ASSIGNMENT OF RENTS AND REVENUES
THIS ASSIGNMENT OF RENTS AND REVENUES (this "Assignment") is made and entered into as of February 26, 2002, by CIRCUS AND ELDORADO JOINT VENTURE, a Nevada general partnership ("Assignor"), and THE BANK OF NEW YORK, as Trustee ("Trustee"), with reference to the following Recitals:
A. Assignor is the owner of that certain real property situated in the County of Washoe, State of Nevada, that is more particularly described on Exhibit A affixed hereto and by this reference incorporated herein and made a part hereof (the "Real Property").
B. Assignor and Trustee, as Indenture Trustee, and the other parties signatory thereto have entered into an Indenture dated as of even date herewith (said Indenture, as it may hereafter be amended, supplemented or otherwise modified from time to time, being the "Indenture") with respect to 10 1/8% Mortgage Note due 2012 (the "Notes") issued and to be issued by Assignor and Silver Legacy Capital Corp., a Nevada corporation ("Capital").
C. Pursuant to the Indenture and subject to the terms and conditions specified therein, it is a condition to the issuance and sale of the Notes pursuant to the Purchase Agreement dated as of February 22, 2002, by and among the Assignor, Capital and the Initial Purchasers named therein that all of Assignor's right, title and interest in and to all rents, issues, profits, products, earnings, income, royalties, proceeds, payments and revenues, including, without limitation, rentals, revenues, receipts, payments, income and deposits of any nature whatsoever now and in the future derived from or received with respect to hotel
rooms, banquet facilities, convention facilities, retail premises, bars, restaurants, casinos and any other facilities, relating to or derived from the Real Property or from leases, subleases, licenses, concessions, franchises or other use or occupancy agreements covering any of the Real Property (collectively, the "Rents and Revenues"), be assigned to Trustee upon the terms and conditions set forth hereinbelow.
D. Capitalized terms used and not otherwise defined herein shall have the meaning assigned to such term in the Indenture.
NOW, THEREFORE, Assignor hereby absolutely and irrevocably grants, sells, assigns, transfers and sets over to Trustee all of the right, title and interest of Assignor in and to the Rents and Revenues as follows:
1. Assignor has granted, sold, assigned, transferred and set over, and by these presents does hereby grant, sell, assign, transfer and set over unto Trustee, its successors and assigns, all of Assignor's right, title and interest in and to the Rents and Revenues, together with all rights, interests and privileges which Assignor has or may have to receive and collect the Rents and Revenues, including, without limitation, the present and continuing right with full power and authority in its own name and in the name of Assignor or otherwise to make, claim for, enforce, collect, receive and receipt for any and all of such Rents and Revenues and to do any and all things which Assignor is or may become entitled for the collection of the Rents and Revenues.
2. The acceptance of this Assignment and the payment of any Rents and Revenues hereby assigned shall not constitute a waiver of any rights of Trustee under the terms of the Indenture or any other Collateral Documents for the benefit of Trustee on behalf of the holders of the Notes (the "Noteholders").
3. It is understood and agreed that Assignor reserves, for so long as there shall exist no Event of Default under the Indenture, the Notes or the Collateral Documents, a revocable license to collect the Rents and Revenues as they become due, but not prior to accrual, and to remit the same in accordance with the Indenture. Upon the occurrence of an Event of Default under the Indenture, the Notes or any other Collateral Document, such license reserved to Assignor shall be immediately revoked without further demand or notice and, subject to the terms of the Intercreditor Agreement, Trustee thereafter will have the right, but not the obligation to: (i) demand payment of the Rents and Revenues from the appropriate party, (ii) give notice that further payment of Rents and Revenues are to be made as directed by the Trustee, and (iii) settle, compromise, bring suit in respect to Rents and Revenues or otherwise deal with the person owing such Rents and Revenues, either in the name of Assignor or its own name. If any Rents and Revenues are collected by Assignor in violation of this Assignment, such Rents and Revenues shall be held in trust for the benefit of Trustee on behalf of the Noteholders. Any such Rents and Revenues which are actually collected by Trustee and not held by a receiver or other third party shall be applied to Assignor's obligations under the Indenture and the Notes. Trustee hereby agrees that, upon Assignor's cure of any Event of Default not relating to the payment of money, Trustee will reinstate Assignor's license to collect the Rents and Revenues.