EXHIBIT 10.83
SECURITY AGREEMENT
This SECURITY AGREEMENT (this "Agreement") is dated as of November 30,
1998 and entered into by and between SANTA FE GAMING CORPORATION, a Nevada
corporation ("Grantor"), and IBJ XXXXXXXX BANK & TRUST COMPANY, as successor
trustee, for the benefit of the holders of the Bonds (as hereinafter defined)
(the "Holders") (the "Secured Party"), under the Indenture dated as of
December 1, 1988 among Pioneer Finance Corp., a Nevada corporation ("PFC"),
Grantor, as successor-in-interest to Sahara Casino Partners, L.P., and
Security Pacific National Bank as predecessor to the Secured Party, as
amended by (i) that certain First Supplemental Indenture, dated as of
December 21, 1990, (ii) that certain Second Supplemental Indenture, dated as
of September 30, 1993, (iii) that certain Tri-Party Agreement, dated as of
December 30, 1994, (iv) that certain Third Supplemental Indenture, dated as
of August 31, 1995, and (v) that certain Fourth Supplemental Indenture, dated
as of November 30, 1998 (the "Indenture").
PRELIMINARY STATEMENTS
A. PFC issued $120,000,000 principal amount of 13 1/2% First Mortgage
Bonds due December 1, 1998 (the "Bonds"), pursuant to the Indenture, of which
$60,000,000 principal amount remains outstanding as of the date hereof.
Capitalized terms used and not otherwise defined herein shall have the
meanings specified in the Indenture.
B. Pursuant to the Offering Circular and Consent Solicitation
Statement dated October 23, 1998 and Supplement dated November 14, 1998
(together, the "Amended Joint Offering Circular/Consent Solicitation
Statement"), PFC has solicited (the "Solicitation") the consents (the
"Consents") of Holders to the Proposed Consents (as defined in the Amended
Joint Offering Circular/Consent Solicitation Statement).
C. In connection with the Solicitation and the receipt and acceptance
of Consents by PFC, Grantor has agreed to grant security interests in the
Collateral (as defined herein) to secure the payment of the principal of,
premium, if any, and interest on, the Bonds.
NOW, THEREFORE, in consideration of the premises, in accordance with the
Solicitation and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Grantor hereby agrees with Secured
Party as follows:
SECTION 1. GRANT OF SECURITY. Grantor hereby grants to Secured
Party, for the equal and ratable benefit of the Holders, a security interest
in all of Grantor's right, title and interest in and to the following, in
each case whether now or hereafter existing or in which Grantor now has or
hereafter acquires an interest and wherever the same may be located (the
"Collateral"):
(a) all present and future chattels, furniture, furnishings, goods,
equipment (including, without limitation, gaming equipment and devices),
fixtures and all other tangible personal property, of whatever kind and
nature (including, without limitation, any building or structure that is now
or that may hereafter be erected on any premises owned by Grantor, the
"Premises"),
including, but not limited to, machinery, materials, goods and equipment now
or hereafter used in any construction or operation relating thereto and all
other tangible personal property, together with all replacements and
substitutions for any and all personal property in which Grantor has an
interest, including without limitation such goods and equipment as shall from
time to time be located, placed, installed or used in or upon, or procured
for use, or to be used or useful in connection with the operation of the
whole, or any part of, the Premises or any facilities on the Premises and all
parts thereof and all accessions thereto (any and all such equipment,
replacements, substitutions, parts and accessions being the "Equipment");
(b) all present and future inventory and merchandise in all of its
forms (including, but not limited to, (i) all goods held by Grantor for sale
or lease or to be furnished under contracts of service or so leased or
furnished, (ii) all raw materials, (iii) works in process, (iv) all goods in
which Grantor has an interest in mass or a joint or other interest or right
of any kind, (v) all goods that are returned to or repossessed by Grantor,
and (vi) all accessions thereto and products thereof (all such inventory,
accessions and products being the "Inventory");
(c) all present and future accounts, accounts receivable, rentals,
revenues, receipts, payments, and income of any nature whatsoever derived
from or received with respect to any facilities on the Premises, agreements,
contracts, leases, contract rights, rights to payment, instruments,
documents, chattel paper, security agreements, guaranties, undertakings,
surety bonds, insurance policies, condemnation deposits and awards, notes and
drafts, securities, certificates of deposit and the right to receive all
payments thereon or in respect thereof (whether principal, interest, fees or
otherwise), contract rights (other than rights under contracts or
governmental permits that may not be transferred by law), including, without
limitation, rights to all deposits from tenants and other users of the
Premises or any facilities on the Premises, rights under all contracts
relating to the construction, renovation or restoration of any of the
improvements now or hereafter located on the Premises or the financing
thereof and all rights under payment or performance bonds, warranties, and
guaranties, and all rights to payment from any credit/charge card
organization or entity, books of account, and principal, interest and
payments due on account of goods sold, services rendered, loans made or
credit extended, on or in connection with the Premises or any facilities on
the Premises and all forms of obligations owing to and rights of Grantor or
in which Grantor may have any interest, however created or arising (any and
all such accounts, contract rights, chattel paper, documents, instruments,
general intangibles and other obligations being the "Accounts", and any and
all such security agreements, leases and other contracts being the "Related
Contracts");
(d) all present and future right, title and interest of Grantor in and
to all leases, subleases, licenses, concessions, franchises and other use or
occupancy agreements, and any amendments, modifications, extensions or
renewals thereof (collectively, "Leases"), whether or not specifically herein
described, that now or may hereafter pertain to or affect the Premises or any
portion thereof, and all amendments to the same, including, but not limited
to, the following: (i) all payments due and to become due under such Leases,
whether as rent, damages, insurance payments, condemnation awards, or
otherwise; (ii) all claims, rights, powers, privileges and remedies under
such Leases; and (iii) all rights of the Grantor under such Leases to
exercise any election or option, or to give-or receive any notice, consent,
waiver or approval, or to accept any surrender of the premises or any part
thereof, together with full power and authority in the name
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of the Grantor, or otherwise, to demand and receive, enforce, collect, and
receipt for any or all of the foregoing, to endorse or execute any checks or
any instruments or orders, to file any claims, and to take any other action
that Secured Party may deem necessary or advisable in connection therewith;
(e) all present and future deposit accounts of Grantor, 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;
(f) all present and future general intangibles (including but not
limited to all governmental permits relating to construction or other
activities on the Premises), 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, rights to
payment or performance, judgments taken on any rights or claims included in
the Collateral, trade secrets, computer programs, software, customer lists,
business names, trademarks, trade names and service marks, patents, patent
applications, licenses, copyrights, technology, processes, proprietary
information and insurance proceeds;
(g) all present and future books and records, including, without
limitation, books of account and ledgers of every kind and nature, ledger
cards, computer programs, tapes, disks and other information storage devices,
all related data processing software, and all electronically recorded data
relating to Grantor or its business, all receptacles and containers for such
records, and all files and correspondence;
(h) all present and future maps, plans, specifications, surveys,
studies, reports, data and drawings (including, without limitation,
architectural, structural, mechanical and engineering plans and
specifications, studies, data and drawings) prepared for or relating to the
Premises or the construction, renovation or restoration of any improvements
on the Premises or the extraction of minerals, sand, gravel or other valuable
substances from the Premises, together with all amendments and modifications
thereto;
(i) all present and future licenses, permits, variances, special
permits, franchises, certificates, rulings, certifications, validations,
exemptions, filings, registrations, authorizations, consents, approvals,
waivers, orders, rights and agreements (including options, option rights and
contract rights), other than those that may not be transferred by law, now or
hereafter obtained by Grantor from any governmental authority having or
claiming jurisdiction over the Premises or any other element of the
Collateral or providing access thereto, or the operation of any business on,
at, or from the Premises;
(j) all present and future stocks, bonds, debentures, securities,
investment property, subscription rights, options, warrants, puts, calls,
certificates, partnership interests, joint venture interests, investments,
brokerage accounts and all rights, preferences, privileges, dividends,
distributions, redemption payments and liquidation payments received or
receivable with respect thereto;
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(k) all present and future accessions, appurtenances, components,
repairs, repair parts, spare parts, replacements, substitutions, additions,
issue and improvements to or of or with respect to any of the foregoing;
(l) all other fixtures and storage and office facilities, and all
accessions thereto and products thereof and all water stock relating to the
Premises;
(m) all other tangible and intangible personal property of Grantor;
(n) all rights, remedies, powers and privileges of Grantor with respect
to any of the foregoing; and
(o) any and all proceeds, products, rents, income and profits of any of
the foregoing, including, without limitation, all money, accounts, general
intangibles, deposit accounts, documents, instruments, chattel paper, goods,
insurance proceeds (whether or not the Secured Party is the loss payee), and
any other tangible or intangible property received upon the sale or
disposition of any of the foregoing (it being agreed, for purposes hereof,
that the term "proceeds" includes whatever is receivable or received when any
of the Collateral is sold, collected, exchanged or otherwise disposed of,
whether such disposition is voluntary or involuntary);
provided, however, that the Collateral shall not include the approximately 20
acre parcel of real property located at Xxxx Xxxxxxxx Xxxx, Xxx Xxxxx,
Xxxxxx, owned by Grantor as of the date hereof, or any shares of capital
stock of subsidiaries of Grantor other than Santa Fe Hotel Inc., a Nevada
corporation, Sahara Resorts, a Nevada corporation, Hacienda Hotel Inc., a
Nevada corporation, Sahara Nevada Corp., a Nevada corporation, and Santa Fe
Coffee Company, a Nevada corporation.
SECTION 2. SECURITY FOR OBLIGATIONS. This Agreement secures, and
the Collateral is collateral security for, the prompt payment or performance
in full when due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise (including the payment of
amounts that would become due but for the operation of the automatic stay
under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)), of
all obligations and liabilities of every nature of PFC now or hereafter
existing under or arising out of or in connection with the Bonds, Indenture
and Mortgage Documents and all amendments, extensions or renewals thereof,
whether for principal, premium, if any, interest (including without
limitation interest that, but for the filing of a petition in bankruptcy with
respect to PFC, would accrue on such obligations), fees, expenses,
indemnities or otherwise, whether voluntary or involuntary, direct or
indirect, absolute or contingent, liquidated or unliquidated, whether or not
jointly owed with others, and whether or not from time to time decreased or
extinguished and later increased, created or incurred, and all or any portion
of such obligations or liabilities that are paid, to the extent all or any
part of such payment is avoided or recovered directly or indirectly from
Secured Party or any Holder as a preference, fraudulent transfer or otherwise
(all such obligations and liabilities being the "Underlying Debt"), and all
obligations of every nature of Grantor now or hereafter existing under this
Agreement (all such obligations of Grantor, together with the Underlying
Debt, being the "Secured Obligations").
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SECTION 3. GRANTOR REMAINS LIABLE. Anything contained herein to the
contrary notwithstanding, (a) Grantor shall remain liable under any contracts
and agreements included in the Collateral, to the extent set forth therein,
to perform all of its duties and obligations thereunder to the same extent as
if this Agreement had not been executed, (b) the exercise by Secured Party of
any of its rights hereunder shall not release Grantor from any of its duties
or obligations under the contracts and agreements included in the Collateral,
and (c) Secured Party shall not have any obligation or liability under any
contracts and agreements included in the Collateral by reason of this
Agreement or otherwise, nor shall Secured Party be obligated to perform any
of the obligations or duties of Grantor thereunder or to take any action to
collect or enforce any claim for payment assigned hereunder.
SECTION 4. REPRESENTATIONS AND WARRANTIES. Grantor represents and
warrants as follows:
(a) OWNERSHIP OF COLLATERAL. Except for the security interest created
by this Agreement, Grantor owns the Collateral free and clear of any Lien.
Except such as may have been filed in favor of Secured Party relating to this
Agreement, no effective financing statement or other instrument similar in
effect covering all or any part of the Collateral is on file in any filing or
recording office.
(b) OFFICE LOCATIONS: OTHER NAMES. The chief place of business, the
chief executive office and the office where Grantor keeps its records
regarding the Accounts and all originals of all chattel paper that evidence
Accounts is, and has been for the four month period preceding the date
hereof, located at 0000 Xxxxx Xxxxxx Xxxxx, Xxx Xxxxx, Xxxxxx 00000. Grantor
has not in the past done, and does not now do, business under any other name
(including any trade-name or fictitious business name) except Santa Fe Gaming
Corporation.
(c) GOVERNMENTAL AUTHORIZATIONS. No authorization, approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either (i) the grant by Grantor of the
security interest granted hereby, (ii) the execution, delivery or performance
of this Agreement by Grantor, or (iii) the perfection of or the exercise by
Secured Party of its rights and remedies hereunder (except (i) the filing of
Uniform Commercial Code financing statements with the office of the Secretary
of State of the State of Nevada and (ii) as has been previously taken by or
at the direction of Grantor).
(d) PERFECTION. This Agreement, together with the filing of a UCC-l
financing statement describing the Collateral with the Secretary of State of
Nevada with the Xxxxx County Recorder creates a valid, perfected, enforceable
and first priority security interest in the Collateral, securing the payment
of the Secured Obligations, and all filings and other actions necessary or
desirable to perfect and protect such security interest have been duly made
or taken.
(e) OTHER INFORMATION. All information heretofore, herein or hereafter
supplied to Secured Party by or on behalf of Grantor with respect to the
Collateral is accurate and complete in all material respects.
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SECTION 5. FURTHER ASSURANCES.
(a) Grantor agrees that from time to time, at the expense of Grantor,
Grantor will promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or desirable,
or that Secured Party reasonably may request, in order to perfect and protect
any security interest granted or purported to be granted hereby or to enable
Secured Party to exercise and enforce its rights and remedies hereunder with
respect to any Collateral. Without limiting the generality of the foregoing,
Grantor will: (i) at the request of Secured Party xxxx conspicuously each
item of chattel paper included in the Accounts, each Related Contract and, at
the request of Secured Party, each of its records pertaining to the
Collateral, with a legend, in form and substance satisfactory to Secured
Party, indicating that such Collateral is subject to the security interest
granted hereby, (ii) at the request of Secured Party, deliver and pledge to
Secured Party hereunder all promissory notes and other instruments (including
checks) and all original counterparts of chattel paper constituting
Collateral, duly endorsed and accompanied by duly executed instruments of
transfer or assignment, all in form, and substance satisfactory to Secured
Party, (iii) execute and file such financing or continuation statements, or
amendments thereto, and such other instruments or notices, as may be
necessary or desirable, or as Secured Party may reasonably request, in order
to perfect and preserve the security interests granted or purported to be
granted hereby, (iv) at any reasonable time, upon request by Secured Party,
exhibit the Collateral to and allow inspection of the Collateral by Secured
Party, or persons designated by Secured Party, and (v) at Secured Party's
reasonable request, appear in and defend any action or proceeding that may
affect Grantor's title to or Secured Party's security interest in all or any
significant part of the Collateral.
(b) Grantor hereby authorizes Secured Party to file one or more
financing or continuation statements, and amendments thereto, relative to all
or any part of the Collateral without the signature of Grantor. Grantor
agrees that a carbon, photographic or other reproduction of this Agreement or
of a financing statement signed by Grantor shall be sufficient as a financing
statement and may be filed as a financing statement in any and all
jurisdictions.
(c) Grantor will furnish to Secured Party from time to time statements
and schedules further identifying and describing the Collateral and such
other reports in connection with the Collateral as Secured Party may
reasonably request, all in reasonable detail.
SECTION 6. CERTAIN COVENANTS OF GRANTOR. Grantor shall:
(a) not use or permit any Collateral to be used unlawfully or in
violation of any provision of this Agreement or any applicable statute,
regulation or ordinance or any policy of insurance covering the Collateral;
(b) notify Secured Party of any change in Grantor's name or identity
within 15 days of such change;
(c) give Secured Party 30 days prior written notice of any change in
Grantor's chief place of business, chief executive office or residence;
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(d) if Secured Party gives value to enable Grantor to acquire rights in
or the use of any Collateral, use such value for such purposes; and
(e) pay promptly when due all property and other taxes, assessments and
governmental charges or levies imposed upon, and all claims (including claims
for labor, materials and supplies) against, the Collateral, except to the
extent the validity thereof is being contested in good faith and for which
adequate reserves have been established; provided that Grantor shall in any
event pay such taxes, assessments, charges, levies or claims not later than
five days prior to the date of any proposed sale under any judgment, writ or
warrant of attachment entered or filed against Grantor or any of the
Collateral as a result of the failure to make such payment.
SECTION 7. SPECIAL COVENANTS WITH RESPECT TO EQUIPMENT AND
INVENTORY. Grantor shall:
(a) keep the Equipment and Inventory at the Premises or, upon 30 days
prior written notice to Secured Party, at such other places in jurisdictions
where all action that may be necessary or desirable, or that Secured Party
may reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby, or to enable Secured Party to
exercise and enforce its rights and remedies hereunder, with respect to such
Equipment and Inventory shall have been taken;
(b) cause the Equipment to be maintained and preserved in the same
condition, repair and working order as when new, ordinary wear and tear
excepted, and shall forthwith make or cause to be made all repairs,
replacements and other improvements in connection therewith that are
necessary or desirable to such end. Grantor shall promptly furnish to Secured
Party a statement respecting any material loss or damage to any of the
Equipment;
(c) notify Secured Party of the establishment after the date hereof of
any securities accounts or deposit accounts in which Secured Party may take a
security interest pursuant to applicable law and take such steps as may be
requested by Secured Party to perfect Secured Party's lien therein; and
(d) perform all acts that are necessary or desirable to cause all
licenses, permits, variances, special permits, franchises, certificates,
rulings, certifications, validations, exemptions, filings, registrations,
authorizations, consents, approvals. waivers, orders, rights, and agreements
in which a security interest has been conveyed to Secured Party pursuant to
subsection 1(h) to remain in full force and effect.
SECTION 8. INSURANCE. Grantor shall, at its own expense,
maintain insurance with respect to the Equipment and Inventory, if any.
SECTION 9. DEPOSIT ACCOUNTS; SECURITIES ACCOUNTS. Upon the
occurrence and during the continuation of an Event of Default or Potential
Event of Default, Secured Party may exercise dominion and control over, and
refuse to permit further withdrawals (whether of money,
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securities, instruments or other property) from any securities accounts or
deposit accounts maintained with Secured Party constituting part of the
Collateral.
SECTION 10. LICENSE OF PATENTS, TRADEMARKS, COPYRIGHTS, ETC. Grantor
hereby assigns, transfers and conveys to Secured Party, effective upon the
occurrence of any Event of Default, the non-exclusive right and license to
use all trademarks, tradenames, copyrights, customers lists, patents or
technical processes owned or used by Grantor that relate to the Collateral
and any other collateral granted by Grantor as security for the Secured
Obligations, together with any goodwill associated therewith, all to the
extent necessary to enable Secured Party to use, possess and realize on the
Collateral and to enable any successor or assign to enjoy the benefits of the
Collateral. This right and license shall inure to the benefit of all
successors, assigns and transferees of Secured Party and its successors,
assigns and transferees, whether by voluntary conveyance, operation of law,
assignment, transfer, foreclosure, deed in lieu of foreclosure or otherwise.
Such right and license is granted free of charge, without requirement that
any monetary payment whatsoever be made to Grantor.
SECTION 11. OTHER LIENS. Grantor shall not, except for the security
interest created by this Agreement and as otherwise contemplated by the
Indenture, the Solicitation and the Mortgage Documents, create or suffer to
exist any Lien upon or with respect to any of the Collateral to secure the
indebtedness or other obligations of any Person.
SECTION 12. SECURED PARTY APPOINTED ATTORNEY-IN-FACT. Grantor hereby
irrevocably appoints Secured Party as Grantor's attorney-in-fact, with full
authority in the place and stead of Grantor and in the name of Grantor,
Secured Party or otherwise, from time to time in Secured Party's discretion
to take any action and to execute any instrument that Secured Party may deem
necessary or advisable to accomplish the purposes of this Agreement,
including without limitation:
(a) to ask for, demand, collect, xxx for, recover, compound, receive
and give acquittance and receipts for moneys due and to become due under or
in respect of any of the Collateral;
(b) to receive, endorse and collect any drafts or other instruments,
documents and chattel paper in connection with clause (a) above;
(c) to file any claims or take any action or institute any proceedings
(including, without limitation, any proceeding before any Nevada Gaming
Authority) that Secured Party may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
Secured Party with respect to any of the Collateral;
(d) to pay or discharge taxes or Liens (other than Liens permitted
under this Agreement) levied or placed upon or threatened against the
Collateral, the legality or validity thereof and the amounts necessary to
discharge the same to be determined by Secured Party in its sole discretion,
any such payments made by Secured Party to become obligations of Grantor to
Secured Party, due and payable immediately without demand; and
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(e) upon the occurrence and during the continuation of an Event of
Default, generally to sell, transfer, pledge, make any agreement with respect
to or otherwise deal with any of the Collateral as fully and completely as
though Secured Party were the absolute owner thereof for all purposes, and to
do, at Secured Party's option and Grantor's expense, at any time or from time
to time, all acts and things that Secured Party deems necessary to protect,
preserve or realize upon the Collateral and Secured Party's security interest
therein in order to effect the intent of this Agreement, all as fully and
effectively as Grantor might do.
SECTION 13. SECURED PARTY MAY PERFORM. If Grantor fails to perform any
agreement contained herein, Secured Party may itself perform, or cause
performance of, such agreement, and the expenses of Secured Party incurred in
connection therewith shall be payable by Grantor under Section 16.
SECTION 14. STANDARD OF CARE. The powers conferred on Secured Party
hereunder are solely to protect its and the Holders' interest in the
Collateral and shall not impose any duty upon it to exercise any such powers.
Except for the exercise of reasonable care in the custody of any Collateral
in its possession and the accounting for moneys actually received by it
hereunder, Secured Party shall have no duty as to any Collateral or as to the
taking of any necessary steps to preserve rights against prior parties or any
other rights pertaining to any Collateral, it being understood that Secured
Party shall have no 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, (b) taking any necessary steps
(other than steps taken in accordance with the standard of care set forth
above to maintain possession of the Collateral) to preserve rights against
any parties with respect to any Collateral, (c) taking any necessary steps to
collect or realize upon the Secured Obligations or any guarantee therefor, or
any part thereof, or any of the Collateral, or (d) initiating any action to
protect the Collateral against the possibility of a decline in market value.
Secured Party shall be deemed to have exercised reasonable care in the
custody and preservation of Collateral in its possession if such Collateral
is accorded treatment substantially equal to that which Secured Party accords
its own property.
SECTION 15. REMEDIES.
If any Event of Default shall have occurred and be continuing, Secured
Party may exercise in respect of the Collateral, in addition to all other
rights and remedies provided for herein or otherwise available to it, all the
rights and remedies of a secured party on default under the Uniform
Commercial Code as in effect in any relevant jurisdiction (the "Code")
(whether or not the Code applies to the affected Collateral), and also may
(i) require Grantor to, and Grantor hereby agrees that it will at its expense
and upon request of Secured Party forthwith, assemble all or part of the
Collateral as directed by Secured Party and make it available to Secured
Party at a place to be designated by Secured Party that is reasonably
convenient to both parties, (ii) enter onto the property where any Collateral
is located and take possession thereof with or without judicial process,
(iii) prior to the disposition of the Collateral, store, process, repair or
recondition the Collateral or otherwise prepare the Collateral for
disposition in any manner to the extent Secured Party deems appropriate, (iv)
take possession of Grantor's premises or place custodians in exclusive
control thereof, remain on such premises and use the same and any of
Grantor's
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equipment for the purpose of completing any work in process, taking any
actions described in the preceding clause, (v) collect any Secured
Obligation, and (vi) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private
sale, at any of Secured Party's offices or elsewhere, for cash, on credit or
for future delivery, at such time or times and at such price or prices and
upon such other terms as Secured Party may deem commercially reasonable.
Secured Party may be the purchaser of any or all of the Collateral at any
such sale and Secured Party shall be entitled, for the purpose of bidding and
making settlement or payment of the purchase price for all or any portion of
the Collateral sold at any such public sale, to use andapply any of the
Secured Obligations as a credit on account of the purchase price for any
Collateral payable by Secured Party at such sale. Each purchaser at any such
sale shall hold the property sold absolutely free from any claim or right on
the part of Grantor, and Grantor hereby waives (to the extent permitted by
applicable law) all rights of redemption, stay and/or 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. Grantor agrees that, to the extent notice
of sale shall be required by law, at least ten days notice to Grantor of the
time and place of any public sale or the time after which any private sale is
to be made shall constitute reasonable notification. Secured Party shall not
be obligated to make any sale of Collateral regardless of notice of sale
having been given. Secured Party may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to which it
was so adjourned. Grantor hereby waives any claims against Secured Party
arising by reason of the fact that the price at which any Collateral may have
been sold at such a private sale was less than the price which might have
been obtained at a public sale, even if Secured Party accepts the first offer
received and does not offer such Collateral to more than one offeree. If the
proceeds of any sale or other disposition of the Collateral are insufficient
to pay all the Secured Obligations, Grantor shall be liable for the
deficiency and the fees of any attorneys employed by Secured Party to collect
such deficiency.
SECTION 16. APPLICATION OF PROCEEDS. Except as expressly provided
elsewhere in this Agreement, all proceeds received by Secured Party in
respect of any sale of, collection from, or other realization upon all or any
part of the Collateral may, in the discretion of Secured Party, be held by
Secured Party as Collateral for, and/or then, or at any other time
thereafter, applied in full or in part by Secured Party against, the Secured
Obligations in the following order of priority:
FIRST: To the payment of all costs and expenses of such sale,
collection or other realization, including costs and expenses of Secured
Party and its agents and counsel, and all other expenses, liabilities and
advances made or incurred by Secured Party in connection therewith, and all
amounts for which Secured Party is entitled to indemnification hereunder and
all advances made by Secured Party hereunder for the account of Grantor, and
to the payment of all costs and expenses paid or incurred by Secured Party in
connection with the exercise of any right or remedy hereunder, all in
accordance with Section 17;
SECOND: To the payment of all other Secured Obligations (for the
ratable benefit of the holders thereof) in such order as Secured Party shall
elect; and
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THIRD: To the payment to or upon the order of Grantor, or to
whomsoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct, of any surplus then remaining from such
proceeds.
SECTION 17. INDEMNITY AND EXPENSES.
(a) Grantor agrees to indemnify Secured Party and the Holders, and any
agent, attorney, employee, officer, or director thereof (collectively,
"Indemnified Persons"), from and against any and all claims, losses and
liabilities in any way relating to, growing out of or resulting from this
Agreement and the transactions contemplated hereby (including, without
limitation, enforcement of this Agreement), except to the extent such claims,
losses or liabilities result solely from such Indemnified Person's gross
negligence or willful misconduct as finally determined by a court of
competent jurisdiction.
(b) Grantor shall pay to Secured Party upon demand the amount of any
and all costs and expenses, including the reasonable fees and expenses of its
counsel and of any experts and agents, that Secured Party may reasonably
incur in connection with (i) the administration of this Agreement, (ii) the
custody, preservation, use or operation of, or the sale of, collection from,
or other realization upon, any of the Collateral, (iii) the exercise or
enforcement of any of the rights of Secured Party hereunder, or (iv) the
failure by Grantor to perform or observe any of the provisions hereof.
SECTION 18. CONTINUING SECURITY INTEREST. This Agreement shall create a
continuing security interest in the Collateral and shall (a) remain in full
force and effect until the indefeasible payment in full, in cash, of the
Secured Obligations, (b) be binding upon Grantor, its successors and assigns,
and (c) inure, together with the rights and remedies of Secured Party
hereunder, to the benefit of Secured Party and its successors, transferees
and assigns. Upon the indefeasible payment in full, in cash, of all Secured
Obligations, the security interest granted hereby shall terminate and all
rights to the Collateral shall revert to Grantor. Upon any such termination
Secured Party will, at Grantor's expense, execute and deliver to Grantor such
documents as Grantor shall reasonably request to evidence such termination.
SECTION 19. AMENDMENTS; ETC. No amendment or waiver of any provision of
this Agreement, or consent to any departure by Grantor herefrom, shall in any
event be effective unless the same shall be approved by the Holders of a
majority of the Outstanding Bonds, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for
which it was given.
SECTION 20. NOTICES. Any notice or other communication herein
required or permitted to be given shall be in writing and may be personally
served, telexed or sent by facsimile or United States mail or courier service
and shall be deemed to have been given when delivered in person or by courier
service, upon receipt of facsimile or telex, or four business days after
depositing it in the United States mail with postage prepaid and properly
addressed. For the purposes hereof, the address of each party hereto shall
be as set forth below, or, as to either party, such other address as shall be
designated by such party in a written notice delivered to the other party
hereto.
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To Secured Party:
IBJ Xxxxxxxx Bank & Trust Company
Xxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
Attention: Reorganization Operations Department
To Grantor:
Santa Fe Gaming Corporation
0000 Xxxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Attention: Chief Financial Officer
SECTION 21. FAILURE OR INDULGENCE NOT WAIVER: REMEDIES CUMULATIVE. No
failure or delay on the part of Secured Party in the exercise of any power,
right or privilege hereunder shall impair such power, right or privilege or
be construed to be a waiver of any default or acquiescence therein, nor shall
any single or partial exercise of any such power, right or privilege preclude
any other or further exercise thereof or of any other power, right or
privilege. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.
SECTION 22. SEVERABILITY. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 23. HEADINGS. Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 24. GOVERNING LAW: TERMS. THIS AGREEMENT SHALL BE GOVERNED
BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS
OF THE STATE OF NEVADA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES,
EXCEPT TO THE EXTENT THAT THE UNIFORM COMMERCIAL CODE PROVIDES THAT THE
VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS
OF A JURISDICTION OTHER THAN THE STATE OF NEVADA.
SECTION 25. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST GRANTOR ARISING OUT OF OR RELATING TO
THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEVADA, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT GRANTOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND IRREVOCABLY
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AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS
AGREEMENT. Grantor hereby agrees that service of all process in any such
proceeding in any such court may be made by registered or certified mail,
return receipt requested, to Grantor at its address provided in Section 20,
such service being hereby acknowledged by Grantor to be sufficient for
personal jurisdiction in any action against Grantor in any such court and to
be otherwise effective and binding service in every respect. Nothing herein
shall affect the right to serve process in any other manner permitted by law.
SECTION 26. WAIVER OF JURY TRIAL. GRANTOR AND SECURED PARTY HEREBY
AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including without limitation contract claims, tort claims, breach of duty
claims, and all other common law and statutory claims. Grantor and Secured
Party each acknowledge that this waiver is a material inducement for Grantor
and Secured Party to enter into a business relationship, that Grantor and
Secured Party have already relied on this waiver in entering into this
Agreement and that each will continue to rely on this waiver in their related
future dealings. Grantor and Secured Party further warrant and represent that
each has reviewed this waiver with its legal counsel, and that each knowingly
and voluntarily waives its jury trial rights following consultation with
legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
SECTION 27. COUNTERPARTS. This Agreement may be executed in one or
more counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and the same
instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.
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IN WITNESS WHEREOF, Grantor and Secured Party have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
SANTA FE GAMING CORPORATION,
as Grantor
By: /s/ XXXXXX X. LAND
--------------------------------------------
Name: Xxxxxx X. Land
Title: Senior Vice President,
Chief Financial Officer
IBJ XXXXXXXX BANK & TRUST COMPANY,
as Secured Party
By: /s/ XXXXXXX XXXXXXXXX
--------------------------------------------
Name: Xxxxxxx XxXxxxxxx
Title: Vice President
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