EXHIBIT 10.94
SANTA FE GAMING CORPORATION
SAHARA LAS VEGAS CORP.
SECOND AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
THIS SECOND AMENDED AND RESTATED NOTE PURCHASE AGREEMENT is made as of
this 25th day of November, 1997 by and among Santa Fe Gaming Corporation
(formerly named Sahara Gaming Corporation), a Nevada corporation ("SGC"), Sahara
Las Vegas Corp., a Nevada corporation ("Company"), SunAmerica Life Insurance
Company, an Arizona corporation ("SunAmerica"), SunAmerica, Inc. ("SAI"), Credit
Suisse First Boston Mortgage Capital LLC, a Delaware limited liability company
("CSFB"), and any other person or persons party hereto from time to time after
the date hereof as a holder (individually, including SunAmerica, SAI and CSFB, a
"Holder" and collectively, "Holders") and SunAmerica, as Collateral Agent
RECITALS
WHEREAS, Company issued and sold to SunAmerica $20,000,000 in principal
amount of Company's 12% Notes Due December 15, 1999 pursuant to that certain
Note Purchase Agreement dated as of January 16, 1996 among Company, SGC and
SunAmerica (the "Original Note Purchase Agreement");
WHEREAS, Company issued and sold to SAI $15,000,000 in additional
principal amount of Company's 12% Notes Due December 15, 1999 pursuant to that
certain Amended and Restated Note Purchase Agreement dated as of July 29, 1997
by and among Company, SGC, SunAmerica and SAI (as amended, the "Existing Note
Purchase Agreement");
WHEREAS, Company desires to restructure the Existing Notes issued to
SunAmerica and SAI pursuant to the Original Note Purchase Agreement and the
Existing Note Purchase Agreement and to issue additional Notes as provided
herein to, among other things, enable Company to acquire the Xxxxxxxxx Facility
from Santa Fe Valley;
WHEREAS, Company intends to grant a security interest in the Xxxxxxxxx
Facility as additional security to secure the Notes and its other Obligations;
WHEREAS, SGC, Sahara Resorts, Casino Properties and Hacienda Hawaiian
have agreed to continue to provide guaranties and Collateral to support and
secure the payment of the Obligations as provided herein and in the other Basic
Documents; and
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WHEREAS, the parties hereto desire to amend and restate the Existing
Note Purchase Agreement as provided herein.
NOW THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the Existing Note Purchase Agreement
is hereby amended and restated as follows:
SECTION 1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS. The following terms used in this Agreement
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shall have the following meanings:
"ADDITIONAL COLLATERAL ACCOUNT" means the "Collateral Account" as
defined in the Additional Collateral Account Agreement.
"ADDITIONAL COLLATERAL ACCOUNT AGREEMENT" means the Collateral Account
Agreement dated as of July 29, 1997 between Company and Collateral Agent, as
amended, supplemented or otherwise modified from time to time.
"ADDITIONAL COLLATERAL ACCOUNT LETTER" means the Collateral Account
Letter dated July 29, 1997 from Company to Bankers Trust Company and
acknowledged by Collateral Agent relating to the Additional Collateral Account,
as amended, supplemented or otherwise modified from time to time, and any other
similar letter entered into with any successor institution.
"AFFILIATE" means, with respect to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling", "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that Person, whether through the
ownership of voting securities or by contract or otherwise. Without limiting
the foregoing, a Person shall be deemed to be "controlled by" another Person if
such other (i) possesses, directly or indirectly, power to vote 10% or more of
the securities having ordinary voting power for the election of directors of
such Person or (ii) with respect to any other Person that is not a corporation,
owns 10% or more of the equity interests of such Person.
"AGREEMENT," "HEREOF" and "HEREUNDER" and words of similar import refer
to this Second Amended and Restated Note Purchase Agreement, as it may be
amended, supplemented or otherwise modified from time to time.
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"AGGREGATE APPRAISED VALUE" means the sum of the appraised value of the
Wet 'N' Wild Property in the Wet 'N' Wild Appraisal (or any substitute or
updated appraisal acceptable to Requisite Holders) and the appraised value of
the Xxxxxxxxx Property in the Xxxxxxxxx Appraisal (or any substitute or updated
appraisal acceptable to Requisite Holders).
"ATLA" has the meaning assigned to such term in Section 4.1E.
"APPRAISALS" means the Wet 'N' Wild Appraisal and the Xxxxxxxxx
Appraisal.
"APPRAISAL DEFICIT AMOUNT" has the meaning assigned to such term in
Section 2.5C(vi).
"APPRAISAL DEFICIT REDEMPTION DATE" has the meaning assigned to such
term in Section 2.5C(vi).
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"BASIC DOCUMENTS" means this Agreement, the Notes, the Guaranties, the
Security Agreements, the Deeds of Trust, the Environmental Indemnities, the Wet
'N' Wild Subordination, Non-Disturbance and Attornment Agreement and all other
instruments or documents now, heretofore or hereafter granting Liens on the
property of any Credit Party or any of their Affiliates to Collateral Agent for
the benefit of Holders and any other instruments or agreements now, heretofore
or hereafter entered into with or for the benefit of Collateral Agent or any
Holder in connection herewith or therewith in connection with the Notes.
"BOARD OF DIRECTORS" means the Board of Directors of any Credit Party
or one of their respective Subsidiaries, as the context requires, or any
committee thereof duly authorized to act on behalf of such Board.
"BUSINESS DAY" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the State of California or Nevada or
is a day on which banking institutions located in either such state are
authorized or required by law or other governmental action to close.
"CAPITAL LEASE", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"CAPITAL STOCK" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including, without
limitation, any preferred stock or any interests in a Joint Venture.
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"CASH" means money, currency or a credit balance in a Deposit Account.
"CASH COLLATERAL ACCOUNT" means the "Collateral Account" as defined in
the Cash Collateral Agreement.
"CASH COLLATERAL ACCOUNT LETTER" means the letter by Company to the
Account Bank (as defined in the Cash Collateral Agreement) dated July 29, 1997
delivered pursuant to the Cash Collateral Agreement, as amended, supplemented or
otherwise modified from time to time.
"CASH COLLATERAL AGREEMENT" means the Cash Collateral Agreement dated
as of July 29, 1997, by Company and Collateral Agent, as such Cash Collateral
Agreement may be supplemented, amended, supplemented or otherwise modified from
time to time.
"CASINO PROPERTIES" means Casino Properties, Inc., a Nevada
corporation.
"CASINO PROPERTIES GUARANTY" means the Guaranty dated as of July 29,
1997 issued by Casino Properties, as such Guaranty may be amended, supplemented
or otherwise modified from time to time.
"CASINO PROPERTIES PLEDGE AGREEMENT" means the Pledge Agreement dated
as of July 29, 1997 by Casino Properties, as such Pledge Agreement may be
amended, supplemented or otherwise modified from time to time.
"CHANGE OF CONTROL" means an event or series of events by which (i) SGC
or SFHI sells, conveys, transfers or leases, directly or indirectly, all or
substantially all of its properties and assets to any Person or group (as such
term is used in Section 13(d) and 14(d) of the Exchange Act); (ii) any Person or
group (other than the Xxxxxx Family) is or becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person or
group shall be deemed to have "beneficial ownership" of all shares that any such
Person or group has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly of
securities representing (a) 25% or more of the combined voting power of SGC's or
SFHI's, as the case may be, Voting Stock and at such time the Xxxxxx Family
together shall fail to beneficially own, directly or indirectly, securities
representing at least 30% of the combined voting power of SGC's or SFHI's, as
the case may be, Voting Stock or (b) more than 50% of the combined voting power
of SGC's or SFHI's Voting Stock, as the case may be; (iii) SGC or SFHI
consolidates with or merges into another Person or conveys, transfers or leases
all or substantially all its properties and assets to any Person or any Person
consolidates with or merges into SGC or SFHI, in either event pursuant to a
transaction in which the outstanding Voting Stock of SGC or SFHI is changed into
or exchanged for cash, securities or other property with the effect that any
Person or group (other than the Xxxxxx Family) becomes the "beneficial owner,"
directly or indirectly, of securities representing (a) 25% or more of the
combined voting power of the Voting Stock of the Person
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that continues after such consolidation or merger or who acquires such assets
and at such time the Xxxxxx Family together shall fail to beneficially own,
directly or indirectly, securities representing at least 30% of the combined
voting power of such Voting Stock or (b) more than 50% of the combined voting
power of the Voting Stock of the Person that continues after such consolidation
or merger or who acquires such assets, (iv) during any period of 24 consecutive
months, individuals who at the beginning of such period constituted SGC's or
SFHI's Board of Directors, as the case may be, (together with any new or
replacement directors whose election by the Board of Directors or whose
nomination for election by the stockholders of SGC or SFHI, as the case may be,
was approved by a vote of at least a majority of the directors then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the directors then in office; (v) SFHI ceases
to own any of the outstanding Capital Stock, or all or substantially all of the
assets, of any Restricted Subsidiary (as defined in the SFHI Indenture) except
where such Capital Stock or such assets are disposed of pursuant to subsection
4.13 of the SFHI Indenture or where such assets are disposed of pursuant to
subsection 3.9 of the SFHI Indenture; or (vi) SGC ceases to own any of the
outstanding Capital Stock, or all or substantially all of the assets, of SFHI or
any of its Consolidated Subsidiaries (as defined in the SFHI Indenture), except
where such Capital Stock or such assets are disposed of pursuant to subsection
4.13 of the SFHI Indenture.
"CLOSING DATE" means January 16, 1996, the date on which the Original
Notes were purchased.
"COLLATERAL" means all the real, personal and mixed property made
subject to a Lien pursuant to the Security Agreements, the Deeds of Trust or any
other Basic Document.
"COLLATERAL ACCOUNT" means account number 241275072 designated as the
"Sahara Las Vegas Collateral Account" and established with Xxxxxxxxx, Xxxxxx &
Xxxxxxxx Securities Corporation and any successor account established with any
institution pursuant to the Collateral Account Letter.
"COLLATERAL ACCOUNT AGREEMENT" means the Collateral Account Agreement
dated as of January 16, 1996 by Company and Collateral Agent, as it may be
amended, supplemented or otherwise modified from time to time.
"COLLATERAL ACCOUNT LETTER" means the Collateral Account Letter dated
January 16, 1996 from Company to Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation and acknowledged by Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation relating to the Collateral Account and any other similar letter
entered into with any successor institution.
"COLLATERAL AGENT" means SunAmerica Life Insurance Company in its
capacity as collateral agent for the Holders, and any successor Collateral Agent
appointed pursuant to this Agreement.
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"COMMISSION" means the Securities and Exchange Commission.
"COMPANY" has the meaning set forth in the Introduction to this
Agreement.
"COMPANY DEED OF TRUST" means the Deed of Trust, Fixture Filing and
Financing Statement and Security Agreement with Assignment of Rents dated as of
January 16, 1996, as amended by the First Amendment to Company Deed of Trust and
Second Amendment to Company Deed of Trust, by Company in favor of Collateral
Agent, as beneficiary thereunder, pursuant to which Company granted to Xxxxxxx
Title of Nevada, as trustee, for the benefit of Collateral Agent on behalf of
the Holders a first priority Lien on, among other things, the Wet 'N' Wild
Premises and Company's right, title and interest in and to the Wet 'N' Wild
Improvements to secure the obligations of Company, as it may be further amended,
supplemented or otherwise modified from time to time.
"COMPANY ENVIRONMENTAL INDEMNITY" means the Environmental Indemnity
Agreement dated as of January 16, 1996, as amended by the First Amendment to
Company Environmental Indemnity and Second Amendment to Company Environmental
Indemnity by Company and SGC in favor of Collateral Agent for the benefit of
Holders and certain other indemnified parties therein pursuant to which Company
and SGC indemnify Collateral Agent for the benefit of Holders and certain other
indemnified parties therein against environmental risks, as it may hereafter be
amended, supplemented or otherwise modified from time to time.
"COMPANY PLEDGE AGREEMENT" means the Pledge Agreement dated as of July
29, 1997 by Company, as such Pledge Agreement may be amended, supplemented, or
otherwise modified from time to time.
"COMPANY SECURITY AGREEMENT" means the Security Agreement dated as of
January 16, 1996, as amended by the First Amendment to Company Security
Agreement and Second Amendment to Company Security Agreement, by Company and
Collateral Agent pursuant to which Company granted to Collateral Agent on behalf
of Holders a security interest in all of Company's assets including personal
property and fixtures, as it may be amended, supplemented or otherwise modified
from time to time.
"CONSENT TO AMENDMENT AND RESTATEMENT" means the Consent to Amendment
and Restatement delivered by the Credit Parties on the Effective Date,
substantially in the form of Exhibit XI annexed hereto.
"CONTINGENT OBLIGATION," as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of that Person (i) with respect to
any Indebted ness, lease, dividend or other obligation of another Person if the
primary purpose or intent thereof by the Person incurring the Contingent
Obligation is to provide assurance to the obligee of such obligation of another
Person that such obligation of another will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation
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will be protected (in whole or in part) against loss in respect thereof, (ii)
with respect to any letter of credit issued for the account of that Person or as
to which that Person is otherwise liable for reimbursement of drawings, or (iii)
under interest rate agreements and currency agreements. Contingent Obligations
shall include, without limitation, (a) the direct or indirect guaranty,
endorsement (otherwise than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of the obligation of another Person, (b) the obligation to make take-or-
pay or similar payments if required regardless of non-performance by any other
party or parties to an agreement, and (c) any liability of such Person for the
obligation of another Person through any agreement (contingent or otherwise) (X)
to purchase, repurchase or otherwise acquire such obligation or any security
therefor, or to provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise) or (Y) to maintain the solvency or any balance sheet item, level
of income or financial condition of another if, in the case of any agreement
described under subclauses (X) or (Y) of this sentence, the primary purpose or
intent thereof is as described in the preceding sentence. For purposes of this
definition, the amount of any Contingent Obligation at any time of determination
shall be computed as the amount that, in light of all the facts and
circumstances existing at such time represents the amount that reasonably can be
expected at such time of determination to become an actual or matured liability.
"CONTRACTUAL OBLIGATION," as applied to any Person, means any security
issued by that Person or any indenture, mortgage, deed of trust, contract,
undertaking, agreement or other instrument to which that Person is a party or by
which it or any of its properties is bound or to which it or any of its
properties is subject.
"CREDIT PARTY" means Company, SGC, Sahara Resorts, Casino Properties,
Hacienda Hawaiian and any other Subsidiary of SGC or Company which is or becomes
a party to a Basic Document.
"CSFB" has the meaning set forth in the Introduction to this Agreement.
"DEEDS OF TRUST" means the Company Deed of Trust and the Xxxxxxxxx Deed
of Trust, as each such Deed of Trust may be amended, supplemented or otherwise
modified from time to time.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"DOLLARS" and the sign "$" mean the lawful money of the United States
of America.
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"EFFECTIVE DATE" means the date on which all conditions to the
effectiveness of this Agreement set forth in subsection 4.1 are satisfied;
provided that if the Effective Date does not occur on or prior to December 2,
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1997, this Agreement shall not become effective and the Existing Note Purchase
Agreement shall continue in full force and effect.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as defined in
Section 3(3) of ERISA which is, or was maintained or contributed to by SGC,
Company or any ERISA Affiliate.
"ENVIRONMENTAL CLAIM" means any accusation, allegation, notice of
violation, claim, demand, abatement order, cleanup order, removal order, or
other order or direction (conditional or otherwise) by any Governmental
Authority or other Person for any injury, loss or damage, including, without
limitation, personal injury (including sickness, disease or death), tangible or
intangible property damage, contribution, indemnity, indirect or consequential
damages, damage to the environment, nuisance, pollution, contamination or other
adverse effects on the environment, or for fines, penalties or restrictions or
to compel cleanup or remediation, in each case relating to, resulting from or in
connection with any Hazardous Material and relating to the Premises or
Improvements.
"ENVIRONMENTAL INDEMNITIES" means the Company Environmental Indemnity
and the Xxxxxxxxx Environmental Indemnity.
"ENVIRONMENTAL LAWS" has the meaning set forth in the Deeds of Trust,
as applicable.
"ENVIRONMENTAL REPORTS" means the Wet 'N' Wild Environmental Report and
the Xxxxxxxxx Environmental Report.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.
"ERISA AFFILIATE" means (i) any corporation which is a member of a
controlled group of corporations within the meaning of Section 414(b) of the
Internal Revenue Code of which SGC or Company is, or was at any time, a member;
(ii) any trade or business (whether or not incorporated) which is, or was at any
time, a member of a group of trades or businesses under common control within
the meaning of Section 414(c) of the Internal Revenue Code of which SGC or
Company is, or was at any time, a member; and (iii) any member of an Affiliated
service group within the meaning of Section 414(m) or (o) of the Internal
Revenue Code of which SGC or Company is a member.
"ERISA EVENT" means (i) a "reportable event" within the meaning of
Section 4043(c) of ERISA and the regulations issued thereunder with respect to
any Pension Plan (excluding those for which the provision for 30-day notice to
the PBGC has been waived by
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regulation); (ii) the failure to meet the minimum funding standard of Section
412 of the Internal Revenue Code with respect to any Pension Plan (whether or
not waived in accordance with Section 412(d) of the Internal Revenue Code) or
the failure to make by its due date a required installment under Section 412(m)
of the Internal Revenue Code with respect to any Pension Plan or the institution
of a proceeding on behalf of a Multiemployer Plan against Company, SGC or any
Affiliate to enforce Section 515 of ERISA, which proceeding is not dismissed
within 30 days; (iii) the provision by the administrator of any Pension Plan
pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such
plan in a distress termination described in Section 4041(c) of ERISA; (iv) the
withdrawal by SGC, Company or any ERISA Affiliates from any Pension Plan with
two or more contributing sponsors or the termination of any such Pension Plan
resulting in liability pursuant to Sections 4063 or 4064 of ERISA; (v) the
institution by the PBGC of proceedings to terminate any Pension Plan, or the
occurrence of any event or condition which might constitute grounds under ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan; (vi) the imposition of liability on SGC, Company or any ERISA
Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the
application of Section 4212(c) of ERISA; (vii) the withdrawal by SGC, Company or
any of their respective ERISA Affiliates in a complete or partial withdrawal
(within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer
Plan if there is any potential liability therefor, or the receipt by SGC,
Company or any of their respective ERISA Affiliates of notice from any
Multiemployer Plan that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated
under Section 4041A or 4042 of ERISA; (viii) the occurrence of an act or
omission which could give rise to the imposition on SGC, Company or any of their
respective ERISA Affiliates of fines, penalties, taxes or related charges under
Chapter 43 of the Internal Revenue Code or under Section 409 or 502(c), (i) or
(l) of ERISA in respect of any Employee Benefit Plan; (ix) the assertion of a
material claim (other than routine claims for benefits) against any Employee
Benefit Plan other than a Multiemployer Plan or the assets thereof, or against
SGC, Company or any of their respective ERISA Affiliates in connection with any
such Employee Benefit Plan; (x) receipt from the Internal Revenue Service of
notice of the failure of any Pension Plan (or any other Employee Benefit Plan
intended to be qualified under Section 401(a) of the Internal Revenue Code) to
qualify under Section 401(a) of the Internal Revenue Code, or the failure of any
trust forming part of any Pension Plan to qualify for exemption from
taxationunder Section 501(a) of the Internal Revenue Code; or (xi) the adoption
of an amendment to any Pension Plan that, pursuant to Section 401(a)(29) of the
Internal Revenue Code or pursuant to Section 307 of ERISA, would require
Company, SGC or any ERISA Affiliate timely to provide security to the plan or
would result in loss of tax exempt status of the trust of which such plan is a
part if not timely provided, or the impositionof a lien pursuant to Section
412(n) of the Internal Revenue Code.
"EVENT OF DEFAULT" has the meaning set forth in Section 7 hereof.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as it may
from time to time be amended, and the related regulations and published
interpretations.
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"EXISTING XXXXXXXXX MORTGAGE DOCUMENTS" means the Note secured by Deed
of Trust in the principal amount of $5,000,000 dated May 6, 1997, executed by
Santa Fe Valley, in favor of certain "promisees" more particularly described in
Exhibit A attached thereto, together with the Deed of Trust with Assignment of
Leases and Rents dated May 6, 1997, the Unsecured Environmental Indemnity
Agreement dated May 6, 1997, the Guaranty of Payment and Performance dated May
6, 1997, executed by Xxxx X. Xxxxxx, the Guaranty of Payment and Performance
dated May 6, 1997, executed by Xxxxxxx Xxxxxx and all other instruments and
documents executed in connection with the transactions described in the
foregoing documents.
"EXISTING NOTE PURCHASE AGREEMENT" has the meaning set forth in the
Introduction to this Agreement.
"EXISTING NOTES" means the Notes as defined in the Existing Note
Purchase Agreement.
"EXISTING WET 'N' WILD LEASE" means that certain ground lease dated as
of January 1, 1987, as amended by (i) the assignment of the Ground Lease dated
March 1, 1987 from Wet 'N' Wild Florida to Wet 'N' Wild Tenant, (ii) the First
Amendment to Ground Lease dated as of March 1, 1993 between Company (as
successor to HHP), as landlord, and Wet 'N' Wild Tenant (as successor to Wet 'N'
Wild Florida), (iii) the Assignment Agreement dated as of October 2, 1995
between HHP and Company, (iv) the Letter Agreement dated August 24, 1995 and
effective October 2, 1995 between Company and Wet 'N' Wild Tenant; and (v) the
Letter Agreement dated June 2, 1997 between Company and Wet 'N' Wild Tenant.
"EXISTING WET 'N' WILD LEASE DOCUMENTS" means the Existing Wet 'N' Wild
Lease, the Existing Wet 'N' Wild Lease Guaranty, the Existing Wet 'N' Wild Lease
Note, the Existing Wet 'N' Wild Lease Security Agreement, the Wet 'N' Wild
Tenant Sale Agreement and any other agreements or instruments relating to any of
the foregoing agreements.
"EXISTING WET 'N' WILD LEASE GUARANTY" means that certain Guaranty
Agreement dated as of October 2, 1995 between Company and HHP.
"EXISTING WET 'N' WILD LEASE NOTE" means that certain promissory note
dated January 1, 1987 in the original principal amount of $9,000,000 issued by
Wet 'N' Wild Tenant (as successor to Wet 'N' Wild Florida) to HHP (as successor
to Xxxxxx Entertainment, Ltd., a Nevada limited partnership).
"EXISTING WET 'N' WILD LEASE SECURITY AGREEMENT" means that certain
Security Agreement dated as of January 1, 1987 between Wet 'N' Wild Tenant (as
successor to Wet 'N' Wild Florida) and HHP (as successor to Xxxxxx
Entertainment, Ltd., a Nevada limited partnership).
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"FACILITIES" means the Wet 'N' Wild Facility and the Xxxxxxxxx
Facility.
"FIRST AMENDMENT TO COMPANY DEED OF TRUST" means that certain First
Amendment to Deed of Trust, Fixture Filing and Financing Statement and Security
Agreement with Assignment of Rents dated as of July 31, 1997 by and between
Company and Collateral Agent, as beneficiary thereunder.
"FIRST AMENDMENT TO COMPANY ENVIRONMENTAL INDEMNITY" means that certain
First Amendment to Environmental Indemnity Agreement dated as of July 31, 1997
between Company and Collateral Agent.
"FIRST AMENDMENT TO COMPANY SECURITY AGREEMENT" means that certain
First Amendment to Company Security Agreement dated as of July 29, 1997 between
Company and Collateral Agent.
"FIRST AMENDMENT TO WET 'N' WILD SUBORDINATION, NON-DISTURBANCE AND
ATTORNMENT AGREEMENT" means that certain First Amendment to Subordination, Non-
Disturbance and Attornment Agreement dated as of July 31, 1997 among Company,
Wet 'N' Wild Tenant and Collateral Agent.
"FISCAL YEAR" means the Fiscal Year of SGC and Company, the last day of
which occurs on September 30th of each year.
"FLOOD ACT" means the National Flood Insurance Act of 1968 as amended
by the Flood Disaster Protection Act of 1973 (42 U.S.C. (S)(S)4013 et. seq.).
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"GAAP" means, subject to the limitations on the application thereof set
forth in subsection 1.2, generally accepted accounting principles set forth in
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession (including, without limitation, to the extent applicable in the AICPA
Audit and Accounting Guide; Audits of Casinos), in each case as the same are
applicable to the circumstances as of the date of determination.
"GAMING AUTHORITIES" means, collectively, (a) the Nevada Gaming
Commission, (b) the Nevada State Gaming Control Board, and (c) any other
Governmental Authority that holds regulatory, licensing or permit authority over
gambling, gaming or casino activities conducted by SGC, Company or any of their
respective Subsidiaries within its jurisdiction.
"GAMING LAWS" means all statutes, rules, regulations, ordinances, codes
and administrative or judicial precedents (including, without limitation, the
Nevada Gaming Control Act (N.R.S. Ch. 463)) pursuant to which any Gaming
Authority possesses regulatory, licensing
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or permit authority over gambling, gaming or casino activities conducted by SGC,
Company or any of their respective Subsidiaries within its jurisdiction.
"GAMING LICENSE" means every license, franchise or other authorization
required on the date hereof or hereafter to own, lease, operate or otherwise
conduct gaming operations at the Santa Fe Hotel & Casino and the Pioneer Hotel &
Gambling Hall or other gaming activities of SGC or any of its Subsidiaries,
including, without limitation, all such licenses granted by any Gaming Authority
and any Gaming Laws.
"GOVERNMENTAL AUTHORITY" means any agency, authority, board, bureau,
commission, department, office or instrumentality of any nature whatsoever of
any governmental or quasi-governmental unit, whether federal, state, county,
district, city or other political subdivision or otherwise and whether now or
hereafter in existence, or any officer or official thereof.
"GUARANTIES" means the SGC Guaranty, the Sahara Resorts Guaranty, the
Casino Properties Guaranty and the Hacienda Hawaiian Guaranty, as each such
Guaranty may be amended, supplemented or otherwise modified from time to time.
"HACIENDA HAWAIIAN" means Hacienda Hawaiian Properties, Inc., a Hawaii
corporation.
"HACIENDA HAWAIIAN GUARANTY" means the Guaranty dated as of July 29,
1997 issued by Hacienda Hawaiian as such Guaranty may be amended, supplemented
or otherwise modified from time to time.
"HACIENDA HAWAIIAN PLEDGE AGREEMENT" means the Pledge Agreement dated
as of July 29, 1997 by Hacienda Hawaiian as such Pledge Agreement may be
amended, supplemented or otherwise modified from time to time.
"HACIENDA INDENTURE" means the Indenture dated June 15, 1983 between
Sahara Resorts (formerly Hacienda Resorts, Inc.) and Nevada State Bank, as
amended by the First Supplemental Indenture dated as of June 23, 1983 between
Sahara Resorts and Valley Bank of Nevada and the Second Supplemental Indenture
dated as of September 30, 1993 between Sahara Resorts, SGC and Nevada State
Bank.
"HAZARDOUS MATERIALS" has the meaning set forth in the Deeds of Trust,
as applicable.
"HENDERSON APPRAISAL" means a self contained MAI appraisal of the
Henderson Premises and the Henderson Improvements prepared to USPAP standards
for loan purposes by a MAI appraiser acceptable to Holders and licensed as an
appraiser in the State of Nevada which shall be satisfactory in form, scope and
substance to Holders.
12
"HENDERSON CONSTRUCTION FINANCING" means a debt financing entered into
by an Affiliate of Company that is not a Subsidiary of Company (other than the
Xxxxxxxxx Development Subsidiary) after the Henderson Release Date and the
transfer of the Henderson Facility to such Affiliate for the development and
construction of the Henderson Facility.
"HENDERSON DEED OF TRUST" means the Deed of Trust, Fixture Filing and
Financing Statement and Security Agreement with Assignment of Rents to be
executed and delivered on the Effective Date by Company in favor of Collateral
Agent, as beneficiary thereunder, pursuant to which Company grants to United
Title of Nevada, as trustee, for the benefit of Collateral Agent on behalf of
the Holders a Lien on the Henderson Facility including Company's right, title
and interest in and to the Henderson Improvements, to secure the obligations of
Company under the Basic Documents, substantially in the form of Exhibit VI-C
annexed hereto, as it may be amended, supplemented or otherwise modified from
time to time.
"HENDERSON DEVELOPMENT DOCUMENTS" means the Development Agreement dated
as of February 21, 1997, by and between Ranch Center Associates Limited
Partnership, a Nevada limited partnership ("Ranch I"), Ranch Center Associates
II, a Nevada general partnership (collectively with Ranch I hereinafter referred
to herein as "Ranch"), and Santa Fe Valley, together with the Construction,
Operation and Reciprocal Easement Agreement between Ranch and Santa Fe Valley
and the Access Fee Agreement between Ranch and Santa Fe Valley both referenced
in the Development Agreement, and all other instruments and documents executed
in connection with such Development Agreement, Construction, Operation and
Reciprocal Easement Agreement or Access Fee Agreement or any of the transactions
described therein.
"HENDERSON DEVELOPMENT SUBSIDIARY" has the meaning assigned to such
term in Section 6.10.
"XXXXXXXXX ENVIRONMENTAL INDEMNITY" means the Environmental Indemnity
Agreement to be issued by Company and SGC on the Effective Date in favor of
Collateral Agent for the benefit of Holders and certain other indemnified
parties therein pursuant to which Company and SGC indemnify Collateral Agent for
the benefit of Holders and certain other indemnified parties therein against
environmental risks, substantially in the form of Exhibit VII-C annexed hereto,
as it may hereafter be amended, supplemented or otherwise modified from time to
time.
"XXXXXXXXX ENVIRONMENTAL REPORT" means the Phase I Environmental Site
Assessment dated November 5, 1997 prepared by Western Technologies, Inc. as
project number 4187JL296 relating to the Henderson Premises delivered to Holders
prior to the Effective Date.
"HENDERSON FACILITY" means the Henderson Premises and the Henderson
Improvements.
13
"HENDERSON IMPROVEMENTS" means all buildings, structures, facilities
and other improvements of every kind and description (if any) now or hereafter
located on the Henderson Premises, including all parking areas, roads,
driveways, walks, fences, walls, beams, recreation facilities, drainage
facilities, lighting facilities and other site improvements, all water, sanitary
and storm sewer, drainage, electricity, steam, gas, telephone and other utility
equipment and facilities, all plumbing, lighting, heating, ventilating, air-
conditioning, refrigerating, incinerating, compacting, fire protection and
sprinkler, surveillance and security, vacuum cleaning, public address and
communications equipment and systems, all screens, awnings, floor coverings,
partitions, elevators, escalators, motors, machinery, pipes, fittings and other
items of equipment and personal property of every kind and description now or
hereafter located on the Henderson Premises or attached to the improvements that
by the nature of their location thereon or attachment thereto are real property
under applicable law; and including all materials intended for the construction,
reconstruction, repair, replacement, alteration, addition or improvement of or
to such buildings, equipment, fixtures, structures and improvements.
"HENDERSON PREMISES" means the real property to be acquired by Company
on the Effective Date situated in Henderson, Nevada, and more particularly
described in Schedule 1.1B annexed hereto.
"HENDERSON PROPERTY DOCUMENTS" all agreements and documents other than
the Basic Documents relating to the Henderson Facility, including the Henderson
Development Documents specified on Schedule 1.1C annexed hereto.
"HENDERSON RELEASE DATE" means the first date on which (i) Company has
prepaid the Notes (together with applicable interest and premium) with available
funds (other than Collateral or the proceeds of Collateral other than proceeds
from the transfer of the Henderson Facility) in a principal amount of not less
than $20,000,000.00 and has transferred the Henderson Facility to a Person
(which may be the Henderson Development Subsidiary but not any other Subsidiary
of Company), (ii) no Event of Default or Potential Event of Default has occurred
and is continuing and (iii) the Collateral Agent has received an Officer's
Certificate from SGC and Company certifying that clauses (i) and (ii) hereof
have been satisfied and that the Henderson Release Date has occurred.
"HENDERSON SUBORDINATION AGREEMENT" means a Subordination Agreement in
the form annexed as Exhibit XV hereto.
"HENDERSON SUBSIDIARY" means SFV, Inc., a Nevada corporation and wholly
owned Subsidiary of Company.
"HENDERSON TITLE COMPANY" has the meaning assigned to such term in
Section 4.1E.
14
"HENDERSON TITLE POLICY" has the meaning assigned to such term in
Section 4.1E.
"HENDERSON TRANSFER" means the transfer of the Henderson Facility from
Santa Fe Valley to Company, which shall occur on the Effective Date.
"HENDERSON TRANSFER DOCUMENTS" means all agreements, instruments and
documents to be entered into by Santa Fe Valley, Company and other Persons in
connection with the sale of Henderson Facility to Company.
"HHP" means Xxxxxx Xxxxxx Properties, Limited Partnership, a Delaware
limited partnership.
"HOLDER" and "HOLDERS" has the meaning set forth in the Introduction to
this Agreement and shall include the successors and assigns of any Holder.
"IMPROVEMENTS" means the Wet 'N' Wild Improvements and the Henderson
Improvements.
"INDEBTEDNESS," as applied to any Person, means, without duplication,
(i) all indebtedness for borrowed money, (ii) that portion of obligations with
respect to Capital Leases that is properly classified as a liability on a
balance sheet in conformity with GAAP, (iii) notes payable and drafts accepted
representing extensions of credit whether or not representing obligations for
borrowed money, (iv) any obligation owed for all or any part of the deferred
purchase price of property or services (excluding any such obligations incurred
under ERISA), which purchase price is (a) due more than six months from the date
of incurrence of the obligation in respect thereof or (b) evidenced by a note or
similar written instrument, (excluding any trade payables payable in the
ordinary course of business), (v) all indebtedness secured by any Lien on any
property or asset owned or held by that Person regardless of whether the
indebtedness secured thereby shall have been assumed by that Person or is
nonrecourse to the credit of that Person and (vi) any Contingent Obligation.
"INITIAL HOLDERS" mean CSFB and SunAmerica.
"INTERCREDITOR AGREEMENT means the Intercreditor Agreement among
SunAmerica and CSFB, substantially in the form of Exhibit XIII annexed hereto,
as amended, supplemented or otherwise modified from time to time.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"JOINT VENTURE" means a joint venture, partnership or other similar
arrange ment, whether in corporate, partnership, limited liability company or
other legal form; provided that
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15
in no event shall any corporate Subsidiary of any Person be considered to be a
Joint Venture to which such Person is a party.
"JUNIOR SUBORDINATED NOTES" means the Junior Subordinated Notes under
and as defined in the Certificate of Designation of the SGC Preferred Stock or
any other securities that are issued in exchange for or to redeem, acquire or
otherwise pay SGC Preferred Stock.
"LIEN" means any lien, mortgage, pledge, assignment, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, any agreement to give any
security interest and any mechanic's liens) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"XXXXXX FAMILY" means Xx. Xxxx Xxxxxx and Xxx. Xxxxxxx Xxxxxx and the
executors, administrators or legal representatives of their estates, heirs,
distributees and beneficiaries, any trust as to which any of the foregoing is a
settlor or co-settlor, any trustee of the estate of any of the foregoing that is
bankrupt or insolvent, any guardian or conservator of any of the foregoing that
is adjudged disabled or incompetent, and any corporation, partnership or other
entity which is an Affiliate of any of the foregoing. Xxxxxx Family shall also
mean any lineal descendants of the grandparents of such Persons, but only to the
extent that the beneficial ownership of the Voting Stock held by such lineal
descendants was directly received (by gift, trust or sale) from any such Person.
"XXXXXX FAMILY DISCLOSURE" has the meaning assigned to such term in
Section 6.1.
"XXXXXX FAMILY PAYMENT" means any direct or indirect compensation,
salary, bonus or other payment or distribution or transfer of any nature made to
Xx. Xxxx Xxxxxx or any other Person described in the definition of Xxxxxx Family
other than (i) any payment, distribution or transfer consisting solely of shares
of common stock of SGC or warrants, options and/or other rights to acquire
common stock of SGC or (ii) distributions made generally to the shareholders of
SGC in respect of their capital stock that are not prohibited under this
Agreement.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect upon the
business, operations, properties, assets, liabilities, condition (financial or
otherwise) of SGC and its Subsidiaries, taken as a whole, Company, the Wet `N'
Wild Premises, or, until the Henderson Release Date, the Henderson Facility, or
(ii) the impairment of the ability of any Credit Party to perform, or of
Collateral Agent or any Holder to enforce, any of the Obligations.
"MULTIEMPLOYER PLAN" means a "multiemployer plan", as defined in
Section 3(37) of ERISA, to which SGC, Company or any of their respective ERISA
Affiliates is contributing or has an obligation to contribute to, or to which
such an obligation existed, or
16
contribution was made within the last six years, or to which Company or any of
its ERISA Affiliates has, or ever has had, an obligation to contribute.
"NOTES" means the Tranche A Notes and the Tranche B Notes.
"OBLIGATIONS" means all obligations of every nature of Company and each
other Credit Party from time to time owed to Collateral Agent, Holders or any of
them under this Agreement, the Notes or any other Basic Document, whether for
principal, interest, fees, expenses, indemnification or otherwise and whether or
not the obligation is allowed as a claim in any proceeding referred to in
subsection 7.6 or 7.7.
"OFFICERS' CERTIFICATE" means, as applied to any corporation, a
certificate executed on behalf of such corporation by (i) its chairman of the
board (if an officer) or its president or one of its vice presidents and (ii)
its chief financial officer or its treasurer.
"ORIGINAL NOTE PURCHASE AGREEMENT" has the meaning set forth in the
Introduction to this Agreement.
"ORIGINAL NOTES" has the meaning set forth in the Introduction to this
Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation (or any successor
thereto).
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.
"PERMITTED ENCUMBRANCES" means the following types of Liens (other than
any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal
Revenue Code or by ERISA):
(i) Liens for taxes, assessments or governmental charges or claims the
payment of which is not, at the time, required by subsection 5.4;
(ii) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics and materialmen and other Liens imposed by law incurred in the
ordinary course of business for sums not yet delinquent or being contested
in good faith, if such reserve or other appropriate provision, if any, as
shall be required by GAAP shall have been made therefor; and
(iii) easements, rights of tenants, reservations, covenants, rights-
of-way, restrictions, minor defects, minor encroachments or minor
irregularities in title and other similar immaterial charges or encumbrances
that (a) arise prior to the Effective Date and
17
are approved in writing by Requisite Holders or (b) arise after the
Effective Date and would not, individually or in the aggregate, result in a
Material Adverse Effect.
"PERMITTED EQUITY FINANCING" means the issuance by Company of its
common stock, preferred stock or related equity securities to third party
investors in exchange for cash paid to Company, provided that in no event shall
--------
the equity securities issued in connection with any Permitted Equity Financing
be entitled, in the aggregate (before or after giving effect to the occurrence
of any contingency set forth therein), to elect a majority of the Board of
Directors of Company or represent 50% or more of the Voting Stock of any class
of equity security of Company and, after giving effect thereto, no Change of
Control shall have occurred or will occur; provided further, that the terms and
conditions (including all documents and agreements) of the Permitted Equity
Financing shall be in form and substance satisfactory to the Holders of more
than 50% in aggregate principal amount of the Tranche B Notes and, after giving
effect to the Permitted Equity Financing, Company shall be an indirect
Subsidiary of SGC. The terms and conditions of the Permitted Equity Financing
shall be deemed satisfactory to the Holders of more than 50% in aggregate
principal amount of the Tranche B Notes have not objected to such terms and
conditions within ten Business Days of receipt of a written notification from
Company specifying all of the terms and conditions proposed in sufficient detail
reasonably requested by such Holders.
"PERSON" means and includes natural persons, corporations, limited
liability companies, limited partnerships, general partnerships, limited
liability partnerships, joint stock companies, joint ventures, associations,
companies, trusts, banks and other organizations, whether or not legal entities,
and governments and agencies and political subdivisions thereof.
"PIONEER BONDS" means the 13 1/2% First Mortgage Bonds due 1998 of
Pioneer Finance issued pursuant to the Pioneer Indenture.
"PIONEER FINANCE" means Pioneer Finance Corp., a Nevada corporation.
"PIONEER INDENTURE" means that certain Indenture dated as of December
1, 1988 among Pioneer Finance, Sahara Casino Partners, L.P., a Delaware limited
partnership ("Sahara Casino"), as Guarantor and Security Pacific National Bank,
as Trustee, as amended by the First Supplemental Indenture dated as of December
21, 1988 among Pioneer Finance, Sahara Casino and Security Pacific National
Bank, as Trustee, the Second Supplemental Indenture dated as of September 30,
1993 among Pioneer Finance, Sahara Casino, Pioneer Operating Limited
Partnership, a Nevada limited partnership, Pioneer Hotel, Inc., a Nevada
corporation, SGC, as successor Guarantor, and Bank of America National Trust and
Savings Association, as Trustee, and the Third Supplemental Indenture dated as
of August 31, 1995 among Pioneer Finance, SGC and IBJ Xxxxxxxxx Bank & Trust
Company, as Trustee.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default.
18
"PREMISES" means the Wet 'N' Wild Premises and the Henderson Premises.
"RELEASE" has the meaning set forth in the Deeds of Trust, as
applicable.
"REQUISITE HOLDERS" means Holders having or holding more than 66 2/3%
of the principal balance of the outstanding Notes.
"REQUISITE TRANCHE A HOLDERS" means Holders having or holding more than
66 2/3% of the principal balance of the outstanding Tranche A Notes.
"REQUISITE TRANCHE B HOLDERS" means Holders having or holding more than
66 2/3% of the principal balance of the outstanding Tranche B Notes.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
capital stock of SGC or Company now or hereafter outstanding, except a dividend
payable solely in shares of that class of capital stock to the holders of that
class or in options, warrants or other rights to purchase such capital stock,
(ii) any redemption, retirement, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, of any shares of any class of
capital stock of SGC or Company now or hereafter outstanding (other than in
exchange for capital stock of SGC or Company or options, warrants or other
rights to purchase such capital stock), (iii) any payment made to retire, or to
obtain the surrender of, any outstanding warrants, options or other rights to
acquire shares of any class of capital stock of SGC or Company now or hereafter
outstanding, and (iv) any payment or prepayment of principal of, premium, if
any, or redemption, purchase, retirement, defeasance (including in-substance or
legal defeasance), sinking fund or similar payment with respect to, any
indebtedness of Company to SGC or any of SGC's Subsidiaries or Affiliates or
with respect to any Junior Subordinated Notes.
"SAHARA RESORTS" means Sahara Resorts, a Nevada corporation.
"SAHARA RESORTS GUARANTY" means the Guaranty dated as of July 29, 1997,
issued by Sahara Resorts as such Guaranty may be amended, supplemented or
otherwise modified from time to time.
"SAHARA RESORTS PLEDGE AGREEMENT" means the Pledge Agreement dated as
of July 29, 1997 by Sahara Resorts, as such Pledge Agreement may be amended,
supplemented or otherwise modified from time to time.
"SAI" has the meaning set forth in the Introduction to this Agreement.
"SANTA FE VALLEY" means Santa Fe Valley, Inc., a Nevada corporation.
19
"SECOND AMENDMENT TO COMPANY DEED OF TRUST" means that certain Second
Amendment to the Company Deed of Trust, substantially in the form of Exhibit
VI-B annexed hereto, executed and delivered on the Effective Date.
"SECOND AMENDMENT TO COMPANY ENVIRONMENTAL INDEMNITY" means that
certain Second Amendment to the Company Environmental Indemnity, substantially
in the form of Exhibit VII-B annexed hereto, executed and delivered on the
Effective Date.
"SECOND AMENDMENT TO COMPANY SECURITY AGREEMENT" means the Second
Amendment to Company Security Agreement, substantially in the form Exhibit IV-B
annexed hereto, executed and delivered on the Effective Date.
"SECOND AMENDMENT TO WET 'N' WILD SUBORDINATION, NON-DISTURBANCE AND
ATTORNMENT AGREEMENT" means that certain Second Amendment to the Wet 'N' Wild
Subordination, Non-Disturbance and Attornment Agreement substantially in the
form of Exhibit XIV annexed hereto, executed and delivered on the Effective
Date.
"SECURITY AGREEMENTS" means the Company Security Agreement, the Sahara
Resorts Pledge Agreement, the Company Pledge Agreement, the Casino Properties
Pledge Agreement, the Hacienda Hawaiian Pledge Agreement, the Collateral Account
Agreement, the Cash Collateral Agreement, and the Additional Collateral Account
Agreement, as each such Security Agreement may hereafter be amended,
supplemented or otherwise modified from time to time.
"SFHI" means Santa Fe Hotel Inc., a Nevada corporation.
"SFHI CASH FLOW" means, for any period, the sum of the following
amounts without duplication for such period with respect to SFHI and its
consolidated Subsidiaries: (i) net income, (ii) provisions for taxes based on
income, (iii) interest expense, (iv) lease payments made with respect to
equipment leased pursuant to the sale/leaseback transactions of gaming equipment
permitted pursuant to the SFHI Indenture (as such lease agreements may be
amended, modified or supplemented from time to time) to the extent not included
in item (iii) above; provided that such lease payments (including any such lease
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payments included in item (iii) above) shall not exceed $200,000 per month, (v)
depreciation expense, (vi) amortization expenses and (vii) other non-cash items
reducing net income but excluding any component of items (ii) through (vi) not
deducted in calculating net income minus non-cash items increasing net income,
-----
other than items excluded from the calculation thereof, all as determined for
SFHI in conformity with GAAP.
"SFHI INDENTURE" means that certain Indenture dated as of December 29,
1993 among SFHI, SGC, as guarantor, and IBJ Xxxxxxxxx Bank & Trust Company as
trustee, as amended.
20
"SFHI NOTES" means the 11% First Mortgage Notes issued by SFHI pursuant
to the terms of the SFHI Indenture.
"SGC" has the meaning set forth in the Introduction to this Agreement.
"SGC GUARANTY" means the Guaranty dated as of January 16, 1996 issued
by SGC, as such Guaranty may be amended, supplemented or otherwise modified from
time to time.
"SGC PREFERRED STOCK" means SGC's Exchangeable Redeemable Preferred
Stock, $2.14 liquidation preference per share, issued prior to the Closing Date
pursuant to the Certificate of Designation for Exchangeable Redeemable Preferred
Stock and any such Exchangeable Redeemable Preferred Stock issued after the
Closing Date to pay dividends in kind with respect thereto.
"SIERRA NOTE" means the Note issued by SGC in favor of Sierra
Construction Corp.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, association, limited liability company, joint venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof.
"SUNAMERICA" has the meaning set forth in the Introduction to this
Agreement.
"TRANCHE A NOTES" means $37,000,000 in principal amount of Company's
9.75% Notes Due December 15, 1999 issued to CSFB on the Effective Date, as
amended, modified or otherwise supplemented or replaced from time to time. The
Tranche A Notes issued on the Effective Date shall consist of a Tranche A-1 Note
in the principal amount of $17,000,000, a Tranche A-2 Note in the principal
amount of $10,000,000, and a Tranche A-2 Note in the principal amount of
$10,000,000.
"TRANCHE B NOTES" means $20,500,000 in principal amount of Company's
13.25% Notes Due December 15, 1999 issued to SunAmerica on the Effective Date,
as amended, modified or otherwise supplemented or replaced from time to time.
The Tranche B Notes issued on the Effective Date shall consist of a Tranche B-1
Note in the principal amount of $5,000,000 and a Tranche B-2 Note in the
principal amount of $15,500,000.
21
"VOTING STOCK" means any class of Capital Stock of any Person then
outstanding entitled to vote in elections of directors (without regard to the
occurrence of any contingency).
"WET 'N' WILD APPRAISAL" means an updated, self contained MAI appraisal
of the Wet 'N' Wild Premises and the Wet 'N' Wild Improvements, and prepared to
USPAP standards for loan purposes by a MAI appraiser acceptable to Holders and
licensed as an appraiser in the State of Nevada which shall be satisfactory in
form, scope and substance to Holders.
"WET 'N' WILD DOCUMENTS" means the Existing Wet 'N' Wild Lease
Documents and all other agreements and documents other than the Basic Documents
relating to the Wet 'N' Wild Facility to which Company is a party, including the
agreements and documents specified on Schedule 1.1C annexed hereto.
"WET 'N' WILD ENVIRONMENTAL REPORT" means the Phase I Environmental
Site Assessment dated November 5, 1997 prepared by Western Technologies, Inc. as
project number 4187JL297 relating to the Wet 'N' Wild Premises delivered to
Holders prior to the Effective Date.
"WET 'N' WILD IMPROVEMENTS" means all buildings, structures, facilities
and other improvements of every kind and description now or hereafter located on
the Wet 'N' Wild Premises, including all parking areas, roads, driveways, walks,
fences, walls, beams, recreation facilities, drainage facilities, lighting
facilities and other site improvements, all water, sanitary and storm sewer,
drainage, electricity, steam, gas, telephone and other utility equipment and
facilities, all plumbing, lighting, heating, ventilating, air-conditioning,
refrigerating, incinerating, compacting, fire protection and sprinkler,
surveillance and security, vacuum cleaning, public address and communications
equipment and systems, all screens, awnings, floor coverings, partitions,
elevators, escalators, motors, machinery, pipes, fittings and other items of
equipment and personal property of every kind and description now or hereafter
located on the Wet 'N' Wild Premises or attached to the improvements that by the
nature of their location thereon or attachment thereto are real property under
applicable law; and including all materials intended for the construction,
reconstruction, repair, replacement, alteration, addition or improvement of or
to such buildings, equipment, fixtures, structures and improvements.
"WET 'N' WILD FACILITY" means the Wet 'N' Wild Premises and the Wet 'N'
Wild Improvements.
"WET 'N' WILD FLORIDA" means Wet 'N' Wild Florida, Inc., a Florida
corporation.
"WET 'N' WILD PREMISES" means the real property owned by Company
situated in Las Vegas, Nevada, and more particularly described in Schedule 1.1A
annexed hereto.
22
"WET 'N' WILD SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT"
means the Wet 'N' Wild Subordination, Non-Disturbance and Attornment Agreement
executed and delivered by Company, Wet 'N' Wild Tenant, and Collateral Agent
dated as of January 16, 1996, as amended by the First Amendment to the Wet 'N'
Wild Subordination, Non-Disturbance and Attornment Agreement and the Second
Amendment to the Wet 'N' Wild Subordination, Non-Disturbance and Attornment
Agreement, and as it may be amended, supplemented or otherwise modified from
time to time.
"WET 'N' WILD TENANT" means Wet 'N' Wild Nevada, Inc., a Nevada
corporation and assignee of Wet 'N' Wild Florida's interest under the Existing
Wet 'N' Wild Lease.
"WET 'N' WILD TENANT SALE AGREEMENT" means the Agreement for Sale of
Partnership Interest and Dissolution of Partnership dated as of January 1, 1987
among Xxxxxx Entertainment, Ltd., a Nevada limited partnership, Wet 'N' Wild,
Ltd., a Florida limited partnership and Wet 'N' Wild Florida.
"WET 'N' WILD TITLE COMPANY" has the meaning assigned to such term in
Section 4.1E.
"WET 'N' WILD TITLE POLICY" has the meaning assigned to such term in
Section 4.1E.
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS
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UNDER AGREEMENT. Except as otherwise expressly provided in this Agreement, all
---------------
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by SGC or Company to Holders pursuant to subsections
5.1A and 5.1B shall be prepared in accordance with GAAP as in effect at the time
of such preparation (and delivered together with the reconciliation statements
provided for in subsection 5.1D). Calculations in connection with the
definitions, covenants and other provisions of this Agreement shall utilize
accounting principles and policies in conformity with those used to prepare the
financial statements referred to in subsection 3.3.
1.3 OTHER DEFINITIONAL PROVISIONS. References to "Sections" and
-----------------------------
"subsections" shall be to Sections and subsections, respectively, of this
Agreement unless otherwise specifically provided. Any of the terms defined in
subsection 1.1 may, unless the context otherwise requires, be used in the
singular or the plural, depending on the reference.
23
SECTION 2. THE NOTES; CLOSING; DELIVERY
2.1A AUTHORIZATION OF EXISTING NOTES. Company has authorized the issuance
-------------------------------
and sale and has issued the Existing Notes to SunAmerica and SAI, as Holders,
pursuant to the terms and conditions of the Existing Note Purchase Agreement.
2.1B AUTHORIZATION OF RESTRUCTURE OF EXISTING NOTES AND ISSUANCE OF
--------------------------------------------------------------
ADDITIONAL NOTES. Company has authorized the restructure of the Existing Notes,
----------------
and, in connection therewith, the issuance and sale of the Tranche A Notes in an
aggregate principal amount of $37,000,000 to CSFB, as a Holder, and the issuance
and sale of the Tranche B Notes in an aggregate principal amount of $20,500,000
to SunAmerica, as a Holder, pursuant to the terms and conditions hereof and as
provided herein. The Tranche A Notes and the Tranche B Notes shall replace the
Existing Notes.
2.2 PURCHASE AND SALE OF NOTES. Subject to the terms and conditions
--------------------------
hereof, Company will issue and sell to CSFB and CSFB will purchase from Company
on the Effective Date $37,000,000 in principal amount of Tranche A Notes
consisting of four separate Tranche A Notes as further specified in the
definition of the Tranche A Notes herein. On the Effective Date, subject to the
terms and conditions hereof, CSFB shall pay the $37,000,000 subscription price
of the Tranche A Notes to be purchased by CSFB, $15,000,000 of which shall be
paid directly to SAI in cash by wire transfer of immediately available funds to
pay in full (together with the cash interest payment referred to in Section 2.3
hereof) the Existing Note issued to SAI and SAI shall thereupon deliver such
Existing Note to Company for cancellation, and $22,000,000 of which shall be
paid to Company or at its direction in cash by wire transfer of immediately
available funds against delivery to CSFB of Tranche A Notes as provided above in
the aggregate principal amount of $37,000,000.
Subject to the terms and conditions hereof, Company will restructure on
the Effective Date the Existing Note issued to SunAmerica in the principal
amount of $20,000,000 by issuing to SunAmerica two Tranche B Notes as further
specified in the definition of the Tranche B Notes herein in an aggregate
principal amount of $20,500,000, which Tranche B Notes shall amend and restate
in its entirety such Existing Note; it being understood that SunAmerica shall
-----------------------------------------
wire transfer $500,000 in immediately available funds to the Company or at its
-------------
direction against delivery to SunAmerica of the Tranche B Notes as provided
above. On the Effective Date, subject to the terms and conditions hereof,
Company shall deliver to SunAmerica the Tranche B Notes (together with the cash
interest payment referred to in Section 2.3 hereof), and SunAmerica shall
deliver its Existing Note to Company for cancellation.
2.3 CLOSING AND DELIVERY OF NOTES. A pre-closing of the purchase and sale
-----------------------------
of the Notes shall be held at O'Melveny & Xxxxx LLP, 000 Xxxxx Xxxx Xxxxxx, Xxx
Xxxxxxx, XX on November 25, 1997 or at such other time and place as the parties
may agree upon. The "Closing", as used herein, shall mean the date that the
Second Amendment to the Company Deed of Trust and the Xxxxxxxxx Deed of Trust
are recorded and all conditions to the Effective
24
Date hereunder have been satisfied or waived by the Holders. Subject to the
terms of this Agreement, at the Closing, Company will deliver to CSFB four
Tranche A Notes in the aggregate principal amount of $37,000,000 and to
SunAmerica two Tranche B Notes in the aggregate principal amount of $20,500,000,
Company will pay to SunAmerica and SAI from the Cash Collateral Account all
accrued interest due to SunAmerica and SAI under the Existing Notes and Company
will satisfy the terms and conditions of the Closing set forth in subsection
4.1. If at the Closing Company shall fail to tender the Notes to the Holders as
provided above in this subsection 2.3 and subsection 2.2, or any of the terms or
conditions specified in subsection 4.1 shall not have been fulfilled to each
Holder's satisfaction, the Holders shall, at their election, be relieved of all
further obligations under this Agreement to purchase the Notes. In no event
shall the Closing occur after December 2, 1997.
2.4 CERTAIN TERMS OF THE NOTES; PAYMENT OF INTEREST.
-----------------------------------------------
A. INTEREST. The Tranche A Notes shall bear interest at a rate of 9.75%
per annum, computed on the basis of a 360-day year of twelve 30 day months. The
Tranche B Notes shall bear interest at a rate of 13.25% per annum, computed on
the basis of a 360-day year of twelve 30-day months. Interest on the Notes shall
be payable semi-annually on June 20 and December 20 of each year, commencing
December 20, 1997 and at the scheduled maturity of the Notes on December 15,
1999. In addition to the foregoing, interest on the Notes shall be payable on
and to any date of any prepayment, redemption or other payment of the Notes (to
the extent accrued on the amount of the prepayment, redemption or other payment)
and at maturity (including at any accelerated maturity).
B. STATED MATURITY. The principal evidenced by the Notes matures on
December 15, 1999, and on such date, or on any accelerated maturity, the full
amount of principal then outstanding, and all accrued and unpaid interest
thereon, shall be due and payable.
C. POST-MATURITY INTEREST. From the occurrence and during the
continuance of an Event of Default, the principal of the Notes and, to the
extent permitted by applicable law, all accrued interest on the Notes and any
fees or other amounts owed hereunder shall bear interest (including post-
petition interest in any proceeding under the Bankruptcy Code or other
applicable bankruptcy laws) compounded monthly payable on demand at a rate which
is 2% per annum in excess of the interest rate otherwise payable under this
Agreement with respect to the Notes (or, in the case of any such fees and other
amounts, at a rate which is 2% per annum in excess of the interest rate
otherwise payable under the Notes). Payment or acceptance of the increased
rates of interest provided for in this subsection 2.4C is not a permitted
alternative to timely payment and shall not constitute a waiver of any Event of
Default or otherwise prejudice or limit any rights or remedies of Collateral
Agent or any Holder. For the purpose of complying with NRS 99.050, Company
hereby declares that it understands that to the extent interest accrued under
the Notes, late charges or other fees and accruals under this Agreement and the
other Basic Documents are added to the outstanding principal owing hereunder and
the
25
other Basic Documents, a compounding of interest results which compounding
is agreed to by Company as a part of the terms of this Agreement and the other
Basic Documents.
D. LATE CHARGES. If any payment of principal and/or interest or any
other amount payable hereunder or under the other Basic Documents is not paid
when due, Company shall pay to each Holder, on demand, a late charge (the "Late
Charge") of five cents ($0.05) for each dollar so overdue in order to compensate
such Holder for its loss of the timely use of the money and frustration of such
Holder in the meeting of its financial commitments. Nothing contained herein
shall constitute an extension of any due date for, or a waiver of any obligation
to pay, any amounts payable hereunder or under the other Basic Documents.
E. RIGHT OF REQUISITE TRANCHE B HOLDERS TO REQUIRE SALE OF SFHI NOTES
TO PAY INTEREST ON DECEMBER 20, 1998 AND JUNE 20, 1999. On or before each of
November 20, 1998 and May 20, 1999, Company shall provide to the Tranche B
Holders evidence satisfactory to the Holders of more than 50% in aggregate
principal amount of the Tranche B Notes that Company has or will have on or
prior to December 15, 1998 or June 15, 1999, as applicable, sufficient funds to
pay in full the interest payments on the Notes due on December 20, 1998 and June
20, 1999, respectively. If Company does not provide such satisfactory evidence
with respect to its ability to pay either the December 1998 or June 1999
interest payment, at the written instruction of the Holders of more than 50% in
aggregate principal amount of the Tranche B Notes, the Company shall sell SFHI
Notes held as Collateral, and deposit the proceeds thereof in the Cash
Collateral Account and apply such proceeds to make the interest payment due on
the Notes on December 20, 1998 and June 20, 1999.
F. BACK-END FEES. On the date on which the principal amount of the
Tranche A Notes is paid in full, Company shall pay to CSFB $675,000 in cash as
an additional structuring advisory fee in respect of the Tranche A Notes;
provided that if on such date an Event of Default has occurred and is
continuing, such fee shall be deferred and shall be paid on the date on which
the fee described in the next succeeding sentence is due. On the date on which
the principal amount of the Tranche B Notes is paid in full, Company shall pay
to SunAmerica $1,425,000 in cash as an additional structuring advisory fee in
respect of the Tranche B Notes.
2.5 GENERAL PROVISIONS REGARDING PAYMENTS; OPTIONAL REDEMPTION; MANDATORY
---------------------------------------------------------------------
REDEMPTION AND CHANGE IN CONTROL REPURCHASE; RELEASE OF SFHI NOTES AS
---------------------------------------------------------------------
COLLATERAL.
----------
A. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) Manner and Time of Payment. All payments by Company of principal,
--------------------------
interest, fees and other Obligations hereunder and under the Notes shall be
made in Dollars in same day funds, without reductions of any payment on
account of any defense, set-off or counterclaim, free of any restriction or
condition and without
26
surrender or presentation of such Note, and delivered to the applicable
Holder not later than 11:00 A.M. (Los Angeles time) on the date due at its
address and in the manner set forth in Schedule 2 annexed hereto (or at such
other place and in such other manner as such Holder may designate from time
to time by written notice to Company); funds received by the applicable
Holder after that time on such due date shall be deemed to have been paid by
Company on the next succeeding Business Day. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business Day,
such payment shall be made on the next succeeding Business Day.
(ii) Application and Apportionment of Payments. Subject to the
-----------------------------------------
Intercreditor Agreement, all payments made hereunder shall be applied first
to late charges, costs and expenses owing to Collateral Agent and then to
Holders hereunder and under the other Basic Documents, second to accrued
interest due under the Tranche A Notes, third to accrued interest due under
the Tranche B Notes, fourth to the principal balance of the Tranche A Notes
and fifth to the principal balance of the Tranche B Notes. Subject to
Section 2.5E, aggregate principal, interest and applicable late charge
payments shall be ratably apportioned among all outstanding Tranche A Notes
or Tranche B Notes, as the case may be, to which such payments relate.
(iii) Notation of Payment. Each Holder agrees that before disposing
-------------------
of any Note held by it, or any part thereof (other than by granting
participations therein), that Holder will make a notation thereon of all
principal payments previously made thereon and of the date to which interest
thereon has been paid; provided that the failure to make (or any error in
--------
the making of) a notation of the Note shall not limit or otherwise affect
the obligations of Company hereunder or under such Note or any payments of
principal or interest on such Note.
B. OPTIONAL REDEMPTION.
(i) Optional Redemption. The Notes shall not be redeemable prior to
-------------------
June 15, 1998. From and after June 15, 1998 to and including December 15,
1998, the Tranche A Notes shall be redeemable at any time in whole or in
part the option of Company at a price paid in immediately available funds of
101 1/2% of the principal amount thereof, and the Tranche B Notes shall be
redeemable at any time in whole or in part at the option of Company at a
price paid in immediately available funds of 104 1/2% of the principal
amount thereof, together in each case with accrued interest to the
redemption date and the applicable fee set forth in subsection 2.4E. During
the period from and including December 16, 1998 to and including June 15,
1999, the Tranche A Notes shall be redeemable at any time in whole or in
part at the option of Company at a price paid in immediately available funds
of 101% of the principal amount thereof and the Tranche B Notes shall be
redeemable at any time in whole or in part at the option of Company at a
price paid in immediately available funds at 103% of the principal amount
thereof, together with accrued interest to the redemption date and the
applicable fee set
27
forth in subsection 2.4E. During the period from and including June 16, 1999
to and including November 15, 1999, the Tranche A Notes shall be redeemable
at any time in whole or in part at the option of Company at price paid in
immediately available funds of 100 1/2% of the principal amount thereof and
the Tranche B Notes shall be redeemable at any time in whole or in part at
the option of Company at a price paid in immediately available funds of 101
1/2% of the principal amount thereof, together with accrued interest to the
redemption date and applicable fee set forth in subsection 2.4E. The Tranche
A Notes and the Tranche B Notes shall be redeemable after November 15, 1999
at any time in whole or in part at the option of Company at a price paid in
immediately available funds of 100% of the principal amount thereof,
together with accrued interest thereon and the applicable fee set forth in
subsection 2.4E. Company shall give Holders not less than thirty days prior
written notice of a redemption pursuant to this subsection 2.5B (i) and
shall not redeem Notes pursuant to this subsection 2.5B except in a minimum
aggregate principal amount of $5,000,000 and integral multiples of
$1,000,000 thereof.
(ii) Redemption Upon Sale of Wet 'N' Wild Premises. Notwithstanding
---------------------------------------------
clause (i) above, if Company transfers the Wet 'N' Wild Premises to an
unaffiliated third party or to another Person with the prior written consent
of the Holders of more than 50% of the aggregate principal amount of the
Tranche B Notes, the Tranche A Notes shall be immediately redeemed by
Company in whole at a price paid in cash equal to the redemption price
payable in connection with the optional redemption of Tranche A Notes
pursuant to subsection 2.5B(i) (or, if prior to June 15, 1998, at 101 1/2%
of the principal amount thereof) and the Tranche B Notes shall be
immediately redeemed by Company in whole at a price paid in cash equal to
the redemption price payable in connection with the optional redemption of
Tranche B Notes pursuant to subsection 2.5B(i) (or, if prior to June 15,
1998, at 104 1/2% of the principal amount thereof), in each case, plus
accrued but unpaid interest thereon to the redemption date and the
applicable fee set forth in subsection 2.4E; provided that if the net
--------
proceeds of any such transfer are sufficient to redeem the Tranche A Notes
on the terms set forth in this subsection 2.5B(ii), Company may, with the
consent of the Holders of more than 50% in aggregate principal amount of the
Tranche B Notes, transfer the Wet 'N Wild Premises to such Person if the net
proceeds of such transfer are used to redeem, as contemplated by this
subsection, in full the Tranche A Notes and such portion of the Tranche B
Notes as may be redeemed after giving effect to the redemption of the
Tranche A Notes. If the Company requests the consent of the Holders of more
than 50% of the Tranche B Notes under this subsection 2.5B(ii), if such
Holders have not responded to such request in writing within ten (10)
Business days of the receipt by the Holders of the Tranche B Notes of such
request, such request shall be deemed to have been rejected.
28
C. MANDATORY REDEMPTION AND CHANGE IN CONTROL REPURCHASE.
(i) Payment Required Under Deeds of Trust. Company shall redeem or
-------------------------------------
otherwise pay the principal amount of the Notes (beginning with the Tranche
A Notes until the Tranche A Notes have been paid in full) and accrued
interest thereon as required pursuant to the Deeds of Trust, at a redemption
price equal to the redemption price payable in connection with the optional
redemption of Tranche A Notes or Tranche B Notes as applicable, pursuant to
subsection 2.5B (i) (or if prior to June 15, 1998, at 101 1/2% of the
principal amount so redeemed in the case of the Tranche A Notes and 104 1/2%
of the principal amount so redeemed in the case of the Tranche B Notes) plus
accrued and unpaid interest thereon to the redemption date and any
applicable fee set forth in subsection 2.4E.
(ii) Redemption Based on Redemption or Transfer of SFHI Notes. If any
--------------------------------------------------------
SFHI Notes that constitute Collateral are mandatorily redeemed under the
SFHI Indenture with the proceeds of any recovery as a result of casualty or
condemnation or pursuant to Section 3.8 of the SFHI Indenture, the same
principal amount of Notes (beginning with the Tranche A Notes until the
Tranche A Notes have been paid in full) shall be immediately redeemed with
accrued interest thereon to the redemption date, at a redemption price equal
to 100% of the principal amount so redeemed (or, if the redemption is a
voluntary redemption or any other type of redemption, purchase or other
payment of any nature under the SFHI Indenture, at a redemption price equal
to the redemption price payable in connection with the optional redemption
of Tranche A Notes or Tranche B Notes as applicable, pursuant to subsection
2.5B (i) or, if prior to June 15, 1998, at 101-1/2% of the principal amount
so redeemed in the case of the Tranche A Notes and 104 1/2% of the principal
amount so redeemed in the case of the Tranche B Notes) plus accrued and
unpaid interest thereon to the redemption date and if the Tranche A Notes or
Tranche B Notes have been paid in full, the applicable fee set forth in
subsection 2.4E.
(iii) Redemption Based on SFHI Cash Flow. If as of the end of any
----------------------------------
fiscal quarter commencing as of the four-quarter period ending on December
31, 1997, SFHI Cash Flow for the preceding four quarter period is less than
$13,500,000, Company will be required to redeem a principal amount of Notes
(beginning with the Tranche A Notes until the Tranche A Notes have been paid
in full) equal to $7,000,000 in the aggregate at a redemption price equal to
the redemption price payable in connection with the optional redemption of
Tranche A Notes pursuant to Section 2.5B(i) (or, if prior to June 15, 1998,
at 101 1/2% of the principal amount so redeemed) plus accrued and unpaid
interest thereon to the redemption date which shall be within 30 days after
the date of delivery by SGC of financial statements for such fiscal quarter
pursuant to subsection 5.1A; it being understood that Company or Collateral
Agent shall be entitled to sell SFHI Notes held as Collateral to persons
other than SGC or any of its Affiliates in order to make such redemption and
that the Holders of more than 50% in aggregate principal
29
amount of the Tranche B Notes shall be entitled to amend or waive this
subsection 2.5C(iii) without the consent of any Holders of the Tranche A
Notes. Company shall only redeem Notes as provided in this subsection
2.5C(iii) on one occasion.
(iv) Redemption Upon Sale of Xxxxxxxxx Premises. If Company transfers
------------------------------------------
any portion of the Xxxxxxxxx Premises, $20,000,000 in principal amount of
the Notes beginning with the Tranche A Notes shall be immediately redeemed
by Company at a redemption price equal to the redemption price payable in
connection with the optional redemption of Tranche A Notes or Tranche B
Notes as applicable pursuant to subsection 2.5B(i) (or if prior to June 15,
1998, at 101 1/2% of the principal amount so redeemed in the case of the
Tranche A Notes and 104 1/2% of the principal amount so redeemed in the case
of the Tranche B Notes) plus accrued and unpaid interest thereon to the
redemption date and, if the Tranche A Notes or the Tranche B Notes have been
paid in full, the applicable fee set forth in subsection 2.4E.
(v) Change-of-Control Repurchase. If there is a Change of Control (the
----------------------------
date of such Change of Control being the "Change of Control Date"), then
----------------------
Company shall promptly thereafter notify each Holder in writing of such
occurrence and not later than ten Business Days after such Change of Control
Date shall commence an offer to repurchase (the "Change of Control
-----------------
Repurchase Offer") all of the outstanding Notes on the Change of Control
----------------
Payment Date (as defined below) at a purchase price in cash equal to 101% of
the aggregate principal amount of the Notes plus accrued and unpaid interest
to the date of repurchase (and at no other premium). The Change of Control
Repurchase Offer shall remain open for 20 Business Days following the date
Company mails notice of the Change of Control Repurchase Offer to the
Holders or such longer period required by applicable law. Notice of a
Change of Control Repurchase Offer shall be mailed by Company to the Holders
of the Notes at their last registered addresses with copies to Collateral
Agent. The notice shall contain all instructions and materials necessary to
enable such Holders to tender Notes pursuant to the Change of Control
Repurchase Offer. The notice shall state:
(1) that the Change of Control Repurchase Offer is being made
pursuant to this subsection 2.5C(v), that Notes may be surrendered in
whole or in part (in denominations of $1,000 and integral multiples
thereof), and that all Notes tendered will be accepted for payment;
(2) that any Notes not tendered will continue to accrue interest;
(3) that any Notes accepted for payment pursuant to the Change of
Control Repurchase Offer shall cease to accrue interest after the date
on which such Notes are paid;
30
(4) that Holders electing to have Notes purchased pursuant to a
Change of Control Repurchase Offer will be required to surrender their
Notes, with the form entitled "Option of Holder to Elect Repurchase" on
the reverse of the Note completed, to Company prior to the close of
business on the expiration date of the Change of Control Repurchase
Offer;
(5) that Holders will be entitled to withdraw their election if
Company receives, not later than the close of business on the Business
Day immediately preceding the expiration date of the Change of Control
Repurchase Offer, a telegram telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of Notes the
Holder delivered for purchase and a statement that such Holder is
withdrawing such Holder's election to have such Notes purchased;
(6) that the Holders whose Notes are tendered only in part will be
issued Notes representing the unpurchased portion of the Notes
surrendered;
(7) the instructions Holders must follow in order to tender their
Notes; and
(8) the circumstances and relevant facts regarding such Change of
Control (including but not limited to information with respect to pro
forma historical financial information after giving effect to such
Change of Control, information regarding the persons acquiring control
and such person's business plans going forward).
On the expiration of the Change of Control Repurchase Offer, Company
shall (A) accept for payment Notes or portions thereof tendered pursuant to the
Change of Control Repurchase Offer, (B) promptly transfer to the Holders
immediately available funds sufficient to pay the purchase price of all Notes or
portions thereof so tendered and (C) promptly deliver to such Holders a new Note
equal in principal amount to any unpurchased portion of the Note surrendered.
If the events which give rise to a Change of Control Repurchase Offer cease to
exist prior to completion of such repurchase offer, then Company shall not be
obligated to repurchase any of the Notes and may revoke any offer set forth
above (whether before or after acceptance thereof by any Holder) and will not be
liable to make the payments set forth above with respect to any revoked offer.
(vi) Appraisal Deficit Redemption. If and to the extent that, as of
----------------------------
the Effective Date, 80% of the Aggregate Appraised Value is less than the
aggregate principal amount of the Notes as of the Effective Date (such
amount, the "Appraisal Deficit Amount"), then on December 31, 1997 (such
date, the "Appraisal Deficit Redemption Date"), Company shall redeem a
principal amount of Tranche A Notes equal to the Appraisal Deficit Amount at
a redemption price equal to 100% of the
31
principal amount so redeemed plus accrued and unpaid interest thereon to the
redemption date unless, prior to the Appraisal Deficit Redemption Date,
Company has delivered updated, restated or new MAI Appraisals with respect
to either or both of the Wet 'N' Wild Property and the Xxxxxxxxx Property to
the Holders, in form and substance satisfactory to Requisite Holders and 80%
of the Aggregate Appraised Value reflected in such MAI Appraisals is equal
to or greater than the principal amount of the Notes.
D. REPURCHASE PURSUANT TO ANY GAMING LAW.
(i) If required to be found suitable by any Gaming Authority, all
Holders and beneficial owners of Notes, whether initial Holders, beneficial
owners or subsequent transferees, shall be subject to the suitability provisions
of the applicable Gaming Law and shall apply for a finding of suitability within
the earlier of (i) 30 days after the applicable Gaming Authority requests that
such Holder or beneficial owner apply for a finding of suitability, or (ii) the
time period prescribed by such Gaming Authority for such application. The Holder
or beneficial owner required to be found suitable shall pay all costs of the
investigation for such finding. In the event that any Gaming Authority
determines that a Holder or beneficial owner is not suitable under such Gaming
Authority's Gaming Laws or such Holder or beneficial owner fails to submit for a
finding of suitability as required by such Gaming Authority in its sole
discretion, then, promptly after the date that such Holder or beneficial owner
(the "Unsuitable Holder") is found unsuitable or fails to submit for a finding
of suitability (the "Unsuitability Date"), SGC and Company shall provide written
notice to that effect to such Unsuitable Holder and the Unsuitable Holder must
thereafter dispose of, pursuant to subsection 2.5D(ii), all Notes the Unsuitable
Holder then possesses, either directly, indirectly or beneficially. Immediately
upon the Unsuitability Date, the Unsuitable Holder shall have no further right
(a) to exercise, directly or indirectly, through any trustee or nominee or any
other person or entity, any right conferred by any Note(s) and (b) to receive
any interest or any other distribution or payment with respect to any such
Note(s) or any remuneration in any form from Company or SGC; provided, however,
-------- -------
that after the Unsuitability Date, interest on any such Note(s) shall continue
to accrue for the benefit of any subsequent Holder thereof.
(ii) Within 30 days after receipt of the notice referred to in clause
(i) above or such shorter period as the Gaming Authorities may prescribe, (1)
the Unsuitable Holder shall sell its Note(s) either directly or through a bona
fide brokerage transaction, in either case on arms-length terms, to a Person who
has not previously been found unsuitable by the Gaming Authorities and who is
not an Affiliate of the Unsuitable Holder or (2) at the election of Company,
Company may redeem such Holder's Notes at the lower of (i) the principal amount
thereof, or (ii) the amount which the Unsuitable Holder paid for the Note(s),
together in either case with accrued interest up to the Unsuitability Date.
(iii) The provisions of this subsection 2.5D shall be construed in
accordance with the provisions of the applicable Gaming Laws.
32
E. PRO RATA REDEMPTION. Subject to the terms and conditions of the
Intercreditor Agreement and except as otherwise provided in this Agreement, in
the event of any redemption in which the aggregate principal amount of Notes to
be redeemed is less than the entire principal amount of Notes outstanding,
Company shall apply all payments made hereunder first to fees, late charges,
costs and expenses owing to Collateral Agent hereunder and under the other Basic
Documents, second to accrued interest due under the Tranche A Notes pro rata,
third to the principal balance of the Tranche A Notes pro rata, fourth to
accrued interest due under the Tranche B Notes pro rata, and fifth to the
principal balance of the Tranche B Notes pro rata (with such adjustments as may
be deemed appropriate by Company so that only Notes in denominations of $1,000,
or integral multiples thereof, shall be purchased) Holders whose Notes are
purchased only in part will be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered in connection with a redemption.
F. RELEASE OF SFHI NOTES AS COLLATERAL. If and to the extent that
(i) the Wet `N' Wild Facility constitutes Collateral hereunder and (ii) the
principal amount of SFHI Notes held as Collateral under the Company Security
Agreement exceeds the principal amount of outstanding Notes (the amount of such
excess, the "Excess Principal Amount"), then, so long as no Event of Default or
Potential Event of Default has occurred and is continuing, Collateral Agent
shall release its security interest held on behalf of Holders in SFHI Notes in a
principal amount not to exceed the Excess Principal Amount within five (5)
Business Days after receiving the written request of Company directing that such
release occur which request shall certify that no Event of Default or Potential
Event of Default has occurred and is continuing; provided that Collateral Agent
--------
shall not release its security interest in any such SFHI Notes unless and until
Company has demonstrated in a manner satisfactory to Collateral Agent that
immediately upon such release, the SFHI Notes released will be contributed or
otherwise transferred to SFHI and retired or otherwise cancelled unless the
Holders of more than 50% in aggregate principal amount of the Tranche B Notes
have agreed that such contribution and retirement need not occur; it being
--------
understood that Collateral Agent shall have no obligation to deliver to Company
----------
any instrument or instruments evidencing the SFHI Notes that is in excess of the
Excess Principal Amount prior to receiving in exchange therefor a substitute
instrument or instruments evidencing SFHI Notes in a principal amount not less
than the principal amount required to be pledged hereunder and under the Company
Security Agreement. Company agrees that the principal amount of SFHI Notes held
as collateral shall equal or exceed the lesser of (i) principal amount of
outstanding Notes and (ii) an amount equal to $33,120,000 minus any SFHI Notes
sold in connection with any payment of interest pursuant to subsection 2.4E or
with any prepayment pursuant to subsection 2.5C(iii) or subsection 2.5C(ii).
G. RIGHT OF FIRST REFUSAL WITH RESPECT TO SFHI NOTES. In the event
that Company desires to sell any SFHI Notes (whether pursuant to the Basic
Documents or otherwise) to any Person, Company shall give the Initial Holders
written notice thereof (the "Sale Notice") which notice shall include the price
at which Company intends, to sell such SFHI Notes (the "Sale Price").
33
The Initial Holders or their respective designees shall then have the
right to acquire any SFHI Notes subject to a Sale Notice upon the same terms and
conditions stated in the Sale Notice by giving written notice of their
willingness to acquire such SFHI Notes to Company within one (1) Business Day of
receipt by the Initial Holders of such Sale Notice. If such Person elect or are
deemed to elect not to acquire such SFHI Notes, then Company may sell the SFHI
Notes pursuant to such Sale Notice on the same terms and conditions set forth in
the Sale Notice delivered to the Initial Holders. If the terms of such Sale
Notice are changed from the terms set forth in the Sale Notice delivered to the
Initial Holders in any manner that is favorable to such third party (including
any reduction of the Sale Price), then Company shall be obligated to deliver to
the Initial Holders written notice of such changes and the Initial Holders or
their respective designees will again have a right to acquire such SFHI Notes on
the basis of such changed terms in accordance with the terms and provisions (and
within the time periods set forth) above. If Company fails to sell the SFHI
Notes pursuant to such Sale Notice within thirty days after delivery of the Sale
Notice to the Initial Holders then Company shall be obligated to redeliver the
Sale Notice to the Initial Holders prior to selling the SFHI Notes pursuant to
such Sale Notice, and the Initial Holders or their respective designees will
again have a right to acquire such SFHI Notes in accordance with the terms and
provisions (and within the time periods set forth) above.
In the event that both Initial Holders elect to acquire particular SFHI
Notes pursuant to this subsection 2.5G, then each Initial Holder shall acquire
50% of the aggregate principal amount of SFHI Notes subject to the Sale Notice.
In the event that an Initial Holder elects to acquire particular SFHI Notes
pursuant to this subsection 2.5G and the other Initial Holder does not elect to
acquire such SFHI Notes, the Initial Holder electing to acquire such SFHI Notes
shall acquire all of the SFHI Notes subject to the Sale Notice.
In no event shall this subsection 2.5G or any election by any Person
constitute a deferral or waiver of any required payment under any Basic Document
or other term or provision of any Basic Document.
2.6 REPLACEMENT OF NOTES. Upon receipt of evidence reasonably satisfactory
--------------------
to Company of the loss, theft, destruction or mutilation of a Note and upon
delivery of an unsecured indemnity agreement reasonably satisfactory to Company
from any Holder of such Note or, in the case of any such mutilation, upon the
surrender of such Note for cancellation to Company at its principal office,
Company, at its expense, will execute and deliver, in lieu thereof, a new Note
of like tenor, dated in the case of a Note, so that there will be no loss of
interest. Any Note in lieu of which any such new Note has been so executed and
delivered by Company, thereupon shall not be deemed an outstanding Note for any
purpose under this Agreement. Notwithstanding the foregoing provisions of this
subsection 2.6, if any Note of which SunAmerica, SAI, CSFB or any other
institutional Holder is the owner is lost, stolen or destroyed, then the
affidavit of such Holder's Treasurer or Assistant Treasurer (or other
responsible officials), setting forth the name of the owner of such Note and the
circumstances with respect to such loss, theft or destruction, shall be accepted
as satisfactory evidence thereof,
34
and no indemnity shall be required as a condition to the execution and delivery
by Company of a new Note in lieu of such Note (or as a condition to the payment
thereof, if due and payable) other than SunAmerica's, SAI, CSFB or such Holder's
written agreement to indemnify Company.
2.7 TAXES. In the event of the passage of any state, Federal, municipal or
-----
other governmental law, order, rule or regulation subsequent to the date hereof
(i) deducting from the value of real property for the purpose of taxation any
lien or encumbrance thereon or in any manner changing or modifying the laws now
in force governing the taxation of any of the Deeds of Trust or debts secured by
mortgages (other than laws governing income, franchise and similar taxes
generally) or the manner of collecting taxes thereon and (ii) imposing a tax to
be paid by Collateral Agent or any Holder, either directly or indirectly, on any
of the Deeds of Trust, this Agreement, the Guaranties or any of the other Basic
Documents or to require an amount of taxes to be withheld or deducted therefrom,
SGC and Company will promptly notify Collateral Agent or such Holder, as
applicable, of such event. In such event, SGC and Company shall (i) jointly and
severally agree to enter into such further instruments as may be reasonably
necessary or desirable to obligate Company to make additional payments to fully
and timely discharge such items and (ii) jointly and severally guarantee such
additional payments. If SGC and Company are not permitted by law to do that
which is required by the preceding sentence, Collateral Agent or such Holder, as
applicable, shall be entitled to exercise any or all of its rights and remedies
under the Basic Documents, including the right to accelerate the Obligations.
The obligations of SGC and Company under this subsection shall survive the
payment of the Notes.
2.8 REGISTRATION; TRANSFER; REGISTRATION OF TRANSFER AND EXCHANGE.
-------------------------------------------------------------
A. Company shall maintain a register for its Notes, which shall
provide for the registration of the Notes and of transfers of the Notes. Upon
surrender for registration or transfer of any Note or any portion thereof
together with an Assignment Agreement in the form of Exhibit XVI annexed hereto
entered into by the transfering Holder and the applicable transferee or
transferees, Company, at its expense, shall execute and deliver, in the name of
the designated transferee or transferees and the transferor, as applicable, one
or more new Notes, as applicable; provided, however, that in connection with any
-------- -------
such transfer, the Holder requesting the transfer shall provide to Company
evidence reasonably satisfactory to it that the transfer is to a "qualified
institutional buyer" or an "accredited investor," as such terms are defined in
Rule 144A and 501, respectively, of the Securities Act, and is exempt from the
registration requirements of the Securities Act and, if the transfer is to an
entity or person other than a "qualified institutional buyer", a Company shall
be provided with an opinion of counsel reasonably satisfactory to it that the
transfer is so exempt from the registration requirements of the Securities Act;
provided further, that, in connection with any transfer, the Holder requesting
-------- -------
such transfer shall provide to Company, the Collateral Agent and the other
Holders an amendment to Schedule 2 annexed hereto that sets forth payment and
other information with respect to such transferee or transferees and shall also
deliver to the Collateral Agent and each
35
other Holder an Intercreditor Assumption Agreement and the Assignment Agreement
referred to above executed by each such transferee provided, further, that
Company shall not be required to register the transfer of Notes to a transferee
with a principal amount of less than $2,000,000; provided, further, that, if no
Event of Default has occurred and is continuing, Company shall have the right to
consent (which consent shall not unreasonably be withheld or delayed) to any
transfer of Notes that causes SunAmerica, SAI and their Affiliates to hold, in
the aggregate, less than 51% of the legal or beneficial interests in all
outstanding Tranche B Notes. Notes may be exchanged at the option of any Holder
thereof for Notes of a like aggregate principal amount in the same name but in
different denominations. Whenever any Notes are so surrendered for exchange,
Company, at its expense, shall execute and deliver the Notes which the Holder
making the exchange is entitled to receive. All Notes issued upon any
registration of transfer or exchange thereof shall be the valid obligations of
Company, evidencing the same debt, and entitled to the same benefits, as Notes
surrendered upon such registration of transfer or exchange. Each Note presented
or surrendered for registration or transfer or exchange shall (if so required by
Company) be duly endorsed, or be accompanied by a written instrument of transfer
in form satisfactory to Company, duly executed by the Holder thereof or its
attorney duly authorized in writing.
B. In connection with any transfer of the Notes pursuant to the
exemption from the provisions of Section 5 of the Securities Act afforded by
Rule 144A promulgated thereunder, Company hereby agrees to provide (i) at the
request of any transferring Holder, including any transferee thereof or Person
who has been granted a participation in any Note pursuant to this Agreement, to
such Holder and to any prospective transferee designated to Company in writing
by such Holder, and (ii) at such prospective transferee's request to such Holder
to Company, the information required by paragraph (d)(4)(i) (or any successor
provision) of Rule 144A under the Securities Act.
2.9 REPRESENTATION OF HOLDERS. Each Holder represents to SGC and Company
-------------------------
that on the Effective Date such Holder is an "accredited investor" within the
meaning of Section 501 of the Securities Act, is acquiring the Notes for
investment and is not acquiring the Notes with a view to the distribution or
sale of the securities within the meaning of the Securities Act, subject,
however, to any requirement of law that the disposition of its property be at
all times within its control.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Holders to enter into this Agreement, and to hold the
Notes hereunder, SGC and Company each represent, warrant and covenant to each
Holder, as of the Effective Date as follows:
36
3.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING AND OTHER MATTERS.
--------------------------------------------------------------------
A. ORGANIZATION AND POWERS; QUALIFICATION AND GOOD STANDING. Each
Credit Party is a corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada. Each Credit Party has all
requisite corporate power and authority to own and operate its properties, to
carry on its business as now conducted and as proposed to be conducted, to enter
into the Basic Documents to which it is or may be party and to carry out the
transactions contemplated thereby. Each Credit Party is qualified to do business
and in good standing in Nevada and in every other jurisdiction where its assets
are located and wherever necessary to carry out its business and operations,
except in such other jurisdictions where the failure to be so qualified or in
good standing has not had and will not have a Material Adverse Effect.
B. SUBSIDIARIES AND JOINT VENTURES. All of the Subsidiaries and
Joint Ventures of SGC as of the Effective Date are identified in Schedule 3.1B
annexed hereto. The capital stock of each of the Subsidiaries of SGC identified
in Schedule 3.1B annexed hereto is duly authorized, validly issued, fully paid
and nonassessable. Each of the Subsidiaries and Joint Ventures of SGC
identified in Schedule 3.1B annexed hereto is a corporation or other entity duly
organized or formed, validly existing and in good standing under the laws of its
respective jurisdiction of incorporation set forth therein, has all requisite
power and authority to own and operate its properties and to carry on its
business as now conducted and as proposed to be conducted, and is qualified to
do business and in good standing in every jurisdiction where its assets are
located and wherever necessary to carry out its business and operations, in each
case except where failure to be so qualified or in good standing or a lack of
such corporate power and authority has not had and will not have a Material
Adverse Effect. Schedule 3.1B annexed hereto correctly sets forth, as of the
Effective Date, the ownership interest of SGC and each of its Subsidiaries in
each of their respective Subsidiaries and Joint Ventures.
C. CAPITALIZATION. The authorized capital stock of SGC consists of
100,000,000 shares of common stock, par value .01 per share, of which 6,195,356
shares are outstanding and 10,000,000 shares of preferred stock, par value .01
per share, of which 8,556,651 shares of SGC Preferred Stock are outstanding.
The authorized capital stock of Company consists of 20,000 shares of common
stock, par value $10 per share, of which 57 shares are issued and outstanding,
50 of which are owned by Sahara Resorts, five of which are owned by Casino
Properties and two of which are owned by Hacienda Hawaiian. The authorized
capital stock of Sahara Resorts consists of 10,000 shares of common stock, par
value $0.20 per share, of which 10,000 are issued and outstanding, all of which
are owned by SGC.
D. EXISTING WET 'N' WILD LEASE INDEBTEDNESS AND OTHER INDEBTEDNESS.
Company is not liable with respect to any Indebtedness except for the Notes and
the Existing Wet 'N' Wild Lease Guaranty and the outstanding principal amount of
the Existing Wet 'N' Wild Lease Note was $5,434,862 as of October 31, 1997. As
of the Effective Date, SGC and its Subsidiaries are not liable with respect to
Indebtedness individually in excess of $100,000
37
except for Indebtedness listed on Schedule 3.1D. Schedule 3.1D correctly
identifies the maturity date and the amount and date of all amortization or
other payments required to be made in respect of such Indebtedness and the
Persons who are obligated (whether pursuant to a guaranty or otherwise) to pay
such Indebtedness. Schedule 1.1C correctly identifies all of the Xxxxxxxxx
Property Documents and the Wet 'N' Wild Documents.
E. OTHER BASIC DOCUMENTS. All representations and warranties in each
other Basic Document are true and correct in all material respects.
3.2 AUTHORIZATION OF NOTES AND OTHER BASIC DOCUMENTS AND RELATED MATTERS.
--------------------------------------------------------------------
A. AUTHORIZATION OF NOTES AND OTHER BASIC DOCUMENTS. The execution
and delivery by each Credit Party of each Basic Document to which each is a
party and the performance by each Credit Party of their respective obligations
thereunder have been duly authorized by all necessary corporate action on the
part of each such Credit Party, as applicable.
B. NO CONFLICT. The execution, delivery and performance by each
Credit Party of each Basic Document to which it is party and the consummation of
the transactions contemplated by the Basic Documents, do not and will not (i)
violate any provision of any law or any governmental rule or regulation
(including any Gaming Laws or, based on the representation and warranty of
Holders contained in subsection 2.9 hereof, federal securities laws) applicable
to any Credit Party or any of their respective Subsidiaries, the Certificate or
Articles of Incorporation or Bylaws of any Credit Party or any of their
respective Subsidiaries or any order, judgment or decree of any court or other
agency of government binding on any Credit Party or any of their respective
Subsidiaries, (ii) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under the SFHI Indenture, the Pioneer
Indenture, the Wet 'N' Wild Documents, the Hacienda Indenture, the Sierra Note,
the Xxxxxxxxx Property Documents or any other Contractual Obligation of any
Credit Party or any of their respective Subsidiaries, (iii) result in or require
the creation or imposition of any Lien upon any of the properties or assets of
any Credit Party or any of their respective Subsidiaries (other than any Liens
created under any of the Basic Documents in favor of Collateral Agent or
Holders), or (iv) require any approval of stockholders or any approval or
consent of any Person under any Contractual Obligation of any Credit Party or
any of their respective Subsidiaries, except for such approvals or consents
which will be obtained on or before the Effective Date and disclosed in writing
to Holders.
C. GOVERNMENTAL CONSENTS. Assuming the accuracy of Holders'
representation contained in subsection 2.9, the execution, delivery and
performance by each Credit Party and their respective Subsidiaries of each Basic
Document and the consummation of the transactions contemplated by each Basic
Document do not and will not require any registration with, consent or approval
of, or notice to, or other action to, with or by, any
38
federal, state or other Governmental Authority or regulatory body, including but
not limited to any Gaming Board.
D. BINDING OBLIGATION. Each of the Basic Documents to which each Credit
Party is party has been duly executed and delivered by each such Credit Party,
as applicable, and is the legally valid and binding obligation of each such
Credit Party, as applicable, enforceable against each such Credit Party in
accordance with its respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles relating to
enforceability.
E. OFFERINGS. No Credit Party or any of their respective
Subsidiaries has, directly or indirectly, offered the Notes, or any part
thereof, or (within the last six months) any similar securities for sale to, or
solicited any offer to buy any of the same from, or otherwise approached or
negotiated in respect thereof with, anyone other than the Holders as of the
Effective Date and their Affiliates and not more than 10 other institutional
investors. Assuming the accuracy of the representations and warranties of the
Holders contained in subsection 2.9, the offer, issuance and sale of the Notes
to the Holders in conformity with the terms of this Agreement constitute
transactions exempt from the registration requirements of Section 5 of the
Securities Act and comply or will comply with federal securities and state blue
sky laws applicable to such offer, sale and issuance.
F. USE OF PROCEEDS. SGC and Company have used all of the proceeds
received from the sale of the Existing Notes as provided in subsection 3.2F and
5.10 of the Existing Note Purchase Agreement. SGC and Company will use the
proceeds of the Notes as provided in subsection 5.10 hereof.
3.3 FINANCIAL CONDITION. SGC and Company have heretofore delivered to
-------------------
Holders at Holders' request, the following financial statements and information:
the audited consolidated financial statements of SGC and its Subsidiaries for
the fiscal years ended September 30, 1996, 1995 and 1994 and for the fiscal
quarter ended June 30, 1997. All such statements were prepared in conformity
with GAAP and fairly present the consolidated financial position of the entities
described in such financial statements as at the respective dates thereof and
the results of operations and cash flows (on a consolidated basis) of the
entities described therein for each of the periods then ended. SGC and its
Subsidiaries do not (and will not following the issuance of the Notes) have any
material Contingent Obligation or liability for taxes, long-term lease or
unusual forward or long-term commitment that is not reflected in the
aforementioned financial statements or the notes thereto and which in any such
case is material in relation to the business, operations, properties, assets,
condition (financial or otherwise) or prospects of SGC, Company, or any of their
respective Subsidiaries.
3.4 NO MATERIAL ADVERSE CHANGE; NO RESTRICTED JUNIOR PAYMENTS. Since
---------------------------------------------------------
September 30, 1997, no event or change has occurred that has caused or
evidences, either in any case or in the aggregate, a Material Adverse Effect.
Since September 30, 1997, neither
39
SGC nor Company has directly or indirectly declared, ordered, paid or made, or
set apart any sum or property for, any Restricted Junior Payment or agreed to do
so.
3.5 TITLE TO PROPERTIES; LIENS. SGC and Company have (or in the case of
--------------------------
the Xxxxxxxxx Facility, will have as of the Effective Date) (i) good, sufficient
and legal title to (in the case of fee interests in real property), (ii) valid
leasehold interests in (in the case of leasehold interests in real or personal
property), or (iii) good title to (in the case of all other property, including
personal property), the Premises and Improvements, as applicable, and all of
their other respective properties and assets reflected in the financial
statements referred to in subsection 3.3, in each case except as disclosed in
the notes to such financial statements and for assets disposed of since the date
of such financial statements in the ordinary course of business or as otherwise
permitted under Section 6. Except as permitted by this Agreement, the properties
and assets of Company are free and clear of Liens.
3.6 LITIGATION; ADVERSE FACTS. Except as disclosed in SGC's Annual Report
-------------------------
on Form 10-K for the fiscal year ending September 30, 1996 and Quarterly Reports
on Form 10-Q for the quarters ended December 31, 1996, March 31, 1997 and June
30, 1997, there are no actions, suits, proceedings, arbitrations or governmental
investigations (whether or not purportedly on behalf of any Credit Party or any
of their respective Subsidiaries) at law or in equity or before or by any
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, pending or, to the
knowledge of any Credit Party, threatened against any Credit Party or any of
their respective Subsidiaries or any property of any Credit Party or any of
their respective Subsidiaries that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect. No Credit Party
or any of their respective Subsidiaries is (i) in violation of any applicable
laws that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect or (ii) subject to or in default with
respect to any final judgments, writs, injunctions, decrees, rules or
regulations of any court or any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect.
3.7 PAYMENT OF TAXES. Except to the extent permitted by subsection 5.4,
----------------
all tax returns and reports of each Credit Party and their respective
Subsidiaries required to be filed by any of them have been timely filed, and all
taxes, assessments, fees and other governmental charges upon any Credit Party
and their respective Subsidiaries and upon their respective properties, assets,
income, businesses and franchises which are due and payable have been paid or
are being contested in good faith by appropriate proceedings. No Credit Party
knows of any proposed tax assessment against any Credit Party or any of their
respective Subsidiaries except as disclosed on Schedule 3.7 annexed hereto and
any such proposed tax assessment is being actively contested by such Credit
Party or Subsidiary, as applicable, in good faith and by appropriate
proceedings; provided that such reserves or other appropriate provisions, if
--------
any, as shall be required in conformity with GAAP shall have been made or
provided therefor. No
40
governmental entity has, during the past three years, examined, or is in the
process of examining, any tax return of any Credit Party or any of their
respective Subsidiaries. No governmental entity has proposed (tentatively or
definitively), asserted or assessed, or, to the knowledge of any Credit Party
threatened to propose or assert, any deficiency, assessment or claim for taxes,
which delinquency, assessment or claim is not described on Schedule 3.7 annexed
hereto, no such delinquency, assessment or claim could reasonably be expected to
have a Material Adverse Effect and, to the best knowledge of each Credit Party,
there would be no basis for any such delinquency, assessment or claim. There are
no agreements, waivers or other arrangements providing for an extension of time
with respect to the assessment of any tax or deficiency against any Credit Party
or any of their respective Subsidiaries or with respect to any tax return filed
or to be filed by any Credit Party or any of their respective Subsidiaries.
Following the Effective Date, the assessment of any additional taxes for periods
for which returns have been filed is not expected to exceed the liability
recorded therefor on the financial statements delivered to Holders pursuant to
subsection 3.3. There are no material unresolved questions or claims concerning
the tax liability of any Credit Party or any of their respective Subsidiaries.
3.8 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS. No Credit
--------------------------------------------------------
Party or any of their respective Subsidiaries is in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any of its Contractual Obligations except as described on Schedule
3.8 annexed hereto and no such default could reasonably be expected to result in
a Material Adverse Effect and, to the knowledge of SGC and Company, no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default.
3.9 GOVERNMENTAL REGULATION. No Credit Party or any of their respective
-----------------------
Subsidiaries is subject to regulation under the Public Utility Holding Company
Act of 1935, the Federal Power Act, the Interstate Commerce Act or the
Investment Company Act of 1940 or under any other federal or state statute or
regulation which may limit its ability to incur Indebtedness or which may
otherwise render all or any portion of the Obligations unenforceable.
3.10 EMPLOYEE BENEFIT PLANS AND EMPLOYEE MATTERS.
-------------------------------------------
A. Each Credit Party and each of their respective ERISA Affiliates
are in compliance in all material respects with all applicable provisions and
requirements of ERISA and the regulations and published interpretations
thereunder with respect to each Employee Benefit Plan, and have performed all
their obligations under each Employee Benefit Plan. No ERISA Event has occurred
or is reasonably expected to occur.
B. Schedule 3.10 annexed hereto lists all Employee Benefit Plans.
Except to the extent required under Section 4980B of the Internal Revenue Code,
no Employee Benefit Plan provides health or welfare benefits (through the
purchase of insurance or otherwise) for
41
any retired or former employees of any Credit Party or any of their respective
ERISA Affiliates. As of the most recent valuation date for any Pension Plan, no
Pension Plan has any unfunded benefit liabilities (as defined in Section
4001(a)(18) of ERISA).
3.11 ENVIRONMENTAL PROTECTION. Except as set forth in Schedule 3.11
------------------------
annexed hereto, in each particular instance, with respect to the particular
clause of this subsection 3.11 to which such exception is taken:
(i) the operations of Company and Santa Fe Valley (including, without
limitation, all operations and conditions at or in any Facility) related to
the Facilities comply in all material respects with all Environmental Laws;
(ii) each of Company and Santa Fe Valley has obtained all Governmental
Authorizations under Environmental Laws necessary to its operations related
to the Facilities, and all such Governmental Authorizations are in good
standing, and Company and Santa Fe Valley are in compliance with all
material terms and conditions of such Governmental Authorizations;
(iii) neither Company nor Santa Fe Valley has received (a) any notice
or claim to the effect that it is or may be liable to any Person as a result
of or in connection with any Hazardous Material related to the Facilities or
(b) any letter or request for information under Section 104 of the
Comprehensive Environmental Response, Compensation, and Liability Act (42
U.S.C. (S) 9604) or comparable state laws, with respect to the Facilities
and, none of the operations of Company or Santa Fe Valley is the subject of
any federal or state investigation relating to or in connection with any
Hazardous Material at the Facilities or any Hazardous Material in any other
manner related to the Facilities;
(iv) neither Company nor Santa Fe Valley is a party to any judicial or
administrative proceeding alleging the violation of or liability under any
Environmental Laws which if adversely determined could reasonably be
expected to have a Material Adverse Effect;
(v) none of Company, Santa Fe Valley, nor the Facilities is subject to
any outstanding written order or agreement with any governmental authority
or private party relating to (a) any Environmental Laws or (b) any
Environmental Claims;
(vi) neither Company nor Santa Fe Valley has any contingent liability
in connection with any Release of any Hazardous Material related to the
Facilities which could reasonably be expected to have a Material Adverse
Effect;
(vii) Company, Santa Fe Valley and, to the best knowledge of each
officer of SGC and Company, none of their predecessors have filed any notice
under any
42
Environmental Law indicating past or present treatment or Release of
Hazardous Material at the Facilities and none of Company's or Santa Fe
Valley's operations involves the generation, transportation, treatment,
storage or disposal of hazardous waste, as defined under 40 C.F.R. Parts
260-270 or any state equivalent;
(viii) except as disclosed in the Environmental Reports, no Hazardous
Material exists on, under or about the Facilities in a manner that has a
reasonable possibility of giving rise to an Environmental Claim having a
Material Adverse Effect, Company and Santa Fe Valley and, to Company's
knowledge, their predecessors have not filed any notice or report of a
Release of any Hazardous Material that has a reasonable possibility of
giving rise to an Environmental Claim having a Material Adverse Effect;
(ix) none of Company, Santa Fe Valley and, to the best knowledge of
each officer of SGC and Company, any of their predecessors have disposed of
any Hazardous Material in a manner that has a reasonable possibility of
giving rise to an Environmental Claim having a Material Adverse Effect;
(x) to the knowledge of SGC and Company, no underground storage tanks
or surface impoundments are on or at the Facilities; and
(xi) no Lien in favor of any Person relating to or in connection with
any Environmental Claim has been filed or has been attached to the
Facilities.
3.12 SOLVENCY. Upon the consummation of all the transactions contemplated
--------
by this Agreement and the Basic Documents: (i) the present fair salable value
of the assets of each Credit Party as an entirety will exceed the amount that
will be required to pay their probable liability on existing debts (whether
matured or unmatured, liquidated or unliquidated, absolute, fixed or
contingent), as they become absolute and matured; (ii) the sum of the debts
(whether matured or unmatured, liquidated or unliquidated, absolute, fixed or
contingent) of each Credit Party will not exceed the aggregate value of all of
their property, fairly valued, assuming sale in an orderly manner and not
subject to any type of distressed or forced liquidation; (iii) the capital of
each Credit Party will not be unreasonably small for such Credit Party to carry
on their businesses; and (iv) no Credit Party intends to, nor does it or believe
it will, by virtue of consummating the transactions contemplated hereby, incur
debts that will be beyond its ability to pay as they mature.
3.13 CERTAIN FEES. No broker's or finder's fee or commission will be
------------
payable with respect to this Agreement or any of the transactions contemplated
hereby and SGC and Company hereby jointly and severally indemnify each Holder
against, and agree that they will hold each Holder harmless from, any claim,
demand or liability for any such broker's or finder's fees alleged to have been
incurred in connection herewith or therewith and any expenses (including
reasonable fees, expenses and disbursements of counsel) arising in connection
with any such claim, demand or liability.
43
3.14 DISCLOSURE. No representation or warranty of any Credit Party or any
----------
of their respective Subsidiaries contained in any Basic Document or in any other
document, certificate or written statement furnished to any Holder by or on
behalf of any Credit Party or any of their respective Subsidiaries for use in
connection with the transactions contemplated by this Agreement, taken as a
whole, contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances in which the same were
made.
SECTION 4. CONDITIONS TO EFFECTIVENESS
4.1 CONDITIONS TO OBLIGATIONS OF HOLDERS TO PURCHASE NOTES ON THE EFFECTIVE
-----------------------------------------------------------------------
DATE. The obligations of each Holder to purchase the Notes to be purchased by
----
such Holder pursuant to this Agreement are subject to the fulfillment, at or
prior to the Effective Date, of the following conditions, any one or more of
which may be waived by the Holders:
A. CREDIT PARTY AND SANTA FE VALLEY DOCUMENTS. On or before the
Effective Date, each of SGC and Company shall deliver or cause to be delivered
to the Holders the following:
(i) Certified copies of the Articles or Certificate of Incorporation of
each Credit Party and Santa Fe Valley (including, in the case of SGC, the
Certificate of Designations for the Preferred Stock), together with a good
standing certificate from the Secretary of State of the State of Nevada (or,
in the case of Hacienda Hawaiian, the Department of Commerce and Consumer
Affairs of the State of Hawaii) and, to the extent generally available, a
certificate or other evidence of good standing as to payment of any
applicable franchise or similar taxes from the appropriate taxing authority
of such state, each dated a recent date prior to the Effective Date;
(ii) Copies of the Bylaws of each Credit Party and Santa Fe Valley,
certified as of the Effective Date by its corporate secretary or an
assistant secretary;
(iii) Resolutions of Board of Directors of each Credit Party approving
and authorizing the execution, delivery and performance of this Agreement
and the other Basic Documents to which it is a party, certified as of the
Effective Date by its corporate secretary or an assistant secretary as being
in full force and effect without modification or amendment, and in the case
of Santa Fe Valley, authorizing the sale of the Xxxxxxxxx Facility;
(iv) Signature and incumbency certificates of the officers of each
Credit Party executing this Agreement and the other Basic Documents to which
it is a party and of the officers of Santa Fe Valley executing the deed and
other documents relating to the sale of the Xxxxxxxxx Facility;
44
(v) in the case of Company, executed originals of this Agreement, the
Notes to be issued to the Holders on the Effective Date (duly executed in
accordance with subsection 2.3, payable to such Holders and with appropriate
insertions), the Second Amendment to the Company Deed of Trust, Xxxxxxxxx
Deed of Trust, Second Amendment to Company Environmental Indemnity,
Xxxxxxxxx Environmental Indemnity, Second Amendment to Wet 'N' Wild
Subordination, Non-Disturbance and Attornment Agreement, Second Amendment to
Company Security Agreement, the Consent to Amendment and Restatement and the
other Basic Documents to which it is party;
(vi) in the case of SGC, executed originals of this Agreement, the
Second Amendment to Company Environmental Indemnity, the Xxxxxxxxx
Environmental Indemnity and the Consent to Amendment and Restatement, and
the other Basic Documents to which it is party;
(vii) in the case of Sahara Resorts, executed originals of the Consent
to Amendment and Restatement; and
(viii) in the case of Casino Properties, executed originals of the
Consent to Amendment and Restatement;
(ix) in the case of Hacienda Hawaiian, executed originals of the
Consent to Amendment and Restatement;
(x) in the case of Santa Fe Valley, the deed transferring title to the
Xxxxxxxxx Facility to Company and all other Xxxxxxxxx Transfer Documents
executed in connection with such transfer; and
(xi) such other documents as any Holders may reasonably request.
B. LEGAL OPINIONS. The Holders shall have received (i) originally
executed copies of one or more favorable written opinions of Xxxxxx, Xxxx &
Xxxxxxxx LLP and Xxxxxx & Xxxxxxxx, counsel for the Credit Parties and Case,
Xxxxxxx & Xxxxxxxx, special counsel for Hacienda Hawaiian, dated as of the
Effective Date and setting forth substantially the matters in the opinions
designated in Exhibit IX-A, Exhibit IX-B and Exhibit IX-C annexed hereto and as
to such other matters as the Holders may reasonably request and (ii) evidence
satisfactory to the Holders that the Credit Parties have requested such counsel
to deliver such opinions to the Holders.
C. OFFICERS CERTIFICATE REGARDING CERTAIN CONDITIONS. The following
conditions shall be satisfied and each Credit Party shall have delivered to the
Holders an Officers' Certificate, in form and substance satisfactory to the
Holders, to that effect:
45
(i) The representations and warranties of each Credit Party, as the
case may be, contained herein and in the other Basic Documents shall be
true, correct and complete in all material respects on and as of the
Effective Date to the same extent as though made on and as of that date;
(ii) No event shall have occurred and be continuing as of the Effective
Date, or would result from the consummation of the issuance of the Notes,
the transfer of the Xxxxxxxxx Facility to Company or the other transactions
contemplated by the Basic Documents, that would constitute an Event of
Default or a Potential Event of Default;
(iii) Each Credit Party shall have performed all agreements and
satisfied all conditions which this Agreement and the other Basic Documents
provide shall be performed or satisfied by each such Credit Party on or
before the Effective Date; and
(iv) No Credit Party has given notice to Collateral Agent or any Holder
under Nevada Revised Statute Section 106 or otherwise that any indebtedness
evidenced by any Note issued on or after the Effective Date will not be
secured by the Lien so created by the Deeds of Trust or any other Basic
Document.
D. PERFECTION OF SECURITY INTERESTS AND RELATED MATTERS. Company
shall have taken or caused to be taken such actions in such a manner so that
Collateral Agent, for the benefit of Holders, has a valid and perfected first
priority security interest in all Collateral, in which a Lien is purported to be
granted by the Basic Documents or any of them, executed as of the Effective
Date. Such actions shall include, without limitation: (i) evidence that
original counterparts of the Second Amendment to Company Deed of Trust and the
Second Amendment to Wet 'N' Wild Subordination, Non-Disturbance and Attornment
Agreement were recorded in all locations to the extent necessary or desirable,
in the judgment of Collateral Agent, to maintain the effectiveness of a valid
and enforceable first priority Lien (subject only to Permitted Encumbrances) on
the Wet 'N' Wild Premises in favor of Collateral Agent for the benefit of
Holders; (ii) the delivery to Collateral Agent of Uniform Commercial Code
financing statements, executed by Company as to the Collateral granted by
Company for all jurisdictions as may be necessary or desirable to perfect
Collateral Agent's security interest in such Collateral; (iii) evidence that
counterparts of the Xxxxxxxxx Deed of Trust were recorded in all locations to
the extent necessary or desirable, in the judgment of Collateral Agent,
effectively to create a valid and enforceable Lien (subject only to Permitted
Encumbrances) on the Xxxxxxxxx Facility in favor of Collateral Agent for the
benefit of Holders, and (iv) evidence reasonably satisfactory to Collateral
Agent that all other filings, recordings and other actions Collateral Agent
deems necessary or advisable to establish, preserve and perfect the first
priority Liens (subject to the Liens permitted under subsection 6.2) granted to
Collateral Agent, for the benefit of Holders, in the Collateral shall have been
made. In addition to the foregoing, on or prior to the Effective Date
arrangements satisfactory to the Collateral Agent shall have been made to
transfer all SFHI Notes and all proceeds thereto held in the Collateral Account
to the Additional
46
Collateral Account and to terminate the Collateral Account Agreement and
Collateral Account Letter.
E. TITLE POLICY FOR FACILITIES. Holders shall have received a CLTA
110.5 Endorsement and CLTA 116 Endorsement in the forms required by Holders
providing for the modification to the Company Deed of Trust, increasing the
coverage under the title policy issued in connection with the funding of the
Existing Notes (the "WET `N' WILD TITLE POLICY") to $52,900,000 which
Endorsements are to be issued by Xxxxxxx Title Guaranty Company (the "WET `N'
WILD TITLE COMPANY"). Holders shall have received a 1970 Form B American Land
Title Association ("ALTA") extended coverage mortgagee form of title insurance
policy, together with all endorsements required by Holders, in the amount of not
less than $20,000,000 (the "XXXXXXXXX TITLE POLICY") (with proof of the payment
of the premiums thereon) or commitment therefor in form and substance acceptable
to Holders issued by United Title Guaranty Company (the "XXXXXXXXX TITLE
COMPANY"), insuring the lien of the Xxxxxxxxx Deed of Trust to be a first
priority lien against the Xxxxxxxxx Facility, free and clear of all defects,
encumbrances and exceptions, except those provided for herein or approved by
Holders and their counsel in writing, together with such affirmative insurance
as Holders may require. The Xxxxxxxxx Title Policy shall contain, among other
things:
(i) full coverage against mechanic's liens (filed and inchoate),
parties in possession and survey matters;
(ii) a foundation endorsement;
(iii) a contiguity endorsement;
(iv) a zoning endorsement;
(v) a reference to the survey but no survey exceptions except those
theretofore approved in writing by Holders and their counsel;
(vi) Form 100 and 116.1 endorsements;
(vii) an access to public streets endorsement; and
(viii) such other items and endorsements requested by Holders.
F. UCC AND JUDGMENT SEARCHES. Holders shall have received current
searches of the UCC filing offices and judgment searches with the Offices of the
Secretary of State of Nevada and the local recorder's office in Xxxxx County and
elsewhere showing no security interests or judgments affecting the Premises, the
Improvements, Company, Santa Fe Valley, SGC or Sahara Resorts, Casino Properties
or Hacienda Hawaiian other than those provided for herein.
47
X. XXXXXXXXX SURVEY. Holders shall have received a current survey
prepared by a surveyor acceptable to Holders and licensed as a land surveyor in
the State of Nevada, that shall (a) be satisfactory, in form, scope and
substance, to Holders, and (b) contain the legal description of the Xxxxxxxxx
Facility in form, scope and substance satisfactory to Holders, with a surveyor's
certification in a form acceptable to the Holders from the surveyor to Holders
and the Xxxxxxxxx Title Company and other persons reasonably requested by
Holders.
X. XXXXX INSURANCE. Holders shall have been provided with
satisfactory evidence, which may be in the form of a letter from an insurance
broker, municipal engineer, land surveyor or other knowledgeable source
unaffiliated with Company, as to whether (a) the Premises are located in an area
designated by the Department of Housing and Urban Development as having special
flood or mudslide hazards, and (b) the community in which the Premises are
located is participating in the National Flood Insurance Program. If both of
the aforesaid conditions exist, Holders shall receive satisfactory policies of
flood insurance covering the Improvements as required by the Flood Act.
I. INSURANCE. Holders shall have received evidence, satisfactory to
Holders, of insurance required to be procured and maintained pursuant to
subsection 5.5 hereof and Section 8 of the Company Security Agreement, Section 6
of the Company Deed of Trust and Section 6 of the Xxxxxxxxx Deed of Trust
indicating that, with respect to casualty insurance, such policies of insurance
have been endorsed to name Collateral Agent, on behalf of Holders, as loss payee
pursuant to a standard mortgagee clause and, with respect to liability
insurance, such policies of insurance name Collateral Agent, on behalf of
Holders, as an additional insured.
J. APPRAISALS. Holders shall have received and approved the
Appraisals, the appraised value of the Wet 'N' Wild Property shall be not less
than $52,400,000 and the appraised value of the Xxxxxxxxx Property shall not be
less than $18,400,000.
K. NECESSARY CONSENTS AND APPROVALS. On or before the Effective
Date, SGC and Company shall have obtained all consents and approvals to the
transactions contemplated under this Agreement and the other Basic Documents and
to the continuing operations of the business of SGC, Company and their
Subsidiaries, of any Person required under any Contractual Obligation or other
obligation (including obligations imposed by law) of SGC or Company or any of
their respective Affiliates and of any governmental entity. Such consents and
approvals shall be in full force and effect, and any applicable waiting periods
shall have expired by the Effective Date without any action taken or threatened
to be taken by any competent governmental authority which might restrain,
prevent or otherwise impose adverse conditions on the transactions contemplated
under this Agreement.
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L. ENVIRONMENTAL INFORMATION. Holders shall have received and
approved the Environmental Reports and a reliance letter in favor of Collateral
Agent from the consultants who prepared the Environmental Reports, in a form
satisfactory to Holders.
M. CHANGES IN STRUCTURE. Any changes in the management, capital or
ownership structure of SGC or its Subsidiaries not previously disclosed to the
Holders shall be satisfactory to the Holders in all respects.
N. NO MATERIAL ADVERSE EFFECT. Since June 30, 1997, no Material
Adverse Effect (in the sole opinion of Holders) shall have occurred.
O. COMPLETION OF PROCEEDINGS. All corporate and other proceedings
taken or to be taken in connection with the transactions contemplated hereby and
all documents incidental thereto not previously found acceptable by the Holders
and its counsel shall be satisfactory in form and substance to the Holders and
such counsel, and the Holders and its counsel shall have received all such
counterpart originals or certified copies of such documents as the Holders may
reasonably request.
P. NO INJUNCTIONS, RESTRAINING ORDER OR ADVERSE LITIGATION. No
order, judgment or decree of any court, arbitrator or governmental authority
shall purport to enjoin or restrain any Holder from acquiring any Notes on the
Effective Date. As of the Effective Date, there shall not be pending or, to the
knowledge of SGC or Company, threatened, any action, suit, proceeding,
governmental investigation or arbitration against SGC, Company or any of their
respective Subsidiaries or any property of SGC, Company or any of their
respective Subsidiaries that has not been disclosed by SGC or Company in writing
pursuant to subsection 3.6 prior to the execution of this Agreement, and there
shall have occurred no development not so disclosed in any such action, suit,
proceeding, governmental investigation or arbitration so disclosed, that, in
either event, in the opinion of the Holders, could be expected to have a
Material Adverse Effect; and no injunction or other restraining order shall have
been issued and no hearing to cause an injunction or other restraining order to
be issued shall be pending or noticed with respect to any action, suit or
proceeding seeking to enjoin or otherwise prevent the consummation of, or to
recover any damages or obtain relief as a result of, the transactions
contemplated by this Agreement, the Basic Documents or the acquisition of the
Notes hereunder.
Q. NO VIOLATION OF LAW. The acquisition of the Notes shall not
violate any law including, without limitation, Regulation G, Regulation T or
Regulation X of the Board of Governors of the Federal Reserve System.
R. DOCUMENTS RELATING TO FACILITIES. On the Effective Date (i) the
Holders shall have received any agreements or other documents relating to the
Facilities all in form and substance satisfactory to the Holders; (ii) Holders
shall have received an Officers' Certificate from SGC and Company stating that
the applicable Wet 'N' Wild Documents and the
49
Xxxxxxxxx Property Documents to which such Person is a party are in full force
and effect and no material term or condition thereof has been amended, modified
or waived, that all agreements and conditions contained in the Wet 'N' Wild
Documents, the Xxxxxxxxx Property Documents and any agreements or documents
referred to therein required to be performed or complied with by SGC, Company
and their respective Affiliates and, to the knowledge of SGC and Company, the
other parties thereto on or before the Effective Date shall have been so
performed or satisfied and that none of SGC, Company or any of their respective
Affiliates, to the knowledge of SGC or Company, any other party to any Wet 'N'
Wild Documents or any of the Xxxxxxxxx Property Documents is in default in the
performance of or compliance with any of the terms or provisions thereof; (iii)
Holders shall have received from the Wet 'N' Wild Tenant any estoppel
certificates or other documents or certifications from the Wet 'N' Wild Tenant
or the holder(s) of the Existing Wet 'N' Wild Lease Notes requested by Holders;
and (iv) Holders shall have received from Ranch (as defined in the definition of
Xxxxxxxxx Development Documents) an estoppel certificate and other
certifications and agreements requested by the Initial Holders regarding the
Xxxxxxxxx Development Documents.
S. OTHER INDEBTEDNESS DOCUMENTS. On the Effective Date (i) the
Holders shall have received any agreements or other documents relating to all
Indebtedness described on Schedule 3.1D annexed hereto; and (ii) Holders shall
have received an Officers' Certificate from SGC and Company stating that such
documents are in full force and effect and no term or condition thereof has been
amended, modified or waived, and that neither SGC nor any of its Subsidiaries is
in default in the performance of or compliance with any of the terms or
provisions thereof.
T. PAYMENT OF FEES AND EXPENSES. Without limiting the provisions of
subsection 9.2, SGC or its Affiliates other than Company shall have paid from
their own funds, or shall have contributed to Company for payment on or before
the Effective Date by wire transfer of immediately available funds, the
reasonable fees, charges and disbursements arising in connection with the
preparation, execution and delivery of the Basic Documents, including but not
limited to the reasonable fees and expenses of counsel to SunAmerica and CSFB,
O'Melveny & Xxxxx LLP, Xxxxxxxxx & Xxxxxx and Xxxxxxxxx, Xxxxxxxxxx & Xxxx, as
applicable, and the reasonable fees and expenses of Company's counsel, Xxxxxx,
Xxxx & Xxxxxxxx LLP, Xxxxx Xxxxxx and Case, Xxxxxxx & Xxxxxxxx, to the extent an
invoice therefor is received by SGC not less than one Business Day prior to the
Effective Date; the appraisers retained to deliver the Appraisals, environmental
and other consultants; closing costs; escrow fees; title issuance premiums;
title search and survey costs; and the reasonable out-of-pocket expenses of
Holders; provided that the selection of the appraiser and any environmental or
--------
other consultant or experts shall not be made without Company's prior consent,
which shall not be unreasonably withheld.
U. USE OF PROCEEDS. SGC and Company shall be prepared to use and
shall use the Note proceeds in accordance with subsection 5.10.
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X. XXXXXXXXX TRANSFER. Company shall have acquired the Xxxxxxxxx
Facility from Santa Fe Valley on the Effective Date concurrently with the
issuance of the Notes and the following conditions shall have been satisfied:
(i) all documents affecting the Xxxxxxxxx Transfer shall be in form
and substance satisfactory to Holders;
(ii) the purchase price shall be not greater than $20,000,000; and
(iii) Company shall have delivered to the Holders an opinion of an
investment banking valuation firm acceptable to the Initial Holders
concluding that the purchase price for the Xxxxxxxxx Facility is fair from a
financial point of view addressed to each Holder and in form and substance
satisfactory to Holders.
W. INTERCREDITOR AGREEMENT. CSFB and SunAmerica shall have entered
into the Intercreditor Agreement.
SECTION 5. AFFIRMATIVE COVENANTS OF SGC AND COMPANY
SGC and Company each hereby covenants and agrees that, until payment in
full of the Obligations, unless the Requisite Holders shall otherwise give
written consent, SGC and Company shall perform, and shall cause each of its
respective Subsidiaries to perform, all covenants in this Section 5.
5.1 FINANCIAL STATEMENTS AND RELATED INFORMATION. SGC and Company will
--------------------------------------------
maintain and cause the other Credit Parties to maintain a system of accounting
established in accordance with sound business practices to permit preparation of
financial statements in conformity with GAAP. SGC and Company will deliver to
each Holder:
A. QUARTERLY, ANNUAL AND OTHER REPORTS: as soon as available all
annual and quarterly reports and such other information, documents and reports
that SGC and its Subsidiaries are required to file with the Securities and
Exchange Commission pursuant to Sections 13 and 15(d) of the Exchange Act.
B. OFFICERS' CERTIFICATES: together with each delivery of quarterly
and annual financial statements of SGC and its Subsidiaries pursuant to
subsection 5.1A above, an Officers' Certificate of SGC stating that the signers
have reviewed the terms of this Agreement and have made, or caused to be made
under their supervision, a review in reasonable detail of the transactions and
condition of SGC, Company and their respective Subsidiaries during the
accounting period covered by such financial statements and that such review has
not disclosed the existence during or at the end of such accounting period, and
that the signers do not have knowledge of the existence as at the date of such
Officers' Certificate, of any condition or event
51
that constitutes an Event of Default or Potential Event of Default, or, if any
such condition or event existed or exists, specifying the nature and period of
existence thereof and what action SGC, Company and their respective Subsidiaries
have taken, are taking and propose to take with respect thereto;
C. RECONCILIATION STATEMENTS: if, as a result of any change in
accounting principles and policies from those used in the preparation of the
audited financial statements referred to in subsection 3.3, the consolidated
financial statements of SGC and its Subsidiaries delivered pursuant to
subsection 5.1A will differ in any material respect from the consolidated
financial statements that would have been delivered pursuant to such subsections
had no such change in accounting principles and policies been made, then
together with the first delivery of financial statements pursuant to subsection
5.1A following such change, a written statement of the chief accounting officer
or chief financial officer of SGC setting forth the differences which would have
resulted if such financial statements had been prepared without giving effect to
such change;
D. SEC FILINGS AND PRESS RELEASES: promptly upon their becoming
available, copies of (a) all financial statements, reports, notices and proxy
statements sent or made available generally by SGC to its security holders, (b)
all regular and periodic reports and all registration statements (other than on
Form S-8 or a similar form) and prospectuses, if any, filed by SGC or any of
their respective Subsidiaries with any securities exchange or with the
Securities and Exchange Commission or any governmental or private regulatory
authority, and (c) all press releases and other statements made available
generally by SGC or any of their respective Subsidiaries to the public
concerning material developments in the business of SGC or any of their
respective Subsidiaries;
E. EVENTS OF DEFAULT, ETC.: promptly upon any officer of any Credit
Party obtaining knowledge (i) of any condition or event that constitutes an
Event of Default or Potential Event of Default, or becoming aware that any
Holder has given any notice or taken any other action with respect to a claimed
Event of Default or Potential Event of Default, (ii) that any Person has given
any notice to SGC, Company or any of their respective Subsidiaries or taken any
other action with respect to a claimed default or event or condition of the type
referred to in subsection 7.2, or (iii) of the occurrence of any event or change
that has caused or evidences, either in any case or in the aggregate, a Material
Adverse Effect, an Officers' Certificate specifying the nature and period of
existence of such condition, event or change, or specifying the notice given or
action taken by any such Person and the nature of such claimed Event of Default,
Potential Event of Default, default, event or condition, and what action SGC,
Company and their respective Subsidiaries have taken, are taking and propose to
take with respect thereto;
F. LITIGATION OR OTHER PROCEEDINGS: promptly upon any officer of any
Credit Party obtaining knowledge of (X) the institution of, or non-frivolous
threat of, any action, suit, proceeding (whether administrative, judicial or
otherwise), governmental
52
investigation or arbitration against SGC, Company or any of their Subsidiaries
or any property of SGC, Company or any of their Subsidiaries (collectively,
"PROCEEDINGS") not previously disclosed in writing by SGC or Company to Holders
or (Y) any material development in any Proceeding that, in any case:
(1) if adversely determined, has a reasonable possibility of
giving rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the consummation of, or
to recover any damages or obtain relief as a result of, the
transactions contemplated hereby;
written notice thereof together with such other information as may be reasonably
available to SGC, Company or any of their respective Subsidiaries to enable
Holders and their counsel to evaluate such matters;
G. AMENDMENTS TO CERTAIN DOCUMENTS. With reasonable promptness but
in any event within three Business Days of the execution thereof, copies of any
amendment, supplement or modification to any Wet 'N' Wild Document, any
Xxxxxxxxx Property Document, the SFHI Indenture, the Pioneer Indenture, the
Hacienda Indenture, the Xxxxxxxxx Transfer Documents or the Sierra Note and
copies of any agreement (or any amendment, supplement or modification to any
agreement) evidencing indebtedness in excess of $100,000 of SGC or any of its
Subsidiaries or any security agreement, deed of trust or other document relating
thereto or any agreement or document relating to any of the Facilities;
H. ERISA EVENTS: promptly upon becoming aware of the occurrence of
or forthcoming occurrence of any ERISA Event, a written notice specifying the
nature thereof, what action SGC, Company or any of their respective ERISA
Affiliates has taken, is taking or proposes to take with respect thereto and,
when known, any action taken or threatened by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto; and upon the request of a
Holder copies of each Schedule B (Actuarial Information) to the annual report
(Form 5500 Series) filed by SGC, Company or any of their respective ERISA
Affiliates with the Internal Revenue Service with respect to each Pension Plan
and such other documents or governmental reports or filings relating to any
Employee Benefit Plan as any Holder shall reasonably request;
I. ENVIRONMENTAL AUDITS AND REPORTS: promptly upon receipt thereof
copies of all environmental audits and reports, whether or not prepared by or on
behalf of any Credit Party or by independent consultants, with respect to any
environmental matters relating to the Facilities; and
53
J. OTHER INFORMATION: with reasonable promptness, such other
information and data with respect to any Credit Party or any of their respective
Subsidiaries as from time to time may be reasonably requested by Collateral
Agent or any Holder.
5.2 INSPECTION. No more than once a fiscal quarter unless an Event of
----------
Default or Potential Event of Default has occurred and is continuing, SGC and
Company will permit any authorized representative designated by any Holder or
Holders of at least a majority in principal amount of the Tranche A Notes or the
Tranche B Notes at such Person's own expense (unless a Potential Event of
Default or an Event of Default has occurred and is continuing in which case at
SGC's and Company's expense), to visit and inspect any Credit Party's properties
or the properties of any of their respective Subsidiaries, including their
financial and accounting records, and to make copies and take extracts
therefrom, and to discuss their affairs, finances and accounts with the chief
financial officer and any other persons approved by the chief financial officer,
under the chief financial officer's direction, and, unless an Event of Default
shall have occurred and be continuing, all upon at least three Business Days'
notice and at reasonable times during normal business hours.
5.3 CORPORATE EXISTENCE, ETC. Except as permitted under subsection 6.3 or
-------------------------
6.5, SGC and Company will preserve and keep in full force and effect their
respective corporate existence and the corporate existence of each other Credit
Party and all rights and franchises material to their respective businesses;
provided, however, that SGC and Company shall not be required to preserve any
-------- -------
such right, license or franchise, or corporate or other existence of any other
Credit Party (other than Sahara Resorts, Casino Properties, Hacienda Hawaiian
and Company), if the Board of Directors of SGC and such Credit Party, as the
case may be, shall determine in good faith in accordance with their respective
charters that the preservation thereof is no longer desirable in the conduct of
the business of SGC, and its Subsidiaries, taken as a whole, and Company and
that the loss thereof is not adverse in any material respect to the Holders and
will not have a Material Adverse Effect.
5.4 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION. SGC and Company will,
----------------------------------------------
and will cause each of their respective Subsidiaries to, pay all taxes,
assessments and other governmental charges imposed upon it or any of its
properties or assets or in respect of any of its income, businesses or
franchises before any penalty accrues thereon, and all claims (including,
without limitation, claims for labor, services, materials and supplies) for sums
that have become due and payable and that by law have or may become a Lien upon
any of its properties or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto; provided that no such charge or claim
--------
need be paid if being contested in good faith by appropriate proceedings timely
instituted and diligently conducted and if such reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall have been
made therefor. SGC and Company will not, nor will they permit any of their
respective Subsidiaries to, file or consent to the filing of any consolidated
income tax return with any Person (other than SGC, Company or any of their
respective Subsidiaries). To the extent that the terms and provisions of the
Deeds of Trust regarding payment of taxes and assessments on
54
the Premises and Improvements conflicts with the terms and provisions of this
Agreement, the terms and provisions of the Deeds of Trust shall govern.
5.5 MAINTENANCE OF PROPERTIES; INSURANCE. SGC and Company will, and will
------------------------------------
cause each of their respective Subsidiaries to, maintain or cause to be
maintained in good repair, working order and condition, ordinary wear and tear
excepted, all material properties used or useful in the business of SGC, Company
and their respective Subsidiaries (including, without limitation, intellectual
property) and from time to time will make or cause to be made all appropriate
repairs, renewals and replacements thereof. SGC and Company will maintain or
cause to be maintained, with financially sound and reputable insurers, insurance
with respect to their respective properties and businesses and the properties
and businesses of their respective Subsidiaries against loss or damage of the
kinds customarily carried or maintained under similar circumstances by
corporations of established reputation engaged in similar businesses. To the
extent that the terms and provisions regarding the payment of insurance
contained in the Deeds of Trust or Security Agreements conflict with the terms
and provisions of this subsection 5.5, the terms and provisions of the Deeds of
Trust and Security Agreements shall govern.
5.6 COMPLIANCE WITH LAWS, ETC. SGC and Company shall, and shall cause each
--------------------------
of their respective Subsidiaries to, comply in all material respects with the
requirements of all applicable laws, rules, regulations and orders of any
governmental authority, including but not limited to all applicable
Environmental Laws and Gaming Laws, noncompliance with which could reasonably be
expected to cause a Material Adverse Effect.
5.7 ENVIRONMENTAL DISCLOSURE AND INSPECTION.
---------------------------------------
A. Company shall exercise due diligence in order to comply and use
its best efforts to cause (i) all tenants under any leases or occupancy
agreements affecting any portion of the Facilities and (ii) all other Persons on
or occupying such property, to comply with all Environmental Laws.
B. After the occurrence and during the continuance of an Event of
Default or otherwise at any time upon the reasonable request of any Holder or
Holders holding not less than 50% of the principal amount of either the Tranche
A Notes or the Tranche B Notes, Company agrees that such Holder may, from time
to time and in its sole and absolute discretion, retain, at Company's expense,
an independent professional consultant to review any report relating to
Hazardous Material prepared by or for Company and, whether or not any such
report exists, upon reasonable notice to Company, to conduct its own
investigation of the Facilities, and SGC and Company each agree to use their
respective best efforts to obtain permission for the professional consultant of
such Holder or Holders to conduct its own investigation of the Facilities,
Company hereby grants to Collateral Agent and its agents, employees, consultants
and contractors the right to enter into or on to the Facilities to perform such
tests on such property as are reasonably necessary to conduct such a review
and/or investigation. Any such investigation of the Facilities shall be
conducted, unless otherwise
55
agreed to by Company and the requesting Holder, during normal business hours
and, to the extent reasonably practicable, shall be conducted with prior notice.
Company and Holders each hereby acknowledge and agree that any report of any
investigation conducted at the request of Holders pursuant to this subsection
5.7 will be obtained and shall be used by such Holder(s) for the purposes of
Holders' internal credit analysis, to monitor the Notes and to protect Holders'
security interests created by the Basic Documents.
C. Company shall promptly advise Holders in writing and in reasonable
detail of (i) any Release of any Hazardous Material on or relating to the
Facilities required to be reported to any federal, state or local governmental
or regulatory agency under any applicable Environmental Laws, (ii) any and all
written communications with respect to any Environmental Claims or with respect
to any Release of Hazardous Material required to be reported to any federal,
state or local governmental or regulatory agency, (iii) any remedial action
taken by Company or, to Company's or SGC's knowledge, any other Person in
response to (x) any Hazardous Material on, under or about the Facilities, or (y)
any Environmental Claim that reasonably could have a Material Adverse Effect,
(iv) Company's discovery of any occurrence or condition on any real property
adjoining or in the vicinity of the Facilities that reasonably could cause the
Facilities or any part thereof to be subject to (x) any restrictions on the
ownership or transferability thereof or (y) any material restriction on the
occupancy or use thereof under any Environmental Laws, and (v) any request for
information from any governmental agency that indicates such agency is
investigating whether Company may be potentially responsible for a Release of
Hazardous Material.
D. Company shall promptly notify Holders of any action that Company
has taken or proposes to take that reasonably could be expected to subject
Company to Environmental Claims, laws, rules or regulations (including, without
limitation, laws, rules and regulations requiring additional environmental
permits or licenses) not theretofore applicable to the Facilities or operations
of Company.
E. Company shall, at its own expense, provide copies of such
documents or information as any Holder may reasonably request in relation to any
matters disclosed pursuant to this subsection 5.7.
5.8 REMEDIAL ACTION REGARDING HAZARDOUS MATERIAL. Company shall promptly
--------------------------------------------
take any and all necessary remedial action in connection with the presence,
storage, use, disposal, transportation or Release of any Hazardous Material on,
under or about the Facilities in order to comply with all applicable
Environmental Laws and Governmental Authorizations. In the event Company
undertakes any remedial action with respect to any Hazardous Material on, under
or about the Facilities, Company shall conduct and complete such remedial action
in compliance with all applicable Environmental Laws and other applicable legal
requirements (including lawful policies, orders and directives of federal, state
and local governmental authorities).
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5.9 DISPOSAL OF COMPANY STOCK; RESTRICTIONS ON SUBSIDIARIES. SGC and
-------------------------------------------------------
Company shall cause Sahara Resorts to own not less than 87% of the capital stock
and other equity securities of Company and Casino Properties and Hacienda
Hawaiian to own all of the other capital stock and equity securities of Company;
provided that Company may engage in one Permitted Equity Financing if all
--------
transaction documentation is in form and substance satisfactory to more than 50%
in aggregate principal amount of the Holders of the Tranche B Notes and the
proceeds thereof are applied to repay in whole or in part the Notes pursuant to
subsection 2.5, acquire and pledge to the Collateral Agent SFHI Notes or acquire
and pledge to the Collateral Agent 10 1/4% notes outstanding under the Hacienda
Indenture.
5.10 USE OF PROCEEDS. Company shall use the cash proceeds of the Notes on
---------------
the Effective Date to acquire the Xxxxxxxxx Facility pursuant to the Xxxxxxxxx
Transfer Documents and shall cause Santa Fe Valley on the Effective Date to
repay all amounts outstanding under the Existing Xxxxxxxxx Mortgage Documents.
5.11 RIGHT OF FIRST REFUSAL. In the event that SGC, Company or any of their
----------------------
respective Affiliates desire to refinance the Notes or any other Indebtedness of
Company pursuant to any debt financing with a Person other than SunAmerica or
one or more of its Affiliates (such financing, a "Third Party Financing"), SGC
and Company shall first obtain from such Person a bona fide written proposal (a
"Third Party Proposal") to provide such Third Party Financing which shall state
all of the material terms and conditions of the Third Party Financing, including
the applicable principal amount, interest rate, maturity and amortization and
fees thereof, and SGC and Company shall deliver copies of such Third Party
Proposal to SunAmerica together with other information reasonably required by
SunAmerica with respect to such Third Party Financing. Notwithstanding anything
herein to the contrary, a Third Party Financing shall not include a Permitted
Equity Financing.
SunAmerica or one or more of its designees shall then have the right to
provide any Third Party Financing upon the same terms and conditions stated in
the Third Party Proposal by giving written notice of their willingness to
provide such financing to Company within 5 Business Days of receipt by
SunAmerica of such Third Party Proposal and other information referred to in the
preceding paragraph, it being understood that if SunAmerica or one or more of
its designees elects to provide Third Party Financing, such Persons shall have a
reasonable period of time, and in any event not less than 30 days to close such
Third Party Financing. If SunAmerica or one or more of its designees elect or
are deemed to elect not to provide such Third Party Financing, then Company may
enter into the Third Party Financing on the same terms and conditions as set
forth in the Third Party Proposal delivered to SunAmerica. If the terms of the
Third Party Financing are changed from those set forth in the Third Party
Proposal delivered to the SunAmerica in any manner that is favorable to the
lender, then Company shall be obligated to deliver to SunAmerica written notice
of such changes and SunAmerica or one of more of its designees will again have a
right to provide the Third Party Financing on the basis of such changed terms in
accordance with the terms and provisions (and within the time periods set forth)
above. If Company fails to consummate the Third Party Financing within six (6)
57
months after delivery of the Third Party Proposal to SunAmerica, then Company
shall be obligated to redeliver the Third Party Proposal to SunAmerica prior to
consummating such Third Party Financing with a third party, and SunAmerica or
one or more of its designees will again have a right to provide the Third Party
Financing in accordance with the terms and provisions (and within the time
periods set forth) above.
In no event shall this subsection 5.11 or any election by any Holders
to provide a Third Party Financing constitute a deferral or waiver of any
required payment under any Basic Document or other term or provision of any
Basic Document.
5.12 SINGLE PURPOSE ENTITY/SEPARATENESS. Company represents, warrants and
----------------------------------
covenants as follows:
(i) the purpose for which the Company is organized shall be limited
solely to (a) owning, holding, selling, leasing, transferring, and exchanging
the Facilities and the SFHI Notes owned by Company as further provided herein
and any 10 1/4% notes outstanding under the Hacienda Indenture acquired with the
proceeds of a Permitted Equity Financing as further provided herein, (b)
entering into the Note Purchase Agreement, other Basic Documents, the Xxxxxxxxx
Property Documents and the Wet 'N Wild Documents, (c) refinancing the Facilities
in connection with a permitted repayment of the Notes and (d) transacting any
and all lawful business for which Corporation may be organized under Nevada law
that is incident, necessary and appropriate to accomplish the foregoing.
(ii) Company does not own and will not own any asset or property other
than (a) the Facilities and the SFHI Notes and any 10 1/4% notes outstanding
under the Hacienda Indenture acquired with the proceeds of a Permitted Equity
Financing as further provided herein, (b) the capital stock of the Xxxxxxxxx
Subsidiary and (c) incidental personal property necessary for and used or to be
used in connection with the ownership of the Facilities. The Xxxxxxxxx
Subsidiary does not own and will not own any asset or property other than,
concurrently or after the Xxxxxxxxx Release Date if the Xxxxxxxxx Facility is
transferred to the Xxxxxxxxx Development Subsidiary, the capital stock of the
Xxxxxxxxx Development Subsidiary.
(iii) Company has not made and will not make any loans or advances to
any entity or person (including any Affiliate of Company), and shall not acquire
obligations or securities of any such Affiliates other than the SFHI and any 10
1/4% notes outstanding under the Hacienda Indenture acquired with the proceeds
of a Permitted Equity Financing as further provided herein Notes or as expressly
permitted hereby.
(iv) Company is and will remain solvent and Company will pay it debts
and liabilities from its assets as the same shall become due.
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(v) Company has done or caused to be done and will do all things
necessary to observe organizational formalities and preserve its existence, and
Company will not, nor will Company permit any of its shareholders to, amend,
modify or otherwise change Articles III or V of the articles of incorporation
and bylaws, or other organizational documents of Company without the prior
written consent of Requisite Holders.
(vi) Company will maintain all of its books, records, financial
statements and bank accounts separate from those of its Affiliates. Company
assets will not be listed as assets on the financial statement of any other
entity other than on the consolidated financial statements of SGC and Saraha
Resorts. Company shall maintain its books, records, resolutions and agreements
as official records.
(vii) Company will be, and at all times will hold itself out to the
public as, a legal entity separate and distinct from any other entity (including
any Affiliate of Company), shall correct any known misunderstanding regarding
its status as a separate entity, shall conduct business in its own name, shall
not identify itself or any of its Affiliates as a division or part of any other
Affiliate and shall maintain and utilize a separate telephone number and
separate stationery invoices and checks.
(viii) Company will maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size and character and
in light of its contemplated business operations.
(ix) Company will not commingle the funds and other assets of Company
with those of any of its Affiliates or any other Person, and will not
participate in any cash management system with any such party.
(x) Company will not commingle its assets with those of any other
person or entity and will hold all of its assets in its own name.
(xi) Company will not hold itself out as being responsible for the
debts or obligations of any other person.
(xii) Company shall at all times cause there to be at least one duly
appointed member of its board of directors (an "Independent Director") to be an
individual who is not at the time of initial appointment and has not been at any
time during the preceding five (5) years: (a) a stockholder of more than 5% of
the capital stock of Company or any of its Affiliates, or an officer, employee,
partner, attorney or counsel of the Company or any of its Affiliates; (b) a
customer, supplier or other person who derives more than 10% of its purchases or
revenues from its activities with the Company or any of its Affiliates; (c) a
person or other entity controlling or under common control with any such
stockholder, partner, customer, supplier or other person (other than solely as a
result of being a director of any of the foregoing); or (d) a member of the
immediate family of any such stockholder, officer, employee, partner,
59
customer, supplier or other person. (As used herein, the term "control" means
the possession, directly or indirectly, of the power to direct or cause the
direction of management, policies or activities of a person or entity, whether
through ownership of voting securities, by contract or otherwise.)
(xiii) Company shall not cause or permit the board of directors of
Company to take any action which, under the terms of any articles of
incorporation or by-laws requires the vote of an Independent Director unless at
the time of such action there shall be at least one member who is an Independent
Director and the directors of Company, including the Independent Director, shall
have participated in such vote and all of such directors shall have voted
affirmatively to authorize such action.
(xiv) The stationery, invoices, and checks utilized by Company or
utilized to collect its funds or pay its expenses shall bear its own name and
shall not bear the name of any other entity unless such entity is clearly
designated as being Company's agent.
(xv) Company shall correct any known misunderstanding regarding its
separate identity.
(xvi) Company shall not identify itself as a division of any other
person or entity.
SECTION 6. NEGATIVE COVENANTS OF SGC AND COMPANY
SGC and Company each hereby covenants and agrees that, until payment in
full of all of the Obligations, unless Requisite Holders shall otherwise give
prior written consent, SGC and Company shall perform and shall cause each of
their respective Subsidiaries to perform, all covenants in this Section 6.
6.1 RESTRICTED JUNIOR PAYMENTS AND XXXXXX FAMILY PAYMENTS. SGC and Company
-----------------------------------------------------
will not, and will not permit any of their Subsidiaries to, directly or
indirectly, declare, make or pay any Restricted Junior Payment; provided that so
--------
long as no Event of Default or Potential Event of Default has occurred and is
continuing, Company may dividend or otherwise distribute SFHI Notes to SGC to
the extent expressly permitted under subsection 2.5F.
SGC and Company will not, and will not permit any of their Subsidiaries
to, directly or indirectly, make or pay Xxxxxx Family Payments except that (i)
Xxxx Xxxxxx may be paid a salary during each fiscal year not to exceed the
salary and bonus paid to Xxxx Xxxxxx during the fiscal year ending September 30,
1997, as disclosed in writing by SGC to the Initial Holders prior to the
Effective Date (the "Xxxxxx Family Disclosure"), (ii) the other members of the
Xxxxxx Family that are currently employed by Company as disclosed in the Xxxxxx
Family Disclosure may be paid a salary not to exceed the amount set forth in the
Xxxxxx
60
Family Disclosure, (iii) Xxxx Xxxxxx and the other members of the Xxxxxx Family
described in clause (ii) above may receive health benefits extended generally to
employees or executive officers of SGC or its Subsidiaries and may also receive
other non-cash benefits described in the Xxxxxx Family Disclosure and payable
generally to other employees or executive officers of SGC and its Subsidiaries
and (iv) the debt owed by LICO, a company owned by Xxxx Xxxxxx, to Hacienda
Hotel, as further described in the Xxxxxx Family Disclosure, may be reduced as a
result of the offset of such debt against the one-time bonus payable to Xxxx
Xxxxxx in 1988 as described in the Xxxxxx Family Disclosure.
6.2 LIENS AND RELATED MATTERS.
-------------------------
A. PROHIBITION ON LIENS. Company shall not, and SGC and Company
shall cause Sahara Resorts and each other Credit Party (other than SGC) to not,
directly or indirectly, create, incur, assume or permit to exist any Lien on or
with respect to any property or asset of any kind (including any document or
instrument in respect of goods or accounts receivable) of Company, Sahara
Resorts or any other Credit Party (other than SGC), whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the Uniform Commercial Code of any State or under any similar
recording or notice statute, except:
(i) Permitted Encumbrances; and
(ii) Company may grant Liens to Collateral Agent pursuant to the Basic
Documents; and
(iii) Sahara Resorts, Casino Properties and Hacienda Hawaiian may
grant non-recourse second priority Liens in the capital stock of Company
that secures the Xxxxxxxxx Construction Financing provided that Collateral
Agent and the lenders providing the Xxxxxxxxx Construction Financing shall
have entered into intercreditor arrangements in form and substance
satisfactory to Requisite Holders which provides, among other things, that
such second priority liens do not have any voting or other rights or
remedies of any nature with respect to such capital stock or Sahara Resorts,
Casino Properties or Hacienda Hawaiian, including, without limitation, a
covenant not to file a petition commencing any proceeding seeking to
liquidate or adjudicate the Company as bankrupt or insolvent, prior to the
indefeasible payment in full of the Obligations.
B. EQUITABLE LIEN IN FAVOR OF LENDERS. If Company, Sahara Resorts,
or any other Credit Party (other than SGC) shall create or assume any Lien upon
any of its properties or assets, whether now owned or hereafter acquired, other
than Liens excepted by the provisions of subsection 6.2A, it shall make or cause
to be made effective provision whereby the Obligations will be secured by such
Lien equally and ratably with any and all other Indebtedness secured thereby as
long as any such Indebtedness shall be so secured; provided
--------
61
that, notwithstanding the foregoing, this covenant shall not be construed as a
consent by Requisite Holders to the creation or assumption of any such Lien not
permitted by the provisions of subsection 6.2A.
C. NO FURTHER NEGATIVE PLEDGES. Except with respect to specific
property encumbered to secure payment of particular Indebtedness permitted
hereunder, Company, Sahara Resorts, and each other Credit Party (other than SGC)
shall not enter into any agreement prohibiting the creation or assumption of any
Lien upon any of its properties or assets, whether now owned or hereafter
acquired.
6.3 WHEN SGC MAY MERGE, ETC. SGC shall not consolidate with or merge with
------------------------
or into or sell, assign, transfer or lease all or substantially all of its
properties and assets as an entirety to any Person, or permit any Person to
merge with or into SGC unless:
(i) SGC shall be the continuing Person, or the Person (if other than
SGC) formed by such consolidation or into which SGC is merged or to which
the properties and assets of SGC, substantially as an entirety are
transferred (the "surviving entity") shall be a corporation organized and
existing under the laws of the United States or any State thereof or the
District of Columbia and shall expressly assume, by an agreement
supplemental hereto, executed and delivered to Collateral Agent, in form
satisfactory to Collateral Agent, all the obligations of SGC, under this
Agreement, the SGC Guaranty and the other Basic Documents and this
Agreement, the SGC Guaranty and the other Basic Documents shall remain in
full force and effect; and
(ii) immediately before and immediately after giving effect to such
transaction, no Event of Default and no Potential Event of Default shall
have occurred and be continuing.
In connection with any consolidation, merger, transfer or lease
contemplated by this subsection 6.3, SGC shall deliver, or cause to be
delivered, to Collateral Agent, in form and substance reasonably satisfactory to
Collateral Agent, an Officers' Certificate and an Opinion of Counsel, each
stating that such consolidation, merger, transfer or lease and the supplemental
agreement in respect thereto comply with this subsection 6.3 and that all
conditions precedent herein provided for relating to such transaction have been
complied with. Upon any consolidation or merger or any transfer of all or
substantially all of the assets of SGC in accordance with this subsection 6.3,
the successor corporation formed by such consolidation or into which SGC is
merged or to which such transfer is made, shall succeed to, and be substituted
for, and may exercise every right and power of, SGC under this Agreement with
the same effect as if such successor corporation had been named as SGC herein.
6.4 INDEBTEDNESS OF COMPANY AND SAHARA RESORTS. Company will not, and SGC
------------------------------------------
and Company will cause Sahara Resorts and each other Credit Party (other than
SGC) to not,
62
directly or indirectly, create, incur, assume, guarantee or otherwise become or
remain directly or indirectly liable with respect to any Indebtedness except:
(i) Indebtedness in respect of the Notes;
(ii) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
drawn against insufficient funds in the ordinary course of business,
provided that such Indebtedness is extinguished within five business days of
its incurrence;
(iii) the obligations of Company under the Existing Wet 'N' Wild
Guaranty Agreement; and
(iv) Sahara Resorts may become and remain liable with respect to
Indebtedness under the Hacienda Indenture.
6.5 FUNDAMENTAL CHANGES. Company will not, and SGC and Company will cause
-------------------
Sahara Resorts and each other Credit Party (other than SGC) to not, (i) form,
acquire or otherwise permit to exist any Subsidiary or Joint Venture or any
investment in the Capital Stock or other ownership interest in any Person except
that Sahara Resorts, Casino Properties and the Hacienda Hawaiian may own the
capital stock set forth on Schedule 3.1B annexed hereto, (ii) liquidate or
dissolve, (iii) merge into or consolidate with any Person or (iv) sell or
otherwise transfer any Collateral except sales of obsolete equipment in the
ordinary course of business and except SFHI Notes or the Xxxxxxxxx Facility and
the Wet 'N Wild Facility as expressly contemplated by and subject to subsections
2.4E, 2.5B(ii), 2.5C(iii), 2.5C(iv) or 2.5F; provided, however, that nothing in
-------- -------
this subsection 6.4 shall prohibit the grant or creation of any Lien permitted
under subsection 6.2; provided further that a Permitted Equity Financing entered
-------- -------
into in accordance with this Agreement shall not be deemed to violate this
subsection 6.5.
6.6 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES. SGC and Company shall
---------------------------------------------
not, and shall not permit Sahara Resorts or any of their respective Subsidiaries
to, directly or indirectly, enter into or permit to exist any transaction
(including, without limitation, the purchase, sale, lease or exchange of any
property or the rendering of any service) with any holder of 5% or more of any
class of equity securities of SGC or with any Affiliate of SGC or of any such
holder, on terms that are less favorable to SGC, Company, Sahara Resorts or that
Subsidiary, as the case may be, than those that might be obtained at the time
from Persons who are not such a holder or Affiliate; provided that the foregoing
--------
restriction shall not apply to (i) any transaction between SGC and any of its
wholly-owned Subsidiaries (other than Company, Sahara Resorts or any other
Credit Party) or between any of its wholly-owned Subsidiaries (other than
Company, Sahara Resorts or any other Credit Party) or (ii) reasonable and
customary fees paid to members of the Boards of Directors of SGC and its
Subsidiaries.
63
6.7 AMENDMENTS TO DOCUMENTS. Company shall not amend, modify, supplement,
-----------------------
extend, renew, alter or otherwise change the terms of any Wet 'N' Wild Document
except with the consent of the Holders of more than 50% of the Tranche B Notes,
which consent shall not be unreasonably withheld. Company shall not amend,
modify, supplement, alter or otherwise change in any respect or renew or extend
beyond February 1998 the Xxxxxxxxx Development Documents, unless (i) the
Xxxxxxxxx Release Date has occurred, (ii) the Holders of more than 50% of the
Tranche B Notes otherwise consent or (iii) Company causes Ranch and any of its
successors and assigns to enter into the Xxxxxxxxx Subordination Agreement, as
such Xxxxxxxxx Subordination Agreement may be amended, modified, supplemented,
altered or otherwise changed with the consent of the Holders of more than a
majority of the Tranche B Holders. Company shall not amend, modify, supplement,
alter or otherwise change the Permitted Equity Financing except with the consent
of Requisite Holders which consent shall not unreasonably withheld.
6.8 STAY, EXTENSION AND USURY LAWS. No Credit Party shall, nor shall they
------------------------------
permit any of their respective Subsidiaries to (to the extent each may lawfully
do so), at any time insist upon, plead or in any manner whatsoever claim or take
the benefit or advantage of, any stay or extension law or any usury law or other
law that would prohibit or forgive any Credit Party from paying all or a portion
of the principal of or premium, if any, or interest on the Notes as contemplated
herein, wherever enacted, now or at any time hereinafter in force, or that may
materially affect the covenants or the performance by any Credit Party of their
respective obligations hereunder in a manner inconsistent with the provisions
hereof. Each of SGC and Company expressly waives all benefit or advantage of
any such law. If a court of competent jurisdiction prescribes that any Credit
Party may not waive its rights to take the benefit or advantage of any stay or
extension law or any usury law or other law in accordance with the prior
sentence, then the obligation to pay interest on the Notes shall be reduced to
the maximum legal limit under applicable law governing the interest payable in
connection with the Notes and any amount of interest or premium, if any, paid by
any Credit Party that is deemed illegal shall be deemed to have been a
prepayment of principal (without penalty) on the Notes.
6.9 GOVERNMENT REGULATION. SGC and Company shall not, and shall not permit
any of their respective Subsidiaries to, be or become subject to, regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable.
6.10 CONDUCT OF BUSINESS; DEVELOPMENT EXPENDITURES. SGC and Company will
not permit Company to engage in any business other than any business relating to
the Facilities. SGC and Company will not permit Casino Properties or Hacienda
Hawaiian to engage in any business other than holding the capital stock of
Company and, in the case of Hacienda Hawaiian, activities relating to its former
time share operations. Company shall not use any Collateral or the proceeds of
any Collateral, including but not limited to any payments received
64
in respect of any SFHI Notes owned by Company or in respect of any Existing Wet
'N' Wild Lease Documents, for the payment of any costs, expenses or other
obligations (including fees and expenses of attorneys, accountants or other
professionals) relating to the improvement or development of the Xxxxxxxxx
Facility or the Wet 'N' Wild Facility. SGC and Company will not permit the
Xxxxxxxxx Subsidiary to engage in any business, except that, on or after the
Xxxxxxxxx Release Date, if the Xxxxxxxxx Facility is transferred to a Subsidiary
of the Xxxxxxxxx Subsidiary (the "Xxxxxxxxx Development Subsidiary"), the
Xxxxxxxxx Subsidiary may own the capital stock of the Xxxxxxxxx Development
Subsidiary and may guaranty indebtedness and other obligations of and pledge
such capital stock to secure the indebtedness and other obligations of the
Xxxxxxxxx Development Subsidiary. SGC and Company will not permit the Xxxxxxxxx
Development Subsidiary to engage in any busines other than any business relating
to the Xxxxxxxxx Facility.
SECTION 7. EVENTS OF DEFAULT
If any one or more of the following conditions or events ("Events of
Default") shall occur:
7.1 FAILURE TO MAKE PAYMENTS WHEN DUE. Failure by Company to pay any
---------------------------------
installment of principal of any Note when due, whether at stated maturity, by
acceleration, by notice of voluntary prepayment, by mandatory prepayment,
redemption or otherwise; or failure by Company to pay any interest on any Note
or any other amount due under this Agreement within 15 days after the date due;
or
7.2 DEFAULT IN OTHER AGREEMENTS. (i) Failure of any Credit Party or any of
---------------------------
their respective Subsidiaries to pay when due any principal of or interest on
any Indebtedness (other than Indebtedness referred to in subsection 7.1) in an
aggregate principal amount of $5,000,000 or more, in each case beyond the end of
any grace period provided therefor; or (ii) breach or default by any Credit
Party or any of their respective Subsidiaries with respect to any other material
term of any items of Indebtedness with an aggregate principal amount of
$5,000,000 or more or any loan agreement, mortgage, indenture or other agreement
relating to such Indebtedness, including but not limited to the SFHI Indenture
or the Pioneer Indenture, if the effect of such breach or default is to cause
that Indebtedness to become or be declared due and payable prior to its stated
maturity or the stated maturity of any underlying obligation, as the case may
be; or (iii) breach or default by Company under any Wet 'N' Wild Document or by
Company under any Xxxxxxxxx Property Document if such breach or default is not
cured within any applicable grace period;
7.3 BREACH OF CERTAIN COVENANTS. Failure of SGC or Company to perform or
---------------------------
comply with any term or condition contained in subsection 2.5, 5.3, 5.9, 5.10 or
5.11 or Section 6 of this Agreement; or
65
7.4 BREACH OF WARRANTY. Any representation, warranty, certification or
------------------
other statement made by any Credit Party or any of their respective Subsidiaries
in any Basic Document shall be false in any material respect on the date as of
which made; or
7.5 OTHER DEFAULTS UNDER BASIC DOCUMENTS. Any Credit Party shall default
------------------------------------
in the performance of or compliance with any term contained in this Agreement or
any of the other Basic Documents, other than any such term referred to in any
other subsection of this Section 7, and such default shall not have been
remedied or waived within 30 days after the earlier of (i) an officer of any
Credit Party becoming aware of such default or (ii) receipt by SGC or Company of
notice from any Holder of such default; or
7.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. (i) A court
-----------------------------------------------------
having jurisdiction in the premises shall enter a decree or order for relief in
respect of any Credit Party or any of their respective material Subsidiaries in
an involuntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, which decree
or order is not stayed; or any other similar relief shall be granted under any
applicable federal or state law; or (ii) an involuntary case shall be commenced
against any Credit Party or any of their respective material Subsidiaries under
the Bankruptcy Code or under any other applicable bankruptcy, insolvency or
similar law now or hereafter in effect; or a decree or order of a court having
jurisdiction in the premises for the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having similar powers over any
Credit Party or any of their respective material Subsidiaries, or over all or a
substantial part of its property, shall have been entered; or there shall have
occurred the involuntary appointment of an interim receiver, trustee or other
custodian of any Credit Party or any of their respective material Subsidiaries
for all or a substantial part of its property; or a warrant of attachment,
execution or similar process shall have been issued against any substantial part
of the property of any Credit Party or any of their respective material
Subsidiaries, and any such event described in this clause (ii) shall continue
for 60 days unless dismissed, bonded or discharged, it being understood that
"material Subsidiary" under subsections 7.6, 7.7 and 7.9 shall include SFHI,
Pioneer Finance, Pioneer Hotel Inc. and their respective successors; or
7.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. (i) Any Credit
---------------------------------------------------
Party or any of their respective material Subsidiaries shall have an order for
relief entered with respect to it or commence a voluntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, or shall consent to the entry of an order for
relief in an involuntary case, or to the conversion of an involuntary case to a
voluntary case, under any such law, or shall consent to the appointment of or
taking possession by a receiver, trustee or other custodian for all or a
substantial part of its property; or any Credit Party or any of their respective
material Subsidiaries shall make any assignment for the benefit of creditors; or
(ii) any Credit Party or any of their respective material Subsidiaries shall be
unable, or shall fail generally, or shall admit in writing its inability, to pay
its debts as such debts become due; or the Board of Directors of any Credit
Party or any of their respective material Subsidiaries (or any committee
thereof) shall adopt any resolution or otherwise
66
authorize any action to approve any of the actions referred to in clause (i)
above or this clause (ii); or
7.8 JUDGMENTS AND ATTACHMENTS. Any money judgment, writ or warrant of
-------------------------
attachment or similar process involving in the aggregate at any time an amount
in excess of $5,000,000 (in either case not adequately covered by insurance as
to which a solvent and unaffiliated insurance company has acknowledged coverage)
shall be entered or filed against any Credit Party or any of their respective
Subsidiaries or any of their respective assets and shall remain undischarged,
unvacated, unbonded or unstayed for a period of 60 days (or in any event later
than five days prior to the date of any proposed sale thereunder); or
7.9 DISSOLUTION. Any order, judgment or decree shall be entered against
-----------
any Credit Party or any of their respective material Subsidiaries decreeing the
dissolution or split up of any Credit Party or that Subsidiary and such order
shall remain undischarged or unstayed for a period in excess of 30 days; or
7.10 EMPLOYEE BENEFIT PLANS. There shall occur one or more ERISA Events
----------------------
which individually or in the aggregate results in or might reasonably be
expected to result in liability of the Credit Parties and their or any of their
ERISA Affiliates in excess of $500,000 during the term of this Agreement; or
there shall exist an amount of unfunded benefit liabilities (as defined in
Section 4001(a)(18) of ERISA), individually or in the aggregate for all Pension
Plans of the Credit Parties and their ERISA Affiliates (excluding for purposes
of such computation any Pension Plans with respect to which assets exceed
benefit liabilities), which exceeds $500,000; or
7.11 MATERIAL ADVERSE EFFECT. Any event or change shall occur that has
-----------------------
caused or evidences, either in any case or in the aggregate, a Material Adverse
Effect; or
7.12 INVALIDITY OF ENVIRONMENTAL INDEMNITIES OR GUARANTIES. Any
-----------------------------------------------------
Environmental Indemnity or any guaranty of the Obligations, including, without
limitation, the Guaranties, for any reason, other than the satisfaction in full
of all Obligations, ceases to be in full force and effect or is declared to be
null and void, or any guarantor or indemnitor, including but not limited to SGC,
Company or Sahara Resorts denies that it has any further liability under any
indemnity or guaranty or under any make-well agreement or under the
Environmental Indemnities or gives notice to such effect, in each case, to the
extent it relates to the Obligations; or
7.13 IMPAIRMENT OF COLLATERAL. (A) A judgment creditor of any Credit Party
------------------------
or any of their respective Subsidiaries shall obtain possession of any portion
of the Collateral under the Basic Documents by any means, including, without
limitation, levy, distraint, replevin or self-help, (B) any substantial portion
of the Collateral shall be taken by eminent domain or condemnation, (C) any of
the Basic Documents shall cease for any reason to be in full force and effect,
or any party thereto shall purport to disavow its obligations thereunder or
shall declare
67
that it does not have any further obligations thereunder or shall contest the
validity or enforceability thereof or Holders shall cease to have a valid and
perfected first priority security interest in any Collateral therein except as
permitted under the terms of such Basic Document, or (D) Collateral Agent's
security interests or Liens, in each case on behalf of Holders, in Collateral
under the Basic Documents shall become otherwise impaired or unenforceable; or
7.14 OWNERSHIP OF COMPANY. (i) SGC shall cease to own all of the Capital
--------------------
Stock of Sahara Resorts or (ii) Sahara Resorts shall cease to own at least 87%
of the Capital Stock of Company (or, if the Permitted Equity Financing has
occurred and Company has issued equity securities in connection therewith,
Sahara Resorts shall cease to own not less than 51% of the common stock of
Company).
THEN in addition to all other remedies of the Collateral Agent or the Holders
hereunder, under the other Basic Documents or at law or equity, (i) upon the
occurrence of any Event of Default described in subsection 7.6 or 7.7, each of
the unpaid principal amount of and accrued interest on the Notes (to the full
extent permitted by applicable law) and all other Obligations shall
automatically become immediately due and payable; without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by SGC and Company, and (ii) upon the occurrence and during the
continuation of any other Event of Default, Requisite Holders or such other
Holders specified in the Intercreditor Agreement may, by written notice to
Company, declare all or a portion of the amounts described in clause (i) above
relating to the Notes and all other Obligations owed to Holders of the Notes to
be, and the same shall forthwith become immediately due and payable. Company
acknowledges, and the parties hereto agree, that each Holder has the right to
maintain its investment in the Notes free from repayment by Company (except as
herein specifically provided for). Notwithstanding anything to the contrary in
this paragraph or in the immediately succeeding paragraph, Holders of more than
50% of the Tranche B Notes may waive any Event of Default or Potential Event of
Default that has occurred (or rescind and annul any acceleration in accordance
with the succeeding paragraph) solely as a result of a breach or default under
the Pioneer Indenture other than an Event of Default arising under subsections
7.6 or 7.7 with respect to SGC.
Notwithstanding anything to the contrary contained in the preceding
paragraph except for the last sentence thereof, if at any time after an
acceleration of Obligations pursuant to such paragraph SGC and Company shall pay
all arrears of interest and all payments on account of principal which shall
have become due otherwise than as a result of such acceleration (with interest
on principal, premium (if any) and, to the extent permitted by law, on overdue
interest, at the rates specified in this Agreement and late charges) and all
Events of Default and Potential Events of Default (other than non-payment of the
principal of and accrued interest as aforesaid on the Obligations, in each case
which is due and payable solely by virtue of acceleration) shall be remedied or
waived pursuant to subsection 7.1, then Requisite Holders or such other Holders
specified in the Intercreditor Agreement, by written notice to SGC and Company,
may at their option rescind and annul such acceleration and its consequences;
but
68
such action shall not affect any subsequent Event of Default or Potential Event
of Default or impair any right consequent thereon. The provisions of this
paragraph are intended merely to bind Holders to a decision which may be made at
the election of the percentage of Holders referenced above and are not intended
to benefit any Credit Party and do not grant any Credit Party the right to
require Holders to rescind or annul any acceleration hereunder, even if the
conditions set forth herein are met.
SGC and Company hereby waive to the extent not prohibited by applicable
law which cannot itself be waived (i) all presentments, demands for performance,
notices of nonperformance (except to the extent required by the provisions
hereof), (ii) any requirement of diligence or promptness on the part of any
holder of Notes in the enforcement of its rights under the provisions of this
Agreement, (iii) any and all notices of every kind and description which may be
required to be given by any statute or rule of law (except to the extent
required by the provisions of this Agreement), and (iv) to the extent permitted
by applicable law, any defense of any kind (other than payment) which it may now
or hereafter have with respect to its liability under the Notes.
No course of dealing between any Credit Party or any of their
respective Subsidiaries and any Holder shall operate as a waiver of any of the
rights of any Holder under any Basic Document. No delay or omission in
exercising any right under any Basic Document shall operate as a waiver of such
right or any other right. A waiver on any one occasion shall not be construed
as a bar to or waiver of any right or remedy on any other occasion. The
remedies provided in this Section 7 are in addition to all rights and remedies
available to each Holder under the Basic Documents or any other document or by
law or equity.
In consideration of, among other things, Holders' agreement to acquire
the Notes, to the extent permitted by applicable law, Company agrees that if a
petition is filed by or against it commencing a case under the Bankruptcy Code
or if Company is the subject of any insolvency, bankruptcy, receivership,
readjustment of debt, dissolution, reorganization, liquidation or similar
proceeding, under state or federal law, voluntary or involuntary, Collateral
Agent on behalf of the Holders will be immediately and absolutely entitled to,
and Company hereby consents to, the following relief, singly, alternatively or
cumulatively, and Company will not object to, contest or oppose any motion,
application, complaint or other proceeding by Collateral Agent to obtain such
relief, and Company will take all actions necessary to enable Collateral Agent
to obtain such relief, including: (a) Collateral Agent shall be entitled to the
immediate termination of the automatic stay imposed by (S) 362 of the Bankruptcy
Code so as to enable it to exercise all of its rights and remedies under this
Agreement and the other Basic Documents or applicable law; (b) Collateral Agent
shall be entitled to the immediate dismissal of such case pursuant to (S)
305(a)(1) of the Bankruptcy Code (with attorney's fees and other costs), and
Company agrees that such dismissal will be in the interests of creditors and
itself; and (c) Collateral Agent shall be entitled to the immediate dismissal of
such case under (S) 1112(b) of the Bankruptcy Code for cause, and Company agrees
that the filing of such case by it shall per se be deemed to have been commenced
in bad faith
69
and solely for the improper purpose of impeding once again the exercise of
Collateral Agent's rights and remedies with attendant unnecessary delay and
needless cost.
SECTION 8. COLLATERAL AGENT AND RELATIONS AMONG HOLDERS, ETC.
8.1 APPOINTMENT OF THE COLLATERAL AGENT, POWERS AND IMMUNITIES. Each
----------------------------------------------------------
Holder of Notes hereby irrevocably appoints and authorizes Collateral Agent to
act as its agent under the Basic Documents with such powers as are expressly
delegated to Collateral Agent by the terms of this Agreement and the other Basic
Documents, together with such other powers as are reasonably incidental thereto.
Collateral Agent (which term as used in this sentence and in subsections 8.5 and
8.6 hereof shall include reference to its Affiliates and the officers,
directors, employees and agents of Collateral Agent and of its Affiliates): (a)
shall not have any duties or responsibilities except those expressly set forth
in this Agreement or in any other Basic Document, or be a trustee for any
Holder; (b) shall not be required to take any action which is contrary to this
Agreement or any other Basic Document or the Intercreditor Agreement or
applicable law; (c) shall not be required to initiate or conduct any litigation
or collection proceedings hereunder or under any other Basic Document or the
Intercreditor Agreement; and (d) shall not be responsible for any action taken
or omitted to be taken by it hereunder or under any other Basic Document or the
Intercreditor Agreement or under any other document or instrument referred to or
provided for herein or therein or in connection herewith or therewith, except
for its own gross negligence or willful misconduct. Neither Collateral Agent nor
any Holder nor any of their respective Affiliates shall be responsible to any
other Holder for any recitals, statements, representations or warranties made by
any Credit Party or any other Person contained in this Agreement or in any
certificate or other document referred to or provided for in, or received by any
Holder under, this Agreement or any other Basic Document or the Intercreditor
Agreement, for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement, any other Basic Document or any other document
referred to or provided for herein or therein, for the creation, perfection or
priority of any Lien on or in any of the Collateral or for any failure by any
Credit Party or any other Person to perform its obligations hereunder or
thereunder. Collateral Agent may employ agents and attorneys-in-fact and shall
not be responsible for the negligence or misconduct of any such agents of
attorneys-in-fact selected by it with reasonable care. Except as otherwise
provided under this Agreement and the Intercreditor Agreement, Collateral Agent
shall take such action under the Basic Documents to which it is a party as shall
be directed by the Requisite Holders. As to any matters not expressly provided
for by any Basic Document or the Intercreditor Agreement, the Collateral Agent
shall not be required to take any action or exercise any discretion, but shall
be required to act or to refrain from acting upon instructions of the Requisite
Holders and shall in all cases be fully protected in acting, or in refraining
from acting, hereunder or under any other Basic Document in accordance with the
instructions of the Requisite Holders, and such instructions of the Requisite
Holders and any action taken or failure to act pursuant thereto shall be binding
on all of the Holders. These provisions of this Section 8 are solely for the
benefit of the Collateral Agent and the Holders and none of
70
Company or the other Credit Parties shall have any rights as a third party
beneficiary of any of the provisions thereof.
8.2 RELIANCE BY COLLATERAL AGENT. Collateral Agent shall be entitled to
----------------------------
rely upon any certificate, notice or other document (including any cable,
telegram, telecopy or telex) believed by it to be genuine and correct and to
have been signed or sent by or on behalf of the proper Person or Persons, and
upon advice and statements of legal counsel, independent accountants and other
experts selected by Collateral Agent. Except as otherwise provided in the
Intercreditor Agreement, Collateral Agent agrees to make such demands and give
such notices under the Basic Documents as the Requisite Holders may request, to
take such action to enforce the Basic Documents or any guaranty or undertaking
under the Basic Documents and to foreclose upon, collect and dispose of the
Collateral or any portion thereof, or enforce any such guaranty or undertaking,
and to release any part of the Collateral as may be directed by the Requisite
Holders; provided, however, that neither the consent nor the direction of the
-------- -------
Requisite Holders shall be required for the release of any part of the
Collateral which is otherwise permitted under this Agreement or the other Basic
Documents. Collateral Agent may at any time request directions from the
Requisite Holders with respect to this Agreement or the other Basic Documents or
the Intercreditor Agreement as to any course of action or other matter relating
hereto or to such Collateral Documents or other Basic Documents or the
Intercreditor Agreement. Except as otherwise provided herein or in the
Collateral Documents or other Basic Documents or the Intercreditor Agreement,
directions given by the Requisite Holders to Collateral Agent hereunder shall be
binding on all the Holders for all purposes. Each Holder agrees not to take any
action whatsoever to enforce any term or provision of this Agreement, or any of
the other Basic Documents or to enforce any of its rights in respect of the
Collateral or in connection with any guaranties or undertakings given in any of
the Basic Documents, except through Collateral Agent in accordance with this
Agreement.
8.3 DEFAULTS. Collateral Agent shall not be deemed to have knowledge or
--------
notice of the occurrence of a Potential Event of Default or Event of Default
unless Collateral Agent has received written notice from a Holder or Company
referring to this Agreement, describing such Potential Event of Default or Event
of Default and stating that such notice is a "Notice of Default". In the event
that Collateral Agent receives such a notice of the occurrence of a Potential
Event of Default or Event of Default, Collateral Agent shall give notice thereof
to the Holders. Collateral Agent shall (subject to the last sentence of
subsection 8.5 hereof) take such action with respect to such Potential Event of
Default or Event of Default as shall be reasonably directed by the Requisite
Holders except as otherwise provided in the Intercreditor Agreement; provided
--------
that, unless and until Collateral Agent shall have received such directions,
Collateral Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Potential Event of Default
or Event of Default as it shall deem advisable in the best interest of the
Holders except to the extent that this Agreement expressly requires that such
action be taken, or not taken, only with the consent or upon the authorization
of the Requisite Holders or all of the Holders.
71
8.4 RIGHTS AS A HOLDER. With respect to the Notes held by Collateral
------------------
Agent, it shall have the same rights and powers hereunder as any Holder and may
exercise the same as though it was not acting as Collateral Agent and the terms
"Holder" or "Holders" shall, unless the context otherwise indicates, include the
Collateral Agent in its individual capacity. Collateral Agent may (without
having to account therefor to any Holder) accept deposits from, extend credit
(on a secured or unsecured basis) to and generally engage in any kind of
financing, insurance, trust or other business with any Credit Party or any of
its Affiliates, as if it was not acting as Collateral Agent. Each Holder and
its Affiliates may (without having to account therefor to Collateral Agent, or
any other Holder) accept deposits from, extend credit (on a secured or unsecured
basis) to and generally engage in any kind of financing, insurance, trust or
other business with any Credit Party or any of its Affiliates, as if it was not
acting as a Holder.
8.5 INDEMNIFICATION. Each Holder agrees to indemnify Collateral Agent (to
---------------
the extent not reimbursed by SGC or Company), ratably in accordance with the
principal amount of Notes purchased by it, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may at any time
(including, without limitation, at any time following the payment of principal
of and/or interest on the Notes) be imposed on, incurred by or asserted against
Collateral Agent in any way relating to or arising out of this Agreement, any
other Basic Document or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby (including the costs
and expenses which SGC or Company is obligated to pay hereunder) or the
enforcement of any of the terms hereof or thereof or of any such other
documents; provided that no Holder shall be liable for any of the foregoing to
--------
the extent they arise from the Collateral Agent's gross negligence or wilful
misconduct. Collateral Agent shall be fully justified in refusing to take or to
continue to take any action hereunder or under the other Basic Documents unless
it shall first be indemnified to its satisfaction by the Holders against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.
8.6 NON-RELIANCE ON COLLATERAL AGENT AND OTHER HOLDERS. Each Holder
--------------------------------------------------
represents that it has, independently and without reliance on Collateral Agent
or any other Holder, and based on such documents and information as it has
deemed appropriate, made its own appraisal of the financial condition and
affairs of each Credit Party and their Affiliates and made its own decision to
purchase the Notes and agrees that it will, independently and without reliance
upon Collateral Agent or any other Holder, continue to make its own appraisals
and decisions in taking or not taking action under this Agreement as it shall
deem appropriate at the time. Neither Collateral Agent nor any Holder shall be
required to keep informed as to the performance or observance by any Credit
Party or any of their Affiliates under this Agreement or any other document
referred to or provided for herein or to make inquiry of, or to inspect the
properties or books of, any Credit Party or any of their Affiliates. Neither
the Collateral Agent nor any Holder shall have any duty or responsibility to
provide any Holder with any credit or other information concerning any Credit
Party or any of their Affiliates, which may come into the possession of
Collateral Agent or such Holder or any of its or their Affiliates.
72
8.7 RESIGNATION OR REMOVAL OF COLLATERAL AGENT. Subject to the appointment
------------------------------------------
and acceptance of a successor Collateral Agent as provided below, Collateral
Agent may resign at any time by giving notice thereof to the Holders, SGC and
Company, and Collateral Agent may be removed at any time with or without cause
by the Requisite Holders. Upon any such resignation or removal, the Requisite
Holders shall have the right to appoint a successor Collateral Agent. If no
successor Collateral Agent shall have been so appointed by the Requisite Holders
and shall have accepted such appointment within 30 days after the retiring
Collateral Agent's giving of notice of resignation or the Requisite Holders'
removal of the retiring Collateral Agent, then the retiring Collateral Agent
may, on behalf of the Holders, appoint a successor Collateral Agent, which shall
be a financial institution with a combined capital and surplus of at least
$500,000,000. Upon the acceptance of any appointment as Collateral Agent
hereunder by a successor Collateral Agent, such successor Collateral Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Collateral Agent, and the retiring Collateral Agent
shall be discharged from its duties and obligations hereunder. Upon the
acceptance of any appointment as Collateral Agent, the retiring or removed
Collateral Agent under this Agreement shall promptly (i) transfer to such
successor Collateral Agent all sums, securities and other items of Collateral
held under any Basic Document, together with all records and other documents
necessary or appropriate in connection with the performance of the duties of the
successor Collateral Agent under each Basic Document and this Agreement, and
(ii) execute and deliver to such successor Collateral Agent such amendments to
financing statements, and take such other actions, as may be necessary or
appropriate in connection with the assignment to such successor of the security
interests created under each of the Basic Documents. After any retiring
Collateral Agent's resignation or removal hereunder as Collateral Agent, the
provisions of this paragraph shall continue in effect for its benefit in respect
of any actions taken or omitted to be taken by it while it was acting as the
Collateral Agent.
8.8 AUTHORIZATION. Collateral Agent is hereby authorized by the Holders to
-------------
execute, deliver and perform in accordance with its terms each of the Basic
Documents to which the Collateral Agent is or is intended to be a party and each
Holder agrees to be bound by all of the agreements of Collateral Agent contained
in such Basic Documents.
8.9 VOTING RIGHTS IN RESPECT OF PLEDGED SFHI NOTES. Company and Holders
----------------------------------------------
agree that the Holders of more than 50% in aggregate principal amount of the
Tranche B Notes may exercise all of the voting and other consensual rights with
respect to the SFHI Notes as contemplated by Section 13 of the Company Security
Agreement and that the Collateral Agent may rely and act upon any instruction
with respect thereto received from such Holders.
73
SECTION 9. MISCELLANEOUS
9.1 AMENDMENTS AND WAIVERS.
----------------------
A. No amendment, modification, termination or waiver of any provision
of this Agreement, the Notes or the other Basic Documents, or consent to any
departure by any Credit Party therefrom, shall in any event be effective without
the written concurrence of Requisite Holders or, to the extent expressly
provided herein, the Holders of the percentage of and type of Notes expressly
provided herein; provided that any such amendment, modification, termination,
--------
waiver or consent which: (i) reduces the requisite percentage of Holders or the
principal balance of the Notes that must consent to an amendment or waiver of an
Event of Default; (ii) reduces the rate of or changes the time for payment of
interest on any Notes; (iii) reduces the principal amount of or extends the
final maturity of any Note, or reduces the redemption price of the Notes; (iv)
changes the currency of payment for any payment on the Notes; (v) changes the
definition of or the requirements of SGC or Company or any of their respective
Subsidiaries upon the occurrence of a Change in Control; (vi) changes in any
manner the provisions contained in this subsection 9.1A or (vii) reduces the
requisite percentage of Holders or the principal balance of the Notes necessary
to amend or modify the provisions as set forth in clauses (i) through (vii)
shall be effective only with respect to the applicable Holders consenting
thereto if evidenced by a writing signed by or on behalf of such Holders.
Holders of the requisite percentage of Notes considering any such proposed
amendment, modification, termination or waiver may elect to approve or
disapprove any such proposal in their sole discretion except as otherwise
expressly provided herein. Any waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given. No
notice to or demand on any Credit Party in any case shall entitle any Credit
Party to any other or further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this subsection 9.1 shall be binding upon each
Holder at the time outstanding, and each future Holder, if signed by SGC, on SGC
and, if signed by Company, on Company.
B. Solely for the purpose of determining whether Holders of the
requisite percentage of the Notes then outstanding approved or consented to any
amendment, modification, termination or waiver to be given under this Agreement
or the Notes, or have directed the taking of any action provided herein or in
the Notes to be taken upon the direction of the Holders of a specified
percentage of the aggregate amount of Notes then outstanding, Notes directly or
indirectly owned by any Credit Party or any of their respective Subsidiaries
shall be deemed not to be outstanding.
9.2 EXPENSES. Whether or not the transactions contemplated hereby shall be
--------
consummated, SGC and Company jointly and severally agree to pay promptly (i) all
the actual reasonable costs and expenses of preparation of the Basic Documents
and of creating and perfecting Liens in favor of Collateral Agent, SunAmerica
and the other Holders or otherwise relating to the Collateral pursuant to any
Basic Document, including filing and recording fees
74
and expenses, title insurance, environmental studies and surveys; (ii) all the
reasonable costs of furnishing all opinions by counsel for each Credit Party
(including without limitation any opinions requested by Collateral Agent or any
other Holder as to any legal matters arising hereunder) and of each Credit
Party's performance of and compliance with all agreements and conditions on its
part to be performed or complied with under this Agreement and the other Basic
Documents including, without limitation, with respect to confirming compliance
with environmental and insurance requirements; (iii) the reasonable fees,
expenses and disbursements of counsel to Collateral Agent and any Holder holding
a majority in principal amount of either the Tranche A Notes or the Tranche B
Notes (including allocated costs of internal counsel) in connection with the
negotiation, preparation, execution and administration of the Basic Documents
and any consents, amendments, waivers or other modifications hereto or thereto
and any other documents or matters requested by any Credit Party; (iv) all other
actual reasonable costs and expenses incurred by Collateral Agent or any Holder
holding a majority of the principal amount of either the Tranche A or the
Tranche B Notes in connection with the negotiation, preparation and execution of
the Basic Documents and the transactions contemplated hereby and thereby; and
(v) after the occurrence of an Event of Default, all costs and expenses,
including reasonable attorneys' fees (including allocated costs of internal
counsel) and costs of settlement, incurred by Collateral Agent and any Holder in
enforcing any Obligations of or in collecting any payments due from any Credit
Party hereunder or under the other Basic Documents by reason of such Event of
Default or in connection with any refinancing or restructuring of the credit
arrange ments provided under this Agreement in the nature of a "work-out" or
pursuant to any insolvency or bankruptcy proceedings.
9.3 INDEMNITY. In addition to the payment of expenses pursuant to
---------
subsection 9.2, whether or not the transactions contemplated hereby shall be
consummated, SGC and Company jointly and severally agree to defend, indemnify,
pay and hold harmless Collateral Agent, each Holder, and the officers,
directors, employees, agents and Affiliates of Collateral Agent and each Holder
(collectively called the "INDEMNITEES") from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature whatsoever
(including without limitation the reasonable fees and disbursements of counsel
for such Indemnitees) in connection with any investigative, administrative or
judicial proceeding commenced or threatened by any Person, whether or not any
such Indemnitee shall be designated as a party or a potential party thereto),
whether direct, indirect or consequential and whether based on any federal,
state or foreign laws, statutes, rules or regulations (including without
limitation securities and commercial laws, statutes, rules or regulations and
Environmental Laws), on common law or equitable cause or on contract or
otherwise, that may be imposed on, incurred by, or asserted against any such
Indemnitee, in any manner relating to or arising out of this Agreement or the
other Basic Documents or the transactions contemplated hereby or thereby
(including without limitation Holders' agreement to purchase any Notes or the
use or intended use of the proceeds of such purchase) or the statements
contained in any commitment letter delivered by any Holder to any Credit Party
with respect thereto (collectively called the "INDEMNIFIED LIABILITIES");
provided that SGC and Company shall not have any obligation to any Indemnitee
--------
hereunder with respect
75
to any Indemnified Liabilities to the extent such Indemnified Liabilities arise
solely from the gross negligence or willful misconduct of that Indemnitee as
determined by a final judgment of a court of competent jurisdiction. To the
extent that the undertaking to defend, indemnify, pay and hold harmless set
forth in the preceding sentence may be unenforceable because it is violative of
any law or public policy, SGC and Company shall contribute the maximum portion
that it is permitted to pay and satisfy under applicable law to the payment and
satisfaction of all Indemnified Liabilities incurred by the Indemnitees or any
of them.
9.4 RATABLE SHARING.
---------------
A. Subject to the Intercreditor Agreement, the Holders of Tranche A
Notes hereby agree among themselves that if any of them shall, whether by
voluntary payment, by realization upon security, through the exercise of any
right of set-off, by counterclaim or cross action or by the enforcement of any
right under any Basic Document or otherwise, or as adequate protection of a
deposit treated as cash collateral under the Bankruptcy Code, receive payment or
reduction of a proportion of the aggregate amount of principal, interest, fees
and other amounts then due and owing to that Holder with respect to the Tranche
A Notes hereunder or under the other Basic Document (collectively, the
"AGGREGATE TRANCHE A AMOUNTS DUE" to such Holder) which is greater than the
proportion received by any other Holder of Tranche A Notes in respect of the
Aggregate Tranche A Amounts Due to such other Holder, then the Holder receiving
such proportionately greater payment shall (i) notify each other Holder of
Tranche A Notes of the receipt of such payment and (ii) apply a portion of such
payment to purchase participations (which it shall be deemed to have purchased
from each seller of a participation simultaneously upon the receipt by such
seller of its portion of such payment) in the Aggregate Tranche A Amounts Due to
the other Holders of Tranche A Notes so that all such recoveries of Aggregate
Tranche A Amounts Due shall be shared by all Holders of Tranche A Notes in
proportion to the Aggregate Tranche A Amounts Due to them; provided that if all
--------
or part of such proportionately greater payment received by such purchasing
Holder is thereafter recovered from such Holder upon the bankruptcy or
reorganization of any Credit Party or otherwise, those purchases shall be
rescinded and the purchase prices paid for such participations shall be returned
to such purchasing Holder ratably to the extent of such recovery, but without
interest. SGC and Company expressly consent to the foregoing arrangement and
agree that any Holder of a participation so purchased may exercise any and all
rights of set-off or counterclaim with respect to any and all monies owing by
SGC and Company to that Holder with respect thereto as fully as if that Holder
were owed the amount of the participation held by that Holder.
B. Subject to the Intercreditor Agreement, the Holders of Tranche B
Notes hereby agree among themselves that if any of them shall, whether by
voluntary payment, by realization upon security, through the exercise of any
right of set-off, by counterclaim or cross action or by the enforcement of any
right under any Basic Document or otherwise, or as adequate protection of a
deposit treated as cash collateral under the Bankruptcy Code, receive payment or
reduction of a proportion of the aggregate amount of principal, interest, fees
and
76
other amounts then due and owing to that Holder with respect to the Tranche
B Notes hereunder or under the other Basic Document (collectively, the
"AGGREGATE TRANCHE B AMOUNTS DUE" to such Holder) which is greater than the
proportion received by any other Holder of Tranche B Notes in respect of the
Aggregate Tranche B Amounts Due to such other Holder, then the Holder receiving
such proportionately greater payment shall (i) notify each other Holder of
Tranche B Notes of the receipt of such payment and (ii) apply a portion of such
payment to purchase participations (which it shall be deemed to have purchased
from each seller of a participation simultaneously upon the receipt by such
seller of its portion of such payment) in the Aggregate Tranche B Amounts Due to
the other Holders of Tranche B Notes so that all such recoveries of Aggregate
Tranche B Amounts Due shall be shared by all Holders of Tranche B Notes in
proportion to the Aggregate Tranche B Amounts Due to them; provided that if all
--------
or part of such proportionately greater payment received by such purchasing
Holder is thereafter recovered from such Holder upon the bankruptcy or
reorganization of any Credit Party or otherwise, those purchases shall be
rescinded and the purchase prices paid for such participations shall be returned
to such purchasing Holder ratably to the extent of such recovery, but without
interest. SGC and Company expressly consent to the foregoing arrangement and
agree that any Holder of a participation so purchased may exercise any and all
rights of set-off or counterclaim with respect to any and all monies owing by
SGC and Company to that Holder with respect thereto as fully as if that Holder
were owed the amount of the participation held by that Holder.
C. Subject to subsection 9.4A and 9.4B above and the Intercreditor
Agreement, and in addition to any other rights Collateral Agent or any Holder
may have under law or in equity, if any amount shall at any time be due and
owing by SGC or Company under this Agreement or the other Basic Documents,
Collateral Agent or such Holder, as the case may be, is authorized at any time
or from time to time, without notice (any such notice being hereby expressly
waived), to set off and to appropriate and to apply any and all deposits
(general or special, including but not limited to indebtedness evidenced by
certificates of deposit, whether matured or unmatured) and any other
indebtedness of Collateral Agent or Holder, as the case may be, owing to SGC or
Company or any other Credit Party and any other property of SGC or Company or
any other Credit Party held by Collateral Agent or Holder, as applicable to or
for the credit or the account of SGC or Company or any other Credit Party
against and on account of the Obligations and liabilities of SGC or Company or
such other Credit Party to Collateral Agent or any Holder, as applicable.
9.5 INDEPENDENCE OF COVENANTS. All covenants hereunder shall be given
-------------------------
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or would otherwise be within the limitations of, another covenant shall not
avoid the occurrence of an Event of Default or Potential Event of Default if
such action is taken or condition exists.
9.6 NOTICES. Unless otherwise specifically provided herein, any notice or
-------
other communication herein required or permitted to be given shall be in writing
and may be
77
personally served, telexed or sent by telefacsimile 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 telefacsimile or telex if sent prior to
5:00 p.m. on a Business Day (and otherwise such facsimile or telex shall be
deemed received on the next Business Day), or three 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 under such party's name on the signature pages hereof or such other
address as shall be designated by such Person in a written notice delivered to
the other parties hereto.
9.7 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
------------------------------------------------------
A. All representations, warranties and agreements made in or pursuant
to the Basic Documents shall survive the execution and delivery of this
Agreement and the purchase of the Notes hereunder.
B. Notwithstanding anything in this Agreement or implied by law to
the contrary, the agreements of SGC and Company set forth in subsections 3.13,
9.2, 9.3 and 9.4 and the agreements of Holders set forth in subsection 9.4 shall
survive the payment of the Notes and the termination of this Agreement.
9.8 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No failure or
-----------------------------------------------------
delay on the part of any Holder in the exercise of any power, right or privilege
hereunder or under any other Basic Document 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 other or further exercise thereof or of any other power, right or
privilege. All rights and remedies existing under this Agreement and the other
Basic Documents are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
9.9 MARSHALLING; PAYMENTS SET ASIDE. No Holder shall be under any
-------------------------------
obligation to marshal any assets in favor of any Credit Party or any other party
or against or in payment of any or all of the Obligations. To the extent that
SGC or Company or any other Credit Party makes a payment or payments to any
Holder, any Holder enforces any security interests or exercises its rights of
set-off, and such payment or payments or the proceeds of such enforcement or
set-off or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to a trustee,
receiver or any other party under any bankruptcy law, any other state or federal
law, common law or any equitable cause, then, to the extent of such recovery,
the obligation or part thereof originally intended to be satisfied, and all
Liens, rights and remedies therefor or related thereto, shall be revived and
continued in full force and effect as if such payment or payments had not been
made or such enforcement or set-off had not occurred.
78
9.10 SEVERABILITY. In case any provision in or obligation under this
------------
Agreement or the other Basic Documents 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.
9.11 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF HOLDERS' RIGHTS. The
----------------------------------------------------------
obligations of Holders hereunder are several and no Holder shall be responsible
for the obligations of any other Holder hereunder. Nothing contained herein or
in any other Basic Document, and no action taken by Holders pursuant hereto or
thereto, shall be deemed to constitute Holders as a partnership, an association,
a joint venture or any other kind of entity. The amounts payable at any time
hereunder to each Holder shall be a separate and independent debt, and each
Holder shall be entitled to protect and enforce its rights arising out of this
Agreement and it shall not be necessary for any other Holder to be joined as an
additional party in any proceeding for such purpose.
9.12 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.
9.13 APPLICABLE LAW. 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.
9.14 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
----------------------
parties hereto and their respective successors and assigns and shall inure to
the benefit of the parties hereto and the successors and assigns of Holders;
Subject to subsection 2.8, SunAmerica and any other Holder may assign the Notes
to its Affiliates or one or more entities, and upon such assignment, any such
Affiliate or entity shall become a Holder for all purposes of the Basic
Documents. The Holders shall have the right to sell participations in their
Notes; provided that, if no Event of Default has occurred and is continuing,
--------
Company shall have the right to consent (which consent shall not be unreasonably
withheld or delayed) to the sale of any participation in the Notes by SunAmerica
that causes SunAmerica and its Affiliates to hold less than 51% of the legal or
beneficial interests in all outstanding Tranche B Notes. Neither SGC's,
Company's or any other Credit Party's rights or obligations hereunder or under
the other Basic Documents nor any interest herein or therein may be assigned or
delegated by SGC, Company or such other Credit Party without the prior written
consent of all Holders.
9.15 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL JUDICIAL
----------------------------------------------
PROCEEDINGS BROUGHT AGAINST ANY CREDIT PARTY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER BASIC DOCUMENT OR ANY
79
OBLIGATION 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 COMPANY 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,
SUCH OTHER BASIC DOCUMENT OR SUCH OBLIGATION. SGC and Company hereby agree 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 SGC or Company, as
applicable, at its address provided in subsection 9.6, such service being hereby
acknowledged by SGC and Company to be sufficient for personal jurisdiction in
any action against SGC or Company, as applicable, 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 any Holder to bring proceedings against SGC or Company in the
courts of any other jurisdiction.
9.16 WAIVER OF JURY TRIAL. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
--------------------
AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER BASIC
DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS
TRANSACTION OR THE RELATIONSHIP THAT IS BEING ESTABLISHED. 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. Each party hereto acknowledges
that this waiver is a material inducement to enter into a business relationship,
that each has 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.
Each party hereto further warrants and represents that it has reviewed this
waiver with its legal counsel and that it 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 OR ANY OF THE OTHER BASIC DOCUMENTS OR TO ANY
OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE SECURITIES MADE HEREUNDER. In the
event of litigation, this Agreement may be filed as a written consent to a trial
by the court.
9.17 COUNTERPARTS; EFFECTIVENESS. This Agreement and any amendments,
---------------------------
waivers, consents or supplements hereto or in connection herewith may be
executed in any number of 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
80
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. This Agreement
shall become effective upon the execution of a counterpart hereof by each of the
parties hereto.
9.18 CONFLICTS WITH OTHER BASIC DOCUMENTS. To the fullest extent possible,
------------------------------------
the terms and provisions of the other Basic Documents shall be read in
conjunction with the terms and provisions of this Agreement and shall supplement
the terms and provisions hereof. To the extent that any terms and provisions
hereunder conflict with the terms provisions of any of the other Basic
Documents, the stricter provisions shall govern.
9.19 RELEASE OF CERTAIN COLLATERAL. If the Xxxxxxxxx Release Date has
-----------------------------
occurred the Collateral Agent shall enter into documentation reasonably
requested by the Company at the Company's expense to release the Xxxxxxxxx
Facility from the lien of the Xxxxxxxxx Deed of Trust and the other Basic
Documents. If the Wet 'N Wild Facility is transferred in accordance with
subsection 2.5B(ii), the Notes have been redeemed to the extent required by
subsection 2.5B(ii) and the consent of the Holders of more than 50% in aggregate
principal amount of the Tranche B Notes has been obtained as contemplated by
subsection 2.5B(ii), the Collateral Agent shall enter into documentation
reasonably requested by the Company at the Company's expense to release the Wet
'N Wild Facility from the lien of the Wet 'N Wild Deed of Trust and the other
Basic Documents.
81
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
SANTA FE GAMING CORPORATION
(formerly named Sahara Gaming Corporation),
a Nevada corporation
By: Xxxxxx X. Land
----------------------------------
Its: SVP & CEO
---------------------------------
Notice Address:
SANTA FE GAMING CORPORATION,
0000 Xxx Xxxxx Xxxx. Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Attention: Xxxxxx Land
SAHARA LAS VEGAS CORP.,
a Nevada corporation
By: Xxxxxx X. Land
----------------------------------
Its: Treasurer & Asst. Secretary
---------------------------------
Notice Address:
Sahara Las Vegas Corp.
0000 Xxx Xxxxx Xxxx. Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Attention: Xxxxxx Land
S-1
SUNAMERICA LIFE INSURANCE COMPANY,
By: Xxxxxxx X. Hanover
-----------------------------------
Its: Authorized Agent
----------------------------------
Notice Address:
SunAmerica Life Insurance Company
0 XxxXxxxxxx Xxxxxx
Xxxxxxx Xxxx
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxxxx XxXxxxxx
and Xxxxxx Xxxxxxx
SUNAMERICA, INC.
By: Xxxxxxx X. Hanover
-----------------------------------
Its: Authorized Agent
----------------------------------
Notice Address:
SunAmerica, Inc.
0 XxxXxxxxxx Xxxxxx
Xxxxxxx Xxxx
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxxxx XxXxxxxx
and Xxxxxx Xxxxxxx
S-2
CREDIT SUISSE FIRST BOSTON MORTGAGE
CAPITAL LLC
By: Xxxxxxx Xxxxxxx
----------------------------
Its: Vice President
---------------------------
Notice Address:
Credit Suisse First Boston Mortgage
Capital LLC
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
S-3
SCHEDULE 2
INFORMATION RELATING TO HOLDERS
-------------------------------
Principal Amount Principal Amount
Name and Address of Purchaser of Tranche A Notes of Tranche B Notes
----------------------------- ------------------ ------------------
SunAmerica Life Insurance Company 0 $20,500,000
Xxx XxxXxxxxxx Xxxxxx
Xxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
(1) All payments by wire transfer of
immediately available funds to:
Wire Instructions
-----------------
CITIBANK
ABA # 000-000-000
A/C # 40573831
RE: SunAmerica Life Insurance Company/
Sahara Las Vegas
with sufficient information
to identify the source and
application of such funds.
(2) All notices of payments and written
confirmations of such wire transfers:
SunAmerica Investments, Inc.
c/o SunAmerica Center
Investment Accounting 00-00
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Sched. 2-1
Credit Suisse First Boston Mortgage $37,000,000 0
Capital LLC
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(1) All payments by transfer of
immediately available funds to:
New Wire Instructions
---------------------
CITIBANK NYC
ABA # 000-0000-00
A/C # 09253506
Attn: XXXXXXX XXXXXXXX
with sufficient information
to identify the source and
application of such funds.
(2) All notices of payments and written
confirmations of such wire transfers:
Credit Suisse First Boston Mortgage
Capital LLC
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
Sched. 2-2
