MODIFICATION OF SUBORDINATED DEED OF TRUST
This MODIFICATION OF SUBORDINATED DEED OF TRUST ("Modification"), is
entered into as of March 3, 1997, by and among FOUR QUEENS, INC., a Nevada
corporation ("Trustor") and FIRST TRUST NATIONAL ASSOCIATION, a national
association in its capacity as Trustee under the Amended and Restated Indenture
referred to in Paragraph F below ("Beneficiary"). All capitalized words not
otherwise defined herein are used as defined in the Amended and Restated
Indenture referred to in Paragraph F below.
Factual Background
A. Trustor executed a certain Deed of Trust, Assignment of Rents, and
Security Agreement in favor of Beneficiary dated as of October 8, 1993 (the
"Deed of Trust") which was recorded in the Official Records of Xxxxx County,
Nevada (the "Official Records") on October 8, 1993 in Book 931008 Document No.
0554. In the Deed of Trust, Trustor granted in trust for the benefit of
Beneficiary and granted Beneficiary a security interest in certain real and
personal property as identified therein (the "Property").
B. The Deed of Trust secures the "Indenture Obligations," as defined in
that certain Indenture dated as of October 8, 1993 by and among Elsinore
Corporation, a Nevada corporation (the "Company"), certain Guarantors named
therein (including Trustor), and Beneficiary (the "Original Indenture").
Pursuant to the Original Indenture, the Company issued the Original Notes in the
aggregate principal amount of $60,000,000, bearing interest at 12 1/2% with a
stated maturity date of October 1, 2000.
C. The Company, Guarantors, and the Senior Noteholders entered into a
certain Note and Stock Purchase Agreement dated October 11, 1994, whereby the
Company issued the Senior Notes, pursuant to a Waiver of Compliance dated as of
October 13, 1994, executed by Beneficiary, the Company, and the Guarantors.
Trustor executed a certain Deed of Trust, Assignment of Rents, and Security
Agreement in favor of the Senior Noteholders as beneficiary dated October 13,
1994 which was recorded in the Official Records on October 14, 1994 in Book
941014 Document No. 00611 (the "Senior Deed of Trust") in which Trustor granted
in trust for the benefit of the Senior Noteholders and granted the Senior
Noteholders a security interest in the Property to secure certain obligations
under the Senior Note Documents.
D. Beneficiary, Trustor, the Company, the Guarantors, and the Senior
Noteholders also entered into a certain Intercreditor Agreement dated as of
October 14, 1994 (the "Intercreditor Agreement"); and Beneficiary and Trustor
entered into a certain Subordination Agreement dated October 13, 1994 (the
"Subordination Agreement") which was recorded in the Official Records on October
14, 1994 in Book 94104 Document No. 00613. In the Intercreditor Agreement and
the Subordination Agreement, among other things, the Beneficiary subordinated
its interests in the Property under the Deed of Trust to the interests of the
Senior Noteholders in the Property under the Senior Deed of Trust.
E. On October 31, 1995, the Company filed a Chapter 11 bankruptcy
reorganization case in the United States Bankruptcy Court for the District of
Nevada (the "Court"), Case No. 95-24685RCJ. On August 9, 1996, the Court entered
its Order Confirming Chapter 11 Plan of Reorganization (the "Order") confirming
the Plan of Reorganization (the "Plan") as identified in the Order.
F. Pursuant to the Order and the Plan, the parties to the Original
Indenture entered into a certain Amended and Restated Indenture dated as of
March 3, 1997 providing, among other things, for the issuance of Amended and
Restated Notes in the aggregate principal amount of $30,000,000, bearing
interest at 13 1/2% with a stated maturity date of August 20, 2001. Each of the
Original Notes is to be exchanged for an Amended and Restated Note in a
principal amount equal to 52.631579% of the unpaid principal amount of the
Original Note.
G. Pursuant to the Order and the Plan, the Company and the Senior
Noteholders have executed a certain Amended and Restated Note Agreement dated as
of March 3, 1997 providing for the exchange of the Senior Notes for Amended and
Restated Senior Notes.
H. The parties desire to modify the Deed of Trust as set forth below.
Amendment
1. All references in the Deed of Trust to the Indenture shall
henceforth refer to the Amended and Restated Indenture. All references in the
Deed of Trust to any documents or instruments which were amended in connection
with the Amended and Restated Indenture shall refer to such documents or
instruments as so amended. All capitalized terms in the Deed of Trust which are
not otherwise defined therein shall have the meanings set forth in the Amended
and Restated Indenture. All capitalized terms which are defined in the Deed of
Trust shall have the meanings set forth in the Amended and Restated Indenture if
different from the definitions in the Deed of Trust.
2. The parties hereby affirm each and every provision of the
Intercreditor Agreement and the Subordination Agreement, including but not
limited to the subordination of the interests of the Beneficiary in the Property
under the Deed of Trust, as modified herein, to the interests of the Senior
Noteholders in the Property under the Senior Deed of Trust.
3. Section 1.5.2 of the Deed of Trust is hereby amended to read in full as
follows: "1.5.2 Events of Loss and Proceeds Therefrom. Upon the occurrence of
each and every Event of Loss, Trustor shall give immediate written notice
thereof to Beneficiary. Pursuant to its rights granted hereunder in all
Insurance Proceeds, upon the occurrence of each and every Event of Loss,
Beneficiary is (to the extent permitted pursuant to the terms of the Facility
Leases) hereby authorized and empowered at its option to adjust or compromise
any loss under any insurance polices on the Trust Estate and to collect and
receive all Insurance Proceeds. Each insurance company is hereby authorized and
directed to make payment for all such Insurance Proceeds directly to Beneficiary
alone and not to Trustor and Beneficiary jointly."
"Beneficiary shall apply such Insurance Proceeds first toward
reimbursement of all of Beneficiary's costs and expenses of recovering
the proceeds, including attorneys' fees. If, in any instance, each and
all of the following conditions are satisfied in Beneficiary's sole
judgment, Beneficiary shall permit Trustor to use the balance of such
proceeds ("Net Claims Proceeds") to pay costs of repairing or
reconstructing the Trust Estate in the manner described below:
(i) The plans and specifications, cost breakdown,
construction contract, construction schedule, contractor and payment
and performance bond for the work of repair or reconstruction must all
be acceptable to Beneficiary.
(ii) Beneficiary must receive evidence satisfactory to it
that after repair or reconstruction, the Trust Estate would be at least
as valuable as it was immediately before the damage or condemnation
occurred.
(iii) The Net Claims Proceeds must be sufficient in
Beneficiary's determination to pay for the total cost of repair or
reconstruction; or Trustor must provide its own funds in an amount
equal to the difference between the Net Claims Proceeds and a
reasonable estimate, made by Trustor and found acceptable by
Beneficiary, of the total cost of repair or reconstruction.
(iv) No Event of Default shall have occurred and be
continuing.
"If Beneficiary finds that such conditions have been met,
Beneficiary shall deposit the Net Claims Proceeds and any funds which
Trustor is required to provide in a noninterest-bearing account. Upon
presentation of evidence satisfactory to Beneficiary that repair or
reconstruction has been completed satisfactorily and lien-free,
Beneficiary shall (1) disburse such Net Claims Proceeds and funds to
Trustor to pay costs of repair or reconstruction, and (2) release to
Trustor any Net Claims Proceeds and funds remaining after payment of
such costs. However, if Beneficiary finds that one or more of such
conditions have not been satisfied, Beneficiary may hold the Net Claims
Proceeds as collateral for the Indenture Obligations pursuant to the
Pledge Agreement."
4. Except as expressly amended herein, the Deed of Trust shall
remain in full force and effect.
IN WITNESS WHEREOF, the Trustor and the Beneficiary have caused this
Modification of Deed of Trust to be executed and delivered by their respective
officers thereunto duly authorized as of the day and first written above.
FOUR QUEENS, INC.
By: __________________________
Title: _________________________
FIRST TRUST NATIONAL ASSOCIATION,
a national association, as Beneficiary
By: __________________________
Title: _________________________
STATE OF NEVADA )
) ss:
COUNTY OF XXXXX )
On this ____ day of ____________________, 199__, before me, the
undersigned, a Notary Public in and for the County of Xxxxx, State of Nevada,
duly commissioned and sworn, personally appeared _________________, known to me
to be the _____________ of FOUR QUEENS, INC., whose name is subscribed to the
within instrument, and who acknowledged to me that he/she executed the same
freely and voluntarily and for the use and purposes therein mentioned.
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NOTARY PUBLIC
STATE OF ______________ )
) ss:
COUNTY OF ____________ )
On this ____ day of ____________________, 199__, before me, the
undersigned, a Notary Public in and for the County of ___________, State of
____________, duly commissioned and sworn, personally appeared
_________________, known to me to be the _____________ of FIRST TRUST NATIONAL
ASSOCIATION, whose name is subscribed to the within instrument, and who
acknowledged to me that he/she executed the same freely and voluntarily and for
the use and purposes therein mentioned.
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NOTARY PUBLIC
