EXHIBIT 10.71
SANTA FE GAMING CORPORATION
SAHARA LAS VEGAS CORP.
THIRD AMENDMENT
TO SECOND AMENDED AND RESTATED
NOTE PURCHASE AGREEMENT
This THIRD AMENDMENT TO SECOND AMENDED AND RESTATED NOTE
PURCHASE AGREEMENT (this "AMENDMENT") is dated as of December 16, 1999 and
entered into by and among Santa Fe Gaming Corporation, a Nevada corporation
("SGC"), Sahara Las Vegas Corp., a Nevada corporation ("COMPANY"), SunAmerica
Life Insurance Company, an Arizona life insurance company ("SUNAMERICA"), Anchor
National Life Insurance Company, an Arizona life insurance company ("ANCHOR"),
and SunAmerica, as Collateral Agent, and, for purposes of Sections 5 and 6
hereof, SGC and the other Credit Support Parties (as defined in Section 5
hereof) listed on the signature pages hereof, and is made with reference to that
certain Second Amended and Restated Note Purchase Agreement dated as of November
25, 1997 (as amended, the "NOTE PURCHASE AGREEMENT"), by and among SGC, Company,
SunAmerica and Anchor. Capitalized terms used herein without definition shall
have the same meanings herein as set forth in the Note Purchase Agreement.
RECITALS
WHEREAS, the Company desires to extend the maturity of the
Indebtedness outstanding under the Note Purchase Agreement by exchanging all of
its outstanding Notes due December 15, 1999, for restated notes of the Company
due December 14, 2000;
WHEREAS, concurrent with the above-mentioned exchange, the
Company desires to amend certain covenants contained in the Note Purchase
Agreement;
WHEREAS, on February 23, 1999 and April 12, 1999, Pioneer
Finance and Pioneer Hotel, Inc. respectively filed voluntary petitions for
relief under the Bankruptcy Code with the United States Bankruptcy Court (the
"PIONEER BANKRUPTCY");
WHEREAS, pursuant to the Pioneer Reorganization Plan, as such
may be amended from time to time, it is contemplated that SGC may be required to
provide a capital contribution to Pioneer Finance and/or Pioneer Hotel, Inc.;
WHEREAS, the Company and SGC have proposed that the
aforementioned capital contribution may be accomplished through a purchase by
Company of additional Pioneer Bonds that may be contributed to Pioneer; and
WHEREAS, the Company desires to amend the Note Purchase
Agreement to provide for advances evidenced by additional notes of the Company
upon the occurrence of specified conditions, the proceeds of which would be used
to purchase additional Pioneer Bonds.
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1 AMENDMENTS TO THE NOTE PURCHASE AGREEMENT
1.1 AMENDMENT TO SECTION 1.1: DEFINITIONS AND CONSTRUCTION.
A. Subsection 1.1 of the Note Purchase Agreement is hereby
amended by adding thereto the following definitions, which shall be inserted in
proper alphabetical order:
"`ADDITIONAL NOTES' means those additional 12% Notes of the
Company due December 14, 2000, issued on the Third Amendment Effective Date to
evidence advances in an aggregate principal amount equal to the Additional Notes
Advance Amount, as amended, modified or otherwise supplemented or replaced from
time to time."
"`ADDITIONAL NOTES ADVANCE AMOUNT' means the aggregate
principal amount of advances outstanding at any time evidenced by the Additional
Notes requested by the Company as set forth in a Borrowing Request; it being
understood that the aggregate principal amount of all advances evidenced by the
Additional Notes shall not exceed the lesser of (i) $7,500,000 and (ii) 80% of
the appraised value of the Wet `N' Wild Property in the Wet `N' Wild Appraisal
LESS the aggregate outstanding amount of the Restated Notes."
"`ADDITIONAL NOTES ADVANCE DATE' means the date of any advance
evidenced by the Additional Notes pursuant to subsection 2.2B, it being
understood that no such advance may occur after the Pioneer Plan Effective
Date."
"`ANCHOR' means Anchor National Life Insurance Company, an
Arizona life insurance company."
"`BORROWING REQUEST' means the request set forth as Exhibit I
attached to the Third Amendment."
"`MATURITY DATE' means December 14, 2000."
"`PIONEER HOTEL' means Pioneer Hotel, Inc., a Nevada
corporation."
"`PIONEER PLAN EFFECTIVE DATE' means the date upon which all
of the conditions precedent to the effectiveness of the Pioneer Reorganization
Plan are fulfilled."
"`PIONEER REORGANIZATION PLAN' means the joint reorganization
plan of Pioneer Finance and Pioneer Hotel, as amended from time to time,
relating to its petition for relief filed under Chapter 11 of the Bankruptcy
Code."
"`RESTATED NOTES' means $43,000,000 in principal amount of
Company's 12% Notes Due December 14, 2000 issued to SunAmerica and Anchor on the
Third Amendment Effective Date, which notes amend and restate the Tranche A
Notes and the Tranche B Notes, as amended, modified or otherwise supplemented or
replaced from time to time."
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"`SFHI 9.5% NOTES' has the meaning set forth in subsection
6.11."
"`SGC PLEDGE AGREEMENT' means that Pledge Agreement in the
form set forth as Exhibit II to the Third Amendment, as amended, modified or
otherwise supplemented or replaced from time to time."
"`THIRD AMENDMENT' means that certain Third Amendment to
Second Amended and Restated Note Purchase Agreement dated as of December 16,
1999 among SGC, the Company and SunAmerica and, for purposes of Sections 4 and 5
thereof, the other Credit Support Parties."
"`THIRD AMENDMENT EFFECTIVE DATE' has the meaning assigned to
that term in the Third Amendment."
B. Section 1.1 of the Note Purchase Agreement is hereby
amended by amending and restating the following definition:
"`INITIAL HOLDERS' means Anchor and SunAmerica.
"`NOTES' means the Restated Notes and the Additional Notes."
C. Section 1.1 of the Note Purchase Agreement is hereby
amended by deleting the following definitions in their entirety: "Appraisal
Deficit Amount", "Appraisal Deficit Redemption Date", "Permitted Equity
Financing", "Requisite Tranche A Holders" and "Requisite Tranche B Holders".
1.2 AMENDMENT TO SECTIONS 2.1 - 2.5. Sections 2.1 - 2.5 of the
Note Purchase Agreement are hereby amended and restated in their entirety as
follows:
"2.1A AUTHORIZATION OF EXCHANGE OF TRANCHE A NOTES AND TRANCHE
B NOTES FOR RESTATED NOTES. Company has authorized the exchange of the
Tranche A Notes and Tranche B Notes for the Restated Notes, pursuant to
the terms and conditions hereof and of the Third Amendment and as
provided herein and in the Third Amendment. The Restated Notes shall
evidence all Obligations evidenced by the Tranche A Notes and Tranche B
Notes and shall replace the Tranche A Notes and the Tranche B Notes.
Company has also authorized the issuance and sale of the Additional
Notes pursuant to the terms and conditions hereof and of the Third
Amendment.
2.2A EXCHANGE OF TRANCHE A NOTES AND TRANCHE B NOTES FOR
RESTATED NOTES. Subject to the terms and conditions hereof and of the
Third Amendment, on the Third Amendment Effective Date, Company will
exchange all of the issued and outstanding Tranche A Notes and Tranche
B Notes for Restated Notes. The Restated Notes will consist of two
Restated Notes in aggregate principal amounts of $12,170,000 and
$20,500,000 payable to SunAmerica and a Restated Note in an aggregate
principal amount of $10,330,000 payable to Anchor. On the Effective
Date, subject to the terms and conditions hereof and of the Third
Amendment, (i) SunAmerica and Anchor shall surrender the Tranche A
Notes and Tranche B Notes and the Company shall issue the Restated
Notes to SunAmerica and Anchor and (ii) Company shall pay an amount in
cash
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by wire transfer of immediately available funds equal to the accrued
but unpaid interest on the Tranche A Notes and Tranche B Notes as of
December 15, 1999 to SunAmerica and Anchor.
2.2B ISSUANCE OF ADDITIONAL NOTES. Subject to the terms and
conditions hereof and of the Third Amendment, on the Third Amendment
Effective Date, the Company shall issue Additional Notes to SunAmerica
and Anchor in an aggregate principal amount equal to $7,500,000. The
Additional Notes will consist of an Additional Note in the aggregate
principal amounts of $5,625,000 payable to SunAmerica and an Additional
Note in the aggregate principal amount of $1,875,000 payable to Anchor.
Each of the Initial Holders severally agree, on the terms and
conditions set forth herein, to advance the Additional Notes Advance
Amount to Company on any Business Day during the period from the date
hereof until the Maturity Date in an aggregate amount not to exceed
$5,625,000 in the case of SunAmerica and $1,875,000 in the case of
Anchor (such Initial Holder's "Commitment"). Any individual advance of
amounts constituting the Additional Notes Advance Amount shall be in an
aggregate amount not less than $1,000,000 (except that the last
Additional Notes Advance Amount may be in an aggregate amount equal to
the total of the then unused portion of the Commitments) nor more than
the aggregate principal amount of the Additional Notes Advance Amount,
and shall be made simultaneously from the Initial Holders ratably
according to their respective Commitments. No amounts advanced pursuant
to the Commitments that are repaid may be reborrowed.
The Initial Holders shall have received, no less than 3
Business Days prior to any proposed Additional Notes Advance Date, an
originally executed Borrowing Request, in each case signed by the chief
executive officer, the chief financial officer or the treasurer of
Company or by any executive officer of Company designated by any of the
above-described officers on behalf of Company (to be confirmed
immediately in writing and to be accompanied or preceded by the
documents required by this subsection 2.2B). The Borrowing Request
shall be in the form attached to the Third Amendment as Exhibit I and
shall specify the Additional Notes Advance Date and the aggregate
amount of the proposed advance. Each Initial Holder shall, before
11:00A.M. (Los Angeles time) on the date of such advance specified in
the Borrowing Request, wire transfer such Initial Holder's pro rata
portion of the advance to the Additional Collateral Account.
Each Borrowing Request shall be irrevocable and binding on the
Company and, in respect of the advance specified in such Borrowing
Request, the Company shall indemnify each Initial Holder against any
loss or expense incurred by such Initial Holder as a result of any
failure to fulfill on or before the Additional Notes Advance Date, the
applicable conditions set forth in this subsection 2.2B, including,
without limitation, any loss (including loss of anticipated interest)
or expense incurred by reason of the liquidation or reemployment of
funds acquired by any Initial Holder to fund the advance to be made by
such Initial Holder as part of such advance when such advance, as a
result of such failure, is not made on such date.
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The failure of any Initial Holder to make a requested advance
shall not relieve any other Initial Holder from its obligation, if any,
hereunder to make its advance on any Additional Notes Advance Date, but
no Initial Holder shall be responsible for the failure of any other
Initial Holder to make the advance to be made by such other Initial
Holder on any Additional Notes Advance Date.
Any advance of the Additional Notes Advance Amount by
SunAmerica and Anchor to the Company on any Additional Notes Advance
Date is subject to the following conditions precedent:
(1) As of the Additional Notes Advance Date:
(a) The representations and warranties contained
herein and in the other Basic Documents shall be true, correct
and complete in all material respects on and as of the
Additional Notes Advance Date to the same extent as though
made on and as of that date, except to the extent such
representations and warranties specifically relate to an
earlier date, in which case such representations and
warranties shall have been true, correct and complete in all
material respects on and as of such earlier date;
(b) No event shall have occurred and be continuing or
would result from the advance of the Additional Notes Amount
that would constitute an Event of Default or a Potential Event
of Default;
(c) 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 it on or before the Additional Notes Advance
Date;
(d) No order, judgment or decree of any court,
arbitrator or governmental authority shall purport to enjoin
or restrain any Holder from advancing the Additional Notes
Amount on the Additional Notes Advance Date;
(e) The advance of the Additional Notes Amount shall
not violate any law including, without limitation, Regulation
T, Regulation U or Regulation X of the Board of Governors of
the Federal Reserve System;
(f) There shall not be pending or, to the knowledge
of any Credit Party, threatened, any action, suit, proceeding,
governmental investigation or arbitration against or affecting
any Credit Party or any property of any Credit Party that was
not disclosed to the Holders or in reports filed by SGC under
the Securities Exchange Act of 1934, as amended, prior to the
Third Amendment Effective Date, nor shall there be any
development in any action, suit, proceeding, governmental
investigation or arbitration that was so disclosed prior to
the Third Amendment Effective Date, that, in the opinion of
the Collateral Agent or of Requisite Holders, could reasonably
be expected to have a Material Adverse Effect; and no
injunction or other restraining order shall have been issued
and no
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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
any Basic Document;
(g) The aggregate principal amount evidenced by the
Additional Notes after giving effect to the advance of the
Additional Note Amount does not exceed the lesser of (a)
$7,500,000 and (b) 80% of the appraised value of the Wet `N'
Wild Property in the Wet `N' Wild Appraisal LESS the aggregate
outstanding amount of the Restated Notes;
(h) The Pioneer Plan Effective Date has not occurred
and the Additional Notes Advance Date shall be prior to
December 10, 2000; and
(i) Collateral Agent shall have received a CLTA 122
Endorsement covering the advance issued by ▇▇▇▇▇▇▇ Title in
the form required by the Collateral Agent with respect to the
title policy issued by ▇▇▇▇▇▇▇ Title Guaranty Company
("▇▇▇▇▇▇▇ Title") as Policy No. CL-1530-169331, dated as of
January 18, 1996.
(2) As of the Additional Notes Advance Date,
arrangements satisfactory to SunAmerica and Anchor shall have been made
for the transfer of the applicable Additional Notes Advance Amount to
the Additional Collateral Account, the transfer of such amount from the
Additional Collateral Account to acquire Pioneer Bonds and the pledge
of such Pioneer Bonds to the Collateral Agent pursuant to the Company
Security Agreement.
(3) If, prior to the delivery of the Borrowing
Request, Company shall have obtained a new Wet `N' Wild Appraisal
reflecting a higher appraised value of the Wet `N' Wild Facility, the
Company shall be entitled to submit such new Wet `N' Wild Appraisal to
SunAmerica and upon written confirmation by SunAmerica that such
appraisal is satisfactory in form, scope, and substance, shall be
entitled to rely on such new Wet `N' Wild Appraisal for the purposes of
determining the Additional Notes Advance Amount.
2.3 CLOSING AND DELIVERY OF TRANCHE A NOTES AND TRANCHE B
NOTES. A pre-closing of the exchange of the Tranche A Notes and the
Tranche B Notes for the Restated Notes and the issuance of the
Additional Notes shall be held at O'Melveny & ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ on the Third Amendment Effective Date or at
such other time and place as the parties may agree upon. The "Closing",
as used herein, shall mean the date that all conditions to the Third
Amendment Effective Date hereunder have been satisfied or waived by the
Holders. Subject to the terms of this Agreement, at the Closing,
Company will deliver to SunAmerica two Restated Notes in the aggregate
principal amount of $32,670,000 and an Additional Note in the aggregate
principal amount of $5,625,000 and Company will deliver to Anchor one
Restated Note in the aggregate principal amount of $10,330,000 and an
Additional Note in the aggregate principal amount of $1,875,000,
Company will pay to SunAmerica and Anchor
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all accrued interest due to SunAmerica and Anchor under the Tranche A
Notes and the Tranche B Notes as of December 15, 1999 and Company will
satisfy the terms and conditions of the Closing set forth in the Third
Amendment. If at the Closing Company shall fail to tender the Restated
Notes and the Additional Notes to the Holders as provided above in this
subsection 2.3 and subsections 2.2A or 2.2B, or any of the terms or
conditions specified in the Third Amendment 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 exchange the Tranche A Notes and Tranche B Notes for Restated Notes
or to accept the Restated Notes or Additional Notes. In no event shall
the Closing occur after December 20, 1999.
2.4 CERTAIN TERMS OF THE NOTES; PAYMENT OF INTEREST.
A. INTEREST. The Notes shall bear interest at a rate of 12%
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 June 20, 2000 and at the
Maturity Date. If amounts are advanced pursuant to the Additional
Notes, interest on the amounts issued under the Additional Notes shall
accrue from the relevant Additional Notes Advance Date and shall be
payable concurrently with the Restated Notes. 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. MATURITY. The principal evidenced by the Notes matures on
the Maturity Date, 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 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.
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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 HOLDERS TO REQUIRE SALE OF SFHI NOTES OR
PIONEER BONDS TO PAY INTEREST. On or before the dates that are (i) 25
days prior to any payment date preceding the Maturity Date and (ii) 25
days prior to the Maturity Date, the Company shall provide to the
Holders evidence satisfactory to the holders of more than 50% in
aggregate principal amount of the Notes that Company has or will have
on or prior to the applicable payment date, sufficient funds to pay in
full the payments on the Notes due on such date. If Company does not
provide such satisfactory evidence with respect to its ability to pay
interest on such interest payment dates, at the written instruction of
the holders of more than 50% in aggregate principal amount of the
Notes, the Company shall sell SFHI Notes or Pioneer Bonds held as
Collateral, and deposit the proceeds thereof in the Cash Collateral
Account and apply such proceeds to make the interest payments due.
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 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. 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 Notes and third to the principal balance of the Notes. Aggregate
principal, interest and applicable late charge payments shall be
ratably
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apportioned among all outstanding 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 may be redeemed at any time
and from time to time, in whole or in part, at the option of the
Company, at a price paid in cash equal to 100% of the principal amount
then outstanding to be redeemed, together with accrued and unpaid
interest thereon to the redemption date. 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 Notes, the 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 Notes
pursuant to subsection 2.5B(i) plus accrued but unpaid interest thereon
to the redemption date. If the Company requests the consent of the
Holders of more than 50% of the 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 Notes of
such request, such request shall be deemed to have been rejected. Upon
a redemption pursuant to this subsection 2.5B(ii), the Wet `N' Wild
Premises shall be released by the Collateral Agent.
C. MANDATORY REDEMPTION AND CHANGE IN CONTROL REPURCHASE.
(i) PAYMENT REQUIRED ON JUNE 20, 2000. On June 20, 2000,
Company shall make a payment of $3,000,000 to be applied on a pro rata
basis to the aggregate principal amount then outstanding under the
Restated Notes, and upon such payment, the Holders shall make a
notation on the Restated Notes reflecting such payment of principal.
(ii) PAYMENT REQUIRED UNDER DEEDS OF TRUST. Company shall
redeem or otherwise pay the principal amount of the Notes 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 Notes pursuant to subsection 2.5B(i)
plus accrued and unpaid interest thereon to the redemption date.
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(iii) REDEMPTION BASED ON REDEMPTION OR TRANSFER OF SFHI NOTES
OR PIONEER BONDS. If any SFHI Notes or Pioneer Bonds that constitute
Collateral are mandatorily redeemed under the SFHI Indenture or the
Pioneer Indenture with the proceeds of any recovery as a result of
casualty or condemnation or pursuant to Section 3.8 of the SFHI
Indenture or pursuant to the Pioneer Indenture, the same principal
amount of Notes 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 or the Pioneer Indenture, at a
redemption price equal to the redemption price payable in connection
with the optional redemption of Notes pursuant to subsection 2.5B(i))
plus accrued and unpaid interest thereon to the redemption date;
provided that this subsection 2.5C(iii) shall not apply to any release
of Pioneer Bonds in accordance with subsection 2.5H.
(iv) REDEMPTION BASED ON SFHI CASH FLOW. If as of the end of
any fiscal quarter, 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 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 Notes pursuant to Section 2.5B(i) 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. Company shall only
redeem Notes as provided in this subsection 2.5C(iv) on one occasion.
(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(vi), 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;
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(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;
(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.
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
11
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.
E. PRO RATA REDEMPTION. 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 Notes pro rata, and third to the
principal balance of the 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 Restated 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
12
Amount"), then, so long as no Event of Default or Potential Event of
Default (other than any Potential Event of Default arising as a
result of (i) the Pioneer Bankruptcy, (ii) the failure by (a)
Pioneer Finance or Pioneer Hotel to pay the Pioneer Bonds at
maturity or (b) SGC to pay the guaranty of the Pioneer Bonds, or
(iii) the cross-default under the 9 1/2 % Notes due 2000 of SFHI
which has resulted from the matters described in (i) and (ii)) 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 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(iv).
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").
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
13
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.
H. RELEASE OF PIONEER BONDS AS COLLATERAL. If and to the
extent that (i) Pioneer Bonds constitute Collateral hereunder and (ii)
such Pioneer Bonds are contributed to Pioneer Finance pursuant to the
Pioneer Reorganization Plan as of the Pioneer Plan Effective Date,
then, so long as no Event of Default or Potential Event of Default has
occurred and is continuing (other than any Potential Event of Default
arising as a result of (i) the Pioneer Bankruptcy, (ii) the failure by
(a) Pioneer Finance or Pioneer Hotel to pay the Pioneer Bonds at
maturity or (b) SGC to pay the guaranty of the Pioneer Bonds, or (iii)
the cross-default under the 9 1/2 % Notes due 2000 of SFHI which has
resulted from the matters described in (i) and (ii)), Collateral Agent
shall release its security interest held on behalf of Holders in such
Pioneer Bonds; PROVIDED that Collateral Agent shall not release its
security interest in any such Pioneer Bonds unless and until Company
has demonstrated in a manner satisfactory to Collateral Agent that
immediately upon such release, the Pioneer Bonds released will be
contributed or otherwise transferred to Pioneer and retired or
otherwise cancelled and unless SGC has executed and delivered the SGC
Pledge Agreement and related Pledge Amendments to the Collateral Agent,
pledged to the Collateral Agent a first priority security interest in
all the capital stock and other equity securities of SFHI, Pioneer
Finance and Pioneer Hotel, delivered the stock certificates evidencing
all such equity interests to the Collateral Agent endorsed in blank,
delivered to the Collateral Agent customary corporate resolutions,
incumbency certificates and legal opinions with respect thereto and
obtained all necessary consents and approvals required by any
Governmental Authority, including any Gaming Authority, for the
execution, delivery and performance of the SGC Pledge Agreement,
including the pledges thereunder."
14
1.3 AMENDMENTS TO SECTION 3.
A. The first paragraph of Section 3 of the Note Purchase
Agreement is amended and restated as follows:
"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 and as of the Third
Amendment Effective Date and each Additional Note Advance Date as
follows:"
B. Subsection 3.1B of the Note Purchase Agreement is amended
and restated as follows:
"B. SUBSIDIARIES AND JOINT VENTURES. All of the Subsidiaries
and Joint Ventures of SGC as of the Third Amendment 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 Third Amendment Effective Date, the ownership interest of SGC
and each of its Subsidiaries in each of their respective Subsidiaries
and Joint Ventures."
C. Subsection 3.1C of the Note Purchase Agreement is amended
and restated as follows:
"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 as of the Effective
Date 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 as of
the Effective Date. 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."
15
D. Subsection 3.1D of the Note Purchase Agreement is amended
and restated as follows:
"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 $3,967,240 as of the Third Amendment Effective Date. As of the
November 30, 1999, SGC and its Subsidiaries are not liable with respect
to Indebtedness individually in excess of $100,000 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 ▇▇▇▇▇▇▇▇▇ Property Documents and the
Wet `N' Wild Documents."
E. Subsection 3.2C of the Note Purchase Agreement is amended
and restated as follows:
"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 federal, state or other Governmental
Authority or regulatory body, including but not limited to any Gaming
Board; provided that the execution and delivery of the SGC Pledge
Agreement requires the approval of certain Gaming Authorities as
contemplated by subsection 2.5H."
F. The first sentence of Subsection 3.3 of the Note Purchase
Agreement is amended and restated as follows:
"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, 1998, 1997 and
1996 and for the fiscal quarter ended June 30, 1998."
G. Subsection 3.4 of the Note Purchase Agreement is amended
and restated as follows:
"3.4 NO MATERIAL ADVERSE CHANGE; NO RESTRICTED JUNIOR
PAYMENTS. Since September 30, 1999, 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, 1999, neither 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."
16
H. The first sentence of Subsection 3.6 of the Note Purchase
Agreement is amended and restated as follows:
"Except as disclosed in SGC's Annual Report on Form 10-K for
the fiscal year ending September 30, 1998 and Quarterly Reports on Form
10-Q for the quarters ended December 31, 1998, March 31, 1999 and June
30, 1999, and Current Reports on Form 8-K dated October 23, 1998,
November 16, 1998, November 27, 1998, December 1, 1998, January 14,
1999, February 23, 1999, March 12, 1999, March 21, 1999, May 3, 1999,
September 1, 1999 and November 15, 1999, 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."
1.4 AMENDMENTS TO SECTION 5.
A. The Note Purchase Agreement is hereby amended by replacing
the reference to "Tranche A Notes or the Tranche B Notes" in subsection 5.2 with
the word "Notes".
B. The Note Purchase Agreement is hereby amended by replacing
the reference to "either the Tranche A Notes or the Tranche B Notes" in
subsection 5.7 with "the Notes".
C. The Note Purchase Agreement is hereby amended by amending
and restating subsection 5.9 as follows:
"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."
D. The Note Purchase Agreement is hereby amended by amending
and restating subsection 5.10 as follows:
"5.10 USE OF PROCEEDS. Company shall use the cash proceeds
of the Station Casinos Note and, on each Additional Notes Advance
Date, the Additional Notes, to acquire Pioneer Bonds (the
"Additional Pioneer Bonds") through the Additional Collateral
Account or to deposit an amount equal to the Applied SFHI Note
Proceeds (as defined below) in the Additional Collateral Account;
PROVIDED that if the Company has dividended to SGC less than the
amount permitted by subsection 6.1(b), has received payment of all
principal and interest evidenced by the Station Casinos Note and has
applied all of the proceeds of the Station Casinos Note either to
acquire Pioneer Bonds, pay principal or interest due on the Notes or
dividend cash to SGC pursuant to subsection 6.1(b), then Company
shall be permitted to dividend all or a portion of the cash proceeds
17
of subsequent advances evidenced by the Additional Notes to SGC to
the extent permitted under subsection 6.1(b), subject to all of the
limitations set forth in subsection 6.1; it being understood that,
under no circumstances, shall Company be entitled to dividend to SGC
more than $7,500,000 in the aggregate pursuant to subsection 6.1(b),
whether satisfied from cash received from the Station Casinos Note,
Pioneer Bonds, the Additional Notes, or otherwise.
So long as no Event of Default or Potential Event of Default
(other than any Potential Event of Default arising as a result of (i)
the Pioneer Bankruptcy, (ii) the failure by (a) Pioneer Finance or
Pioneer Hotel to pay the Pioneer Bonds at maturity or (b) SGC to pay
the guaranty of Pioneer Bonds, or (iii) the cross-default under the
SFHI 9.5% Notes which has resulted from the matters described in
clauses (i) and (ii)) has occurred and is continuing, Company shall be
entitled to apply up to $1,400,000 of the proceeds of the SFHI Notes
pledged as Collateral to acquire Pioneer Bonds; PROVIDED that any such
proceeds that are so applied (the "Applied SFHI Note Proceeds") must be
redeposited into the Additional Collateral Account prior to or
concurrent with the date of the first advance evidenced by the
Additional Notes from sources other than the SFHI Notes or any proceeds
thereof."
E. The Note Purchase Agreement is hereby amended by amending
and restating paragraphs (i), (ii) and (iii) of subsection 5.12 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, the Pioneer Bonds and
the Station Casinos Note owned by Company as further provided herein,
(b) entering into the Note Purchase Agreement, other Basic Documents,
the ▇▇▇▇▇▇▇▇▇ 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 a
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, the SFHI Notes, the Pioneer
Bonds and the Station Casinos Note, (b) the capital stock of the
▇▇▇▇▇▇▇▇▇ Subsidiary and (c) incidental personal property necessary for
and used or to be used in connection with the ownership of the
Facilities. The ▇▇▇▇▇▇▇▇▇ Subsidiary does not own and will not own any
asset or property.
(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 Notes, the Pioneer Bonds and the Station Casinos
Note, as further provided herein or as expressly permitted hereby."
18
1.5 AMENDMENTS TO SECTION 6.
A. The Note Purchase Agreement is hereby amended by amending
and restating subsection 6.1 as follows:
"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 (other than any Potential
Event of Default arising as a result of (i) the Pioneer Bankruptcy,
(ii) the failure by (a) Pioneer Finance or Pioneer Hotel to pay the
Pioneer Bonds at maturity or (b) SGC to pay the guaranty of the
Pioneer Bonds, or (iii) the cross-default under the 9 1/2 % Notes
due 2000 of SFHI which has resulted from the matters described in
(i) and (ii)) has occurred and is continuing, (a) Company may
dividend or otherwise distribute SFHI Notes to SGC to the extent
expressly permitted under subsection 2.5F and may dividend or
otherwise distribute Pioneer Bonds to SGC to the extent expressly
permitted under subsection 2.5H and only in connection with the
Collateral Agent's receipt of the pledges and Government Authority
approvals contemplated by subsection 2.5H, and (b) Company may
dividend or otherwise distribute to SGC (x) cash received by the
Company from Station Casinos under the Station Casinos Note or, to
the extent permitted by subsection 5.10, the proceeds of the
Additional Notes and/or (y) Pioneer Bonds; PROVIDED that the amount
dividended or distributed pursuant to this clause (b) shall not
exceed $7,500,000 in the aggregate; it being understood that, for
purposes of this clause (b), any Pioneer Bonds dividended or
distributed shall be valued at the sum of the purchase price thereof
and the amount of all accrued and unpaid interest on such Pioneer
Bonds; PROVIDED, FURTHER, that SGC shall only use any such Station
Casinos Note payments it receives (1) to contribute such cash to
Pioneer Finance for the sole purpose of allowing Pioneer Finance to
acquire Pioneer Bonds, (2) to make a payment to SFHI in an amount
not greater than the value of SFHI's obligations under the
Non-Competition Agreement and the ROFR Agreement (as such terms are
defined in the ▇▇▇▇▇▇▇▇▇ Sale Agreement) as demonstrated to the
satisfaction of the Collateral Agent or (3) to pay principal due
under the Sierra Note as a result of the retirement of Pioneer Bonds
pursuant to clauses (a) or (1) of this Section 6.1 in an amount not
to exceed the percentage of the principal amount of the outstanding
Sierra Note that is equal to the percentage of the principal amount
of Pioneer Bonds retired pursuant to clause (b) and (x) of this
subsection 6.1.
SGC and Company will not, and will not permit any of their
Subsidiaries to, directly or indirectly, make or pay any ▇▇▇▇▇▇
Family Payments except as set forth on Schedule 1 to the Third
Amendment and except that ▇▇▇▇ ▇▇▇▇▇▇ and the other members of the
▇▇▇▇▇▇ Family described in Schedule 1 to the Third Amendment 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 on Schedule 1 to the Third Amendment and
payable generally to other employees or executive officers of SGC
and its Subsidiaries."
19
B. The Note Purchase Agreement is hereby amended by amending
and restating subsection 6.5 as follows:
"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, the Pioneer Bonds and the Wet `N Wild Facility as
expressly contemplated by and subject to subsections 2.4E, 2.5B(ii),
2.5C(iv), 2.5C(v), 2.5F or 2.5H; PROVIDED, HOWEVER, that nothing in
this subsection 6.4 shall prohibit the grant or creation of any Lien
permitted under subsection 6.2."
C. The Note Purchase Agreement is hereby amended by amending
and restating subsection 6.7 as follows:
"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 Notes, which consent shall not be
unreasonably withheld and shall not amend, modify, supplement,
extend, renew, alter or otherwise change the terms of the Station
Casinos Note."
D. The Note Purchase Agreement is hereby amended by amending
and restating subsection 6.10 as follows:
"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 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 Wet `N' Wild
Facility. SGC and Company will not permit the ▇▇▇▇▇▇▇▇▇ Subsidiary
to engage in any business."
E. The Note Purchase Agreement is hereby amended by amending
and restating subsection 6.11 as follows:
"6.11 STATION CASINOS NOTE PROCEEDS AND RELATED MATTERS.
The Company will cause all payments under the Station Casinos Note
(such payments, the "Station Casinos Note Payments") to be deposited
directly into the Additional Collateral Account and the Company and
the Collateral Agent agree that such amounts shall be subject to the
20
terms of the Additional Collateral Account Agreement and the
Additional Collateral Account Letter. The Company shall be entitled
to apply the Station Casino Note Payments (a) to repay the Notes in
accordance with Section 2.5 hereof, (b) to purchase SFHI Notes, the
9.50% Notes issued by SFHI due December 15, 2000 (the "SFHI 9.5%
Notes") or the Pioneer Bonds provided that such SFHI Notes, SFHI
9.5% Notes or Pioneer Bonds, as the case may be, are immediately
pledged to the Collateral Agent pursuant to arrangements
satisfactory to the Collateral Agent, or (c) to dividend or
distribute up to $7,500,000 of the Station Casino Note Payments to
SGC to the extent permitted pursuant to Section 6.1(b) hereof. In
the event Station Casinos fails to make any payment or otherwise
fails to comply with any provision under the Station Casinos Note or
asserts any right of set off, offset, counterclaim or similar right
under the Station Casinos Note, SGC and the Company shall promptly
notify the Collateral Agent in writing thereof which notice shall
include a description of the actions that SGC and the Company
intends to take with respect thereto. In the event the Company
desires to dividend or distribute Station Casino Note Payments or
Pioneer Bonds to SGC and such dividend or distribution is permitted
pursuant to Section 6.1(b), Company shall give written notice to the
Collateral Agent and the Collateral Agent shall promptly prepare
written instructions to release such Collateral from the Additional
Collateral Account or such other account in which such Collateral is
held.
Collateral Agent and the Holders shall have a first
priority security interest pursuant to the Company Security
Agreement and the other Basic Documents in all of the Company's
right, title and interest now existing or hereinafter arising under
the ▇▇▇▇▇▇▇▇▇ Sale Agreement and the other ▇▇▇▇▇▇▇▇▇ Documents,
including but not limited to the Station Casino Note, all Station
Casinos Note Payments, all SFHI Notes, SFHI 9.5% Notes or Pioneer
Bonds acquired by the Company and all proceeds of every nature of
any of the foregoing, and, notwithstanding anything herein to the
contrary, shall have all rights and remedies with respect thereto
under the Basic Documents."
1.6 AMENDMENTS TO SECTION 7.
A. The Note Purchase Agreement is hereby amended by amending
and restating subsection 7.2 as follows:
"7.2 DEFAULT IN OTHER AGREEMENTS. (i) Failure of any Credit
Party or any of their respective Subsidiaries (other than, prior to
the Pioneer Plan Effective Date, Pioneer Hotel or Pioneer Finance,
or SGC with respect to its guaranty of the Pioneer Bonds) 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 (other
than, prior to the Pioneer Plan Effective Date, Pioneer Hotel or
Pioneer Finance, or SGC with respect to its guaranty of the Pioneer
Bonds) 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
21
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 ▇▇▇▇▇▇▇▇▇ Property Document if such breach or default is
not cured within any applicable grace period;"
B. The Note Purchase Agreement is hereby amended by amending
and restating subsection 7.6 as follows:
"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 and its successors, and from and after the Pioneer Plan
Effective Date, shall include Pioneer Finance and Pioneer Hotel and
their respective successors; or"
C. The Note Purchase Agreement is hereby amended by (i)
deleting the parenthetical "(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)" from the first paragraph of subsection 7.14; (ii) deleting the
phrase "or such other Holders specified in the Intercreditor Agreement" from
the second and third paragraphs of subsection 7.14; and (iii) replacing the
reference to "Tranche B Notes" in the last sentence of the second paragraph
of subsection 7.14 with the word "Notes".
1.7 AMENDMENT TO SUBSECTION 8.1. The Note Purchase
Agreement is hereby amended by deleting the references to "and the
Intercreditor Agreement" and "or the Intercreditor Agreement" in subsection
8.1.
1.8 AMENDMENT TO SUBSECTION 8.2. The Note Purchase
Agreement is hereby amended by (i) deleting the phrase "Except as otherwise
provided in the Intercreditor Agreement," in the second sentence of
subsection 8.2 and (ii) deleting references to "or the Intercreditor
Agreement" in subsection 8.2.
22
1.9 AMENDMENT TO SUBSECTION 8.3. The Note Purchase
Agreement is hereby amended by deleting the phrase "except as otherwise
provided in the Intercreditor Agreement" in subsection 8.3.
1.10 AMENDMENT TO SUBSECTION 8.9. The Note Purchase
Agreement is hereby amended by replacing the reference to "Tranche B Notes"
in subsection 8.9 with the word "Notes".
1.11 AMENDMENTS TO SECTION 9.
A. The Note Purchase Agreement is hereby amended by
replacing references to "either the Tranche A Notes or the Tranche B Notes"
in subsection 9.2 with "the Notes".
B. The Note Purchase Agreement is hereby amended by adding
an additional sentence to the end of subsection 9.3 as follows:
"In furtherance but not in limitation of the foregoing, SGC
and the Company jointly and severally agree that this subsection 9.3
shall fully apply to any investigative, administrative or judicial
proceeding commenced or threatened by any Person relating in any way
to the Pioneer Bankruptcy or to any bankruptcy or insolvency of SGC
or its Affiliates or to the acquisition by the Company or any of its
Affiliates of any Indebtedness, including, but not limited to, any
acquisition of the SFHI Notes or Pioneer Bonds."
C. The Note Purchase Agreement is hereby amended by amending
and restating subsection 9.4 as follows:
"9.4 RATABLE SHARING.
A. The Holders of the 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 Notes hereunder or
under the other Basic Document (collectively, the "AGGREGATE AMOUNTS
DUE" to such Holder) which is greater than the proportion received
by any other Holder of Notes in respect of the Aggregate Amounts Due
to such other Holder, then the Holder receiving such proportionately
greater payment shall (i) notify each other Holder of 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
Amounts Due to the other Holders of Notes so that all such
recoveries of Aggregate Amounts Due shall be shared by all Holders
of Notes in proportion to the Aggregate 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
23
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 subsection 9.4A above, 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."
D. The Note Purchase Agreement is hereby amended by replacing
the reference to "Tranche B Notes" in subsection 9.14 with the word "Notes".
E. The Note Purchase Agreement is hereby amended by amending
and restating subsection 9.19 as follows:
"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 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 Pioneer Bonds, the
SFHI Notes and the Wet `N' Wild Facility from the liens created by
the Wet `N' Wild Deed of Trust and the other Basic Documents."
1.12 SUBSTITUTION OF SCHEDULES. The parties hereto agree
that Schedules 3.1B, 3.1D and 3.8 attached to the Note Purchase Agreement
shall be amended, restated and replaced in their entirety by Schedules 3.1B,
3.1D and 3.8 attached hereto.
SECTION 2 LIMITATION OF AMENDMENT
Without limiting the generality of the provisions of
subsection 9.1 of the Note Purchase Agreement, the amendments set forth above
shall be limited precisely by its terms, shall not have any force or effect
with respect to any other matter except as expressly provided above, and
nothing in this Amendment shall be deemed to:
24
(a) constitute a waiver or modification of any other term,
provision or condition of the Note Purchase Agreement, any other
Basic Documents or any other instrument or agreement referred to
therein; or
(b) prejudice any right or remedy that the Collateral Agent
or any Holder may now have (except to the extent such right or
remedy was based upon existing defaults that will not exist after
giving effect to this Amendment) or may have in the future under or
in connection with the Note Purchase Agreement, any Basic Documents
or any other instrument or agreement referred to therein.
Except as expressly set forth herein, the terms, provisions
and conditions of the Note Purchase Agreement and the other Basic Documents
shall remain in full force and effect and in all other respects are hereby
ratified and confirmed.
SECTION 3 CONDITIONS TO THE EFFECTIVENESS OF THIS AMENDMENT
Section 1 of this Amendment shall become effective upon the
satisfaction of the following conditions on or prior to December 20, 1999
(the date of satisfaction of such conditions being referred to herein as the
"THIRD AMENDMENT EFFECTIVE Date"):
A. SGC and the Company shall have delivered to the
Collateral Agent on behalf of the Holders the following:
1. Resolutions of each Credit Party's Board of Directors or
the executive committee thereof approving and authorizing the
execution, delivery, and performance of this Amendment, the Notes
and other amendments to the Basic Documents entered into in
connection herewith, certified as of the Third Amendment Effective
Date by its corporate secretary or an assistant secretary as being
in full force and effect without modification or amendment;
2. Signature and incumbency certificates of each Credit
Party's officers executing this Amendment, the Notes and other
amendments to the Basic Documents entered into by such Credit Party;
3. Originals of this Amendment duly executed by SGC, the
Company and the other Credit Parties;
4. Originals of (i) the Third Amendment to Deed of Trust,
Fixture Filing and Financing Statement and Security Agreement with
Assignment of Rents, (ii) the Third Amendment to Company Security
Agreement, (iii) the Third Amendment to Environmental Indemnity
Agreement and (iv) the Third Amendment to Subordination,
Non-Disturbance and Attornment Agreement, duly executed by the
parties thereto;
5. The original executed Restated Notes and Additional
Notes in the form set forth hereto as Exhibits III and IV,
respectively, endorsed in a manner satisfactory to the Collateral
Agent; and
25
6. Opinions of counsel of ▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP and
▇▇▇▇▇ & ▇▇▇▇▇▇ in the forms set forth hereto as Exhibits V and VI,
respectively.
B. Collateral Agent shall have received a CLTA 110.5
Endorsement and a Revolving Credit Endorsement to the title policy issued in
connection with the funding of the Existing Notes (the "WET `N' WILD TITLE
POLICY") providing for the modification to the Company Deed of Trust pursuant
to this Third Amendment and otherwise in the form attached hereto as Exhibit
VII, which Endorsements are to be issued by ▇▇▇▇▇▇▇ Title.
C. All accrued and unpaid interest on the Tranche A Notes
and the Tranche B Notes as of December 15, 1999 and all outstanding legal
fees of O'Melveny & ▇▇▇▇▇ LLP, counsel to the Holders, shall be paid in full
by wire transfer of immediately available funds.
D. All corporate and other proceedings taken or to be taken
in connection with the this Third Amendment and all documents incidental
hereto not previously found acceptable by the Collateral Agent and its
counsel shall be satisfactory in form and substance to the Collateral Agent
and such counsel, and the Collateral Agent and its counsel shall have
received all such counterpart originals or certified copies of such documents
and opinions as the Collateral Agent may reasonably request.
E. In the event that the Company does not deliver to the
Collateral Agent a copy of the Third Amendment to Subordination;
Non-Disturbance and Attornment Agreement duly executed by Wet `N' Wild Nevada
on or prior to the satisfaction of all of the conditions set forth in this
Section 3, the Third Amendment Effective Date shall nevertheless occur and
the Company shall deliver the Third Amendment to Subordination;
Non-Disturbance and Attornment Agreement duly executed by Wet `N' Wild Nevada
to the Collateral Agent on or prior to January 5, 2000 or an Event of Default
shall be deemed to have occurred.
SECTION 4 REPRESENTATIONS AND WARRANTIES
In order to induce SunAmerica and Anchor to enter into this
Amendment and to amend the Note Purchase Agreement in the manner provided
herein, each of SGC and the Company represents and warrants to SunAmerica and
Anchor that the following statements are true, correct and complete:
A. CORPORATE POWER AND AUTHORITY. Each Credit Party has all
requisite corporate power and authority to enter into this Amendment and to
carry out the transactions contemplated by, and perform its obligations
under, the Note Purchase Agreement, as amended by this Amendment (the
"AMENDED AGREEMENT").
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery
of this Amendment and the performance of the Amended Agreement have been duly
authorized by all necessary corporate action on the part of each Credit Party.
26
C. NO CONFLICT. The execution and delivery by each Credit
Party of this Amendment and the performance by each Credit Party of the
Amended Agreement and other Basic Documents do not and will not (i) violate
any provision of any law or any governmental rule or regulation applicable to
any Credit Party, the Certificate or Articles of Incorporation or Bylaws of
any Credit Party or any order, judgment or decree of any court or other
agency of government binding on any Credit Party, (ii) conflict with, result
in a breach of or constitute (with due notice or lapse of time or both) a
default under any material contractual obligation of any Credit Party, (iii)
result in or require the creation or imposition of any Lien upon any of the
properties or assets of any Credit Party (other than Liens created under any
of the Basic Documents in favor of the Collateral Agent and the Holders), or
(iv) require any approval of stockholders or any approval or consent of any
Person under any material contractual obligation of any Credit Party.
D. GOVERNMENTAL CONSENTS. The execution and delivery by
each Credit Party of this Amendment and the performance by each Credit Party
of the Amended Agreement and the other Basic Documents do not and will not
require any registration with, consent or approval of, or notice to, or other
action to, with or by, any federal, state or other governmental authority or
regulatory body.
E. BINDING OBLIGATION. This Amendment, the Amended
Agreement and the other Basic Documents have been duly executed and delivered
by each Credit Party and are the legally valid and binding obligations of
each Credit Party enforceable against each Credit Party in accordance with
their 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.
F. ABSENCE OF DEFAULT. No event will result from the
consummation of the transactions contemplated by this Amendment that would
constitute an Event of Default or a Potential Event of Default.
In order to induce SGC and the Company to enter into this
Amendment and to amend the Note Purchase Agreement in the manner provided
herein, each of SunAmerica and Anchor represents and warrants to SGC and the
Company that on the Third Amendment Effective Date, each of SunAmerica and
Anchor 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 5 ACKNOWLEDGEMENT AND CONSENT
SGC is a party to the Note Purchase Agreement and certain
other Basic Documents, including the Amended Agreement and SGC Guaranty,
pursuant to which, among other things, SGC has guarantied the Obligations of
the Company. Sahara Resorts is a party to the Sahara Resorts Guaranty and the
Sahara Resorts Pledge Agreement, pursuant to which, among other things,
Sahara Resorts has (i) guarantied the Obligations and (ii) created Liens in
favor of SunAmerica on certain Collateral to secure the obligations of Sahara
Resorts under the
27
Basic Documents to which Sahara Resorts is party. Casino Properties is a
party to the Casino Properties Guaranty and the Casino Properties Pledge
Agreement, pursuant to which, among other things, Casino Properties has (i)
guarantied the Obligations and (ii) created Liens in favor of SunAmerica on
certain Collateral to secure the obligations of Casino Properties under the
Basic Documents to which Casino Properties is party. Hacienda Hawaiian is
party to the Hacienda Hawaiian Guaranty and the Hacienda Hawaiian Pledge
Agreement, pursuant to which, among other things, Hacienda Hawaiian has (i)
guarantied the Obligations and (ii) created Liens in favor of SunAmerica on
certain Collateral to secure the obligations of Hacienda Hawaiian under the
Basic Documents to which Hacienda Hawaiian is party. SGC, Sahara Resorts,
Casino Properties sand Hacienda Hawaiian are collectively referred to herein
as the "CREDIT SUPPORT PARTIES", and the Guaranties, the Sahara Resorts
Pledge Agreement, the Casino Properties Pledge Agreement and Hacienda
Hawaiian Pledge Agreement are collectively referred to herein as the "CREDIT
SUPPORT DOCUMENTS".
Each Credit Support Party hereby acknowledges that it has
reviewed the terms and provisions of the Note Purchase Agreement, this
Amendment and the other Basic Documents and consents to the amendments and
modifications of the Note Purchase Agreement effected pursuant to this
Amendment. Each Credit Support Party hereby confirms that each Credit Support
Document to which it is a party or otherwise bound and all Collateral
encumbered thereby will continue to guaranty or secure, as the case may be,
to the fullest extent possible the payment and performance of all
"Obligations," "Guaranteed Obligations" and "Secured Obligations," as the
case may be (in each case as such terms are defined in the applicable Credit
Support Document), including without limitation the payment and performance
of all such "Obligations," "Guaranteed Obligations" and "Secured
Obligations," as the case may be, in respect of the Obligations of Company
now or hereafter existing under or in respect of the Amended Agreement.
Each Credit Support Party acknowledges and agrees that any
of the Credit Support Documents to which it is a party or otherwise bound
shall continue in full force and effect and that all of its obligations
thereunder shall be valid and enforceable and shall not be impaired or
limited by the execution or effectiveness of this Amendment or any other
Basic Document or agreement. Each Credit Support Party represents and
warrants that all representations and warranties with respect to such Credit
Support Parties contained in the Amended Agreement and the Credit Support
Documents to which it is a party or otherwise bound are true, correct and
complete in all material respects on and as of the date of this Amendment to
the same extent as though made on and as of that date, except to the extent
such representations and warranties specifically relate to an earlier date,
in which case they were true, correct and complete in all material respects
on and as of such earlier date.
Each Credit Support Party (other than SGC) acknowledges and
agrees that (i) notwithstanding the conditions to effectiveness set forth in
this Amendment, such Credit Support Party is not required by the terms of the
Note Purchase Agreement or any other Basic Document to consent to the
amendments to the Note Purchase Agreement effected pursuant to this Amendment
and (ii) nothing in the Note Purchase Agreement, this Amendment or any other
Note Purchase Document shall be deemed to require the consent of such Credit
Support Party to any future amendments to the Note Purchase Agreement.
28
SECTION 6 RELEASE
Company and each Credit Support Party, its
successors-in-title, legal representatives, assignees and heirs, as
applicable, and, to the extent the same is claimed by right of, through or
under Company or any such Credit Support Party, its past, present and future
employees, agents, representatives, officers, directors, shareholders,
parents, subsidiaries, affiliates and trustees, and each of them (the
"RELEASING PARTIES") does hereby forever remise, release and discharge the
Collateral Agent and each Holder, and the Collateral Agent's and each
Holder's successors-in-title, legal representatives and assignees, past,
present and future officers, directors, shareholders, trustees, agents,
employees, parents, subsidiaries, affiliates, consultants, experts, advisors,
attorneys and other professionals, as well as any and all persons and
entities to whom the Collateral Agent or any Holder would be liable if such
persons or entities were found to be liable to Company or any Credit Support
Party or any of them, and each of them (collectively hereinafter the
"RELEASED PARTIES"), from any and all manner of action and actions, cause and
causes of action, claims, counterclaims, suits, debts, dues, sums of money,
accounts, reckonings, bonds, bills, specialties, covenants, contracts,
controversies, damages, judgments, expenses, executions, liens, claims of
liens, claims of costs, penalties, attorneys' fees, or any other
compensation, recovery or relief on account of any liability, obligation,
demand or cause of action of whatever nature relating to, arising out of or
in connection with the Note Purchase Agreement, this Amendment, the Amended
Agreement and the other Basic Documents or any Events of Default or Potential
Events of Default, including but not limited to, acts, omissions to act,
actions, negotiations, discussions and events resulting in the finalization
and execution of this Amendment or any other Basic Documents, as, among and
between any Releasing Party and any Released Party, such claims whether now
accrued and whether now known or hereafter discovered, from the beginning of
time through the date hereof, and specifically including, without any
limitation, any claims of liability asserted or which could have been
asserted with respect to, arising out of or in any manner whatsoever
connected directly or indirectly with any "lender liability-type" claim (the
"RELEASE"). Notwithstanding anything herein to the contrary, this Release
will not extend to and will not affect any claims which may be asserted
pursuant to events, circumstances, acts or omissions after the date of this
Amendment.
It is a further condition of the consideration hereof and
is the intention of the Company and each Credit Support Party in executing
this Amendment that the same shall be effective as a bar as to each and every
claim, demand and cause of action specified in this Section 6 and, in
furtherance of this intention, Company and each Credit Support Party hereby
expressly waives any and all rights or benefits conferred by the provisions
of any applicable law, including but not limited to SECTION 1542 OF THE
CALIFORNIA CIVIL CODE, and expressly consents that this Amendment shall be
given full force and effect according to each and all of its express terms
and conditions, including those relating to unknown and unsuspected claims,
demands and causes of actions, if any, as well as those relating to any other
claims, demands and causes of actions hereinabove specified. SECTION 1542
provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE
TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
29
Company and each Credit Support Party acknowledges that it may hereafter
discover claims or facts in addition to or different from those which Company
or any Credit Support Party now knows or believes to exist with respect to
the subject matter of this Agreement described in this Section 6 and which,
if known or suspected at the time of executing this Amendment, may have
materially affected this Release. Nevertheless, Company and each Credit
Support Party hereby waives any right, claim or cause of action that might
arise as a result of such different or additional claims or facts. Company
and each Credit Party acknowledges that it understands the significance and
consequence of such release and such specific waiver herein, including such
waivers of SECTION 1542.
The parties agree that the references to Section 1542 of
the California Civil Code herein are made in an abundance of caution and no
inference may be drawn to that section, or any other aspect of California
law, governs this Amendment, the Note Purchase Agreement or any other Basic
Document.
Nothing in this Section 6 or in this Amendment is, is
intended to be, or should be construed or constituting a release of any
rights or claims that are or may be held by the Released Parties against the
Releasing Parties.
SECTION 7 MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE NOTE PURCHASE AGREEMENT
AND THE OTHER BASIC DOCUMENTS.
(i) On and after the date of this Amendment, each reference in
the Note Purchase Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import referring to the
Note Purchase Agreement, and each reference in the other Basic
Documents to the "Note Purchase Agreement", "thereunder",
"thereof" or words of like import referring to the Note
Purchase Agreement shall mean and be a reference to the
Amended Agreement.
(ii) Except as specifically amended by this Amendment, the
Note Purchase Agreement and the other Basic Documents shall
remain in full force and effect and are hereby ratified and
confirmed.
(iii) The execution, delivery and performance of this
Amendment shall not, except as expressly provided herein,
constitute a waiver of any provision of, or operate as a
waiver of any right, power or remedy of SunAmerica under, the
Note Purchase Agreement or any of the other Basic Documents.
B. FEES AND EXPENSES. SGC and Company acknowledge that all
costs, fees and expenses as described in subsection 9.2 of the Note Purchase
Agreement incurred by any Holder and its counsel with respect to this
Amendment and the documents and transactions contemplated hereby shall be for
the account of Company.
30
C. HEADINGS. Section and subsection headings in this
Amendment are included herein for convenience of reference only and shall not
constitute a part of this Amendment for any other purpose or be given any
substantive effect.
D. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEVADA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. COUNTERPARTS; EFFECTIVENESS. This Amendment 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 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 Amendment
shall become effective upon the execution of a counterpart hereof by Company,
SunAmerica, Anchor and each of the Credit Support Parties and receipt by
Company and SunAmerica, Anchor of written or telephonic notification of such
execution and authorization of delivery thereof.
31
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
SANTA FE GAMING CORPORATION,
individually and as a Credit Support Party
By: /s/ ▇▇▇▇▇▇ ▇. Land
---------------------------------------------
Title: Senior Vice President and Chief Financial
Officer
SAHARA LAS VEGAS CORP.
By: /s/ ▇▇▇▇▇▇ ▇. Land
---------------------------------------------
Title: Senior Vice President and Chief Financial
Officer
SAHARA RESORTS (for purposes of Sections 5
and 6 only), as a Credit Support
Party
By: /s/ ▇▇▇▇▇▇ ▇. Land
---------------------------------------------
Title: Senior Vice President and Chief Financial
Officer
CASINO PROPERTIES, INC. (for purposes of
Sections 5 and 6 only), as a Credit Support Party
By: By: /s/ ▇▇▇▇▇▇ ▇. Land
---------------------------------------------
Title: Senior Vice President and Chief Financial
Officer
HACIENDA HAWAIIAN PROPERTIES, INC.
(for purposes of Sections 5 and 6 only), as a Credit
Support Party
By: /s/ ▇▇▇▇▇▇ ▇. Land
---------------------------------------------
Title: Senior Vice President and Chief Financial
Officer
S-1
SUNAMERICA LIFE INSURANCE COMPANY,
as Holder and as Collateral Agent
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------------
Title: Authorized Agent
ANCHOR NATIONAL LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------------
Title: Authorized Agent
S-2