1
Exhibit 4.8
MORTGAGE NOTES PROCEEDS AGREEMENT
MORTGAGE NOTES PROCEEDS AGREEMENT (this "Agreement"), dated as
of December 30, 1997, among THE RESORT AT ▇▇▇▇▇▇▇▇▇, LIMITED PARTNERSHIP (the
"Partnership"), THE RESORT AT ▇▇▇▇▇▇▇▇▇, INC. ("▇▇▇▇▇▇▇▇▇, Inc.", and together
with the Partnership, the "Assignors"), NATIONAL WESTMINSTER BANK PLC, as
Administrative Agent under the Credit Agreement referred to below (in such
capacity, the "Administrative Agent") and FIRST SECURITY TRUST COMPANY OF NEVADA
as Account Agent hereunder (in such capacity, the "Account Agent"). Except as
otherwise defined herein, terms used herein and defined in the Credit Agreement
(or in the Disbursement Agreement referred to therein) shall be used herein as
so defined.
W I T N E S S E T H :
WHEREAS, the Assignors, the lenders (the "Lenders") from time
to time party thereto, Gleacher Natwest, Inc., as Arranging Agent and the
Administrative Agent have entered into a Credit Agreement, dated as of December
30, 1997 (as modified or restated and in effect from time to time, the "Credit
Agreement");
WHEREAS, all proceeds of Construction Loans are required to be
directly deposited into the Mortgage Notes Proceeds Account;
WHEREAS, the amounts in the Mortgage Notes Proceeds Account
may be disbursed into the Disbursement Account from time to time upon the
satisfaction of the applicable conditions set forth in the Disbursement
Agreement;
NOW, THEREFORE, it is agreed:
SECTION 1. ESTABLISHMENT OF MORTGAGE NOTE PROCEEDS ACCOUNT;
ETC.
1.01. Establishment. The Account Agent has established in its
own name and for the benefit of the Lenders an account (Account No. 702254A)
(the "Mortgage Notes Proceeds Account") for purposes of this Agreement, which
Mortgage Notes Proceeds Account is maintained at the Account Agent's office
located at Las Vegas, Nevada (Wire transfers: First Security Bank of Nevada --
(ABA 1224 01668). Subject to the provisions of this Agreement, the Mortgage
Notes Proceeds Account shall be under the sole dominion and control of the
Account Agent and, except as set forth in Section 3.01 hereof, the Account Agent
shall have the sole right to make withdrawals from the Mortgage Notes Proceeds
Account and to exercise all rights with respect to the Collateral (as
hereinafter defined) from time to time therein.
2
1.02. Deposits to the Mortgage Notes Proceeds Account. The
Administrative Agent will transfer, in the funds received, all proceeds of
Construction Loans to the Account Agent for immediate deposit into the Mortgage
Notes Proceeds Account to be held therein until released pursuant to the
provisions of Section 3 below.
1.03. Investment of Funds. So long as any amounts remain in
the Mortgage Notes Proceeds Account, the Account Agent will from time to time,
at the request of the General Partner, invest funds on deposit in the Mortgage
Notes Proceeds Account in Cash Equivalents. All investments made pursuant to
this Section 1.03 (and any instruments evidencing same), and all proceeds
thereof, shall be held in the Mortgage Notes Proceeds Account as part of the
Collateral. All such investments shall be made in the name of the Account Agent.
All risk of loss in respect of investments made pursuant to this Section 1.03
shall be on the Assignors.
SECTION 2. PLEDGE AND GRANT OF SECURITY INTEREST.
2.01. Pledge and Grant of Security Interest. As collateral
security to secure the full and prompt payment when due (whether at stated
maturity, by acceleration or otherwise) of the Obligations, each Assignor hereby
pledges and assigns to the Account Agent, for the benefit of the Lenders, a
continuing possessory Lien and security interest in all of the right, title and
interest of such Assignor in and to the Mortgage Notes Proceeds Account, in all
funds deposited therein, in all investments from time to time therein, and in
all cash and non-cash proceeds of any of the foregoing (collectively, the
"Collateral"), from the date of the establishment of the Mortgage Notes Proceeds
Account until the termination thereof pursuant to the terms hereof. As used
herein, "Obligations" shall mean (i) the principal of and interest on Loans made
under the Credit Agreement, (ii) all other obligations and indebtedness of each
Assignor to the Lenders now existing or hereafter incurred under, arising out
of, or in connection with the Credit Agreement and the other Credit Documents
and the due performance and compliance by each Assignor with all of the terms,
conditions and agreements contained in the Credit Agreement and the other Credit
Documents, (iii) any and all sums advanced by the Account Agent in order to
preserve the Collateral or to preserve its security interest in the Collateral,
(iv) in the event of any proceeding for the collection or enforcement of any
indebtedness, obligations or liabilities of any Assignor referred to in clauses
(i), (ii) or (iii) above, after an Event of Default shall have occurred and be
continuing, the reasonable expenses of retaking, holding, preparing for sale or
lease, selling or otherwise disposing of or realizing on the Collateral, or of
any exercise by the Account Agent of its rights hereunder, together with
reasonable attorneys' fees and court costs and (v) all amounts paid by any
Indemnitee (as hereinafter defined) as to which such Indemnitee has the right to
reimbursement under Section 9 hereof.
SECTION 3. WITHDRAWALS, APPLICATIONS AND REMEDIES.
3.01. Withdrawals. (a) Upon receipt by the Account Agent of a
Transfer Notice from the Disbursement Agent, the Account Agent shall, on the
Transfer Date or other date specified in the Transfer Notice, withdraw from the
Mortgage Notes Proceeds Account and transfer to the Disbursement Account its
Account Agent's Portion for such date (i.e., the portion, if any, of the
Requested Amount remaining unfunded after giving effect to all withdrawals from
the Subordinated Notes Proceeds Accounts and the Partnership Funds Account
resulting from
-2-
3
such Transfer Notice made pursuant to the order required by Section 2.02 of the
Disbursement Agreement).
(b) On the date which is 30 days after the Commencement Date,
all amounts in the Mortgage Notes Proceeds Account shall be withdrawn by the
Account Agent and transferred to the Administrative Agent to be applied to repay
Loans as provided in Section 3.02(A)(g) of the Credit Agreement.
(c) To the extent required to make any withdrawal pursuant to
the foregoing clauses of this Section 3.01, the Account Agent shall, and is
hereby authorized to, liquidate Cash Equivalents then on deposit in the Mortgage
Notes Proceeds Accounts pursuant to its customary practices for liquidating such
securities.
(d) Collateral may only be withdrawn as provided in clauses
(a) and (b) of this Section 3.01, Section 3.02 and/or Section 10 and shall
remain in the Mortgage Notes Proceeds Account until so withdrawn. Neither the
Account Agent nor the Administrative Agent shall have any liability whatsoever
to any Lender or any Person as a result of any release of Collateral by transfer
to the Disbursement Account following receipt by the Account Agent of a Transfer
Notice regardless of any subsequent determination that one or more of the
conditions specified herein or in the Disbursement Agreement to such withdrawal
were not satisfied.
3.02. Remedies Upon a Noticed Event of Default; Application of
Proceeds. (a) If a Noticed Event of Default (as defined in the Disbursement
Agreement) shall occur and be continuing, if and to the extent directed to do so
by the Administrative Agent (acting at the direction of the Required Lenders),
the Account Agent shall, subject to any mandatory requirements of applicable law
(including the Gaming Laws), (i) exercise in respect of all of the Collateral in
addition to other rights and remedies provided for herein or otherwise available
to it under applicable law, all of the rights and remedies of a secured party on
default under the Uniform Commercial Code then in effect in the State of New
York, (ii) liquidate all Cash Equivalents in accordance with its customary
practices for liquidating such securities and/or (iii) withdraw the Collateral,
if any, from the Mortgage Notes Proceeds Account and pay the same to the
Administrative Agent for application to the Obligations in accordance with
Section 7.4 of the Security Agreement executed by the Partnership.
(b) Each Assignor shall remain jointly and severally liable to
the extent of any deficiency between the amount of the proceeds of the
Collateral applied as provided in preceding clause (a) and the aggregate amount
of the Obligations.
SECTION 4. FURTHER ASSURANCES.
Each Assignor agrees that it will, at any time and from time
to time, at its expense, promptly execute and deliver all further agreements,
instruments and other documents and take all further action that may be
necessary or that the Account Agent or the Administrative Agent may reasonably
request in order to perfect and protect the security interest purported to be
created hereby or otherwise to enable the Account Agent to exercise and enforce
its rights and remedies hereunder.
-3-
4
SECTION 5. TRANSFERS AND OTHER LIENS.
Each Assignor agrees that it will not create or suffer to
exist any Lien upon or with respect to any Collateral except for the security
interest purported to be created hereby.
SECTION 6. ATTORNEY-IN-FACT.
Each Assignor hereby irrevocably appoints, which appointment
shall be coupled with an interest, the Account Agent its attorney-in-fact, with
full authority after the occurrence of and during the continuance of an Event of
Default, in the place and stead of such Assignor and in the name of such
Assignor or otherwise, from time to time in the Account Agent's discretion to
execute any instrument and to take any other action which the Account Agent may
deem necessary or advisable to accomplish the purposes of this Agreement or to
facilitate the assignment or other transfer by the Account Agent of any or all
of its rights hereunder.
SECTION 7. PERFORMANCE BY THE ACCOUNT AGENT.
If any Assignor fails to perform any agreement or obligation
contained herein, the Account Agent itself may perform or cause performance of
such agreement or obligation, and the expenses of the Account Agent incurred in
connection therewith shall be payable to the Account Agent by the Assignors.
SECTION 8. RESPONSIBILITY OF THE ACCOUNT AGENT AND
ADMINISTRATIVE AGENT.
(a) Neither the Account Agent nor any of their respective
directors, officers, agents, employees, affiliates, representatives and agents
shall be liable for any failure to invest or reinvest any cash in the Mortgage
Notes Proceeds Account in accordance herewith or for any losses incurred by
reason of investments made by the Account Agent pursuant to Section 1.03 hereof.
The Account Agent shall act hereunder on the same terms and conditions as are
set forth in Section 10 of the Credit Agreement (which section is incorporated
herein by reference with each reference therein to "Agent" to include the
Account Agent hereunder and by accepting the benefit hereof, the Lenders being
deemed to have agreed to such provisions as so incorporated) and shall hold the
Collateral in accordance with this Agreement and with only such obligations in
respect thereof as are expressly set forth in this Agreement.
(b) The Account Agent acknowledges and agrees that (i) all
disbursements and releases made pursuant to this Agreement shall be made by the
Account Agent irrespective of, and without deduction for, any counterclaim,
defense, recoupment or set-off and shall be final, (ii) all service charges and
fees with respect to this Agreement or the Mortgage Notes Proceeds Account shall
be paid by the Assignors, (iii) it irrevocably waives and renounces any pledge,
security interest (whether consensual, statutory or otherwise) or right of
offset or compensation that it has or may ever have for its own benefit with
respect to the Mortgage Notes Proceeds Account, (iv) it shall maintain
appropriate books and records with respect to the Mortgage Notes Proceeds
Account in which shall be recorded all transactions related thereto including,
without limitation, all disbursements hereunder and any investments made by the
Account Agent and shall
-4-
5
permit the Administrative Agent or any of its agents or representatives to
inspect and to make copies of such books and records, as is reasonable, at the
Assignors' sole cost and expense and (v) it shall exercise its customary efforts
and utilize prudence in performing its duties hereunder in accordance with the
terms of this Agreement.
SECTION 9. INDEMNITY.
9.1. Indemnity. (a) Each Assignor jointly and severally agrees
to indemnify, reimburse and hold the Account Agent and, to the extent acting
hereunder, the Administrative Agent and their respective successors, assigns,
employees, agents and servants (hereinafter in this Section 9.1 referred to
individually as "Indemnitee," and collectively as "Indemnitees") harmless from
any and all liabilities, obligations, damages, injuries, penalties, claims,
demands, actions, suits, judgments and any and all costs, expenses or
disbursements (including reasonable attorneys' fees and expenses and herein
collectively called "expenses") of whatsoever kind and nature imposed on,
asserted against or incurred by any of the Indemnitees in any way relating to or
arising out of this Agreement or any other document executed in connection
herewith or in any other way connected with the administration of the
transactions contemplated hereby or the enforcement of any of the terms of, or
the preservation of any rights under any thereof, or in any way relating to or
arising out of the use of the Collateral; provided that no Indemnitee shall be
indemnified pursuant to this Section 9.1(a) for expenses to the extent caused by
the gross negligence or willful misconduct of such Indemnitee.
(b) Without limiting the application of Section 9.1(a) hereof,
each Assignor jointly and severally agrees to pay, or reimburse the Account
Agent, for any and all fees, costs and expenses of whatever kind or nature
incurred in connection with the creation, preservation or protection of the
Account Agent's Liens on, and security interest in, the Account, including,
without limitation, all fees and taxes in connection with the recording or
filing of instruments and documents in public offices, payment or discharge of
any taxes or Liens upon or in respect of the Collateral and all other fees,
costs and expenses in connection with protecting, maintaining or preserving the
Collateral and the Account Agent's interest therein, whether through judicial
proceedings or otherwise, or in defending or prosecuting any actions, suits or
proceedings arising out of or relating to the Collateral.
(c) Without limiting the application of Section 9.1(a) or (b)
hereof, each Assignor jointly and severally agrees to pay, indemnify and hold
each Indemnitee harmless from and against any loss, costs, damages and expenses
which such Indemnitee may suffer, expend or incur in consequence of or growing
out of any misrepresentation by such Assignor in this Agreement or in any
writing contemplated by or made or delivered pursuant to or in connection with
this Agreement.
(d) If and to the extent that the obligations of any Assignor
under this Section 9.1 are unenforceable for any reason, such Assignor hereby
agrees to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
9.2. Indemnity Obligations Secured by Collateral; Survival.
Any amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute
-5-
6
Obligations secured by the Collateral. The indemnity obligations of each
Assignor contained in this Section 9 shall continue in full force and effect
notwithstanding the full payment of all Obligations.
SECTION 10. TERMINATION; RELEASE.
(a) Upon the Termination Date (as defined below), this
Agreement shall terminate, and the Account Agent will duly assign, transfer and
deliver to the Assignors (without recourse and without any representation or
warranty) the Collateral, if any, that remains in the possession of the Account
Agent and has not theretofore been sold or otherwise applied or released
pursuant to this Agreement together with any monies at the time held by the
Account Agent hereunder. As used in this Agreement, "Termination Date" shall
mean the earlier of (x) that date upon which all Commitments under the Credit
Agreement have terminated and all Loans and other Obligations have been repaid
in full and (y) that date, occurring after the Commencement Date, which is one
Business Day after the date upon which all of the amounts on deposit in the
Mortgage Notes Proceeds Account have been applied as required by Section
3.01(b).
(b) At any time that the Assignors desire that Collateral be
released as provided in the foregoing Section 10(a), the Assignors shall deliver
to the Account Agent and the Administrative Agent a certificate signed by an
Authorized Officer of the General Partner, stating that the release of the
respective Collateral is permitted pursuant to said Section 10(a). Neither the
Account Agent nor the Administrative Agent shall have any liability whatsoever
to any Lender as a result of any release of Collateral by it as permitted by
this Section 10.
SECTION 11. NOTICES, ETC.
Except as otherwise specified herein, all notices, requests,
demands or other communications to or upon the respective parties hereto shall
be deemed to have been duly given or made when delivered as follows:
(a) if to any Assignor, at:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
(b) if to the Account Agent:
First Security Trust of NV
c/o First Security Bank
Trust Dept.
▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-6-
7
(c) if to the Administrative Agent:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
SECTION 12. MISCELLANEOUS.
This Agreement and the rights and obligations of the parties
hereunder shall be construed in accordance with and be governed by the law of
the State of New York. This Agreement shall be binding upon each Assignor and
its successors and assigns and shall inure to the benefit of and be enforceable
by the Account Agent and the Administrative Agent and their successors and
assigns. The headings in this Agreement are for purposes of reference only and
shall not limit or define the meaning hereof. This Agreement may be executed in
any number of counterparts, each of which shall be an original, but all of which
shall constitute one instrument. Delivery of an executed counterpart of the
signature pages to this Agreement by telecopier shall be effective as delivery
of a manually executed counterpart of this Agreement. This Agreement shall
become effective on the date on which each of the parties shall have executed
and delivered a copy hereof. In the event that any provision of this Agreement
shall prove to be invalid or unenforceable, such provision shall be deemed to be
severable from the other provisions of this Agreement, which shall remain
binding on all parties hereto.
SECTION 13. WAIVER; AMENDMENT.
None of the terms and conditions of this Agreement may be
changed, waived, modified or varied in any manner whatsoever, except pursuant to
a writing signed by all the parties hereto, with the Administrative Agent to act
only at the direction of the Required Lenders or all Lenders, as provided in
Section 11.12 of the Credit Agreement. The Account Agent will be replaced
hereunder by a new Account Agent at such time as such new Account Agent replaces
the Disbursement Agent under and in accordance with Section 13 of the
Disbursement Agreement. Upon the effectiveness of such replacement, the original
Account Agent will transfer to the new Mortgage Notes Proceeds Account
established by the new Account Agent all amounts on deposit in the original
Mortgage Notes Proceeds Account.
-7-
8
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered by their duly authorized representatives,
as of the date first above written.
THE RESORT AT ▇▇▇▇▇▇▇▇▇, LIMITED
PARTNERSHIP, as an Assignor
By:________________________________
its General Partner
By:________________________________
Title:
THE RESORT AT ▇▇▇▇▇▇▇▇▇, INC.,
as an Assignor
By:________________________________
Title
FIRST SECURITY TRUST COMPANY OF
NEVADA as Account Agent
By:________________________________
Title:
NATIONAL WESTMINSTER BANK PLC,
as Administrative Agent
By:________________________________
Title: