EXHIBIT 10.84
PLEDGE AGREEMENT
This PLEDGE AGREEMENT (this "Agreement") is dated as of November
30, 1998 and entered into by and between SANTA FE GAMING CORPORATION, a
Nevada corporation ("Pledgor"), and IBJ ▇▇▇▇▇▇▇▇ 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"), Santa Fe Gaming Corporation, a Nevada corporation and
successor-in-interest to Sahara Casino Partners, L.P. ("SFGC"), 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. Pledgor is the legal and beneficial owner of the shares of
stock (the "Pledged Shares") described in SCHEDULE I annexed hereto and
issued by the corporations named therein.
B. 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.
C. Payment of the principal of, premium, if any, and interest on
the Bonds has been guaranteed by the Pledgor (the "Guaranty").
D. 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).
E. In connection with the Solicitation and the receipt and
acceptance of Consents by PFC, Pledgor has agreed to secure the obligations
arising under the Guaranty by a pledge by Pledgor of all the outstanding
common stock of its wholly owned subsidiaries, Sahara Resorts, a Nevada
corporation ("SR"), Santa Fe Hotel Inc., a Nevada corporation ("SFHI"),
Hacienda Hotel Inc., a Nevada corporation ("Hacienda"), Sahara Nevada Corp.,
a Nevada corporation ("Sahara Nevada"), and Santa Fe Coffee Company, a Nevada
corporation (Santa Fe Coffee").
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, Pledgor hereby agrees
with Secured Party as follows:
SECTION 1. PLEDGE OF SECURITY. Pledgor hereby pledges to Secured
Party, for the equal and ratable benefit of the Holders, and hereby grants to
Secured Party a security interest in, for the equal and ratable benefit of
the Holders, all of Pledgor's right, title and interest in and to the
following (the "Pledged Collateral"):
(a) the Pledged Shares and the certificates representing the
Pledged Shares and any interest of Pledgor in the entries on the books of any
financial intermediary pertaining to the Pledged Shares, and all dividends,
cash, warrants, rights, instruments and other property or proceeds from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Shares;
(b) all additional shares of, and all securities convertible into
and warrants, options and other rights to purchase or otherwise acquire,
stock of any issuer of the Pledged Shares from time to time acquired by
Pledgor in any manner (which shares shall be deemed to be part of the Pledged
Shares), the certificates or other instruments representing such additional
shares, securities, warrants, options or other rights and any interest of
Pledgor in the entries on the books of any financial intermediary pertaining
to such additional shares, and all dividends, cash, warrants, rights,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or
all of such additional shares, securities, warrants, options or other rights;
and
(c) to the extent not covered by clauses (a) through (b) above,
all proceeds of any or all of the foregoing Pledged Collateral. For purposes
of this Agreement, the term "proceeds" includes whatever is receivable or
received when Pledged Collateral or proceeds are sold, exchanged, collected
or otherwise disposed of, whether such disposition is voluntary or
involuntary, and includes, without limitation, proceeds of any indemnity or
guaranty payable to Pledgor or Secured Party from time to time with respect
to any of the Pledged Collateral.
SECTION 2. SECURITY FOR OBLIGATIONS. This Agreement secures, and
the Pledged 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 Pledgor now
or hereafter existing under or arising out of or in connection with the
Guaranty 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 Pledgor,
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
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preference, fraudulent transfer or otherwise (all such obligations and
liabilities being the "Underlying Debt"), and all obligations of every nature
of Pledgor now or hereafter existing under this Agreement (all such
obligations of Pledgor, together with the Underlying Debt, being the "Secured
Obligations").
SECTION 3. DELIVERY OF PLEDGED COLLATERAL. All certificates or
instruments representing or evidencing the Pledged Collateral shall be
delivered to and held by or on behalf of Secured Party pursuant hereto and
shall be in suitable form for transfer by delivery or, as applicable, shall
be accompanied by Pledgor's endorsement, where necessary, or duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to Secured Party. Upon the occurrence and during the
continuation of an Event of Default, Secured Party shall have the right, at
any time in its discretion and without notice to Pledgor, to transfer to or
to register in the name of Secured Party or any of its nominees any or all of
the Pledged Collateral, subject only to the revocable rights specified in
Section 7(a). In addition, upon the occurrence and during the continuation
of an Event of Default, Secured Party shall have the right at any time to
exchange certificates or instruments representing or evidencing Pledged
Collateral for certificates or instruments of smaller or larger
denominations. Secured party acknowledges that the certificates evidencing
shares of common stock of SFHI must be held by or on behalf of Secured Party
in the state of Nevada.
SECTION 4. REPRESENTATIONS AND WARRANTIES. Pledgor represents and
warrants as follows:
(a) DUE AUTHORIZATION, ETC. OF PLEDGED COLLATERAL. All of the
Pledged Shares have been duly authorized and validly issued and are fully
paid and non-assessable.
(b) DESCRIPTION OF PLEDGED COLLATERAL. The Pledged Shares
constitute percentage interests of the issued and outstanding shares of stock
of each of the Persons set forth on SCHEDULE I annexed hereto, and there are
no outstanding warrants, options or other rights to purchase, or other
agreements outstanding with respect to, or property that is now or hereafter
convertible into, or that requires the issuance or sale of, any Pledged
Shares.
(c) OWNERSHIP OF PLEDGED COLLATERAL. Pledgor is the legal, record
and beneficial owner of the Pledged Collateral free and clear of any Lien
except for the security interest created by this Agreement and Permitted
Liens.
(d) 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 pledge by Pledgor of the
Pledged Collateral pursuant to this Agreement and the grant by Pledgor of the
security interest granted hereby, (ii) the execution, delivery or performance
of this Agreement by Pledgor, or (iii) the exercise by Secured Party of the
voting or other rights, or the remedies in respect of the Pledged Collateral,
provided for in this Agreement (except as may be required in connection with
a disposition of Pledged Collateral by laws affecting the offering and sale
of securities generally and as may be required under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976, as amended).
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(e) PERFECTION. Assuming Secured Party's continued possession of
the certificates representing the Pledged Shares, the pledge of the Pledged
Collateral pursuant to this Agreement creates a valid and perfected first
priority security interest in the Pledged Collateral, securing the payment of
the Secured Obligations.
SECTION 5. OTHER LIENS; ADDITIONAL PLEDGED COLLATERAL; ETC.
Pledgor shall:
(a) not (i) create or suffer to exist any Lien upon or with
respect to any of the Pledged Collateral, except for the security interest
under this Agreement or (ii) permit any issuer of Pledged Shares to merge or
consolidate unless all the outstanding capital stock of the surviving or
resulting corporation is, upon such merger or consolidation, pledged
hereunder and no cash, securities or other property is distributed in respect
of the outstanding shares of any other constituent corporation;
(b) (i) cause each issuer of Pledged Shares not to issue any stock
or other securities in addition to or in substitution for the Pledged Shares
issued by such issuer, except to Pledgor, and (ii) pledge hereunder,
immediately upon its acquisition (directly or indirectly) thereof, any and
all additional shares of stock or other securities of each issuer of Pledged
Shares;
(c) promptly deliver to Secured Party all written notices received
by it as holder of the Pledged Collateral; and
(d) pay promptly when due all taxes, assessments and governmental
charges or levies imposed upon, and all claims against, the Pledged
Collateral, except to the extent the validity thereof is being contested in
good faith and for which adequate reserves have been established; PROVIDED
that Pledgor 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
Pledgor or any of the Pledged Collateral as a result of the failure to make
such payment.
SECTION 6. FURTHER ASSURANCES; PLEDGE AMENDMENTS.
(a) Pledgor agrees that from time to time, at the expense of
Pledgor, Pledgor will promptly execute and deliver all further instruments
and documents, and take all further action, that may be necessary or
desirable, or that Secured Party may request, in order to perfect and protect
any security interest granted or purported to be granted hereby or to enable
Secured Party to exercise and enforce its rights and remedies hereunder with
respect to any Pledged Collateral. Without limiting the generality of the
foregoing, Pledgor will: (i) execute and file such financing or continuation
statements, or amendments thereto, control agreements 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 and (ii) at Secured
Party's request, appear in and defend any action or proceeding that may
affect Pledgor's title to or Secured Party's security interest in all or any
part of the Pledged Collateral.
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(b) Pledgor further agrees that it will, upon obtaining any
additional shares of stock or other securities required to be pledged
hereunder as provided in Section 5(b), promptly (and in any event within five
business days) deliver to Secured Party a Pledge Amendment, duly executed by
Pledgor, in substantially the form of SCHEDULE II annexed hereto (a "Pledge
Amendment"), in respect of the additional Pledged Shares to be pledged
pursuant to this Agreement. Pledgor hereby authorizes Secured Party to
attach each Pledge Amendment to this Agreement and agrees that all Pledged
Shares listed on any Pledge Amendment delivered to Secured Party shall for
all purposes hereunder be considered Pledged Collateral; PROVIDED that the
failure of Pledgor to execute a Pledge Amendment with respect to any
additional Pledged Shares pledged pursuant to this Agreement shall not impair
the security interest of Secured Party therein or otherwise adversely affect
the rights and remedies of Secured Party hereunder with respect thereto.
SECTION 7. VOTING RIGHTS; DIVIDENDS; ETC.
(a) So long as no Event of Default (as defined in the Indenture)
shall have occurred and be continuing:
(i) Pledgor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Pledged Collateral or any part
thereof for any purpose not inconsistent with the terms of this Agreement,
the Indenture or the Consents;
(ii) Pledgor shall be entitled to receive and retain, and to utilize
free and clear of the lien of this Agreement, any and all dividends paid in
respect of the Pledged Collateral; PROVIDED, HOWEVER, that any and all
(A) dividends, paid or payable other than in cash in respect of,
and instruments and other property received, receivable or otherwise
distributed in respect of, or in exchange for, any Pledged Collateral,
(B) dividends and other distributions paid or payable in cash in
respect of any Pledged Collateral in connection with a partial or
total liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid-in-surplus, and
(C) cash paid, payable or otherwise distributed in redemption of
or in exchange for any Pledged Shares,
shall be, and shall forthwith be delivered to Secured Party to hold
as, Pledged Collateral and shall, if received by Pledgor, be received
in trust for the benefit of Secured Party, be segregated from the
other property or funds of Pledgor and be forthwith delivered to
Secured Party as Pledged Collateral in the same form as so received
(with all necessary endorsements); and
(iii) Secured Party shall promptly execute and deliver (or cause
to be executed and delivered) to Pledgor all such proxies, dividend payment
orders and other instruments as Pledgor may from time to time reasonably
request for the purpose of enabling Pledgor
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to exercise the voting and other consensual rights which it is entitled
to exercise pursuant to paragraph (i) above and to receive the dividends
which it is authorized to receive and retain pursuant to paragraph (ii)
above.
(b) Upon the occurrence and during the continuation of an Event of
Default:
(i) upon written notice from Secured Party to Pledgor, all rights of
Pledgor to exercise the voting and other consensual rights which it would
otherwise be entitled to exercise pursuant to Section 7(a)(i) shall cease,
and all such rights shall thereupon become vested in Secured Party who
shall thereupon have the sole right to exercise such voting and other
consensual rights;
(ii) all rights of Pledgor to receive the dividends which it would
otherwise be authorized to receive and retain pursuant to Section 7(a)(ii),
at Secured Party's option, shall cease, and all such rights shall, at
Secured Party's option, thereupon become vested in Secured Party who shall
thereupon have the sole right to receive and hold as Pledged Collateral
such dividends; and
(iii) all dividends which are received by Pledgor contrary to the
provisions of paragraph (ii) of this Section 7(b) shall be received in
trust for the benefit of Secured Party, shall be segregated from other
funds of Pledgor and shall forthwith be paid over to Secured Party as
Pledged Collateral in the same form as so received (with any necessary
endorsements).
(c) In order to permit Secured Party to exercise the voting and
other consensual rights which it may be entitled to exercise pursuant to
Section 7(b)(i) and to receive all dividends and other distributions which it
may be entitled to receive under Section 7(a)(ii) or Section 7(b)(ii), (i)
Pledgor shall promptly execute and deliver (or cause to be executed and
delivered) to Secured Party all such proxies, dividend payment orders and
other instruments as Secured Party may from time to time reasonably request
and (ii) without limiting the effect of the immediately preceding clause (i),
Pledgor hereby grants to Secured Party an irrevocable proxy to vote the
Pledged Shares and to exercise all other rights, powers, privileges and
remedies to which a holder of the Pledged Shares would be entitled
(including, without limitation, giving or withholding written consents of
shareholders, calling special meetings of shareholders and voting at such
meetings), which proxy shall be effective, automatically and without the
necessity of any action (including any transfer of any Pledged Shares on the
record books of the issuer thereof) by any other Person (including the issuer
of the Pledged Shares or any officer or agent thereof), upon the occurrence
and during the continuation of an Event of Default and which effectiveness
shall terminate upon the earlier of (i) the Event of Default being waived or
cured (subject to revival upon future Events of Default) and (ii) payment in
full of the Secured Obligations.
SECTION 8. SECURED PARTY APPOINTED ATTORNEY-IN-FACT. Pledgor
hereby irrevocably appoints Secured Party as Pledgor's attorney-in-fact, with
full authority in the place and stead of Pledgor and in the name of Pledgor,
Secured Party or otherwise, from time to time in Secured Party's discretion
to take any action and to execute any instrument that Secured Party
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may deem necessary or advisable to accomplish the purposes of this Agreement,
including, without limitation:
(a) to file one or more financing or continuation statements, or
amendments thereto, relative to all or any part of the Pledged Collateral
without the signature of Pledgor (to the extent permitted by applicable law);
(b) during the continuance of any Event of Default, to ask,
demand, collect, ▇▇▇ for, recover, compound, receive and give acquittance and
receipts for moneys due and to become due under or in respect of any of the
Pledged Collateral;
(c) during the continuance of any Event of Default, to receive,
endorse and collect any instruments made payable to Pledgor representing any
dividend, principal or interest payment or other distribution in respect of
the Pledged Collateral or any part thereof and to give full discharge for the
same; and
(d) during the continuance of any Event of Default, to file any
claims or take any action or institute any proceedings that Secured Party may
deem necessary or desirable for the collection of any of the Pledged
Collateral or otherwise to enforce the rights of Secured Party with respect
to any of the Pledged Collateral.
SECTION 9. SECURED PARTY MAY PERFORM. If Pledgor 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 Pledgor under Section 13(b).
SECTION 10. STANDARD OF CARE. The powers conferred on Secured
Party hereunder are solely to protect its interest in the Pledged 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 Pledged Collateral
in its possession and the accounting for moneys actually received by it
hereunder, Secured Party shall have no duty as to any Pledged 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 Pledged 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
Pledged Collateral) to preserve rights against any parties with respect to
any Pledged 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 Pledged Collateral, or (d) initiating any action to protect the
Pledged 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 Pledged Collateral in its possession if such
Pledged Collateral is accorded treatment substantially equal to that which
Secured Party accords its own property consisting of negotiable securities.
SECTION 11. REMEDIES.
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(a) If any Event of Default shall have occurred and be continuing,
Secured Party may exercise in respect of the Pledged 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 Pledged Collateral),
and Secured Party may also in its sole discretion, without notice except as
specified below, sell the Pledged Collateral or any part thereof in one or
more parcels at public or private sale, at any exchange or broker's board or
at any of Secured Party's offices or elsewhere, for cash, on credit or for
future delivery, at such time or times and at such price or prices and upon
such other terms as Secured Party may deem commercially reasonable,
irrespective of the impact of any such sales on the market price of the
Pledged Collateral. Secured Party or any Holder may be the purchaser of any
or all of the Pledged Collateral at any such sale and Secured Party, as agent
for and representative of Holders (but not any Holder or Holders in its or
their respective individual capacities unless Requisite Holders shall
otherwise agree in writing), shall be entitled, for the purpose of bidding
and making settlement or payment of the purchase price for all or any portion
of the Pledged Collateral sold at any such public sale, to use and apply any
of the Secured Obligations as a credit on account of the purchase price for
any Pledged 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 Pledgor, and Pledgor 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. Pledgor agrees that, to the
extent notice of sale shal be required by law, at least ten days' notice to
Pledgor 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 Pledged 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. Pledgor hereby waives any
claims against Secured Party arising by reason of the fact that the price at
which any Pledged 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
Pledged Collateral to more than one offeree. If the proceeds of any sale or
other disposition of the Pledged Collateral are insufficient to pay all the
Secured Obligations, Pledgor shall be liable for the deficiency and the fees
of any attorneys employed by Secured Party to collect such deficiency.
(b) Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933, as from time to time amended (the
"Securities Act"), and applicable state securities laws, Secured Party may be
compelled, with respect to any sale of all or any part of the Pledged
Collateral conducted without prior registration or qualification of such
Pledged Collateral under the Securities Act and/or such state securities
laws, to limit purchasers to those who will agree, among other things, to
acquire the Pledged Collateral for their own account, for investment and not
with a view to the distribution or resale thereof. Pledgor acknowledges that
any such private sales may be at prices and on terms less favorable than
those obtainable through a public sale without such restrictions (including,
without limitation, a public offering made pursuant to a registration
statement under the Securities Act) and Pledgor agrees that any such
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private sale shall be deemed to have been made in a commercially reasonable
manner and that Secured Party shall have no obligation to engage in public
sales and no obligation to delay the sale of any Pledged Collateral for the
period of time necessary to permit the issuer thereof to register it for a
form of public sale requiring registration under the Securities Act or under
applicable state securities laws, even if such issuer would, or should, agree
to so register it.
(c) If Secured Party determines to exercise its right to sell any
or all of the Pledged Collateral, upon written request, Pledgor shall and
shall cause each issuer (which is a Subsidiary of Pledgor) of any Pledged
Shares to be sold hereunder from time to time to furnish to Secured Party all
such information as Secured Party may request in order to determine the
number of shares and other instruments included in the Pledged Collateral
which may be sold by Secured Party in exempt transactions under the
Securities Act and the rules and regulations of the Securities and Exchange
Commission thereunder, as the same are from time to time in effect.
SECTION 12. 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 Pledged Collateral may, in the discretion of Secured Party, be
held by Secured Party as Pledged Collateral for, and/or then, or at any 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 reasonable compensation to
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 Pledgor, 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 13;
SECOND: To the payment of all other Secured Obligations in such order
as Secured Party shall elect; and
THIRD: To the payment to or upon the order of Pledgor, or to
whosoever 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 13. INDEMNITY AND EXPENSES.
(a) Pledgor 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.
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(b) Pledgor 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 incur in
connection with (i) the administration of this Agreement, (ii) the custody or
preservation of, or the sale of, collection from, or other realization upon,
any of the Pledged Collateral, (iii) the exercise or enforcement of any of
the rights of Secured Party hereunder, or (iv) the failure by Pledgor to
perform or observe any of the provisions hereof.
SECTION 14. CONTINUING SECURITY INTEREST. This Agreement shall
create a continuing security interest in the Pledged Collateral and shall (a)
remain in full force and effect until the indefeasible payment in full in
cash, of all Secured Obligations, (b) be binding upon Pledgor, 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 Pledged Collateral shall revert to Pledgor. Upon any
such termination Secured Party will, at Pledgor's expense, execute and
deliver to Pledgor such documents as Pledgor shall reasonably request to
evidence such termination and Pledgor shall be entitled to the return, upon
its request and at its expense, against receipt and without recourse to
Secured Party, of such of the Pledged Collateral as shall not have been sold
or otherwise applied pursuant to the terms hereof.
SECTION 15. AMENDMENTS; ETC. No amendment, modification,
termination or waiver of any provision of this Agreement, and no consent to
any departure by Pledgor therefrom, shall in any event be effective unless
approved by the Holders of a majority of the Outstanding Bonds and, in the
case of any such amendment or modification, by Pledgor. Any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given.
SECTION 16. 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.
To Secured Party:
IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
Attention: Reorganization Operations Department
To Pledgor:
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Santa Fe Gaming Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
SECTION 17. 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 18. SEVERABILITY. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 19. 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 20. GOVERNING LAW; TERMS. THIS AGREEMENT AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER 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 PLEDGED COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION
OTHER THAN THE STATE OF NEVADA. Unless otherwise defined herein, terms used
in Articles 8 and 9 of the Uniform Commercial Code in the State of Nevada are
used herein as therein defined.
SECTION 21. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST PLEDGOR 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 PLEDGOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES
TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS
AGREEMENT. Pledgor 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 Pledgor at its address provided in Section 16,
such service being hereby acknowledged by Pledgor to be
11
sufficient for personal jurisdiction in any action against Pledgor 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 or shall limit the right of Secured Party to bring
proceedings against Pledgor in the courts of any other jurisdiction.
SECTION 22. WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, PLEDGOR 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. Pledgor and Secured Party each acknowledge
that this waiver is a material inducement for Pledgor and Secured Party to
enter into a business relationship, that Pledgor 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.
Pledgor 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 23. 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.
12
IN WITNESS WHEREOF, Pledgor 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 Pledgor
By: /s/ ▇▇▇▇▇▇ ▇. LAND
----------------------------------
Name: ▇▇▇▇▇▇ ▇. Land
Title: Senior Vice President,
Chief Financial Officer
IBJ ▇▇▇▇▇▇▇▇ BANK & TRUST
COMPANY, as Secured Party
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
S-1
SCHEDULE I
Attached to and forming a part of the Pledge Agreement dated as of
November 30, 1998 between Santa Fe Gaming Corporation, as Pledgor, and IBJ
▇▇▇▇▇▇▇▇ Bank & Trust Company, as Secured Party.
PART A
STOCK
CLASS OF CERTIFICATE PAR NUMBER OF PERCENTAGE
STOCK ISSUER STOCK NOS. VALUE SHARES INTEREST
------------ -------- ----------- ----- --------- ----------
SAHARA RESORTS COMMON 1 NO PAR 10,000 100%
SANTA FE HOTEL, INC. COMMON 1 NO PAR 1,000 100%
HACIENDA HOTEL, INC. COMMON 1 NO PAR 1,000 100%
SAHARA NEVADA CORP. COMMON 1 NO PAR 1,000 100%
SANTA FE COFFEE COMMON 1 NO PAR 100 100%
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SCHEDULE II
PLEDGE AMENDMENT
This Pledge Amendment, dated _____________, ____, is delivered
pursuant to Section 6(b) of the Pledge Agreement referred to below. The
undersigned hereby agrees that this Pledge Amendment may be attached to the
Pledge Agreement dated November __, 1998, between the undersigned and IBJ
▇▇▇▇▇▇▇▇ Bank & Trust Company, as Secured Party (the "Pledge Agreement,"
capitalized terms defined therein being used herein as therein defined), and
that the Pledged Shares listed on this Pledge Amendment shall be deemed to be
part of the Pledged Shares and shall become part of the Pledged Collateral
and shall secure all Secured Obligations.
SANTA FE GAMING CORPORATION,
By:
---------------------------------
Name:
Title:
STOCK
CLASS OF CERTIFICATE PAR NUMBER OF PERCENTAGE
STOCK ISSUER STOCK NOS. VALUE SHARES INTEREST
------------ -------- ----------- ----- --------- ----------
II-1
