rise to absolute and unconditional obligations on the part of Guarantor; hence,
--------------------------
in any construction hereof, notwithstanding any provision of any Loan Document
--------------------------------------------------
to the contrary, this Guaranty shall be construed strictly in favor of Lender in
- ---------------
order to accomplish its stated purpose.
-8-
15. Liability. Notwithstanding anything to the contrary elsewhere
---------
contained herein or in any Loan Document to which Guarantor is a Party, the
aggregate liability of Guarantor hereunder for payment and performance of the
Guarantied Obligations shall not exceed an amount which, in the aggregate, is
$1.00 less than that amount which if so paid or performed would constitute or
result in a "fraudulent transfer", "fraudulent conveyance", or terms of similar
import, under applicable state or federal Law, including without limitation,
Section 548 of the United States Bankruptcy Code. The liability of Guarantor
hereunder is independent of any other guaranties at any time in effect with
respect to all or any part of the Guarantied Obligations, and Guarantor's
liability hereunder may be enforced regardless of the existence of any such
guaranties. Any termination by or release of any guarantor in whole or in part
shall not affect the continuing liability of Guarantor hereunder, and no notice
of any such termination or release shall be required. The execution hereof by
Guarantor is not founded upon an expectation or understanding that there will be
any other guarantor of the Guarantied Obligations.
16. WAIVER OF JURY TRIAL. GUARANTOR AND LENDER EXPRESSLY WAIVE THEIR
--------------------
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS GUARANTY, THE LOAN
AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY
OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER NOW EXISTING OR
HEREAFTER ARISING AND WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR
OTHERWISE. GUARANTOR AND LENDER AGREE THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING
THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL
BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR
OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS GUARANTY, THE LOAN AGREEMENT OR THE OTHER LOAN DOCUMENTS
OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS GUARANTY, THE LOAN
AGREEMENT AND THE OTHER LOAN DOCUMENTS. ANY PARTY HERETO MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
-9-
17. THIS GUARANTY SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEVADA WITHOUT REFERENCE
TO THE CONFLICT OF LAWS OR CHOICE OF LAW PRINCIPLES THEREOF.
IN WITNESS WHEREOF, Guarantor has executed this Guaranty by its duly
authorized officer as of the date first written above.
"Guarantor"
ELDORADO CAPITAL CORP.,
a Nevada corporation
By:_______________________
Title: ___________________
-10-
[EXHIBIT E]
NOTE
----
$50,000,000 July 31, 1996
Reno, Nevada
FOR VALUE RECEIVED, the undersigned promises to pay to the order of
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION (the "Bank") the
principal amount of FIFTY MILLION and 00/100 DOLLARS ($50,000,000) in
consideration of Advances made by Bank pursuant to the Commitment under the Loan
Agreement hereinafter described, payable as hereinafter set forth. The
undersigned promises to pay interest on the principal amount hereof remaining
unpaid from time to time from the date of each Loan hereunder until the date of
payment in full, payable as hereinafter set forth.
Reference is made to the Amended and Restated Loan Agreement dated as
of July 31, 1996 among the undersigned, as Borrower, the Banks therein named,
and Bank of America National Trust and Savings Association, as Administrative
Agent for itself and for the Banks (the "Loan Agreement"). Terms defined in the
Loan Agreement and not otherwise defined herein are used herein with the
meanings defined for those terms in the Loan Agreement. This is one of the Notes
referred to in the Loan Agreement, and any holder hereof is entitled to all of
the rights, remedies, benefits and privileges provided for in the Loan Agreement
as originally executed or as it may from time to time be supplemented, modified
or amended. The Loan Agreement, among other things, contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events
upon the terms and conditions therein specified.
The principal indebtedness evidenced by this Note shall be payable
as provided in the Loan Agreement and in any event on the Maturity Date.
Interest shall be payable on the outstanding daily unpaid principal
amount of each Loan hereunder from the date thereof until payment in full and
shall accrue and be payable at the rates and on the dates set forth in the Loan
Agreement both before and after default and before and after maturity and
judgment, with interest on overdue interest to bear interest at the Default
Rate, to the fullest extent permitted by applicable Law.
The amount of each payment hereunder shall be made to the
Administrative Agent at the Administrative Agent's Office for the account of the
Bank, in lawful money of the United States of America and in immediately
available funds not later than 11:00 a.m., California time, on the day of
payment (which
-1-
must be a Banking Day). All payments received after 11:00 a.m., California time,
on any Banking Day, shall be deemed received on the next succeeding Banking Day.
The Bank shall use its best efforts to keep a record of Advances made by it and
payments of principal with respect to this Note, and such record shall be
presumptive evidence of the principal amount owing under this Note.
The undersigned hereby promises to pay all costs and expenses of any
holder hereof incurred in collecting the undersigned's obligations hereunder or
in enforcing or attempting to enforce any of any holder's rights hereunder,
including reasonable attorneys' fees and disbursements, whether or not an action
is filed in connection therewith, subject however to the provisions of Section
11.3 of the Loan Agreement.
- ----
The undersigned hereby waives presentment, demand for payment,
dishonor, notice of dishonor, protest, notice of protest and any other notice or
formality, to the fullest extent permitted by applicable Laws, except as
------
otherwise provided in any Loan Document.
THIS NOTE SHALL BE DELIVERED TO AND ACCEPTED BY THE BANK, OR BY THE
ADMINISTRATIVE AGENT ON THE BANK'S BEHALF, IN THE STATE OF NEVADA, AND SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LOCAL LAWS
THEREOF.
ELDORADO RESORTS LLC PARTNERSHIP, a
Nevada limited liability company
By: _____________________________
Donald L. Carano, Chief Executive
Officer
-2-
LOANS AND PAYMENTS OF PRINCIPAL
- --------------------------------------------------------------------------------
Amount of Amount of Unpaid Notation
Date Loans Principal Paid Principal Made by
Balance
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------
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-3-
[Exhibit G]
PRICING CERTIFICATE
To: Bank of America National Trust and Savings Association, as
Administrative Agent
This Certificate is delivered with reference to that certain Amended
and Restated loan Agreement dated as of July 31, 1996 among Eldorado Resorts
LLC, a Nevada limited liability company, the Banks therein named, and Bank of
America National Trust and Savings Association, as Administrative Agent for
itself and for the Banks (the "Loan Agreement"). Capitalized terms used herein
are used with the meanings set forth in the loan Agreement, as amended as of the
date of this Pricing Certificate.
The undersigned Senior Officer of Borrower hereby certifies that, as
of the last day of the Fiscal Quarter ended ________________ (the "Subject
Fiscal Quarter"), the Pricing Leverage Ratio was :1.00. The Pricing Leverage
Ratio as of the last day of the Subject Fiscal Quarter was calculated as the
ratio of:
(a) the average daily outstanding principal
amount of Funded Debt for the
Subject Fiscal Quarter; to
$________________________
(b) Consolidated EBITDA for the twelve month
fiscal period ended on the last day
of the Subject Fiscal Quarter.
$________________________
IN WITNESS WHEREOF, this Pricing Certificate has been executed as of the date
set forth below.
ELDORADO RESORTS LIC
By:________________________________
___________________________________
[Printed Name and Title of Officer]
Dated:_____________________________
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[Exhibit H]
REQUEST FOR LETTER OF CREDIT
----------------------------
This REQUEST FOR LETTER OF CREDIT is executed and delivered by Eldorado
Resorts LLC, a Nevada limited liability company ("Borrower") to Bank of America
National Trust and Savings Association, as Administrative Agent, pursuant to the
Amended and Restated Loan Agreement (the "Agreement") dated as of July 31, 1996,
entered into by Borrower and Bank of America National Trust and Savings Associ-
ation, as Administrative Agent and sole initial Bank. Any terms used herein and
not defined herein shall have the meanings defined in the Agreement.
Borrower hereby requests that the Issuing Bank issue a Letter of Credit
for the account of Borrower pursuant to the Agreement, as follows:
Face Amount of Letter of Credit: $___________.
Date of Issuance: _______________, 19__.
Beneficiary under Letter of Credit:
Name: -------------------------------
Address:
--------------------------
--------------------------
--------------------------
Expire Date: _______________, 19__
In connection with the Letter of Credit requested herein, Borrower
hereby represents, warrants and certifies to the Banks that, as of the date of
the Letter of Credit requested herein:
(i) except as disclosed by Borrower and approved in writing
by the Majority Banks, the representations and warranties contained in
Article 4 (other than Sections 4.5 (first sentence), 4.6, 4.7, 4.11 and
--------- ----- ---- --- --- --- ----
4.18) are true and correct on and as of the date hereof;
----
(ii) other than matters described in Schedule 4.11 or not
-------------
required as of the Closing Date to be therein described, there shall not be
then pending or threatened any action, suit, proceeding or investigation
against or affecting Borrower or any of its Property before any
Governmental Agency that constitutes a Material Adverse Effect;
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(iii) no Default or Event of Default exists.
This Request for Letter of Credit is executed on _______ 19__, by a
Responsible Official of Borrower, on behalf of Borrower. The undersigned, in
such capacity, hereby certifies each and every matter contained herein to be
true and correct.
ELDORADO RESORTS LLC
By: _________________________
Title: _________________________
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[Exhibit I]
REQUEST FOR LOAN
----------------
This REQUEST FOR LOAN is executed and delivered by Eldorado Resorts
LLC, a Nevada limited liability company ("Borrower") to Bank of America National
Trust and Savings Association, as Administrative Agent, pursuant to the Amended
and Restated Loan Agreement (the "Agreement") dated as of July 31, 1996, entered
into by Borrower and Bank of America National Trust and Savings Association, as
the Administrative Agent and sole initial Bank. Any terms used herein and not
defined herein shall have the meanings defined in the Agreement.
Borrower hereby requests that the Banks make a Loan for the account of
Borrower pursuant to the Agreement, as follows:
A. Amount of Loan: $_________________.
B. Date of Loan: ______________, 19__.
C. Type of Loan (check one box only):
[___] Base Rate Loan.
[___] Eurodollar Loan with a ____-day
Eurodollar Rate Period.
In connection with the Loan requested herein, Borrower hereby
represents, warrants and certifies to the Banks that, as of the date of the Loan
requested herein:
(i) except as disclosed by Borrower and approved in writing
by the Majority Banks, the representations and warranties contained in
Article 4 (other than Sections 4.5 (first sentence), 4.6, 4.7, 4.11 and
--------- ----- ---- --- --- --- ----
4.18) are true and correct on and as of the date hereof;
----
(ii) other than matters described in Schedule 4.11 or not
-------------
required as of the Closing Date to be therein described, there shall
not be then pending or threatened any action, suit, proceeding or
investigation against or affecting Borrower or any of its Property
before any Governmental Agency that constitutes a Material Adverse
Effect;
(iii) no Default or Event of Default exists.
This Request for Loan is executed on _______, 19__, by a Responsible
Official of Borrower, on behalf of Borrower. The
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undersigned, in such capacity, hereby certifies each and every matter contained
herein to be true and correct.
ELDORADO RESORTS LLC, a Nevada
limited liability company
By:
-------------------------
Title:
-----------------------
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[Exhibit J]
AMENDED AND RESTATED SECURITY AGREEMENT
---------------------------------------
This AMENDED AND RESTATED SECURITY AGREEMENT ("Agreement"), dated as of
July 31, 1996, is made by ELDORADO RESORTS LLC, a Nevada limited liability
company, as Grantor, in favor of BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, a national banking association, as the Administrative Agent and
sole initial Bank under the Amended and Restated Loan Agreement hereafter
referred to, and in favor of each of the Banks which may hereafter become a
party thereto, collectively as Secured Party, with reference to the following
facts:
RECITALS
--------
A. Grantor has entered into an Amended and Restated Loan Agreement of
even date herewith among Grantor and Bank of America National Trust and Savings
Association, as Administrative Agent and sole initial Bank (as it may from time
to time be amended, restated, extended, renewed, modified or supplemented, the
"Loan Agreement"). This Agreement is the Security Agreement referred to in the
Loan Agreement and is one of the "Loan Documents" referred to in the Loan
Agreement.
B. Pursuant to the Loan Documents of even date the Banks are making
certain credit facilities available to Grantor.
C. As a condition of the availability of such credit facilities,
Grantor is required to enter into this Agreement to amend and restate the
Security Agreement referred to in the Existing Loan Agreement and to grant
security interests to Secured Party as herein provided.
AGREEMENT
---------
NOW, THEREFORE, in order to induce Secured Party to extend the
aforementioned credit facilities, and for other good and valuable consideration,
the receipt and adequacy of which hereby is acknowledged, Grantor hereby
represents, warrants, covenants, agrees, assigns and grants as follows:
1. Definitions. Terms defined in the Loan Agreement and not
-----------
otherwise defined in this Agreement shall have the meanings defined for those
terms in the Loan Agreement. Terms defined in the Uniform Commercial Code and
not otherwise defined in this Agreement or in the Loan Agreement shall have the
meanings defined for those terms in the Nevada Commercial Code. In addition, as
used in this Agreement, the following terms shall have the meanings respectively
set forth after each:
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"Agreement" means this Security Agreement, and any extensions,
---------
modifications, renewals, restatements, supplements or amendments hereof.
"Collateral" means and includes all present and future right, title and
----------
interest of Grantor in or to any Property or assets whatsoever, and all rights
and powers of Grantor to transfer any interest in or to any Property or assets
whatsoever, including, without limitation, any and all of the following
---------
Property:
(a) All present and future accounts, accounts receivable,
agreements, contracts, leases, contract rights, rights to payment,
instruments, documents, chattel paper, security agreements, guaranties,
undertakings, surety bonds, insurance policies, notes and drafts, and all
forms of obligations owing to Grantor or in which Grantor may have any
interest, however created or arising;
(b) All present and future general intangibles, all tax refunds
of every kind and nature to which Grantor now or hereafter may become
entitled, however arising, all other refunds, and all deposits, goodwill,
choses in action, trade secrets, computer programs, software, customer
lists, trademarks, trade names, service marks, patents, licenses,
copyrights, technology, processes, proprietary information and insurance
proceeds;
(c) All present and future deposit accounts of Grantor,
including, without limitation, any demand, time, savings, passbook or like
---------
account maintained by Grantor with any bank, savings and loan association,
credit union or like organization, and all money, Cash and Cash Equivalents
of Grantor, whether or not deposited in any such deposit account;
(d) All present and future books and records, including, without
---------
limitation, books of account and ledgers of every kind and nature, all
electronically recorded data relating to Grantor or its business, all
receptacles and containers for such records, and all files and
correspondence;
(e) All present and future goods, including, without limitation,
---------
all consumer goods, farm products, inventory, equipment, gaming devices and
associated equipment as defined in Nevada Revised Statutes Chapter 463,
machinery, tools, molds, dies, furniture, furnishings, fixtures, trade
fixtures, motor vehicles and all other goods used in connection with or in
the conduct of Grantor's business;
(f) All present and future inventory and merchandise, including,
---------
without limitation, all present and future goods held for sale or lease or
to be furnished under a contract of service, all raw materials, work in
process and finished goods, all packing materials, supplies
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and containers relating to or used in connection with any of the foregoing, and
all bills of lading, warehouse receipts or documents of title relating to any of
the foregoing;
(g) All present and future stocks, bonds, debentures, securities,
subscription rights, options, warrants, puts, calls, certificates, partnership
interests, joint venture interests, Investments and/or brokerage accounts and
all rights, preferences, privileges, dividends, distributions, redemption
payments, or liquidation payments with respect thereto;
(h) All present and future accessions, appurtenances, components,
repairs, repair parts, spare parts, replacements, substitutions, additions,
issue and/or improvements to or of or with respect to any of the foregoing;
(i) All other tangible and intangible Property of Grantor;
(j) All rights, remedies, powers and/or privileges of Grantor with
respect to any of the foregoing; and
(k) Any and all proceeds and products of any of the foregoing,
including, without limitation, all money, accounts, general intangibles, deposit
accounts, documents, instruments, chattel paper, goods, insurance proceeds, and
any other tangible or intangible property received upon the sale or disposition
of any of the foregoing.
"Secured Obligations" means any and all present and future Obligations
-------------------
of any type or nature of Grantor arising under or relating to the loan Documents
or any one or more of them, whether due or to become due, matured or unmatured,
liquidated or unliquidated, or contingent or noncontingent, including
---------
Obligations of performance as well as Obligations of payment, and including
---------
interest that accrues after the commencement of any bankruptcy or insolvency
proceeding by or against Grantor.
"Secured Party" means the Administrative Agent, as collateral agent for
-------------
the ratable benefit of the Banks. All rights of the Secured Party under this
Agreement shall be exercised by the Administrative Agent, acting with the
consent of the Banks or Majority Banks to the extent required by the Loan
Agreement.
2. Further Assurances. At any time and from time to time at the request of
------------------
Secured Party, Grantor shall execute and deliver to Secured Party all such
financing statements and other instruments and documents in form and substance
satisfactory to Secured Party as shall be necessary or desirable to fully
perfect, when filed and/or recorded, Secured Party's security interests granted
pursuant to Section 3 of this Agreement. At any time and from time to time,
Secured Party shall be
-3-
entitled to file and/or record any or all such financing statements, instruments
and documents held by it, and any or all such further financing statements,
documents and instruments, and to take all such other actions, as Secured Party
may deem appropriate to perfect and to maintain perfected the security interests
granted in Section 3 of this Agreement. Before and after the occurrence of any
Event of Default, at Secured Party's request, Grantor shall execute all such
further financing statements, instruments and documents, and shall do all such
further acts and things, as may be deemed necessary or desirable by Secured
Party to create and perfect, and to continue and preserve, an indefeasible
security interest in the Collateral in favor of Secured Party, or the priority
thereof. With respect to any Collateral consisting of certificated securities,
instruments, documents, certificates of title or the like, as to which Secured
Party's security interest need be perfected by, or the priority thereof need be
assured by, possession of such Collateral, Grantor will upon demand of Secured
Party deliver possession of same in pledge to Secured Party. With respect to any
Collateral consisting of securities, instruments, partnership or joint venture
interests or the like, Grantor hereby consents and agrees that the issuers of,
or obligors on, any such Collateral, or any registrar or transfer agent or
trustee for any such Collateral, shall be entitled to accept the provisions of
this Agreement as conclusive evidence of the right of Secured Party to effect
any transfer or exercise any right hereunder or with respect to any such
Collateral, notwithstanding any other notice or direction to the contrary
heretofore or hereafter given by Grantor or any other Person to such issuers or
such obligors or to any such registrar or transfer agent or trustee.
3. Security Agreement. For valuable consideration, Grantor hereby
------------------
assigns and pledges to Secured Party, and grants to Secured Party a security
interest in, all presently existing and hereafter acquired Collateral, as
security for the timely payment and performance of the Secured Obligations, and
each of them. This Agreement is a continuing and irrevocable agreement and all
the rights, powers, privileges and remedies hereunder shall apply to any and all
Secured Obligations, including those arising under successive transactions which
shall either continue the Secured Obligations, increase or decrease them, or
from time to time create new Secured Obligations after all or any prior Secured
Obligations have been satisfied, and notwithstanding the bankruptcy of Grantor
or any other Person or any other event or proceeding affecting any Person.
4. Grantor's Representations. Warranties and Agreements. Except as
---------------------------------------------------- ------
otherwise disclosed to Secured Party in writing concurrently herewith, Grantor
represents, warrants and agrees that: (a) Grantor will pay, prior to
delinquency, all taxes, charges, Liens and assessments against the Collateral,
except such as are expressly permitted by the Loan Agreement or are timely
- ------
contested in good faith, and upon its failure to pay or so contest such taxes,
charges, Liens and assessments, Secured Party at its option may pay any of them,
and Secured Party shall be the sole judge of the legality or validity thereof
and the amount necessary to discharge the same; (b) the Collateral will not be
used for any unlawful purpose or in violation of any Law, regulation or
ordinance, nor used in any way that will void or impair any insurance required
to be carried in connection therewith; (c) Grantor will, to the extent
consistent with good business practice, keep the Collateral in reasonably good
-4-
repair, working order and condition, and from time to time make all needful and
proper repairs, renewals, replacements, additions and improvements thereto and,
as appropriate and applicable, will otherwise deal with the Collateral in all
such ways as are considered good practice by owners of like Property; (d)
Grantor will take all reasonable steps to preserve and protect the Collateral;
(e) Grantor will maintain, with responsible insurance companies, insurance
covering the Collateral against such insurable losses as is required by the Loan
Agreement and as is consistent with sound business practice, and will cause
Secured Party to be designated as an additional insured and loss payee with
respect to such insurance, will obtain the written agreement of the insurers
that such insurance shall not be cancelled, terminated or materially modified to
the detriment of Secured Party without at least 30 days prior written notice to
Secured Party, and will furnish copies of such insurance policies or
certificates to Secured Party promptly upon request therefor; and (f) Grantor
will promptly notify Secured Party in writing in the event of any substantial or
material damage to the Collateral from any source whatsoever, and, except for
------
the disposition of collections and other proceeds of the Collateral permitted by
Section 6 hereof, Grantor will not remove or permit to be removed any part of
the Collateral from its place of business without the prior written consent of
Secured Party, except for such items of the Collateral as are removed in the
------
ordinary course of business or in connection with any transaction or disposition
otherwise permitted by the Loan Documents.
5. Secured Party's Rights Re Collateral. At any time (whether or not an
------------------------------------
Event of Default has occurred), without notice or demand and at the expense of
Grantor, Secured Party may, to the extent it may be necessary or desirable to
protect the security hereunder, but Secured Party shall not be obligated to: (a)
enter upon any premises on which Collateral is situated and examine the same or
(b) perform any obligation of Grantor under this Agreement or any obligation of
any other Person under the Loan Documents. At any time and from time to time, at
the expense of Grantor, Secured Party may, to the extent it may be necessary or
desirable to protect the security hereunder, but Secured Party shall not be
obligated to: (i) notify obligors on the Collateral that the Collateral has
been assigned to Secured Party; (ii) at any time and from time to time request
from obligors on the Collateral, in the name of Grantor or in the name of
Secured Party, information concerning the Collateral and the amounts owing
thereon; and (iii) cause the Collateral to be registered in the name of Secured
Party, as legal owner. Grantor shall maintain books and records pertaining to
the Collateral in such detail, form and scope as Secured Party shall reasonably
require consistent with Secured Party's interests hereunder. Grantor shall at
any time at Secured Party's request mark the Collateral and/or Grantor's ledger
cards, books of account and other records relating to the Collateral with
appropriate notations satisfactory to Secured Party disclosing that they are
subject to Secured Party's security interests. Secured Party shall at all
reasonable times on reasonable notice have full access to and the right to audit
any and all of Grantor's books and records pertaining to the Collateral, and to
confirm and verify the value of the Collateral and to do whatever else Secured
Party reasonably may deem necessary or desirable to protect its interests;
provided, however, that any such action which involves communicating with
- -------- -------
customers of Grantor shall be carried out by Secured Party through Grantor's
independent auditors unless Secured Party shall
-5-
then have the right directly to notify obligors on the Collateral as provided in
Section 9. Secured Party shall be under no duty or obligation whatsoever to take
any action to preserve any rights of or against any prior or other parties in
connection with the Collateral, to exercise any voting rights or managerial
rights with respect to any Collateral, whether or not an Event of Default shall
have occurred, or to make or give any presentments, demands for performance,
notices of non-performance, protests, notices of protests, notices of dishonor
or notices of any other nature whatsoever in connection with the Collateral or
the Secured Obligations. Secured Party shall be under no duty or obligation
whatsoever to take any action to protect or preserve the Collateral or any
rights of Grantor therein, or to make collections or enforce payment thereon, or
to participate in any foreclosure or other proceeding in connection therewith.
6. Collections on the Collateral. Except as otherwise provided in any
----------------------------- ------
Loan Document, Grantor shall have the right to use and to continue to make
collections on and receive dividends and other proceeds of all of the Collateral
in the ordinary course of business so long as no Event of Default shall have
occurred and be continuing. Upon the occurrence and during the continuance of an
Event of Default, at the option of Secured Party, except as prohibited by
applicable Law Grantor's right to make collections on and receive dividends and
other proceeds of the Collateral and to use or dispose of such collections and
proceeds shall terminate, and any and all dividends, proceeds and collections,
including all partial or total prepayments, then held or thereafter received on
or on account of the Collateral will be held or received by Grantor in trust for
Secured Party and immediately delivered in kind to Secured Party. Any remittance
received by Grantor from any Person shall be presumed to relate to the
Collateral and to be subject to Secured Party's security interests. Upon the
occurrence and during the continuance of an Event of Default, Secured Party
shall have the right at all times to receive, receipt for, endorse, assign,
deposit and deliver, in the name of Secured Party or in the name of Grantor, any
and all checks, notes, drafts and other instruments for the payment of money
constituting proceeds of or otherwise relating to the Collateral; and Grantor
hereby authorizes Secured Party to affix, by facsimile signature or otherwise,
the general or special endorsement of it, in such manner as Secured Party shall
deem advisable, to any such instrument in the event the same has been delivered
to or obtained by Secured Party without appropriate endorsement, and Secured
Party and any collecting bank are hereby authorized to consider such endorsement
to be a sufficient, valid and effective endorsement by Grantor, to the same
extent as though it were manually executed by the duly authorized officer of
Grantor, regardless of by whom or under what circumstances or by what authority
such facsimile signature or other endorsement actually is affixed, without duty
of inquiry or responsibility as to such matters, and Grantor hereby expressly
waives demand, presentment, protest and notice of protest or dishonor and all
other notices of every kind and nature with respect to any such instrument.
7. Possession of Collateral by Secured Party. All the Collateral now,
-----------------------------------------
heretofore or hereafter delivered to Secured Party shall be held by Secured
Party in its possession, custody and control. Any or all of the Collateral
delivered to Secured Party may be held in an interest bearing or noninterest
bearing account, in
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Secured Party's sole and absolute discretion, and Secured Party may, in its
discretion, apply any such interest to payment of the Secured Obligations.
Nothing herein shall obligate Secured Party to invest any Collateral or obtain
any particular return thereon. Upon the occurrence and during the continuance of
an Event of Default, whenever any of the Collateral is in Secured Party's
possession, custody or control, Secured Party may use, operate and consume the
Collateral, whether for the purpose of preserving and/or protecting the
Collateral, or for the purpose of performing any of Grantor's obligations with
respect thereto, or otherwise. Secured Party may at any time deliver or
redeliver the Collateral or any part thereof to Grantor, and the receipt of any
of the same by Grantor shall be complete and full acquittance for the
Collateral so delivered, and Secured Party thereafter shall be discharged from
any liability or responsibility therefor. So long as Secured Party exercises
reasonable care with respect to any Collateral in its possession, custody or
control, Secured Party shall have no liability for any loss of or damage to such
Collateral, and in no event shall Secured Party have liability for any
diminution in value of Collateral occasioned by economic or market conditions or
events. Secured Party shall be deemed to have exercised reasonable care within
the meaning of the preceding sentence if the Collateral in the possession,
custody or control of Secured Party is accorded treatment substantially equal to
that which Secured Party accords its own property, it being understood that
Secured Party shall not have any responsibility for (a) ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relating to any Collateral, whether or not Secured Party has or is
deemed to have knowledge of such matters, or (b) taking any necessary steps to
preserve rights against any Person with respect to any Collateral.
8. Events of Default. There shall be an Event of Default hereunder upon
-----------------
the occurrence and during the continuance of an Event of Default under the Loan
Agreement.
9. Rights Upon Event of Default. Upon the occurrence and during the
----------------------------
continuance of an Event of Default, Secured Party shall have, in any
jurisdiction where enforcement hereof is sought, in addition to all other rights
and remedies that Secured Party may have under applicable Law or in equity or
under this Agreement (including, without limitation, all rights set forth in
---------
Section 6 hereof) or under any other Loan Document, all rights and remedies of a
secured party under the Uniform Commercial Code as enacted in any jurisdiction,
and, in addition, the following rights and remedies, all of which may be
exercised with or without notice to Grantor and without affecting the
Obligations of Grantor hereunder or under any other Loan Document, or the
enforceability of the Liens and security interests created hereby: (a) to
foreclose the Liens and security interests created hereunder or under any other
agreement relating to any Collateral by any available judicial procedure or
without judicial process; (b) to enter any premises where any Collateral may be
located for the purpose of securing, protecting, inventorying, appraising,
inspecting, repairing, preserving, storing, preparing, processing, taking
possession of or removing the same; (c) to sell, assign, lease or otherwise
dispose of any Collateral or any part thereof, either at public or private sale
or at any broker's board, in lot or in bulk, for cash, on credit or otherwise,
with or without representations or warranties and upon such terms as shall be
acceptable to Secured Party; (d) to notify obligors on the Collateral
-7-
that the Collateral has been assigned to Secured Party and that all payments
thereon are to be made directly and exclusively to Secured Party; (e) to collect
by legal proceedings or otherwise all dividends, distributions, interest,
principal or other sums now or hereafter payable upon or on account of the
Collateral; (f) to enter into any extension, reorganization, deposit, merger or
consolidation agreement, or any other agreement relating to or affecting the
Collateral, and in connection therewith Secured Party may deposit or surrender
control of the Collateral and/or accept other Property in exchange for the
Collateral; (g) to settle, compromise or release, on terms acceptable to Secured
Party, in whole or in part, any amounts owing on the Collateral and/or any
disputes with respect thereto; (h) to extend the time of payment, make
allowances and adjustments and issue credits in connection with the Collateral
in the name of Secured Party or in the name of Grantor; (i) to enforce payment
and prosecute any action or proceeding with respect to any or all of the
Collateral and take or bring, in the name of Secured Party or in the name of
Grantor, any and all steps, actions, suits or proceedings deemed by Secured
Party necessary or desirable to effect collection of or to realize upon the
Collateral, including any judicial or nonjudicial foreclosure thereof or
---------
thereon, and Grantor specifically consents to any nonjudicial foreclosure of any
or all of the Collateral or any other action taken by Secured Party which may
release any obligor from personal liability on any of the Collateral, and
Grantor waives any right not expressly provided for in this Agreement to receive
notice of any public or private judicial or nonjudicial sale or foreclosure of
any security or any of the Collateral; and any money or other property received
by Secured Party in exchange for or on account of the Collateral, whether
representing collections or proceeds of Collateral, and whether resulting from
voluntary payments or foreclosure proceedings or other legal action taken by
Secured Party or Grantor may be applied by Secured Party without notice to
Grantor to the Secured Obligations in such order and manner as Secured Party in
its sole discretion shall determine; (j) to insure, process and preserve the
Collateral; (k) to exercise all rights, remedies, powers or privileges provided
under any of the Loan Documents; (1) to remove, from any premises where the same
may be located, the Collateral and any and all documents, instruments, files and
records, and any receptacles and cabinets containing the same, relating to the
Collateral, and Secured Party may, at the cost and expense of Grantor, use such
of its supplies, equipment, facilities and space at its places of business as
may be necessary or appropriate to properly administer, process, store, control,
prepare for sale or disposition and/or sell or dispose of the Collateral or to
properly administer and control the handling of collections and realizations
thereon, and Secured Party shall be deemed to have a rent-free tenancy of any
premises of Grantor for such purposes and for such periods of time as reasonably
required by Secured Party; (m) to receive, open and dispose of all mail
addressed to Grantor and notify postal authorities to change the address for
delivery thereof to such address as Secured Party may designate; provided that
--------
Secured Party agrees that it will promptly deliver over to Grantor such opened
mail as does not relate to the Collateral; and (n) to exercise all other rights,
powers, privileges and remedies of an owner of the Collateral; all at Secured
Party's sole option and as Secured Party in its sole discretion may deem
advisable. Grantor will, at Secured Party's request, assemble the Collateral and
make it available to Secured Party at places which Secured Party may designate,
whether at the premises of Grantor or elsewhere, and will make available to
Secured Party, free of cost, all premises, equipment and
-8-
facilities of Grantor for the purpose of Secured Party's taking possession of
the Collateral or storing same or removing or putting the Collateral in salable
form or selling or disposing of same.
Upon the occurrence and during the continuance of an Event of Default,
Secured Party also shall have the right, without notice or demand, either in
person, by agent or by a receiver to be appointed by a court, and without regard
to the adequacy of any security for the Secured Obligations, to take possession
of the Collateral or any part thereof and to collect and receive the rents,
issues, profits, income and proceeds thereof. Taking possession of the
Collateral shall not cure or waive any Event of Default or notice thereof or
invalidate any act done pursuant to such notice. The rights, remedies and powers
of any receiver appointed by a court shall be as ordered by said court.
Any public or private sale or other disposition of the Collateral may be
held at any office of Secured Party, or at Grantor's place of business, or at
any other place permitted by applicable Law, and without the necessity of the
Collateral's being within the view of prospective purchasers. Secured Party may
direct the order and manner of sale of the Collateral, or portions thereof, as
it in its sole and absolute discretion may determine, and Grantor expressly
waives any right to direct the order and manner of sale of any Collateral.
Secured Party or any Person on Secured Party's behalf may bid and purchase at
any such sale or other disposition. The net cash proceeds resulting from the
collection, liquidation, sale, lease or other disposition of the Collateral
shall be applied, first, to the expenses (including reasonable attorneys' fees
and disbursements) of retaking, holding, storing, processing and preparing for
sale or lease, selling, leasing, collecting, liquidating and the like, and then
to the satisfaction of the Secured Obligations in such order as shall be
determined by Secured Party in its sole and absolute discretion. Grantor and any
other Person then obligated therefor shall pay to Secured Party on demand any
deficiency with regard thereto which may remain after such sale, disposition,
collection or liquidation of the Collateral.
Unless the Collateral is perishable or threatens to decline speedily in
value or is of a type customarily sold on a recognized market, Secured Party
will send or otherwise make available to Grantor reasonable notice of the time
and place of any public sale thereof or of the time on or after which any
private sale thereof is to be made. The requirement of sending reasonable notice
conclusively shall be met if such notice is mailed, first class mail, postage
prepaid, to Grantor at its address set forth in the Loan Agreement, or delivered
or otherwise sent to Grantor, at least five (5) days before the date of the
sale. Grantor expressly waives any right to receive notice of any public or
private sale of any Collateral or other security for the Secured Obligations
except as expressly provided for in this paragraph.
- ------
With respect to any Collateral consisting of securities, partnership
interests, joint venture interests, Investments or the like, and whether or not
any of such Collateral has been effectively registered under the Securities Act
of 1933 or other applicable Laws, Secured Party may, in its sole and absolute
discretion, sell all or any part of such Collateral at private sale in such
manner and under such circum-
-9-
stances as Secured Party may deem necessary or advisable in order that the sale
may be lawfully conducted. Without limiting the foregoing, Secured Party may
(i) approach and negotiate with a limited number of potential purchasers, and
(ii) restrict the prospective bidders or purchasers to persons who will
represent and agree that they are purchasing such Collateral for their own
account for investment and not with a view to the distribution or resale
thereof. In the event that any such Collateral is sold at private sale, Grantor
agrees that if such Collateral is sold for a price which Secured Party in good
faith believes to be reasonable under the circumstances then existing, then (a)
the sale shall be deemed to be commercially reasonable in all respects, (b)
Grantor shall not be entitled to a credit against the Secured Obligations in an
amount in excess of the purchase price, and (c) Secured Party shall not incur
any liability or responsibility to Grantor in connection therewith,
notwithstanding the possibility that a substantially higher price might have
been realized at a public sale. Grantor recognizes that a ready market may not
exist for such Collateral if it is not regularly traded on a recognized
securities exchange, and that a sale by Secured Party of any such Collateral for
an amount substantially less than a pro rata share of the fair market value of
the issuer's assets minus liabilities may be commercially reasonable in view of
the difficulties that may be encountered in attempting to sell a large amount of
such Collateral or Collateral that is privately traded.
Upon consummation of any sale of Collateral hereunder, Secured Party
shall have the right to assign, transfer and deliver to the purchaser or
purchasers thereof the Collateral so sold. Each such purchaser at any such sale
shall hold the Collateral so sold absolutely free from any claim or right upon
the part of Grantor or any other Person except a third party lienholder
permitted under the Loan Documents, and Grantor hereby waives (to the extent
permitted by applicable Laws) all rights of redemption, stay and appraisal which
it now has or may at any time in the future have under any rule of Law or
statute now existing or hereafter enacted. If the sale of all or any part of the
Collateral is made on credit or for future delivery, Secured Party shall not be
required to apply any portion of the sale price to the Secured Obligations until
such amount actually is received by Secured Party, and any Collateral so sold
may be retained by Secured Party until the sale price is paid in full by the
purchaser or purchasers thereof. Secured Party shall not incur any liability in
case any such purchaser or purchasers shall fall to pay for the Collateral so
sold, and, in case of any such failure, the Collateral may be sold again.
10. Voting Rights: Dividends: etc. With respect to any Collateral
-----------------------------
consisting of securities, partnership interests, joint venture interests,
Investments or the like (referred to collectively and individually in this
Section 10 and in Section 11 as the "Investment Collateral"), so long as no
---------------------
Event of Default occurs and remains continuing:
10.1 Voting Rights. Grantor shall be entitled to exercise any and
-------------
all voting and other consensual rights pertaining to the Investment Collateral,
or any part thereof, for any purpose not inconsistent with the terms of this
Agreement, the Loan Agreement, or the other Loan Documents; provided, however,
-------- -------
that Grantor
-10-
shall not exercise, or shall refrain from exercising, any such right if it would
result in a Default.
10.2 Dividend and Distribution Rights. Except as otherwise
--------------------------------
provided in any loan Document, Grantor shall be entitled to receive and to
retain and use any and all dividends or distributions paid in respect of the
Investment Collateral; provided, however, that any and all such dividends or
-------- -------
distributions received in the form of capital stock, certificated securities,
warrants, options or rights to acquire capital stock or certificated securities
forthwith shall be, and the certificates representing such capital stock or
certificated securities, if any, forthwith shall be delivered to Secured Party
to hold as pledged Collateral and shall, if received by Grantor, be received in
trust for the benefit of Secured Party, be segregated from the other Property of
Grantor, and forthwith be delivered to Secured Party as pledged Collateral in
the same form as so received (with any necessary endorsements).
11. Rights During Event of Default. With respect to any Investment
------------------------------
Collateral, so long as an Event of Default has occurred and is continuing:
11.1 Voting. Dividend. and Distribution Rights. At the option of
-----------------------------------------
Secured Party, all rights of Grantor to exercise the voting and other consensual
rights which it would otherwise be entitled to exercise pursuant to Section 10.1
above, and to receive the dividends and distributions which it would otherwise
be authorized to receive and retain pursuant to Section 10.2 above, shall cease,
and all such rights thereupon shall become vested in Secured Party which
thereupon shall have the sole right to exercise such voting and other consensual
rights and to receive and to hold as pledged Collateral such dividends and
distributions.
11.2 Dividends and Distributions Held in Trust. All dividends and
-----------------------------------------
other distributions which are received by Grantor contrary to the provisions of
this Agreement shall be received in trust for the benefit of Secured Party,
shall be segregated from other funds of Grantor, and forthwith shall be paid
over to Secured Party as pledged Collateral in the same form as so received
(with any necessary endorsements).
11.3 Irrevocable Proxy. Grantor does hereby revoke all previous
-----------------
proxies with regard to the Investment Collateral and appoint Secured Party as
its proxyholder to attend and vote at any and all meetings of the shareholders
or other equity holders of the Persons that issued the Investment Collateral and
any adjournments thereof, held on or after the date of the giving of this proxy
and prior to the termination of this proxy, and to execute any and all written
consents of shareholders or equity holders of such Persons executed on or after
the date of the giving of this proxy and prior to the termination of this proxy,
with the same effect as if Grantor had personally attended the meetings or had
personally voted its shares or other interests or had personally signed the
written consents; provided, however, that the proxyholder shall have rights
-------- -------
hereunder only upon the occurrence and during the continuance of an Event of
Default. Grantor hereby authorizes Secured Party to substitute another Person as
the proxyholder and, upon the occurrence and during the continuance of any Event
of Default, hereby authorizes the proxyholder to file this
-11-
proxy and any substitution instrument with the secretary or other appropriate
official of the appropriate Person. This proxy is coupled with an interest and
is irrevocable until such time as all Secured Obligations have been paid and
performed in full.
12. Attorney-in-Fact. Grantor hereby irrevocably nominates and appoints
----------------
Secured Party as its attorney-in-fact for the following purposes: (a) to do all
acts and things which Secured Party may deem necessary or advisable to perfect
and continue perfected the security interests created by this Agreement and,
upon the occurrence and during the continuance of an Event of Default, to
preserve, process, develop, maintain and protect the Collateral; (b) upon the
occurrence and during the continuance of an Event of Default, to do any and
every act which Grantor is obligated to do under this Agreement, at the expense
of the Grantor so obligated and without any obligation to do so; (c) to prepare,
sign, file and/or record, for Grantor, in the name of the Grantor, any financing
statement, application for registration, or like paper, and to take any other
action deemed by Secured Party necessary or desirable in order to perfect or
maintain perfected the security interests granted hereby; and (d) upon the
occurrence and during the continuance of an Event of Default, to execute any and
all papers and instruments and do all other things necessary or desirable to
preserve and protect the Collateral and to protect Secured Party's security
interests therein; provided, however, that Secured Party shall be under no
-------- -------
obligation whatsoever to take any of the foregoing actions, and, absent bad
faith or actual malice, Secured Party shall have no liability or responsibility
for any act taken or omission with respect thereto.
13. Costs and Expenses. Grantor agrees to pay to Secured Party all
------------------
costs and expenses (including, without limitation, reasonable attorneys' fees
---------
and disbursements) incurred by Secured Party in the enforcement or attempted
enforcement of this Agreement, whether or not an action is filed in connection
therewith, and in connection with any waiver or amendment of any term or
provision hereof. All advances, charges, costs and expenses, including
---------
reasonable attorneys' fees and disbursements, incurred or paid by Secured Party
in exercising any right, privilege, power or remedy conferred by this Agreement
(including, without limitation, the right to perform any Secured Obligation of
---------
Grantor under the Loan Documents), or in the enforcement or attempted
enforcement thereof, shall be secured hereby and shall become a part of the
Secured Obligations and shall be paid to Secured Party by Grantor, immediately
upon demand, together with interest thereon at the Default Rate.
14. Statute of Limitations and Other Laws. Until the Secured
-------------------------------------
Obligations shall have been paid and performed in full, the power of sale and
all other rights, privileges, powers and remedies granted to Secured Party
hereunder shall continue to exist and may be exercised by Secured Party at any
time and from time to time irrespective of the fact that any of the Secured
Obligations may have become barred by any statute of limitations. Grantor
expressly waives the benefit of any and all statutes of limitation, and any and
all Laws providing for exemption of property from execution or for valuation and
appraisal upon foreclosure, to the maximum extent permitted by applicable Law.
-12-
15. Other Agreements. Nothing herein shall in any way modify or limit
----------------
the effect of terms or conditions set forth in any other security or other
agreement executed by Grantor or in connection with the Secured Obligations, but
each and every term and condition hereof shall be in addition thereto. All
provisions contained in the Loan Agreement or any other Loan Document that apply
to Loan Documents generally are fully applicable to this Agreement and are
incorporated herein by this reference.
16. Understandings With Respect to Waivers and Consents. Grantor
---------------------------------------------------
warrants and agrees that each of the waivers and consents set forth herein are
made after consultation with legal counsel and with full knowledge of their
significance and consequences, with the understanding that events giving rise to
any defense or right waived may diminish, destroy or otherwise adversely affect
rights which Grantor otherwise may have against Secured Party or others, or
against Collateral, and that, under the circumstances, the waivers and consents
herein given are reasonable and not contrary to public policy or Law. If any of
the waivers or consents herein are determined to be contrary to any applicable
Law or public policy, such waivers and consents shall be effective to the
maximum extent permitted by Law.
17. Release of Grantor. This Agreement and all Secured Obligations of
------------------
Grantor hereunder shall be released when all Secured Obligations have been paid
in full in cash or otherwise performed in full and when no portion of the
Commitments remain outstanding. Upon such release of Grantor's Secured
Obligations hereunder, Secured Party shall return any pledged Collateral to
Grantor, or to the Person or Persons legally entitled thereto, and shall
endorse, execute, deliver, record and file all instruments and documents, and do
all other acts and things, reasonably required for the return of the Collateral
to Grantor, or to the Person or Persons legally entitled thereto, and to
evidence or document the release of Secured Party's interests arising under this
Agreement, all as reasonably requested by, and at the sole expense of, Grantor.
IN WITNESS WHEREOF, Grantor has executed this Agreement by its duly
authorized officers as of the date first written above.
"Grantor"
ELDORADO RESORTS LLC
By:______________________________________
Donald L. Carano, Chief Executive Officer
-13-
[Exhibit K]
SECURITY AGREEMENT
------------------
This SECURITY AGREEMENT ("Agreement"), dated as of July 31, 1996, is
made by ELDORADO CAPITAL CORP., a Nevada corporation, as Grantor, in favor of
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking
association, as the Administrative Agent and sole initial Bank under the Amended
and Restated Loan Agreement hereafter referred to, and in favor of each of the
Banks which may hereafter become a party thereto, collectively as Secured Party,
with reference to the following facts:
RECITALS
--------
A. Grantor has guaranteed the obligations of ELDORADO RESORTS LLC
("Borrower") pursuant to an Amended and Restated Loan Agreement of even date
herewith among Borrower and Bank of America National Trust and Savings
Association, as Administrative Agent and sole initial Bank (as it may from time
to time be amended, restated, extended, renewed, modified or supplemented, the
"Loan Agreement"). This Agreement is the Security Agreement referred to in the
Loan Agreement and is one of the "Loan Documents" referred to in the Loan
Agreement.
B. Pursuant to the Loan Documents of even date the Banks are making
certain credit facilities available to Borrower.
C. As a condition of the availability of such credit facilities,
Grantor is required to enter into this Agreement and to grant security interests
to Secured Party as herein provided.
D. Grantor expects to realize direct and indirect benefits from the
execution of this Agreement
AGREEMENT
---------
NOW, THEREFORE, in order to induce Secured Party to extend the
aforementioned credit facilities, and for other good and valuable consideration,
the receipt and adequacy of which hereby is acknowledged, Grantor hereby
represents, warrants, covenants, agrees, assigns and grants as follows:
1. Definitions. Terms defined in the Loan Agreement and not otherwise
-----------
defined in this Agreement shall have the meanings defined for those terms in the
Loan Agreement. Terms defined in the Uniform Commercial Code and not otherwise
defined in this Agreement or in the Loan Agreement shall have the meanings
defined for those terms in the Nevada Commercial Code. In addition, as
-1-
used in this Agreement, the following terms shall have the meanings respectively
set forth after each:
"Agreement" means this Security Agreement, and any extensions,
---------
modifications, renewals, restatements, supplements or amendments hereof.
"Collateral" means and includes all present and future right,
----------
title and interest of Grantor in or to any Property or assets whatsoever,
and all rights and powers of Grantor to transfer any interest in or to any
Property or assets whatsoever, including, without limitation, any and all
---------
of the following Property:
(a) All present and future accounts, accounts receivable,
agreements, contracts, leases, contract rights, rights to payment,
instruments, documents, chattel paper, security agreements,
guaranties, undertakings, surety bonds, insurance policies, notes and
drafts, and all forms of obligations owing to Grantor or in which
Grantor may have any interest, however created or arising;
(b) All present and future general intangibles, all tax
refunds of every kind and nature to which Grantor now or hereafter may
become entitled, however arising, all other refunds, and all deposits,
goodwill, choses in action, trade secrets, computer programs,
software, customer lists, trademarks, trade names, service marks,
patents, licenses, copyrights, technology, processes, proprietary
information and insurance proceeds;
(c) All present and future deposit accounts of Grantor,
including, without limitation, any demand, time, savings, passbook or
---------
like account maintained by Grantor with any bank, savings and loan
association, credit union or like organization, and all money, Cash
and Cash Equivalents of Grantor, whether or not deposited in any such
deposit account;
(d) All present and future books and records, including,
---------
without limitation, books of account and ledgers of every kind and
nature, all electronically recorded data relating to Grantor or its
business, all receptacles and containers for such records, and all
files and correspondence;
(e) All present and future goods, including, without
---------
limitation, all consumer goods, farm products, inventory, equipment,
gaming devices and associated equipment as defined in Nevada Revised
Statutes Chapter 463, machinery, tools, molds, dies, furniture,
furnishings, fixtures, trade fixtures, motor vehicles and all other
goods used in connection with or in the conduct of Grantor's business;
-2-
(f) All present and future inventory and merchandise, including,
---------
without limitation, all present and future goods held for sale or lease or
to be furnished under a contract of service, all raw materials, work in
process and finished goods, all packing materials, supplies and containers
relating to or used in connection with any of the foregoing, and all bills
of lading, warehouse receipts or documents of title relating to any of the
foregoing;
(g) All present and future stocks, bonds, debentures, securities,
subscription rights, options, warrants, puts, calls, certificates,
partnership interests, joint venture interests, Investments and/or
brokerage accounts and all rights, preferences, privileges, dividends,
distributions, redemption payments, or liquidation payments with respect
thereto;
(h) All present and future accessions, appurtenances, components,
repairs, repair parts, spare parts, replacements, substitutions, additions,
issue and/or improvements to or of or with respect to any of the foregoing;
(i) All other tangible and intangible Property of Grantor;
(j) All rights, remedies, powers and/or privileges of Grantor
with respect to any of the foregoing; and
(k) Any and all proceeds and products of any of the foregoing,
including, without limitation, all money, accounts, general intangibles,
---------
deposit accounts, documents, instruments, chattel paper, goods, insurance
proceeds, and any other tangible or intangible property received upon the
sale or disposition of any of the foregoing.
"Secured Obligations" means any and all present and future Obligations
-------------------
of any type or nature of Grantor arising under or relating to the Guaranty, of
even date herewith, made Grantor in favor of Secured Party. The Guaranty relates
to the Loan Agreement and the Loan Documents or any one or more of them, and all
obligations thereunder whether due or to become due, matured or unmatured,
liquidated or unliquidated, or contingent or noncontingent, including
---------
Obligations of performance as well as Obligations of payment, and including
---------
interest that accrues after the commencement of any bankruptcy or insolvency
proceeding by or against Grantor.
"Secured Party" means the Administrative Agent, as collateral agent
-------------
for the ratable benefit of the Banks. All rights of the Secured Party under this
Agreement shall be exercised by the Administrative Agent, acting with the
consent of the Banks or Majority Banks to the extent required by the Loan
Agreement.
-3-
2. Further Assurances. At any time and from time to time at the
------------------
request of Secured Party, Grantor shall execute and deliver to Secured Party all
such financing statements and other instruments and documents in form and
substance satisfactory to Secured Party as shall be necessary or desirable to
fully perfect, when filed and/or recorded, Secured Party's security interests
granted pursuant to Section 3 of this Agreement. At any time and from time to
time, Secured Party shall be entitled to file and/or record any or all such
financing statements, instruments and documents held by it, and any or all such
further financing statements, documents and instruments, and to take all such
other actions, as Secured Party may deem appropriate to perfect and to maintain
perfected the security interests granted in Section 3 of this Agreement. Before
and after the occurrence of any Event of Default, at Secured Party's request,
Grantor shall execute all such further financing statements, instruments and
documents, and shall do all such further acts and things, as may be deemed
necessary or desirable by Secured Party to create and perfect, and to continue
and preserve, an indefeasible security interest in the Collateral in favor of
Secured Party, or the priority thereof. With respect to any Collateral
consisting of certificated securities, instruments, documents, certificates of
title or the like, as to which Secured Party's security interest need be
perfected by, or the priority thereof need be assured by, possession of such
Collateral, Grantor will upon demand of Secured Party deliver possession of same
in pledge to Secured Party. With respect to any Collateral consisting of
securities, instruments, partnership or joint venture interests or the like,
Grantor hereby consents and agrees that the issuers of, or obligors on, any such
Collateral, or any registrar or transfer agent or trustee for any such
Collateral, shall be entitled to accept the provisions of this Agreement as
conclusive evidence of the right of Secured Party to effect any transfer or
exercise any right hereunder or with respect to any such Collateral,
notwithstanding any other notice or direction to the contrary heretofore or
hereafter given by Grantor or any other Person to such issuers or such obligors
or to any such registrar or transfer agent or trustee.
3. Security Agreement. For valuable consideration, Grantor hereby
------------------
assigns and pledges to Secured Party, and grants to Secured Party a security
interest in, all presently existing and hereafter acquired Collateral, as
security for the timely payment and performance of the Secured Obligations, and
each of them. This Agreement is a continuing and irrevocable agreement and all
the rights, powers, privileges and remedies hereunder shall apply to any and all
Secured Obligations, including those arising under successive transactions which
shall either continue the Secured Obligations, increase or decrease them, or
from time to time create new Secured Obligations after all or any prior Secured
Obligations have been satisfied, and notwithstanding the bankruptcy of Grantor
or any other Person or any other event or proceeding affecting any Person.
4. Grantor's Representations. Warranties and Agreements. Except as
----------------------------------------------------- ------
otherwise disclosed to Secured Party in writing concurrently herewith, Grantor
represents, warrants and agrees that: (a) Grantor will pay, prior to
delinquency, all taxes, charges, Liens and assessments against the Collateral,
except such as are expressly permitted by the Loan Agreement or are timely
- ------
contested in good faith, and upon its failure to pay or so contest such taxes,
charges, Liens and assessments,
-4-
Secured Party at its option may pay any of them, and Secured Party shall be the
sole judge of the legality or validity thereof and the amount necessary to
discharge the same; (b) the Collateral will not be used for any unlawful purpose
or in violation of any Law, regulation or ordinance, nor used in any way that
will void or impair any insurance required to be carried in connection
therewith; (c) Grantor will, to the extent consistent with good business
practice, keep the Collateral in reasonably good repair, working order and
condition, and from time to time make all needful and proper repairs, renewals,
replacements, additions and improvements thereto and, as appropriate and
applicable, will otherwise deal with the Collateral in all such ways as are
considered good practice by owners of like Property; (d) Grantor will take all
reasonable steps to preserve and protect the Collateral; (e) Grantor will
maintain, with responsible insurance companies, insurance covering the
Collateral against such insurable losses as is required by the Loan Agreement
and as is consistent with sound business practice, and will cause Secured Party
to be designated as an additional insured and loss payee with respect to such
insurance, will obtain the written agreement of the insurers that such insurance
shall not be cancelled, terminated or materially modified to the detriment of
Secured Party without at least 30 days prior written notice to Secured Party,
and will furnish copies of such insurance policies or certificates to Secured
Party promptly upon request therefor; and (f) Grantor will promptly notify
Secured Party in writing in the event of any substantial or material damage to
the Collateral from any source whatsoever, and, except for the disposition of
------
collections and other proceeds of the Collateral permitted by Section 6 hereof,
Grantor will not remove or permit to be removed any part of the Collateral from
its place of business without the prior written consent of Secured Party, except
------
for such items of the Collateral as are removed in the ordinary course of
business or in connection with any transaction or disposition otherwise
permitted by the Loan Documents.
5. Secured Party's Rights Re Collateral. At any time (whether or not
------------------------------------
an Event of Default has occurred), without notice or demand and at the expense
of Grantor, Secured Party may, to the extent it may be necessary or desirable to
protect the security hereunder, but Secured Party shall not be obligated to: (a)
enter upon any premises on which Collateral is situated and examine the same or
(b) perform any obligation of Grantor under this Agreement or any obligation of
any other Person under the Loan Documents. At any time and from time to time, at
the expense of Grantor, Secured Party may, to the extent it may be necessary or
desirable to protect the security hereunder, but Secured Party shall not be
obligated to: (i) notify obligors on the Collateral that the Collateral has
been assigned to Secured Party; (ii) at any time and from time to time request
from obligors on the Collateral, in the name of Grantor or in the name of
Secured Party, information concerning the Collateral and the amounts owing
thereon; and (iii) cause the Collateral to be registered in the name of Secured
Party, as legal owner. Grantor shall maintain books and records pertaining to
the Collateral in such detail, form and scope as Secured Party shall reasonably
require consistent with Secured Party's interests hereunder. Grantor shall at
any time at Secured Party's request mark the Collateral and/or Grantor's ledger
cards, books of account and other records relating to the Collateral with
appropriate notations satisfactory to Secured Party disclosing that they are
subject to Secured Party's security interests. Secured Party shall at all
reasonable
-5-
times on reasonable notice have full access to and the right to audit any and
all of Grantor's books and records pertaining to the Collateral, and to confirm
and verify the value of the Collateral and to do whatever else Secured Party
reasonably may deem necessary or desirable to protect its interests; provided,
--------
however, that any such action which involves communicating with customers of
- -------
Grantor shall be carried out by Secured Party through Grantor's independent
auditors unless Secured Party shall then have the right directly to notify
obligors on the Collateral as provided in Section 9. Secured Party shall be
under no duty or obligation whatsoever to take any action to preserve any rights
of or against any prior or other parties in connection with the Collateral, to
exercise any voting rights or managerial rights with respect to any Collateral,
whether or not an Event of Default shall have occurred, or to make or give any
presentments, demands for performance, notices of non-performance, protests,
notices of protests, notices of dishonor or notices of any other nature
whatsoever in connection with the Collateral or the Secured Obligations. Secured
Party shall be under no duty or obligation whatsoever to take any action to
protect or preserve the Collateral or any rights of Grantor therein, or to make
collections or enforce payment thereon, or to participate in any foreclosure or
other proceeding in connection therewith.
6. Collections on the Collateral. Except as otherwise provided in any
----------------------------- ------
Loan Document, Grantor shall have the right to use and to continue to make
collections on and receive dividends and other proceeds of all of the Collateral
in the ordinary course of business so long as no Event of Default shall have
occurred and be continuing. Upon the occurrence and during the continuance of an
Event of Default, at the option of Secured Party, except as prohibited by
applicable Law Grantor's right to make collections on and receive dividends and
other proceeds of the Collateral and to use or dispose of such collections and
proceeds shall terminate, and any and all dividends, proceeds and collections,
including all partial or total prepayments, then held or thereafter received on
or on account of the Collateral will be held or received by Grantor in trust for
Secured Party and immediately delivered in kind to Secured Party. Any remittance
received by Grantor from any Person shall be presumed to relate to the
Collateral and to be subject to Secured Party's security interests. Upon the
occurrence and during the continuance of an Event of Default, Secured Party
shall have the right at all times to receive, receipt for, endorse, assign,
deposit and deliver, in the name of Secured Party or in the name of Grantor, any
and all checks, notes, drafts and other instruments for the payment of money
constituting proceeds of or otherwise relating to the Collateral; and Grantor
hereby authorizes Secured Party to affix, by facsimile signature or otherwise,
the general or special endorsement of it, in such manner as Secured Party shall
deem advisable, to any such instrument in the event the same has been delivered
to or obtained by Secured Party without appropriate endorsement, and Secured
Party and any collecting bank are hereby authorized to consider such endorsement
to be a sufficient, valid and effective endorsement by Grantor, to the same
extent as though it were manually executed by the duly authorized officer of
Grantor, regardless of by whom or under what circumstances or by what authority
such facsimile signature or other endorsement actually is affixed, without duty
of inquiry or responsibility as to such matters, and Grantor hereby expressly
waives demand, presentment, protest and notice of protest
-6-
or dishonor and all other notices of every kind and nature with respect to any
such instrument.
7. Possession of Collateral by Secured Party. All the Collateral now,
-----------------------------------------
heretofore or hereafter delivered to Secured Party shall be held by Secured
Party in its possession, custody and control. Any or all of the Collateral
delivered to Secured Party may be held in an interest bearing or noninterest
bearing account, in Secured Party's sole and absolute discretion, and Secured
Party may, in its discretion, apply any such interest to payment of the Secured
Obligations. Nothing herein shall obligate Secured Party to invest any
Collateral or obtain any particular return thereon. Upon the occurrence and
during the continuance of an Event of Default, whenever any of the Collateral is
in Secured Party's possession, custody or control, Secured Party may use,
operate and consume the Collateral, whether for the purpose of preserving and/or
protecting the Collateral, or for the purpose of performing any of Grantor's
obligations with respect thereto, or otherwise. Secured Party may at any time
deliver or redeliver the Collateral or any part thereof to Grantor, and the
receipt of any of the same by Grantor shall be complete and full acquittance for
the Collateral so delivered, and Secured Party thereafter shall be discharged
from any liability or responsibility therefor. So long as Secured Party
exercises reasonable care with respect to any Collateral in its possession,
custody or control, Secured Party shall have no liability for any loss of or
damage to such Collateral, and in no event shall Secured Party have liability
for any diminution in value of Collateral occasioned by economic or market
conditions or events. Secured Party shall be deemed to have exercised reasonable
care within the meaning of the preceding sentence if the Collateral in the
possession, custody or control of Secured Party is accorded treatment
substantially equal to that which Secured Party accords its own property, it
being understood that Secured Party shall not have any responsibility for (a)
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relating to any Collateral, whether or not
Secured Party has or is deemed to have knowledge of such matters, or (b) taking
any necessary steps to preserve rights against any Person with respect to any
Collateral.
8. Events of Default. There shall be an Event of Default hereunder
-----------------
upon the occurrence and during the continuance of an Event of Default under the
Loan Agreement.
9. Rights Upon Event of Default. Upon the occurrence and during the
----------------------------
continuance of an Event of Default, Secured Party shall have, in any
jurisdiction where enforcement hereof is sought, in addition to all other rights
and remedies that Secured Party may have under applicable Law or in equity or
under this Agreement (including, without limitation, all rights set forth in
---------
Section 6 hereof) or under any other Loan Document, all rights and remedies of a
secured party under the Uniform Commercial Code as enacted in any jurisdiction,
and, in addition, the following rights and remedies, all of which may be
exercised with or without notice to Grantor and without affecting the
Obligations of Grantor hereunder or under any other Loan Document, or the
enforceability of the Liens and security interests created hereby: (a) to
foreclose the Liens and security interests created hereunder or under any other
agreement relating to any Collateral by any available judicial procedure or
without
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judicial process; (b) to enter any premises where any Collateral may be located
for the purpose of securing, protecting, inventorying, appraising, inspecting,
repairing, preserving, storing, preparing, processing, taking possession of or
removing the same; (c) to sell, assign, lease or otherwise dispose of any
Collateral or any part thereof, either at public or private sale or at any
broker's board, in lot or in bulk, for cash, on credit or otherwise, with or
without representations or warranties and upon such terms as shall be acceptable
to Secured Party; (d) to notify obligors on the Collateral that the Collateral
has been assigned to Secured Party and that all payments thereon are to be made
directly and exclusively to Secured Party; (e) to collect by legal proceedings
or otherwise all dividends, distributions, interest, principal or other sums now
or hereafter payable upon or on account of the Collateral; (f) to enter into any
extension, reorganization, deposit, merger or consolidation agreement, or any
other agreement relating to or affecting the Collateral, and in connection
therewith Secured Party may deposit or surrender control of the Collateral
and/or accept other Property in exchange for the Collateral; (g) to settle,
compromise or release, on terms acceptable to Secured Party, in whole or in
part, any amounts owing on the Collateral and/or any disputes with respect
thereto; (h) to extend the time of payment, make allowances and adjustments and
issue credits in connection with the Collateral in the name of Secured Party or
in the name of Grantor; (i) to enforce payment and prosecute any action or
proceeding with respect to any or all of the Collateral and take or bring, in
the name of Secured Party or in the name of Grantor, any and all steps, actions,
suits or proceedings deemed by Secured Party necessary or desirable to effect
collection of or to realize upon the Collateral, including any judicial or
---------
nonjudicial foreclosure thereof or thereon, and Grantor specifically consents to
any nonjudicial foreclosure of any or all of the Collateral or any other action
taken by Secured Party which may release any obligor from personal liability on
any of the Collateral, ad Grantor waives any right not expressly provided for in
this Agreement to receive notice of any public or private judicial or
nonjudicial sale or foreclosure of any security or any of the Collateral; and
any money or other property received by Secured Party in exchange for or on
account of the Collateral, whether representing collections or proceeds of
Collateral, and whether resulting from voluntary payments or foreclosure
proceedings or other legal action taken by Secured Party or Grantor may be
applied by Secured Party without notice to Grantor to the Secured Obligations in
such order and manner as Secured Party in its sole discretion shall determine;
(j) to insure, process and preserve the Collateral; (k) to exercise all rights,
remedies, powers or privileges provided under any of the Loan Documents; (1) to
remove, from any premises where the same may be located, the Collateral and any
and all documents, instruments, files and records, and any receptacles and
cabinets containing the same, relating to the Collateral, and Secured Party may,
at the cost and expense of Grantor, use such of its supplies; equipment,
facilities and space at its places of business as may be necessary or
appropriate to properly administer, process, store, control, prepare for sale or
disposition and/or sell or dispose of the Collateral or to properly administer
and control the handling of collections and realizations thereon, and Secured
Party shall be deemed to have a rent-free tenancy of any premises of Grantor for
such purposes and for such periods of time as reasonably required by Secured
Party; (m) to receive, open and dispose of all mail addressed to Grantor and
notify postal authorities to change the address for delivery thereof to such
address as Secured Party may designate; provided that Secured Party agrees that
--------
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it will promptly deliver over to Grantor such opened mail as does not relate to
the Collateral; and (n) to exercise all other rights, powers, privileges and
remedies of an owner of the Collateral; all at Secured Party's sole option and
as Secured Party in its sole discretion may deem advisable. Grantor will, at
Secured Party's request, assemble the Collateral and make it available to
Secured Party at places which Secured Party may designate, whether at the
premises of Grantor or elsewhere, and will make available to Secured Party, free
of cost, all premises, equipment and facilities of Grantor for the purpose of
Secured Party's taking possession of the Collateral or storing same or removing
or putting the Collateral in salable form or selling or disposing of same.
Upon the occurrence and during the continuance of an Event of Default,
Secured Party also shall have the right, without notice or demand, either in
person, by agent or by a receiver to be appointed by a court, and without regard
to the adequacy of any security for the Secured Obligations, to take possession
of the Collateral or any part thereof and to collect and receive the rents,
issues, profits, income and proceeds thereof. Taking possession of the
Collateral shall not cure or waive any Event of Default or notice thereof or
invalidate any act done pursuant to such notice. The rights, remedies and powers
of any receiver appointed by a court shall be as ordered by said court.
Any public or private sale or other disposition of the Collateral may
be held at any office of Secured Party, or at Grantor's place of business, or at
any other place permitted by applicable Law, and without the necessity of the
Collateral's being within the view of prospective purchasers. Secured Party may
direct the order and manner of sale of the Collateral, or portions thereof, as
it in its sole and absolute discretion may determine, and Grantor expressly
waives any right to direct the order and manner of sale of any Collateral.
Secured Party or any Person on Secured Party's behalf may bid and purchase at
any such sale or other disposition. The net cash proceeds resulting from the
collection, liquidation, sale, lease or other disposition of the Collateral
shall be applied, first, to the expenses (including reasonable attorneys' fees
and disbursements) of retaking, holding, storing, processing and preparing for
sale or lease, selling, leasing, collecting, liquidating and the like, and then
to the satisfaction of the Secured Obligations in such order as shall be
determined by Secured Party in its sole and absolute discretion. Grantor and any
other Person then obligated therefor shall pay to Secured Party on demand any
deficiency with regard thereto which may remain after such sale, disposition,
collection or liquidation of the Collateral.
Unless the Collateral is perishable or threatens to decline speedily
in value or is of a type customarily sold on a recognized market, Secured Party
will send or otherwise make available to Grantor reasonable notice of the time
and place of any public sale thereof or of the time on or after which any
private sale thereof is to be made. The requirement of sending reasonable notice
conclusively shall be met if such notice is mailed, first class mail, postage
prepaid, to Grantor at its address set forth in the Loan Agreement, or delivered
or otherwise sent to Grantor, at least five (5) days before the date of the
sale. Grantor expressly waives any right to receive
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notice of any public or private sale of any Collateral or other security for the
Secured Obligations except as expressly provided for in this paragraph.
------
With respect to any Collateral consisting of securities, partnership
interests, joint venture interests, Investments or the like, and whether or not
any of such Collateral has been effectively registered under the Securities Act
of 1933 or other applicable Laws, Secured Party may, in its sole and absolute
discretion, sell all or any part of such Collateral at private sale in such
manner and under such circumstances as Secured Party may deem necessary or
advisable in order that the sale may be lawfully conducted. Without limiting the
foregoing, Secured Party may (i) approach and negotiate with a limited number of
potential purchasers, and (ii) restrict the prospective bidders or purchasers to
persons who will represent and agree that they are purchasing such Collateral
for their own account for investment and not with a view to the distribution or
resale thereof. In the event that any such Collateral is sold at private sale,
Grantor agrees that if such Collateral is sold for a price which Secured Party
in good faith believes to be reasonable under the circumstances then existing,
then (a) the sale shall be deemed to be commercially reasonable in all respects,
(b) Grantor shall not be entitled to a credit against the Secured Obligations in
an amount in excess of the purchase price, and (c) Secured Party shall not incur
any liability or responsibility to Grantor in connection therewith,
notwithstanding the possibility that a substantially higher price might have
been realized at a public sale. Grantor recognizes that a ready market may not
exist for such Collateral if it is not regularly traded on a recognized
securities exchange, and that a sale by Secured Party of any such Collateral for
an amount substantially less than a pro rata share of the fair market value of
the issuer's assets minus liabilities may be commercially reasonable in view of
the difficulties that may be encountered in attempting to sell a large amount of
such Collateral or Collateral that is privately traded.
Upon consummation of any sale of Collateral hereunder, Secured Party
shall have the right to assign, transfer and deliver to the purchaser or
purchasers thereof the Collateral so sold. Each such purchaser at any such sale
shall hold the Collateral so sold absolutely free from any claim or right upon
the part of Grantor or any other Person except a third party lienholder
permitted under the Loan Documents, and Grantor hereby waives (to the extent
permitted by applicable Laws) all rights of redemption, stay and appraisal which
it now has or may at any time in the future have under any rule of Law or
statute now existing or hereafter enacted. If the sale of all or any part of the
Collateral is made on credit or for future delivery, Secured Party shall not be
required to apply any portion of the sale price to the Secured Obligations until
such amount actually is received by Secured Party, and any Collateral so sold
may be retained by Secured Party until the sale price is paid in full by the
purchaser or purchasers thereof. Secured Party shall not incur any liability in
case any such purchaser or purchasers shall fail to pay for the Collateral so
sold, and, in case of any such failure, the Collateral may be sold again.
10. Voting Rights: Dividends: etc. With respect to any Collateral
-----------------------------
consisting of securities, partnership interests, joint venture interests,
Investments or the like (referred to collectively and individually in this
Section 10 and in Section 11
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as the "Investment Collateral"), so long as no Event of Default occurs and
---------------------
remains continuing:
10.1 Voting Rights. Grantor shall be entitled to exercise any and all
-------------
voting and other consensual rights pertaining to the Investment Collateral, or
any part thereof, for any purpose not inconsistent with the terms of this
Agreement, the Loan Agreement, or the other Loan Documents; provided, however
-------- -------
that Grantor shall not exercise, or shall refrain from exercising, any such
right if it would result in a Default.
10.2 Dividend and Distribution Rights. Except as otherwise provided in
--------------------------------
any Loan Document, Grantor shall be entitled to receive and to retain and use
any and all dividends or distributions paid in respect of the Investment
Collateral; provided, however, that any and all such dividends or distributions
-------- -------
received in the form of capital stock, certificated securities, warrants,
options or rights to acquire capital stock or certificated securities forthwith
shall be, and the certificates representing such capital stock or certificated
securities, if any, forthwith shall be delivered to Secured Party to hold as
pledged Collateral and shall, if received by Grantor, be received in trust for
the benefit of Secured Party, be segregated from the other Property of Grantor,
and forthwith be delivered to Secured Party as pledged Collateral in the same
form as so received (with any necessary endorsements).
11. Rights During Event of Default. With respect to any Investment
------------------------------
Collateral, so long as an Event of Default has occurred and is continuing:
11.1 Voting, Dividend, and Distribution Rights. At the option of
-----------------------------------------
Secured Party, all rights of Grantor to exercise the voting and other consensual
rights which it would otherwise be entitled to exercise pursuant to Section 10.1
above, and to receive the dividends and distributions which it would otherwise
be authorized to receive and retain pursuant to Section 10.2 above, shall cease,
and all such rights thereupon shall become vested in Secured Party which
thereupon shall have the sole right to exercise such voting and other consensual
rights and to receive and to hold as pledged Collateral such dividends and
distributions.
11.2 Dividends and Distributions Held in Trust. All dividends and
-----------------------------------------
other distributions which are received by Grantor contrary to the provisions of
this Agreement shall be received in trust for the benefit of Secured Party,
shall be segregated from other funds of Grantor, and forthwith shall be paid
over to Secured Party as pledged Collateral in the same form as so received
(with any necessary endorsements).
11.3 Irrevocable Proxy. Grantor does hereby revoke all previous
-----------------
proxies with regard to the Investment Collateral and appoint Secured Party as
its proxyholder to attend and vote at any and all meetings of the shareholders
or other equity holders of the Persons that issued the Investment Collateral and
any adjournments thereof, held on or after the date of the giving of this proxy
and prior to the termination of this proxy, and to execute any and all written
consents of shareholders or equity holders of such Persons executed on or after
the date of the giving of this
-11-
proxy and prior to the termination of this proxy, with the same effect as if
Grantor had personally attended the meetings or had personally voted its shares
or other interests or had personally signed the written consents; provided,
--------
however, that the proxyholder shall have rights hereunder only upon the
- -------
occurrence and during the continuance of an Event of Default. Grantor hereby
authorizes Secured Party to substitute another Person as the proxyholder and,
upon the occurrence and during the continuance of any Event of Default, hereby
authorizes the proxyholder to file this proxy and any substitution instrument
with the secretary or other appropriate official of the appropriate Person. This
proxy is coupled with an interest and is irrevocable until such time as all
Secured Obligations have been paid and performed in full.
12. Attorney-in-Fact. Grantor hereby irrevocably nominates and
----------------
appoints Secured Party as its attorney-in-fact for the following purposes: (a)
to do all acts and things which Secured Party may deem necessary or advisable to
perfect and continue perfected the security interests created by this Agreement
and, upon the occurrence and during the continuance of an Event of Default, to
preserve, process, develop, maintain and protect the Collateral; (b) upon the
occurrence and during the continuance of an Event of Default, to do any and
every act which Grantor is obligated to do under this Agreement, at the expense
of the Grantor so obligated and without any obligation to do so; (c) to prepare,
sign, file and/or record, for Grantor, in the name of the Grantor, any financing
statement, application for registration, or like paper, and to take any other
action deemed by Secured Party necessary or desirable in order to perfect or
maintain perfected the security interests granted hereby; and (d) upon the
occurrence and during the continuance of an Event of Default, to execute any and
all papers and instruments and do all other things necessary or desirable to
preserve and protect the Collateral and to protect Secured Party's security
interests therein; provided, however, that Secured Party shall be under no
-------- -------
obligation whatsoever to take any of the foregoing actions, and, absent bad
faith or actual malice, Secured Party shall have no liability or responsibility
for any act taken or omission with respect thereto.
13. Costs and Expenses. Grantor agrees to pay to Secured Party all
------------------
costs and expenses (including, without limitation, reasonable attorneys' fees
---------
and disbursements) incurred by Secured Party in the enforcement or attempted
enforcement of this Agreement, whether or not an action is filed in connection
therewith, and in connection with any waiver or amendment of any term or
provision hereof. All advances, charges, costs and expenses, including
---------
reasonable attorneys' fees and disbursements, incurred or paid by Secured Party
in exercising any right, privilege, power or remedy conferred by this Agreement
(including, without limitation, the right to perform any Secured Obligation of
---------
Grantor under the Loan Documents), or in the enforcement or attempted
enforcement thereof, shall be secured hereby and shall become a part of the
Secured Obligations and shall be paid to Secured Party by Grantor, immediately
upon demand, together with interest thereon at the Default Rate.
14. Statute of Limitations and Other Laws. Until the Secured
-------------------------------------
Obligations shall have been paid and performed in full, the power of sale and
all other rights, privileges, powers and remedies granted to Secured Party
hereunder shall
-12-
continue to exist and may be exercised by Secured Party at any time and from
time to time irrespective of the fact that any of the Secured Obligations may
have become barred by any statute of limitations. Grantor expressly waives the
benefit of any and all statutes of limitation, and any and all Laws providing
for exemption of property from execution or for valuation and appraisal upon
foreclosure, to the maximum extent permitted by applicable Law.
15. Other Agreements. Nothing herein shall in any way modify or limit
----------------
the effect of terms or conditions set forth in any other security or other
agreement executed by Grantor or in connection with the Secured Obligations, but
each and every term and condition hereof shall be in addition thereto. All
provisions contained in the Loan Agreement or any other Loan Document that apply
to Loan Documents generally are fully applicable to this Agreement and are
incorporated herein by this reference.
16. Understandings With Respect to Waivers and Consents. Grantor
---------------------------------------------------
warrants and agrees that each of the waivers and consents set forth herein are
made after consultation with legal counsel and with full knowledge of their
significance and consequences, with the understanding that events giving rise to
any defense or right waived may diminish, destroy or otherwise adversely affect
rights which Grantor otherwise may have against Secured Party or others, or
against Collateral, and that, under the circumstances, the waivers and consents
herein given are reasonable and not contrary to public policy or Law. If any of
the waivers or consents herein are determined to be contrary to any applicable
Law or public policy, such waivers and consents shall be effective to the
maximum extent permitted by Law.
17. Release of Grantor. This Agreement and all Secured Obligations of
------------------
Grantor hereunder shall be released when all Secured Obligations have been paid
in full in cash or otherwise performed in full and when no portion of the
Commitments remain outstanding. Upon such release of Grantor's Secured
Obligations hereunder, Secured Party shall return any pledged Collateral to
Grantor, or to the Person or Persons legally entitled thereto, and shall
endorse, execute, deliver, record and file all instruments and documents, and do
all other acts and things, reasonably required for the return of the Collateral
to Grantor, or to the Person or Persons legally entitled thereto, and to
evidence or document the release of Secured Party's interests arising under this
Agreement, all as reasonably requested by, and at the sole expense of, Grantor.
IN WITNESS WHEREOF, Grantor has executed this Agreement by its duly
authorized officers as of the date first written above.
"Grantor"
ELDORADO CAPITAL CORP.
By:
----------------------------------------
Donald L Carano, Chief Executive Officer
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