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                         SANTA FE GAMING CORPORATION
                             SANTA FE HOTEL INC.
                                          
                                          
                                          
                                          
                                          
                           NOTE PURCHASE AGREEMENT
                                         
                                       
                      9.50% NOTES DUE DECEMBER 15, 2000
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                         ____________________________
                                       

                             AS OF APRIL 14, 1998
                                        
                         ____________________________




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<PAGE>

                         SANTA FE GAMING CORPORATION
                             SANTA FE HOTEL INC.
                                       
                           NOTE PURCHASE AGREEMENT
                                       
                                       
                              TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                 Page
                                                                                 ----
<S>                                                                             <C>
SECTION 1.  DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1
     1.1    Certain Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . .  1
     1.2    Accounting Terms; Utilization of GAAP for Purposes of
            Calculations Under Agreement . . . . . . . . . . . . . . . . . . . . . 21
     1.3    Other Definitional Provisions. . . . . . . . . . . . . . . . . . . . . 21

SECTION 2.  THE NOTES; CLOSING; DELIVERY . . . . . . . . . . . . . . . . . . . . . 21
     2.1    Authorization of Issuance of Notes . . . . . . . . . . . . . . . . . . 21
     2.2    Purchase and Sale of Notes . . . . . . . . . . . . . . . . . . . . . . 21
     2.3    Closing and Delivery of Notes. . . . . . . . . . . . . . . . . . . . . 22
     2.4    Certain Terms of the Notes; Payment of Interest. . . . . . . . . . . . 22
     2.5    General Provisions Regarding Payments; Optional Redemption;
            Mandatory Redemption and Change in Control Repurchase. . . . . . . . . 23
     2.6    Replacement of Notes . . . . . . . . . . . . . . . . . . . . . . . . . 27
     2.7    Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
     2.8    Registration; Transfer; Registration of Transfer and Exchange. . . . . 28
     2.9    Representation of Initial Holders. . . . . . . . . . . . . . . . . . . 29

SECTION 3.  REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . 29
     3.1    Organization, Powers, Qualification, Good Standing and Other
            Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
     3.2    Authorization of Notes and Other Basic Documents and Related
            Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
     3.3    Financial Condition. . . . . . . . . . . . . . . . . . . . . . . . . . 32
     3.4    No Material Adverse Change; No Restricted SGC Payments . . . . . . . . 33
     3.5    Title to Properties; Liens . . . . . . . . . . . . . . . . . . . . . . 33
     3.6    Litigation; Adverse Facts. . . . . . . . . . . . . . . . . . . . . . . 33
     3.7    Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
     3.8    Performance of Agreements; Materially Adverse Agreements . . . . . . . 34
     3.9    Governmental Regulation. . . . . . . . . . . . . . . . . . . . . . . . 34
     3.10   Employee Benefit Plans and Employee Matters. . . . . . . . . . . . . . 34
     3.11   Environmental Protection . . . . . . . . . . . . . . . . . . . . . . . 35
     3.12   Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
     3.13   Certain Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36



                                       i
<PAGE>

     3.14   Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

SECTION 4.  CONDITIONS TO EFFECTIVENESS. . . . . . . . . . . . . . . . . . . . . . 37
     4.1    Conditions to Obligations of Holders to Purchase Notes on the
            Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

SECTION 5.  AFFIRMATIVE COVENANTS OF SGC AND COMPANY . . . . . . . . . . . . . . . 43
     5.1    Financial Statements and Related Information . . . . . . . . . . . . . 43
     5.2    Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
     5.3    Corporate Existence, Etc.. . . . . . . . . . . . . . . . . . . . . . . 47
     5.4    Payment of Taxes and Claims; Tax Consolidation . . . . . . . . . . . . 47
     5.5    Maintenance of Properties; Insurance . . . . . . . . . . . . . . . . . 47
     5.6    Compliance with Laws, etc. . . . . . . . . . . . . . . . . . . . . . . 48
     5.7    Environmental Disclosure and Inspection. . . . . . . . . . . . . . . . 48
     5.8    Remedial Action Regarding Hazardous Material . . . . . . . . . . . . . 49
     5.9    Disposal of Company Stock. . . . . . . . . . . . . . . . . . . . . . . 49
     5.10   Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
     5.11   Right of First Refusal . . . . . . . . . . . . . . . . . . . . . . . . 50
     5.12   Permitted Ground Lease and Permitted Ground Lease Encumbrances . . . . 51
     5.13   Certain Additional Covenants . . . . . . . . . . . . . . . . . . . . . 51

SECTION 6.  NEGATIVE COVENANTS OF SGC AND COMPANY. . . . . . . . . . . . . . . . . 52
     6.1    Restricted SGC Payments and Lowden Family Payments . . . . . . . . . . 52
     6.2    Restricted Company Payments and Restricted Investments . . . . . . . . 52
     6.3    Liens and Related Matters. . . . . . . . . . . . . . . . . . . . . . . 53
     6.4    Fundamental Changes. . . . . . . . . . . . . . . . . . . . . . . . . . 54
     6.5    Mergers and Consolidations . . . . . . . . . . . . . . . . . . . . . . 54
     6.6    Additional Indebtedness of Company . . . . . . . . . . . . . . . . . . 55
     6.7    Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . 55
     6.8    Sale and Leaseback . . . . . . . . . . . . . . . . . . . . . . . . . . 55
     6.9    Amendments to Documents. . . . . . . . . . . . . . . . . . . . . . . . 55
     6.10   Stay, Extension and Usury Laws . . . . . . . . . . . . . . . . . . . . 56
     6.11   Government Regulation. . . . . . . . . . . . . . . . . . . . . . . . . 56
     6.12   Conduct of Business. . . . . . . . . . . . . . . . . . . . . . . . . . 56
     6.13   Limitation on Tax Sharing Payments and Agreements. . . . . . . . . . . 56

SECTION 7.  EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . . 57
     7.1    Failure to Make Payments When Due. . . . . . . . . . . . . . . . . . . 57
     7.2    Default in Other Agreements. . . . . . . . . . . . . . . . . . . . . . 57
     7.3    Breach of Certain Covenants. . . . . . . . . . . . . . . . . . . . . . 57
     7.4    Breach of Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . 57
     7.5    Other Defaults Under Basic Documents . . . . . . . . . . . . . . . . . 57
     7.6    Involuntary Bankruptcy; Appointment of Receiver, etc.. . . . . . . . . 58



                                      ii
<PAGE>

     7.7    Voluntary Bankruptcy; Appointment of Receiver, etc.. . . . . . . . . . 58
     7.8    Judgments and Attachments. . . . . . . . . . . . . . . . . . . . . . . 58
     7.9    Dissolution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
     7.10   Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . 59
     7.11   Material Adverse Effect. . . . . . . . . . . . . . . . . . . . . . . . 59
     7.12   Invalidity of Company Environmental Indemnity or the SGC Guaranty. . . 59
     7.13   Impairment of Collateral . . . . . . . . . . . . . . . . . . . . . . . 59
     7.14   Ownership of Company . . . . . . . . . . . . . . . . . . . . . . . . . 59

SECTION 8.  COLLATERAL AGENT AND RELATIONS AMONG HOLDERS, ETC. . . . . . . . . . . 61
     8.1    Appointment of Collateral Agent, Powers and Immunities . . . . . . . . 61
     8.2    Reliance by Collateral Agent . . . . . . . . . . . . . . . . . . . . . 62
     8.3    Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
     8.4    Rights as Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
     8.5    Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
     8.6    Non-Reliance on Collateral Agent and Other Holders . . . . . . . . . . 64
     8.7    Resignation or Removal of Collateral Agent . . . . . . . . . . . . . . 64
     8.8    Authorization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

SECTION 9.  MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
     9.1    Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . 65
     9.2    Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
     9.3    Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
     9.4    Ratable Sharing. . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
     9.5    Independence of Covenants. . . . . . . . . . . . . . . . . . . . . . . 68
     9.6    Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
     9.7    Survival of Representations, Warranties and Agreements . . . . . . . . 69
     9.8    Failure or Indulgence Not Waiver; Remedies Cumulative. . . . . . . . . 69
     9.9    Marshalling; Payments Set Aside. . . . . . . . . . . . . . . . . . . . 69
     9.10   Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
     9.11   Obligations Several; Independent Nature of Holders' Rights . . . . . . 70
     9.12   Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
     9.13   Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
     9.14   Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . 70
     9.15   Consent to Jurisdiction and Service of Process . . . . . . . . . . . . 70
     9.16   Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . 71
     9.17   Counterparts; Effectiveness. . . . . . . . . . . . . . . . . . . . . . 71
     9.18   Conflicts With Other Basic Documents . . . . . . . . . . . . . . . . . 71

</TABLE>

                                       iii
<PAGE>

                                    SCHEDULES


<TABLE>
<S>      <C>
1.1A      Santa Fe Hotel Documents
1.1B      Santa Fe Hotel Premises
1.1C      Permitted Liens
2         Information Relating to Holders
3.1B      Subsidiaries and Joint Ventures of SGC
3.1D      Indebtedness
3.10      Employee Benefit Plans
</TABLE>










                                       iv
<PAGE>

                                     EXHIBITS


<TABLE>
<S>      <C>
I         Form of Note
II        Form of SGC Guaranty
III       Form of Company Deed of Trust
IV        Form of Company Security Agreement
V         Form of Company Environmental Indemnity
VI        Form of Subordination and Intercreditor Agreement
VII       Form of Assignment Agreement
VIII-A    Form of Opinion of Gibson, Dunn & Crutcher LLP
VIII-B    Form of Opinion of Jones Vargas
</TABLE>














                                       v

<PAGE>

                             SANTA FE GAMING CORPORATION
                                 SANTA FE HOTEL INC.

                               NOTE PURCHASE AGREEMENT



          THIS NOTE PURCHASE AGREEMENT is made as of this 14th day of April,
1998 by and among Santa Fe Gaming Corporation (formerly named Sahara Gaming
Corporation), a Nevada corporation ("SGC"), Santa Fe Hotel Inc., a Nevada
corporation ("COMPANY"), SunAmerica Life Insurance Company, an Arizona
corporation ("SUNAMERICA"), Credit Suisse First Boston Mortgage Capital LLC, a
Delaware limited liability company ("CSFB"), and any other person or persons
party hereto from time to time after the date hereof as a holder (individually,
including SunAmerica and CSFB, a "HOLDER," and collectively, "HOLDERS") and
SunAmerica, as Collateral Agent (together with any successor, "COLLATERAL
AGENT").

                                       RECITALS

          WHEREAS, Company desires to issue and sell to Holders $14,000,000 in
principal amount of Company's 9.50% Notes due December 15, 2000 (the "NOTES");

          WHEREAS, Company intends to grant a security interest in the Santa Fe
Hotel Facility and certain related property as security to secure the Notes and
its related obligations; and

          WHEREAS, SGC has agreed to guaranty the payment of such obligations as
provided herein and in certain related documents;
     
          NOW THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Company, SGC, Holders and Collateral
Agent hereby agree as follows:


SECTION 1.  DEFINITIONS

     1.1  CERTAIN DEFINED TERMS.  The following terms used in this Agreement
shall have the following meanings:

          "AFFILIATE" means, with respect to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person.  For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling", "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct 

                                      1

<PAGE>

or cause the direction of the management and policies of that Person, whether 
through the ownership of Voting Stock or by contract or otherwise.  Without 
limiting the foregoing, a Person shall be deemed to be "controlled by" 
another Person if such other Person (i) possesses, directly or indirectly, 
power to vote 10% or more of the securities having ordinary voting power for 
the election of directors of such Person or (ii) with respect to any other 
Person that is not a corporation, owns 10% or more of the equity interests of 
such Person which are generally entitled to vote.

          "AFFILIATE TRANSACTION" has the meaning assigned to such term in
subsection 6.7 hereof.

          "AGREEMENT," "HEREOF" and "HEREUNDER" and words of similar import
refer to this Note Purchase Agreement, as it may hereafter be amended,
supplemented or otherwise modified from time to time.

          "ALTA" has the meaning assigned to such term in subsection 4.1E
hereof.

          "AMORTIZATION EXPENSE" means, for any period, amounts recognized
during such period as amortization of all goodwill and other assets classified
as Intangible Assets in accordance with GAAP.

          "AVERAGE LIFE" means, as of any date of determination, with reference
to any Indebtedness, the quotient obtained by dividing (i) the sum of the
products of the number of years from the date of determination to the dates of
each successive scheduled principal payment or mandatory repurchase or repayment
of such Indebtedness multiplied by the amount of such principal payment by (ii)
the sum of all such principal payments.

          "BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.

          "BASIC DOCUMENTS" means this Agreement, the Notes, the Company Deed of
Trust, the Company Security Agreement, the Company Environmental Indemnity, the
SGC Guaranty, the Subordination and Intercreditor Agreement and all other
instruments or documents now, heretofore or hereafter granting Liens on the
property of any Credit Party or any of their Affiliates to Collateral Agent for
the benefit of Holders and any other instruments or agreements now, heretofore
or hereafter entered into with or for the benefit of Collateral Agent or any
Holder in connection herewith or therewith in connection with the Notes.

          "BOARD OF DIRECTORS" means the Board of Directors of any Credit Party
or one of their respective Subsidiaries, as the context requires, or any
committee thereof duly authorized to act on behalf of such Board of Directors.

                                      2

<PAGE>

          "BUSINESS DAY" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the State of California or Nevada or
is a day on which banking institutions located in either such state are
authorized or required by law or other governmental action to close.

          "CAPITAL LEASE OBLIGATIONS" of a Person means any obligation that is
required to be classified and accounted for as a capital lease on the face of a
balance sheet of such Person prepared in accordance with GAAP; the amount of
such obligation shall be the capitalized amount thereof, determined in
accordance with GAAP; the stated maturity thereof shall be the date of the last
payment of rent or any other amount due under such lease prior to the first date
upon which such lease may be terminated by the lessee without payment of a
penalty; and such obligation shall be deemed secured by a Lien on any property
or assets to which such lease relates.

          "CAPITAL STOCK" of any Person means any and all shares, rights to
purchase, warrants or options (whether or not currently exercisable),
participations or other equivalents of interests (however designated) in the
equity (which includes, but is not limited to, common stock, preferred stock and
partnership and joint venture interests) of such Person (excluding any debt
securities that are convertible into, or exchangeable for, such interests in
equity).

          "CASH" means money, currency or a credit balance in a Deposit Account.

          "CHANGE OF CONTROL" means an event or series of events by which
(i) SGC or Company sells, conveys, transfers or leases, directly or indirectly,
all or substantially all of its properties and assets to any Person or group (as
such term is used in Section 13(d) and 14(d) of the Exchange Act); (ii) any
Person or group (other than the Lowden Family) is or becomes the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that
a Person or group shall be deemed to have "beneficial ownership" of all shares
that any such Person or group has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of securities representing (a) 25% or more of the combined voting
power of SGC's or Company's, as the case may be, Voting Stock and at such time
the Lowden Family together shall fail to beneficially own, directly or
indirectly, securities representing at least 30% of the combined voting power of
SGC's or Company's, as the case may be, Voting Stock or (b) more than 50% of the
combined voting power of SGC's or Company's Voting Stock, as the case may be;
(iii) SGC or Company consolidates with or merges into another Person or conveys,
transfers or leases all or substantially all its properties and assets to any
Person or any Person consolidates with or merges into SGC or Company, in either
event pursuant to a transaction in which the outstanding Voting Stock of SGC or
Company is changed into or exchanged for Cash, securities or other property with
the effect that any Person or group (other than the Lowden Family) becomes the
"beneficial owner," directly or indirectly, of securities representing (a) 25%
or more of the combined voting power of the Voting Stock of the Person that
continues 

                                      3

<PAGE>

after such consolidation or merger or who acquires such assets and at such 
time the Lowden Family together shall fail to beneficially own, directly or 
indirectly, securities representing at least 30% of the combined voting power 
of such Voting Stock or (b) more than 50% of the combined voting power of the 
Voting Stock of the Person that continues after such consolidation or merger 
or who acquires such assets; (iv) during any period of 24 consecutive months, 
individuals who at the beginning of such period constituted SGC's or 
Company's Board of Directors, as the case may be, (together with any new or 
replacement directors whose election by the Board of Directors or whose 
nomination for election by the stockholders of SGC or Company, as the case 
may be, was approved by a vote of at least a majority of the directors then 
still in office who were either directors at the beginning of such period or 
whose election or nomination for election was previously so approved) cease 
for any reason to constitute a majority of the directors then in office; (v) 
SGC ceases to own any of the outstanding Capital Stock, or all or 
substantially all of the assets, of Company or any of its Subsidiaries, 
except where such assets are disposed of pursuant to subsection 6.4 hereof; 
or (vi) SGC and/or Company are deemed to have undergone a "Change of Control" 
as defined in the Company Indenture.

          "COLLATERAL" means all the real, personal and mixed property made
subject to a Lien pursuant to the Company Deed of Trust, the Company Security
Agreement or any other Basic Document.

          "COLLATERAL AGENT" means SunAmerica Life Insurance Company in its
capacity as collateral agent for Holders, and any successor Collateral Agent
appointed pursuant to this Agreement.

          "COMMISSION" means the Securities and Exchange Commission.

          "COMPANY" has the meaning set forth in the Introduction to this
Agreement.

          "COMPANY ALLOCABLE SHARE" of SGC's consolidated or combined group's
actual Tax liability for any taxable period means the product of (x) SGC's
consolidated or combined group's actual Tax liability for such taxable period
and (y) a fraction the numerator of which is the sum of the positive Tax
liabilities that Company and each Subsidiary would have incurred had each such
entity filed a separate tax return for such taxable period and the denominator
of which is the sum of the positive Tax liabilities that SGC and each of its
Subsidiaries (including Company and each Subsidiary) would have incurred had
each such entity filed a separate return for such taxable period.

          "COMPANY DEED OF TRUST" means the Deed of Trust, Fixture Filing and
Financing Statement and Security Agreement with Assignment of Rents to be
entered into as of the Effective Date by Company in favor of Collateral Agent,
as beneficiary thereunder, pursuant to which Company grants to Title Company, as
trustee for the benefit of Collateral Agent on behalf of Holders, a first
priority Lien on, among other things, the Santa Fe Hotel Premises and Company's
right, title and interest in and to the 

                                      4

<PAGE>

Santa Fe Hotel Improvements to secure the Obligations of Company, 
substantially in the form attached hereto as Exhibit III, as it may 
thereafter be amended, supplemented or otherwise modified from time to time.

          "COMPANY ENVIRONMENTAL INDEMNITY" means the Environmental Indemnity
Agreement to be entered into by Company and SGC as of the Effective Date in
favor of Collateral Agent for the benefit of Holders and certain other
indemnified parties therein pursuant to which Company and SGC indemnify
Collateral Agent for the benefit of Holders and certain other indemnified
parties therein against environmental risks, substantially in the form attached
hereto as Exhibit V, as it may thereafter be amended, supplemented or otherwise
modified from time to time.

          "COMPANY INDENTURE" means that certain Indenture dated as of
December 29, 1993 among Company, SGC, as guarantor, and Company Indenture
Trustee, as amended by the First Supplemental Indenture dated on or prior to the
Effective Date among Company, SGC and Company Indenture Trustee, as it may
thereafter be amended, supplemented or otherwise modified from time to time.

          "COMPANY INDENTURE CONSENT SOLICITATION" means the Solicitation of
Consents to Indenture Amendments dated February 16, 1998, the Supplement thereto
dated March 4, 1998 and the Supplement thereto dated March 12, 1998.

          "COMPANY INDENTURE DEED OF TRUST" means that certain Deed of Trust and
Security Agreement with Assignment of Rents and Fixture Filing dated as of
December 29, 1993 by Company to Title Company, as trustee for the benefit of
Company Indenture Trustee.

          "COMPANY INDENTURE NOTES" means the notes issued pursuant to the
Company Indenture.

          "COMPANY INDENTURE TRUSTEE" means IBJ Schroder Bank & Trust Company,
as trustee under the Company Indenture, and any successor trustee under the
Company Indenture.

          "COMPANY SECURITY AGREEMENT" means the Security Agreement to be
entered into by Company and Collateral Agent as of the Effective Date pursuant
to which Company grants to Collateral Agent on behalf of Holders a security
interest in certain of Company's assets including personal property and
fixtures, in substantially the form annexed hereto as Exhibit IV, as it may
thereafter be amended, supplemented or otherwise modified from time to time.

          "COMPANY SEPARATE TAX" means the Tax for any taxable period that would
have been paid by Company and its Subsidiaries if they filed a consolidated or
combined return for such taxable period and all prior taxable periods.

                                      5

<PAGE>

          "CONSOLIDATED COVERAGE RATIO" with respect to any period means the
ratio of (i) the aggregate amount of Consolidated Operating Cash Flow for such
period to (ii) the aggregate amount of Consolidated Interest Expense for such
period.

          "CONSOLIDATED INTEREST EXPENSE" means, for any period, the total
interest expense of a Person and its Subsidiaries determined in accordance with
GAAP, including (i) interest expense attributable to Capital Lease Obligations,
(ii) amortization of debt discount, (iii) capitalized interest, (iv) Cash and
non-Cash interest payments, (v) commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance
financing, (vi) net costs under arrangements designed to protect such Person
against fluctuations in interest rates (including amortization of discounts) and
(vii) interest expense in respect of obligations of other Persons deemed to be
Indebtedness of Company or any Subsidiary under clause (v) or (vi) of the
definition of Indebtedness.

          "CONSOLIDATED NET INCOME" means, for any period, the net income (or
loss) of a Person and its Subsidiaries determined in accordance with GAAP;
PROVIDED, HOWEVER, that there shall not be included in such Consolidated Net
Income:  (i) any net income of any Person if such Person is not a Subsidiary,
except that (1) Company's equity in the net income of any such Person or
Subsidiary for such period shall be included in such Consolidated Net Income up
to the aggregate amount of Cash actually distributed by such Person or
Subsidiary during such period to Company or a Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other distribution to a
Subsidiary, to the limitations contained in clause (iii) below) and (2)
Company's equity in the net loss of any such Person or Subsidiary for such
period shall be included in determining such Consolidated Net Income; (ii) any
net income (or loss) of any Person acquired by Company or a Subsidiary in a
pooling of interests transaction for any period prior to the date of such
acquisitions; (iii) any net income (or loss) of any Subsidiary if such
Subsidiary is subject to restrictions, directly or indirectly, on the payment of
dividends or the making of distributions by such Subsidiary, directly or
indirectly, to Company, except that (a) Company's equity in the net income of
any such Subsidiary for such period shall be included in such Consolidated Net
Income up to the aggregate amount of Cash that could have been distributed by
such Subsidiary during such period to Company or another Subsidiary as a
dividend or other distribution (subject, in the case of a dividend or other
distribution to another Subsidiary, to the limitation contained in this clause)
unless at the time of computation no Cash would be permitted to be distributed,
and (b) Company's equity in the net loss of any such Subsidiary for such period
shall be included in determining such Consolidated Net Income; (iv) any gain or
loss realized upon the sale or other disposition of any property, plant or
equipment of Company or any of its Subsidiaries that is not sold or otherwise
disposed of in the ordinary course of business and any gain or loss realized
upon the sale or other disposition of any Capital Stock of any Person; and (v)
the cumulative effect of a change in accounting principles.

                                      6

<PAGE>

          "CONSOLIDATED OPERATING CASH FLOW" means, for any period, for any
Person, the aggregate amount of Consolidated Net Income before Consolidated
Interest Expense, income Taxes, depreciation expense, Amortization Expense and
any non-Cash amortization of debt issuance cost.

          "CONTINGENT OBLIGATION," as applied to any Person, means any direct 
or indirect liability, contingent or otherwise, of that Person (i) with 
respect to any Indebtedness, lease, dividend or other obligation of another 
Person if the primary purpose or intent thereof by the Person incurring the 
Contingent Obligation is to provide assurance to the obligee of such 
obligation of another Person that such obligation of another shall be paid or 
discharged, or that any agreements relating thereto shall be complied with, 
or that the holders of such obligation shall be protected (in whole or in 
part) against loss in respect thereof, (ii) with respect to any letter of 
credit issued for the account of that Person or as to which that Person is 
otherwise liable for reimbursement of drawings, or (iii) under interest rate 
agreements and currency agreements. Contingent Obligations shall include, 
without limitation, (a) the direct or indirect guaranty, endorsement 
(otherwise than for collection or deposit in the ordinary course of 
business), co-making, discounting with recourse or sale with recourse by such 
Person of the obligation of another Person, (b) the obligation to make 
take-or-pay or similar payments if required regardless of non-performance by 
any other party or parties to an agreement, and (c) any liability of such 
Person for the obligation of another Person through any agreement (contingent 
or otherwise) (X) to purchase, repurchase or otherwise acquire such 
obligation or any security therefor, or to provide funds for the payment or 
discharge of such obligation (whether in the form of loans, advances, stock 
purchases, capital contributions or otherwise) or (Y) to maintain the 
solvency or any balance sheet item, level of income or financial condition of 
another if, in the case of any agreement described under subclauses (X) or 
(Y) of this sentence, the primary purpose or intent thereof is as described 
in the preceding sentence.  For purposes of this definition, the amount of 
any Contingent Obligation at any time of determination shall be computed as 
the amount that, in light of all the facts and circumstances existing at such 
time, represents the amount that reasonably can be expected at such time of 
determination to become an actual or matured liability.

          "CONTRACTUAL OBLIGATION," as applied to any Person, means any
provision of any security issued by that Person or any indenture, mortgage, deed
of trust, contract, undertaking, agreement or other instrument (i) to which such
Person is a party, (ii) by which that Person or any of its properties is bound
or (iii) to which such Person or any of its properties is subject, in each case
a breach or default of which could have a Material Adverse Effect.

          "CREDIT PARTY" means Company, SGC and any other Subsidiary of SGC or
Company which is or becomes a party to a Basic Document.

          "CSFB" has the meaning set forth in the Introduction to this
Agreement.     

                                      7

<PAGE>

          "DEPOSIT ACCOUNT" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.

          "DOLLARS" and the sign "$" mean the lawful money of the United States
of America.

          "EFFECTIVE DATE" means the date on which all conditions to the
effectiveness of this Agreement set forth in subsection 4.1 are satisfied;
PROVIDED that if the Effective Date does not occur on or prior to April 15,
1998, this Agreement shall not become effective.

          "EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as defined
in Section 3(3) of ERISA which is or was maintained or contributed to by SGC,
Company or any ERISA Affiliate.

          "ENVIRONMENTAL CLAIM" means any accusation, allegation, notice of
violation, claim, demand, abatement order, cleanup order, removal order, or
other order or direction (conditional or otherwise) by any Governmental
Authority or other Person for any injury, loss or damage, including, without
limitation, personal injury (including sickness, disease or death), tangible or
intangible property damage, contribution, indemnity, indirect or consequential
damages, damage to the environment, nuisance, pollution, contamination or other
adverse effects on the environment, or for fines, penalties or restrictions or
to compel cleanup or remediation, in each case relating to, resulting from or in
connection with any Hazardous Material and relating to the Santa Fe Hotel
Facility.

          "ENVIRONMENTAL LAWS" has the meaning set forth in the Company Deed of
Trust.

          "ENVIRONMENTAL REPORT" means the Phase I Environmental Site Assessment
dated March 26, 1998 prepared by Western Technologies Inc. as project number
4188JL080, relating to the Santa Fe Hotel Facility and delivered to Holders
prior to the Effective Date.

          "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.

          "ERISA AFFILIATE" means (i) any corporation which is a member of a 
controlled group of corporations within the meaning of Section 414(b) of the 
Internal Revenue Code of which SGC or Company is, or was at any time, a 
member; (ii) any trade or business (whether or not incorporated) which is, or 
was at any time, a member of a group of trades or businesses under common 
control within the meaning of Section 414(c) of the Internal Revenue Code of 
which SGC or Company is, or was at any time, a 

                                      8

<PAGE>

member; and (iii) any member of an Affiliated service group within the 
meaning of Section 414(m) or (o) of the Internal Revenue Code of which SGC or 
Company is a member.

          "ERISA EVENT" means (i) a "reportable event" within the meaning of
Section 4043(c) of ERISA and the regulations issued thereunder with respect to
any Pension Plan (excluding those for which the provision for 30-day notice to
the PBGC has been waived by regulation); (ii) the failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with Section 412(d) of the
Internal Revenue Code) or the failure to make by its due date a required
installment under Section 412(m) of the Internal Revenue Code with respect to
any Pension Plan or the institution of a proceeding on behalf of a Multiemployer
Plan against Company, SGC or any Affiliate to enforce Section 515 of ERISA,
which proceeding is not dismissed within 30 days; (iii) the provision by the
administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a
notice of intent to terminate such plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the withdrawal by SGC, Company or any ERISA
Affiliates from any Pension Plan with two or more contributing sponsors or the
termination of any such Pension Plan resulting in liability pursuant to Sections
4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings to
terminate any Pension Plan, or the occurrence of any event or condition which
might constitute grounds under ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan; (vi) the imposition of liability
on SGC, Company or any ERISA Affiliates pursuant to Section 4062(e) or 4069 of
ERISA or by reason of the application of Section 4212(c) of ERISA; (vii) the
withdrawal by SGC, Company or any of their respective ERISA Affiliates in a
complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of
ERISA) from any Multiemployer Plan if there is any potential liability therefor,
or the receipt by SGC, Company or any of their respective ERISA Affiliates of
notice from any Multiemployer Plan that it is in reorganization or insolvency
pursuant to Section 4241 or 4245 of ERISA, or that it intends to terminate or
has terminated under Section 4041A or 4042 of ERISA; (viii) the occurrence of an
act or omission which could give rise to the imposition on SGC, Company or any
of their respective ERISA Affiliates of fines, penalties, Taxes or related
charges under Chapter 43 of the Internal Revenue Code or under Section 409 or
502(c), (i) or (l) of ERISA in respect of any Employee Benefit Plan; (ix) the
assertion of a material claim (other than routine claims for benefits) against
any Employee Benefit Plan other than a Multiemployer Plan or the assets thereof,
or against SGC, Company or any of their respective ERISA Affiliates in
connection with any such Employee Benefit Plan; (x) receipt from the Internal
Revenue Service of notice of the failure of any Pension Plan (or any other
Employee Benefit Plan intended to be qualified under Section 401(a) of the
Internal Revenue Code) to qualify under Section 401(a) of the Internal Revenue
Code, or the failure of any trust forming part of any Pension Plan to qualify
for exemption from taxation under Section 501(a) of the Internal Revenue Code;
or (xi) the adoption of an amendment to any Pension Plan that, pursuant to
Section 401(a)(29) of the Internal Revenue Code or pursuant to Section 307 of
ERISA, would require 

                                      9

<PAGE>

Company, SGC or any ERISA Affiliate timely to provide security to the plan or 
would result in loss of tax exempt status of the trust of which such plan is 
a part if not timely provided, or the imposition of a Lien pursuant to 
Section 412(n) of the Internal Revenue Code.

          "EVENT OF DEFAULT" has the meaning assigned to such term in Section 7
hereof.

          "EXCHANGE ACT" means the Securities Exchange Act of 1934, as it may be
amended from time to time.

          "EXCHANGEABLE STOCK" means any Capital Stock of a corporation that is
exchangeable or convertible into another security (other than into Capital Stock
of such corporation that is neither Exchangeable Stock nor Redeemable Stock).

          "FISCAL YEAR" means the Fiscal Year of SGC and Company, the last day
of which occurs on September 30th of each year.

          "FLOOD ACT" means the National Flood Insurance Act of 1968, as amended
by the Flood Disaster Protection Act of 1973 (42 U.S.C. Sections 4013 ET. SEQ.).

          "GAAP" means, subject to the limitations on the application thereof
set forth in subsection 1.2, generally accepted accounting principles set forth
in opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession (including, without limitation, to the extent
applicable in the AICPA Audit and Accounting Guide, Audits of Casinos), in each
case as the same are applicable to the circumstances as of the date of
determination.

          "GAMING AUTHORITIES" means, collectively, (a) the Nevada Gaming
Commission, (b) the Nevada State Gaming Control Board, and (c) any other
Governmental Authority that holds regulatory, licensing or permit authority over
gambling, gaming or casino activities conducted by SGC, Company or any of their
respective Subsidiaries within its jurisdiction.

          "GAMING LAWS" means all statutes, rules, regulations, ordinances,
codes and administrative or judicial precedents (including, without limitation,
the Nevada Gaming Control Act (N.R.S. Ch. 463)) pursuant to which any Gaming
Authority possesses regulatory, licensing or permit authority over gambling,
gaming or casino activities conducted by SGC, Company or any of their respective
Subsidiaries within its jurisdiction.

                                      10

<PAGE>

          "GAMING LICENSE" means every license, franchise or other authorization
required on the date hereof or hereafter to own, lease, operate or otherwise
conduct gaming operations at the Santa Fe Hotel Facility or other gaming
activities of Company, including, without limitation, all such licenses granted
by any Gaming Authority and any Gaming Laws.

          "GOVERNMENTAL AUTHORITY" means any agency, authority, board, bureau,
commission, department, office or instrumentality of any nature whatsoever of
any governmental or quasi-governmental unit, whether federal, state, county,
district, city or other political subdivision or otherwise and whether now or
hereafter in existence, or any officer or official thereof.

          "HAZARDOUS MATERIALS" has the meaning set forth in the Company Deed of
Trust.

          "HOLDER" and "HOLDERS" has the meaning set forth in the Introduction
to this Agreement and shall include the successors and assigns of any Holder.

          "INDEBTEDNESS" of any Person means, without duplication, (i) the
principal of and premium (if any) in respect of (a) indebtedness of such Person
for money borrowed and (b) indebtedness evidenced by notes, debentures, bonds or
other similar instruments for the payment of which such Person is responsible or
liable; (ii) all Capital Lease Obligations of such Person; (iii) all obligations
of such Person issued or assumed as the deferred purchase price of property,
assets or services, all conditional sale obligations and all obligations under
any title retention agreement (but excluding trade accounts payable arising in
the ordinary course of business and due no more than three months from the date
the obligation is incurred, and also excluding trade accounts payable consisting
of fees for professional services); (iv) all obligations of such Person for the
reimbursement of any obligor on any letter of credit, banker's acceptance or
similar credit transaction (other than obligations with respect to letters of
credit securing obligations (other than obligations described in (i) through
(iii) above) entered into in the ordinary course of business of such Person to
the extent such letters of credit are not drawn upon or, if and to the extent
drawn upon, such drawing is reimbursed no later than the third Business Day
following receipt by such Person of a demand for reimbursement following payment
on the letter of credit); (v) all obligations of the type referred to in clauses
(i) through (iv) of other Persons and all dividends of other Persons for the
payment of which, in either case, such Person is responsible or liable as
obligor, guarantor or otherwise; and (vi) all obligations of the type referred
to in clauses (i) through (v) of other Persons secured by any Lien on any
property or asset of such Person (whether or not such obligation is assumed by
such Person), the amount of such obligation being deemed to be the lesser of the
value of such property or asset or the amount of the obligation so secured.

                                       11
<PAGE>

          "INDEPENDENT" when used with respect to any specified Person means a
Person who (i) does not have any material direct or indirect financial interest
in Company, SGC or any other obligor under the Notes or in any Affiliate of
Company, SGC or such other obligor and (ii) is not connected with Company, SGC
or such other obligor or any Affiliate of Company, SGC or such other obligor, as
an officer, employee, promoter, underwriter, trustee, partner, director or
Person performing similar functions.  Whenever it is herein provided that any
Independent Person's opinion or certificate shall be furnished to Collateral
Agent, such Person shall be appointed by a written order of Company or SGC, as
applicable, and such opinion or certificate shall state that the signer has read
this definition and that the signer is Independent within the meaning hereof.

          "INDEPENDENT FINANCIAL ADVISOR" means an accounting, appraisal or
investment banking firm of nationally recognized standing that is, in the
judgment of Company's Board of Directors, (i) qualified to perform the task for
which it has been engaged, and (ii) disinterested and Independent with respect
to Company, all of its Subsidiaries and each Affiliate and Related Person of
Company and/or the Lowden Family that is involved in an Affiliate Transaction or
other transaction with respect to which such firm has been engaged.

          "INITIAL HOLDERS" means CSFB and SunAmerica.

          "INTANGIBLE ASSETS" means the amount of (i) all Restricted Investments
in unconsolidated Subsidiaries and in Persons which are not Subsidiaries
(except, in each case, Restricted Investments which are readily marketable,
valued at the lower of cost or market value), and (ii) all unamortized debt
discount and expense, unamortized deferred charges, goodwill, patents,
trademarks, service marks, trade names, copyrights, organization and development
expenses and other intangible items, all of the foregoing as determined in
accordance with GAAP.

          "INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended, or any successor statutes.

          "JOINT VENTURE" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership, limited liability company or
other legal form; PROVIDED that in no event shall any corporate Subsidiary of
any Person be considered to be a Joint Venture to which such Person is a party.

          "JUNIOR SUBORDINATED NOTES" means the Junior Subordinated Notes under
and as defined in the Certificate of Designation of the SGC Preferred Stock or
any other securities that are issued in exchange for or to redeem, acquire or
otherwise pay SGC Preferred Stock.

          "LATE CHARGES" has the meaning assigned to such term in subsection
2.4D hereof.

                                       12
<PAGE>

          "LIEN" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, any agreement
to give any security interest and any mechanic's liens) and any option, trust or
other preferential arrangement having the practical effect of any of the
foregoing.

          "LOAN NOTICE" has the meaning assigned to such term in subsection 3.2C
hereof.

          "LOWDEN FAMILY" means Mr. Paul Lowden and Mrs. Suzanne Lowden and the
executors, administrators or legal representatives of their estates, heirs,
distributees and beneficiaries, any trust as to which any of the foregoing is a
settlor or co-settlor, any trustee of the estate of any of the foregoing that is
bankrupt or insolvent, any guardian or conservator of any of the foregoing that
is adjudged disabled or incompetent, and any corporation, partnership or other
entity which is an Affiliate of any of the foregoing.  Lowden Family shall also
mean any lineal descendants of the grandparents of such Persons, but only to the
extent that the beneficial ownership of the Voting Stock held by such lineal
descendants was directly received (by gift, trust or sale) from any such Person.

          "LOWDEN FAMILY DISCLOSURE" has the meaning assigned to such term in
subsection 6.1 hereof.

          "LOWDEN FAMILY PAYMENT" means any direct or indirect compensation,
salary, bonus or other payment or distribution or transfer of any nature made to
Mr. Paul Lowden or any other Person described in the definition of Lowden
Family, other than (i) any payment, distribution or transfer consisting solely
of shares of common stock of SGC or warrants, options and/or other rights to
acquire common stock of SGC or (ii) distributions made generally to the
shareholders of SGC in respect of their Capital Stock that are not prohibited
under this Agreement.

          "MARKETABLE SECURITIES" means (i) Cash; (ii) securities issued or
fully guaranteed or insured by the United States Government or any agency
thereof having maturities of not more than six months from the date of
acquisition; (iii) certificates of deposit, time deposits, Eurodollar time
deposits, or bankers' acceptances having in each case a term of not more than
six months from the date of acquisition, issued by any commercial bank organized
under the laws of the United States of America or any state thereof or the
District of Columbia, each having combined capital and surplus of not less than
$500,000,000 and having a rating of "A" or better from both Standard & Poor's
Corporation and Moody's Investors Service, Inc.; (iv) commercial paper of an
issuer rated at least A-1 by Standard & Poor's Corporation or P-1 by Moody's
Investors Services, Inc. and in either case having a term of not more than three
months; or (v) any fund investing exclusively in investments of the types
described in clauses (i) through (iv) above, and if such fund has at least
$500,000,000 under management, including investments in repurchase obligations
of the foregoing investments.

                                       13
<PAGE>

          "MATERIAL ADVERSE EFFECT" means (i) a material adverse effect upon the
business, operations, properties, assets, liabilities or condition (financial or
otherwise) of SGC and its Subsidiaries, taken as a whole, the Santa Fe Hotel
Facility or Company or (ii) the impairment of the ability of any Credit Party to
perform, or of Collateral Agent or any Holder to enforce, any of the
Obligations.

          "MULTIEMPLOYER PLAN" means a "multiemployer plan", as defined in
Section 3(37) of ERISA, to which SGC, Company or any of their respective ERISA
Affiliates is contributing or has an obligation to contribute to, or to which
such an obligation existed, or contribution was made within the last six years,
or to which Company or any of its ERISA Affiliates has, or ever has had, an
obligation to contribute.

          "NOTES" means the $14,000,000 in principal amount of Company's 9.50%
Notes due December 15, 2000 issued to SunAmerica and CSFB on the Effective Date,
as they may hereafter be amended, modified or otherwise supplemented or replaced
from time to time.

          "OBLIGATIONS" means all obligations of every nature of Company and
each other Credit Party from time to time owed to Collateral Agent, Holders or
any of them under this Agreement, the Notes or any other Basic Document, whether
for principal, interest, fees, expenses, indemnification or otherwise and
whether or not the obligation is allowed as a claim in any proceeding referred
to in subsection 7.6 or 7.7.

          "OFFICERS' CERTIFICATE" means, as applied to any corporation, a
certificate executed on behalf of such corporation by (i) its chairman of the
board (if an officer) or its president or one of its vice presidents and
(ii) its chief financial officer or its treasurer.

          "PBGC" means the Pension Benefit Guaranty Corporation (or any
successor thereto).

          "PDS" means PDS Financial Corporation-Nevada, a Nevada corporation.

          "PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.

          "PERMITTED ADDITIONAL INDEBTEDNESS" means (i) Permitted Refinancing
Indebtedness; (ii) nonrecourse Indebtedness solely to finance the purchase of
furniture, fixtures or equipment for use in the operations of Permitted Lines of
Business secured by a Lien on such furniture, fixtures or equipment (including
gaming equipment); (iii) Indebtedness payable to any of, or among, Company and
any Subsidiary; (iv) recourse Indebtedness not exceeding $2,000,000 in the
aggregate incurred solely to finance the purchase of furniture, fixtures or
equipment for use in the operations of Permitted Lines of Business; (v)
Indebtedness under any revolving credit facilities and/or term loans; 

                                       14
<PAGE>

PROVIDED that the aggregate amount of such Indebtedness outstanding at any 
time shall not exceed $5,000,000; (vi) Indebtedness of Company or any 
Subsidiary outstanding as of December 29, 1993 and identified as such on 
Schedule 3.1D annexed hereto; (vii) to the extent that such incurrence does 
not result in the incurrence by Company or any Subsidiary of any obligation 
for the payment of borrowed money of others, Indebtedness incurred solely in 
respect of performance bonds and completion guarantees; and (viii) other 
Indebtedness; PROVIDED that (a) Company's Consolidated Coverage Ratio, 
calculated cumulatively for the four most recent consecutive fiscal quarters 
of Company and ending prior to the date of incurrence of such Indebtedness 
(giving effect to (1) the incurrence of such Indebtedness as if it had 
occurred on the first day of such four-quarter period and (2) the repayment 
of any other Indebtedness being repaid with proceeds from such Indebtedness 
as if such other Indebtedness had been repaid at the beginning of such 
four-quarter period), shall not be less than 2.0-to-1.0, (b) the aggregate 
amount of such Indebtedness (excluding any such Indebtedness incurred to 
finance the acquisition of gaming equipment, which may equal 100% of the 
acquisition cost of such gaming equipment) does not exceed 75% of the costs 
of the projects and assets with respect to which such Indebtedness is 
incurred and (c) such Indebtedness does not mature or require payments of 
principal or partial redemption prior to maturity of the Notes.

          "PERMITTED GROUND LEASE" means the proposed ground lease, and any
related documents entered into in connection therewith, by Company to a third
party developer of approximately three acres of real property included in the
Santa Fe Hotel Premises, all as more fully described in Proposal Three of the
Company Indenture Consent Solicitation and as approved by Requisite Holders
pursuant to subsection 5.12A hereof.

          "PERMITTED GROUND LEASE ENCUMBRANCES" means any easements, 
rights-of-way or other restrictions granted by Company and/or the ground 
lessee in connection with the Permitted Ground Lease, as such easements, 
rights-of-way and restrictions are approved by Requisite Holders pursuant to 
subsection 5.12B hereof.

          "PERMITTED LIENS" means (i) statutory Liens to secure the performance
of obligations, surety or appeal bonds, performance bonds or other obligations
of a like nature (including, without limitation, mechanic's, worker's, material
provider's and maritime Liens) incurred in the ordinary course of business
(exclusive of obligations in respect of the payment of borrowed money), or for
Taxes, assessments or governmental charges or claims; PROVIDED that in each case
the obligations are not yet delinquent or are being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted and any
reserve or other appropriate provision for accounting purposes as shall be
required in conformity with GAAP shall have been made therefore; (ii) subleases
granted to others not interfering in any material respect with the business of
Company or any Subsidiary; (iii) leases (other than ground leases) identified on
Schedule 1.1C annexed hereto or entered into after the Effective Date in respect
of the real property on which facilities owned or leased by Company are located;
PROVIDED that any 

                                       15
<PAGE>

such leases which are entered into after the Effective Date shall be related 
to, and shall not interfere in any material respect with, the operations of, 
or the revenues derived from, the Santa Fe Hotel Facility as operated by 
Company on the Effective Date; (iv) the Permitted Ground Lease and any 
Permitted Ground Lease Encumbrances; (v) Liens arising from UCC financing 
statements regarding property leased by Company or any Subsidiary otherwise 
permitted hereunder; (vi) easements, rights-of-way, navigational servitudes, 
restrictions, minor defects or irregularities in title and other similar 
charges or encumbrances that do not interfere in any material respect with 
the ordinary conduct of business of Company or any Subsidiary; (vii) Liens in 
existence as of the Effective Date and identified as such on Schedule 1.1C 
annexed hereto; (viii) Liens granted by third party lessors or fee owners 
with respect to real property as to which Company or a Subsidiary has a 
leasehold interest and which are identified on Schedule 1.1C annexed hereto; 
(ix) Liens created by any of the "Collateral Documents" as defined in the 
Company Indenture, which Liens on Collateral are subject to the Subordination 
and Intercreditor Agreement; (x) Liens with respect to the equipment listed 
on Schedule 1.1C annexed hereto granted to secure the SFHI Notes; (xi) 
purchase money security interests granted in connection with Indebtedness 
incurred pursuant to clause (ii) of the definition of Permitted Additional 
Indebtedness; PROVIDED that all such purchase money security interests shall 
be limited to property acquired with the proceeds of such Indebtedness; and 
(xii) Liens granted by the ground lessee under the Permitted Ground Lease 
which are limited to the leasehold interest of such ground lessee under the 
Permitted Ground Lease and related property owned by such ground lessee.

          "PERMITTED LINES OF BUSINESS" means the existing gaming businesses of
Company and its Subsidiaries, and hotel, restaurant and other businesses related
to, or supportive of, such gaming businesses.

          "PERMITTED REFINANCING INDEBTEDNESS" means Indebtedness of Company or
a Subsidiary (i) issued in exchange for, or (ii) the proceeds from the issuance
and sale or disbursement of which are used to substantially concurrently repay,
redeem, refund, refinance, discharge or otherwise retire for value, in whole or
in part (collectively, "repayment"), or constituting an amendment, modification
or supplement to, or a deferral or renewal of (collectively, an "amendment"),
any Indebtedness of Company or a Subsidiary (and any penalties, fees and
expenses actually incurred by Company or such Subsidiary in connection with the
repayment or amendment thereof) existing immediately after the original issuance
of the Notes or incurred pursuant to subsection 6.6, in a principal amount (or,
if such Permitted Refinancing Indebtedness provides for an amount less than the
principal amount thereof to be due and payable upon the acceleration thereof,
with an original issue price) not to exceed (a) the principal amount of the
Indebtedness so refinanced (or, if such Permitted Refinancing Indebtedness
refinances Indebtedness under a revolving credit facility or other agreement
providing a commitment for subsequent borrowings, with a maximum commitment not
to exceed the maximum commitment under such revolving credit facility or other
agreement) PLUS (b) unpaid accrued interest on such Indebtedness PLUS (c)
penalties, fees and expenses actually 

                                       16
<PAGE>

incurred by Company or such Subsidiary, as the case may be, in connection 
with the repayment or amendment thereof; PROVIDED that Permitted Refinancing 
Indebtedness of Company that constitutes a repayment of or an amendment to 
Subordinated Indebtedness shall not have an Average Life less than the 
Indebtedness to be so refinanced at the time of such incurrence, and shall 
contain subordination and default provisions no less favorable in any 
material respect to Holders of the Notes than those contained in such repaid 
or amended Indebtedness.

          "PERSON" means and includes natural persons, corporations, limited
liability companies, limited partnerships, general partnerships, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks and other organizations, whether or not legal entities,
and governments and agencies and political subdivisions thereof.

          "PIONEER INDENTURE" means that certain Indenture dated as of
December 1, 1988 among Pioneer Finance Corp., Sahara Casino Partners, L.P., as
Guarantor, and Security Pacific National Bank, as Trustee, as amended by the
First Supplemental Indenture dated as of December 21, 1988, the Second
Supplemental Indenture dated as of September 30, 1993 among Pioneer Finance
Corp., Sahara Casino Partners, L.P., Pioneer Operating Limited Partnership,
Pioneer Hotel, Inc., SGC, as successor Guarantor, and Bank of America National
Trust and Savings Association, as Trustee, and the Third Supplemental Indenture
dated as of August 31, 1995 among Pioneer Finance Corp., SGC and Company
Indenture Trustee, as Trustee.

          "POTENTIAL EVENT OF DEFAULT" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default.

          "REDEEMABLE STOCK" means any Capital Stock that by its terms or
otherwise is, or upon the happening of an event would be, required to be
redeemed or repurchased, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, at any
time; PROVIDED, HOWEVER, that Capital Stock shall not be deemed to be Redeemable
Stock solely because such Capital Stock is redeemable in the event that the
holder thereof is not found suitable by a Gaming Authority.

          "RELATED PERSON" of any Person means (i)(a) if such Person is a
corporation, any Person who is a director or officer (1) of such Person, (2) of
any Subsidiary of such Person or (3) of any Affiliate of such Person or (b) if
such Person is an individual, any immediate family member or lineal descendent
of such Person or spouse of such immediate family member or of such lineal
descendant, (ii) any Affiliate of any Person included in clause (i) and any
Person who is a director or officer of such Affiliate, or (iii) where such
Person is Company, any Subsidiary or SGC or any member of the Lowden Family,
until such time as a Change of Control shall occur.

                                       17
<PAGE>

          "RELEASE" has the meaning set forth in the Company Deed of Trust.

          "REQUISITE HOLDERS" means Holders having or holding more than 50% of
the principal balance of the outstanding Notes.

          "RESTRICTED COMPANY PAYMENT" means, as applied to any Person, (i) any
dividend on, or any distribution in respect of, or other means to purchase,
redeem or retire for value, any Capital Stock of Company or any Subsidiary,
other than, in the case of Company, through the issuance (as a dividend or stock
split thereon or in exchange therefor) solely of Company's own Capital Stock
(excluding Exchangeable Stock or Redeemable Stock) and, in the case of a
Subsidiary, with respect to shares of its Capital Stock owned, directly or
indirectly, by Company; and (ii) any principal payment on, or redemption,
repurchase, defeasance or other means to acquire or retire for value,
Subordinated Indebtedness during the continuance of any Event of Default
hereunder or prior to any scheduled principal payment or maturity.  

          "RESTRICTED INVESTMENT" means any guarantee of Indebtedness of, or any
loan or advancement to, or other investment in, any Affiliate or Related Person
of Company or of a Subsidiary.

          "RESTRICTED SGC PAYMENT" means (i) any dividend or other 
distribution, direct or indirect, on account of any shares of any class of 
Capital Stock of SGC now or hereafter outstanding, except a dividend payable 
solely in shares of that class of Capital Stock to the holders of that class 
or in options, warrants or other rights to purchase such Capital Stock, (ii) 
any redemption, retirement, sinking fund or similar payment, purchase or 
other acquisition for value, direct or indirect, of any shares of any class 
of Capital Stock of SGC now or hereafter outstanding (other than in exchange 
for Capital Stock of SGC or options, warrants or other rights to purchase 
such Capital Stock), (iii) any payment made to retire, or to obtain the 
surrender of, any outstanding warrants, options or other rights to acquire 
shares of any class of Capital Stock of SGC now or hereafter outstanding, and 
(iv) any payment or prepayment of principal of, premium, if any, or 
redemption, purchase, retirement, defeasance (including in-substance or legal 
defeasance), sinking fund or similar payment with respect to, any 
Indebtedness of Company to SGC or any of SGC's Subsidiaries or Affiliates or 
with respect to any Junior Subordinated Notes.

          "SANTA FE HOTEL APPRAISAL" means a self-contained MAI appraisal of the
Santa Fe Hotel Facility, prepared to USPAP standards for loan purposes by an MAI
appraiser acceptable to Holders and licensed as an appraiser in the State of
Nevada, which shall be in form, scope and substance satisfactory to Requisite
Holders.

          "SANTA FE HOTEL DOCUMENTS" means any and all agreements, contracts,
obligations, arrangements or understandings (whether written or oral and whether
express or implied), and other documents (including, without limitation, the
agreements and other documents specified on Schedule 1.1A annexed hereto) which
relate to the Santa Fe 

                                       18
<PAGE>

Hotel Facility and affect the priority of the Lien of the Company Deed of 
Trust or which constitute Contractual Obligations; PROVIDED that any such 
documentation in respect of leased or purchased furniture, fixtures or 
equipment having a net book value of less than $1,000,000 shall not be 
considered a Santa Fe Hotel Document.

          "SANTA FE HOTEL FACILITY" means the Santa Fe Hotel Premises and the
Santa Fe Hotel Improvements.

          "SANTA FE HOTEL IMPROVEMENTS" means all buildings, structures, 
facilities and other improvements of every kind and description (if any) now 
or hereafter located on the Santa Fe Hotel Premises, including all parking 
areas, roads, driveways, walks, fences, walls, beams, recreation facilities, 
drainage facilities, lighting facilities and other site improvements, all 
water, sanitary and storm sewer, drainage, electricity, steam, gas, telephone 
and other utility equipment and facilities, all plumbing, lighting, heating, 
ventilating, air-conditioning, refrigerating, incinerating, compacting, fire 
protection and sprinkler, surveillance and security, vacuum cleaning, public 
address and communications equipment and systems, all screens, awnings, floor 
coverings, partitions, elevators, escalators, motors, machinery, pipes, 
fittings and other items of equipment and personal property of every kind and 
description now or hereafter located on the Santa Fe Hotel Premises or 
attached to the improvements that by the nature of their location thereon or 
attachment thereto are real property under applicable law; and including all 
materials intended for the construction, reconstruction, repair, replacement, 
alteration, addition or improvement of or to such buildings, equipment, 
fixtures, structures and improvements; PROVIDED that gaming equipment which 
is subject to regulation pursuant to any Gaming Law shall not be considered a 
Santa Fe Hotel Improvement.

          "SANTA FE HOTEL PREMISES" means the real property owned by Company on
the Effective Date relating to the Santa Fe Hotel & Casino and situated in Las
Vegas, Nevada and more particularly described on Schedule 1.1B annexed hereto.

          "SECURITIES ACT" means the Securities Act of 1933, as it may be
amended from time to time.

          "SFHI NOTES" means (i) the amended and restated promissory note issued
by Company to SGC in a principal amount not exceeding $4,961,556 dated as of
April 14, 1998 and (ii) the amended and restated promissory note issued by
Company to SGC in a principal amount not exceeding $4,978,440 dated as of April
14, 1998, each as amended, supplemented, extended or otherwise modified from
time to time.

          "SGC" has the meaning set forth in the Introduction to this Agreement.

          "SGC GUARANTY" means the Guaranty to be issued by SGC as of the
Effective Date, substantially in the form attached hereto as Exhibit II, as it
may thereafter be amended, supplemented or otherwise modified from time to time.

                                       19
<PAGE>

          "SGC PREFERRED STOCK" means SGC's Exchangeable Redeemable Preferred
Stock, $2.14 liquidation preference per share, issued prior to the Effective
Date pursuant to the Certificate of Designation for Exchangeable Redeemable
Preferred Stock.

          "STRUCTURING ADVISORY FEE" has the meaning assigned to such term in
subsection 2.4E hereof.

          "SUBORDINATED INDEBTEDNESS" means any Indebtedness of Company or a
Subsidiary (whether outstanding on the date of this Agreement or thereafter
incurred) that is by its terms subordinate or junior in right of payment to the
Notes.

          "SUBORDINATION AND INTERCREDITOR AGREEMENT" means the Subordination
and Intercreditor Agreement to be entered into by Company, SunAmerica and
Company Indenture Trustee as of the Effective Date substantially in the form of
Exhibit VI annexed hereto, as it may thereafter be amended, supplemented or
otherwise modified from time to time, pursuant to which the Lien of the Company
Indenture Deed of Trust is subordinated to the Lien of the Company Deed of Trust
and certain additional agreements are made by the parties to the Company
Indenture and this Agreement regarding their respective obligations thereunder.

          "SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, association, limited liability company, Joint Venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof.

          "SUNAMERICA" has the meaning set forth in the Introduction to this
Agreement.

          "TAX" means any federal, state, county, local or foreign taxes,
charges, fees, levies, other assessments, or withholding taxes or charges
imposed by any Governmental Authority, and includes any interest and penalties
(civil or criminal) or additions to any such taxes.

          "TITLE COMPANY" has the meaning assigned to such term in subsection
4.1E hereof.

          "TITLE POLICY" has the meaning assigned to such term in subsection
4.1E hereof

                                       20

<PAGE>

          "UNSUITABILITY DATE" has the meaning assigned to such term in
subsection 2.5D(i) hereof.

          "UNSUITABLE HOLDER" has the meaning assigned to such term in
subsection 2.5D(i) hereof.

          "VOTING STOCK" means any class of Capital Stock of any Person then
outstanding entitled to vote in elections of directors (without regard to the
occurrence of any contingency).

     1.2  ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS
UNDER AGREEMENT.  Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP.  Financial statements and other information
required to be delivered by SGC or Company to Holders pursuant to subsections
5.1A and 5.1B shall be prepared in accordance with GAAP as in effect at the time
of such preparation (and delivered together with the reconciliation statements
provided for in subsection 5.1C).  Calculations in connection with the
definitions, covenants and other provisions of this Agreement shall utilize
accounting principles and policies in conformity with those used to prepare the
financial statements referred to in subsection 3.3.

     1.3  OTHER DEFINITIONAL PROVISIONS.  References to "Sections" and
"subsections" shall be to Sections and subsections, respectively, of this
Agreement unless otherwise specifically provided.  Any of the terms defined in
subsection 1.1 may, unless the context otherwise requires, be used in the
singular or the plural, depending on the reference.


SECTION 2.  THE NOTES; CLOSING; DELIVERY

     2.1  AUTHORIZATION OF ISSUANCE OF NOTES.  Company has authorized the
issuance and sale of Notes in an aggregate principal amount of $7,000,000 to
CSFB, as a Holder, and the issuance and sale of Notes in an aggregate principal
amount of $7,000,000 to SunAmerica, as a Holder, pursuant to the terms and
conditions hereof and as provided herein.

     2.2  PURCHASE AND SALE OF NOTES.  On the Effective Date, subject to the
terms and conditions hereof, (i) SunAmerica shall pay the $7,000,000
subscription price of the Note to be purchased by SunAmerica (the "SUNAMERICA
NOTE"), $6.93 million of which shall be paid to Company or at its direction in
Cash by wire transfer of immediately available funds against delivery to
SunAmerica of the SunAmerica Note, and the remaining $70,000 of which shall be
credited against the subscription price of the SunAmerica Note and retained by
SunAmerica as its share of the Structuring Advisory Fee and (ii) CSFB shall pay
the $7,000,000 subscription price of the Note to be purchased 

                                      21
<PAGE>

by CSFB (the "CSFB NOTE"), $6.93 million of which shall be paid to Company or 
at its direction in Cash by wire transfer of immediately available funds 
against delivery to CSFB of the CSFB Note, and the remaining $70,000 of which 
shall be credited against the subscription price of the CSFB Note and 
retained by CSFB as its share of the Structuring Advisory Fee.

     2.3  CLOSING AND DELIVERY OF NOTES.  A pre-closing of the purchase and sale
of the Notes shall be held at O'Melveny & Myers LLP, 400 South Hope Street, Los
Angeles, CA on April 13, 1998 or at such other time and place as the parties may
agree upon.  The "CLOSING", as used herein, shall mean the date that the Company
Deed of Trust is recorded and all conditions to the Effective Date hereunder
have been satisfied or waived by Holders.  Subject to the terms of this
Agreement, at the Closing, Company shall deliver to CSFB a Note in the aggregate
principal amount of $7,000,000 and to SunAmerica a Note in the aggregate
principal amount of $7,000,000, and Company shall satisfy the terms and
conditions of the Closing set forth in subsection 4.1.  If at the Closing
Company shall fail to tender the Notes to Holders as provided above in this
subsection 2.3 and in subsection 2.2, or any of the terms or conditions
specified in subsection 4.1 shall not have been fulfilled to each Holder's
satisfaction, Holders shall, at their election, be relieved of all further
obligations under this Agreement to purchase the Notes.  In no event shall the
Closing occur after April 15, 1998.

     2.4  CERTAIN TERMS OF THE NOTES; PAYMENT OF INTEREST.

          A.   INTEREST.  The Notes shall bear interest at a rate of 9.50% per
annum, computed on the basis of a 360-day year of twelve 30 day months. 
Interest on the Notes shall be payable quarterly on March 15, June 15, September
15 and December 15 of each year, commencing June 15, 1998 and at the scheduled
maturity of the Notes on December 15, 2000.  In addition to the foregoing,
interest on the Notes shall be payable on and to any date of any prepayment,
redemption or other payment of the Notes (to the extent accrued on the amount of
the prepayment, redemption or other payment) and at maturity (including at any
accelerated maturity).

          B.   STATED MATURITY.  The principal evidenced by the Notes matures on
December 15, 2000, 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 

                                      22
<PAGE>

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 N.R.S. 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.

          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.   STRUCTURING ADVISORY FEE.  On the Effective Date, Company shall
pay to Initial Holders a structuring advisory fee in the amount of $140,000 (the
"STRUCTURING ADVISORY FEE"), which Structuring Advisory Fee shall be credited
against the subscription price of the Notes as set forth in subsection 2.2
hereof.

     2.5  GENERAL PROVISIONS REGARDING PAYMENTS; OPTIONAL REDEMPTION; MANDATORY
REDEMPTION AND CHANGE IN CONTROL REPURCHASE.

          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 on
     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.

                                      23
<PAGE>

          (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 pari passu
     according to the principal balance of each Note as provided below, and
     THIRD to the principal balance of the Notes pari passu according to the
     principal balance of each Note as provided below.  Subject to subsection
     2.5E, aggregate principal, interest and applicable late charge payments
     shall be ratably apportioned among all outstanding Notes 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), such Holder shall 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 on 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.  The Notes shall be redeemable at any time
in whole or in part at the option of Company at a price paid in immediately
available funds of (i) 101% of the principal amount thereof from the Effective
Date to June 15, 2000 and (ii) 100% of the principal amount thereof from and
after such date, in each case together with accrued interest 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 and shall not redeem Notes
pursuant to this subsection 2.5B except in a minimum aggregate principal amount
of $1,000,000 and integral multiples of $100,000 thereof.

          C.   MANDATORY REDEMPTION AND CHANGE IN CONTROL REPURCHASE.

          (i)  PAYMENT REQUIRED UNDER COMPANY DEED OF TRUST.  Company shall
     redeem or otherwise pay the principal amount of the Notes and accrued
     interest thereon as required pursuant to the Company Deed 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, plus accrued
     and unpaid interest thereon to the redemption date.

          (ii) 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 

                                      24
<PAGE>

     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 Holders or 
     such longer period required by applicable law (the "CHANGE OF CONTROL 
     PAYMENT DATE").  Notice of a Change of Control Repurchase Offer shall 
     be mailed by Company to 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(ii), that Notes may be surrendered in
          whole or in part (in denominations of $1,000 and integral multiples
          thereof), and that all Notes tendered shall be accepted for payment;

               (2)  that any Notes not tendered shall 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 shall 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 Change of Control Payment Date;

               (5)  that each Holder shall be entitled to withdraw its election
          if Company receives, not later than the close of business on the
          Business Day immediately preceding the Change of Control Payment Date,
          a telegram, telex, facsimile transmission or letter setting forth the
          name of such Holder, the principal amount of Notes such Holder
          delivered for purchase and a statement that such Holder is withdrawing
          such Holder's election to have such Notes purchased;

               (6)  that Holders whose Notes are tendered only in part shall be
          issued Notes representing the unpurchased portion of the Notes
          surrendered;

               (7)  the instructions which 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, 

                                      25
<PAGE>

          information regarding the Persons acquiring control and such Persons' 
          business plans going forward).

          On the Change of Control Payment Date, Company shall (A) accept for
     payment Notes or portions thereof tendered pursuant to the Change of
     Control Repurchase Offer, (B) promptly transfer to 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 shall 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 finding of suitability, or (ii) the
time period prescribed by such Gaming Authority for such application.  Any
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 any 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 (the "UNSUITABILITY DATE") that such
Holder or beneficial owner (the "UNSUITABLE HOLDER") is found unsuitable or
fails to submit for a finding of suitability, 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 

                                      26
<PAGE>

transaction, in either case on arm's-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 Unsuitable 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 shall be issued new Notes equal in principal amount
to the unpurchased portion of the Notes surrendered in connection with a
redemption.

     2.6  REPLACEMENT OF NOTES.  Upon receipt of evidence reasonably
satisfactory to Company of the loss, theft, destruction or mutilation of a Note
and upon delivery of an unsecured indemnity agreement reasonably satisfactory to
Company from any Holder of such Note or, in the case of any such mutilation,
upon the surrender of such Note for cancellation to Company at its principal
office, Company, at its expense, shall execute and deliver, in lieu thereof, a
new Note of like tenor, dated in the case of a Note, so that there shall be no
loss of interest.  Any Note in lieu of which any such new Note has been so
executed and delivered by Company, thereupon shall not be deemed an outstanding
Note for any purpose under this Agreement.  Notwithstanding the foregoing
provisions of this subsection 2.6, if any Note of which SunAmerica or CSFB or
any other institutional Holder is the owner is lost, stolen or destroyed, then
the affidavit of such Holder's Treasurer or Assistant Treasurer (or other
responsible officials), setting forth the name of the owner of such Note and the
circumstances with respect to such loss, theft or destruction, shall be accepted
as satisfactory evidence thereof, and no indemnity shall be required as a
condition to the execution and delivery by Company of a new Note in lieu of such
Note (or as a condition to the payment thereof, if due and payable) other than
SunAmerica's or CSFB's or such Holder's written agreement to indemnify Company.

     2.7  TAXES.  In the event of the passage of any state, federal, municipal
or other governmental law, order, rule or regulation subsequent to the date
hereof (i) deducting from the value of real property for the purpose of taxation
any Lien or encumbrance thereon or in any manner changing or modifying the laws
now in force governing the 

                                      27
<PAGE>

taxation of the Company Deed of Trust or Indebtedness secured by mortgages 
(other than laws governing income, franchise and similar Taxes generally) or 
the manner of collecting Taxes thereon and (ii) imposing a Tax to be paid by 
Collateral Agent or any Holder, either directly or indirectly, on any of the 
Company Deed of Trust, this Agreement, the SGC Guaranty or any of the other 
Basic Documents, or requiring an amount of Taxes to be withheld or deducted 
therefrom, SGC and Company shall promptly notify Collateral Agent or such 
Holder, as applicable, of such event.  In such event, SGC and Company shall 
(i) jointly and severally agree to enter into such further instruments as may 
be reasonably necessary or desirable to obligate Company to make additional 
payments to fully and timely discharge such items and (ii) jointly and 
severally guarantee such additional payments.  If SGC and Company are not 
permitted by law to do that which is required by the preceding sentence, 
Collateral Agent or such Holder, as applicable, shall be entitled to exercise 
any or all of its rights and remedies under the Basic Documents, including 
the right to accelerate the Obligations.  The obligations of SGC and Company 
under this subsection shall survive the payment of the Notes.

     2.8  REGISTRATION; TRANSFER; REGISTRATION OF TRANSFER AND EXCHANGE.

          A.   Company shall maintain a register for its Notes, which shall
provide for the registration of the Notes and of transfers of the Notes.  Upon
surrender for registration or transfer of any Note or any portion thereof
together with an Assignment Agreement in the form of Exhibit VII annexed hereto
entered into by the transferring Holder and the applicable transferee or
transferees, Company, at its expense, shall execute and deliver, in the name of
the designated transferee or transferees and the transferor, as applicable, one
or more new Notes, as applicable; PROVIDED, HOWEVER, that in connection with any
such transfer, Holder requesting the transfer shall provide to Company evidence
reasonably satisfactory to it that the transfer is to a "qualified institutional
buyer" or an "accredited investor," as such terms are defined in Rule 144A and
501, respectively, of the Securities Act, and is exempt from the registration
requirements of the Securities Act, and, if the transfer is to an entity or
Person other than a "qualified institutional buyer", Company shall be provided
with an opinion of counsel reasonably satisfactory to it that the transfer is so
exempt from the registration requirements of the Securities Act; PROVIDED
FURTHER, that, in connection with any transfer, Holder requesting such transfer
shall provide to Company, Collateral Agent and the other Holders an amendment to
Schedule 2 annexed hereto that sets forth payment and other information with
respect to such transferee or transferees and shall also deliver to Collateral
Agent and each other Holder an Intercreditor Assumption Agreement and the
Assignment Agreement referred to above executed by each such transferee;
PROVIDED, FURTHER, that Company shall not be required to register the transfer
of Notes to a transferee with a principal amount of less than $1,000,000; and
PROVIDED FURTHER that, if no Event of Default has occurred and is continuing,
Company shall have the right to consent (which consent shall not be unreasonably
withheld or delayed) to any transfer of the Notes that causes either Initial
Holder to hold less than 51% of the principal amount of Notes acquired by such
Initial Holder on the date hereof.  Notes may be exchanged at the 

                                      28
<PAGE>

option of any Holder thereof for Notes of a like aggregate principal amount 
in the same name but in different denominations.  Whenever any Notes are so 
surrendered for exchange, Company, at its expense, shall execute and deliver 
the Notes which Holder making the exchange is entitled to receive.  All Notes 
issued upon any registration of transfer or exchange thereof shall be the 
valid Obligations of Company, evidencing the same Indebtedness, and entitled 
to the same benefits, as Notes surrendered upon such registration of transfer 
or exchange.  Each Note presented or surrendered for registration or transfer 
or exchange shall (if so required by Company) be duly endorsed, or be 
accompanied by a written instrument of transfer in form satisfactory to 
Company, duly executed by Holder thereof or its attorney duly authorized in 
writing.

          B.   In connection with any transfer of the Notes pursuant to the
exemption from the provisions of Section 5 of the Securities Act afforded by
Rule 144A promulgated thereunder, Company hereby agrees to provide (i) at the
request of any transferring Holder, including any transferee thereof or Person
who has been granted a participation in any Note pursuant to this Agreement, to
such Holder and to any prospective transferee designated to Company in writing
by such Holder, and (ii) at such prospective transferee's request to such Holder
or Company, the information required by paragraph (d)(4)(i) (or any successor
provision) of Rule 144A under the Securities Act.

     2.9  REPRESENTATION OF INITIAL HOLDERS.  Each Initial Holder represents to
SGC and Company that on the Effective Date such Initial Holder is an "accredited
investor" within the meaning of Section 501 of the Securities Act, is acquiring
the Notes for investment and not with a view to the distribution or sale thereof
within the meaning of the Securities Act, subject, however, to any requirement
of law that the disposition of its property be at all times within its control.


SECTION 3.  REPRESENTATIONS AND WARRANTIES

          To induce Holders to enter into this Agreement, and to hold the Notes
hereunder, SGC and Company each represent, warrant and covenant to each Holder,
as of the Effective Date, as follows:

     3.1  ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING AND OTHER MATTERS.

          A.   ORGANIZATION AND POWERS; QUALIFICATION AND GOOD STANDING.  Each
Credit Party is a corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada.  Each Credit Party has all
requisite corporate power and authority to own and operate its properties, to
carry on its business as now conducted and as proposed to be conducted, to enter
into the Basic Documents to which it is or may be party and to carry out the
transactions contemplated thereby.  Each Credit Party is qualified to do
business and in good standing in Nevada and in every other jurisdiction where
its assets are located and wherever necessary to carry out its business and

                                      29
<PAGE>

operations, except in such other jurisdictions where the failure to be so 
qualified or in good standing has not had and will not have a Material 
Adverse Effect.

          B.   SUBSIDIARIES AND JOINT VENTURES.  All of the Subsidiaries and
Joint Ventures of SGC as of the Effective Date are identified on Schedule 3.1B
annexed hereto.  The Capital Stock of each of the Subsidiaries of SGC identified
on Schedule 3.1B annexed hereto is duly authorized, validly issued, fully paid
and nonassessable.  Each of the Subsidiaries and Joint Ventures of SGC
identified on Schedule 3.1B annexed hereto is a corporation or other entity duly
organized or formed, validly existing and in good standing under the laws of its
respective jurisdiction of incorporation set forth therein, has all requisite
power and authority to own and operate its properties and to carry on its
business as now conducted and as proposed to be conducted, and is qualified to
do business and in good standing in every jurisdiction where its assets are
located and wherever necessary to carry out its business and operations, in each
case except where failure to be so qualified or in good standing or a lack of
such corporate power and authority has not had and will not have a Material
Adverse Effect.  Schedule 3.1B annexed hereto correctly sets forth, as of the
Effective Date, the ownership interest of SGC and each of its Subsidiaries in
each of their respective Subsidiaries and Joint Ventures.

          C.   CAPITALIZATION.  The authorized Capital Stock of SGC consists of
100,000,000 shares of common stock, par value $0.01 per share, of which
6,195,356 shares are outstanding, and 10,000,000 shares of preferred stock, par
value $0.01 per share, of which 8,556,651 shares of SGC Preferred Stock are
outstanding.  The authorized Capital Stock of Company consists of 1,000 shares
of common stock, no par value per share, of which 1,000 shares are issued and
outstanding.

          D.   EXISTING COMPANY INDEBTEDNESS AND RELATED MATTERS.  Company is
not liable with respect to any Indebtedness except for the Notes and
Indebtedness listed on Schedule 3.1D annexed hereto.  Such 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.

          E.   SANTA FE HOTEL DOCUMENTS.  Schedule 1.1A is a true, correct and
complete disclosure of all Santa Fe Hotel Documents in existence as of the
Effective Date, and, except as set forth on Schedule 1.1A annexed hereto, no
surveys, reports (including physical inspection and environmental reports),
permits, licenses, correspondence or any other documents relating to the Santa
Fe Hotel Facility disclose any facts, conditions or circumstances that could
reasonably be expected to have a Material Adverse Effect or to adversely affect
the priority of the Lien of the Company Deed of Trust; PROVIDED that, for
purposes of this subsection 3.1E, the definition of "Material Adverse Effect"
shall not include a material adverse effect upon the business,

                                      30

<PAGE>

operations, properties, assets, liabilities or condition (financial or 
otherwise) of SGC and its Subsidiaries, taken as a whole.

          F.   OTHER BASIC DOCUMENTS.  All representations and warranties in
each other Basic Document are true and correct in all material respects.

     3.2  AUTHORIZATION OF NOTES AND OTHER BASIC DOCUMENTS AND RELATED MATTERS.

          A.   AUTHORIZATION OF NOTES AND OTHER BASIC DOCUMENTS.  The execution
and delivery by each Credit Party of each Basic Document to which each is a
party and the performance by each Credit Party of their respective Obligations
thereunder have been duly authorized by all necessary corporate action on the
part of each such Credit Party, as applicable.

          B.   NO CONFLICT.  The execution, delivery and performance by each
Credit Party of each Basic Document to which it is party, and the consummation
of the transactions contemplated by the Basic Documents, do not and will not
(i) violate any provision of any law or any governmental rule or regulation
(including any Gaming Laws or, based on the representation and warranty of
Initial Holders contained in subsection 2.9 hereof, federal securities laws)
applicable to any Credit Party or any of their respective Subsidiaries, the
Certificate or Articles of Incorporation or Bylaws of any Credit Party or any of
their respective Subsidiaries or any order, judgment or decree of any court or
other agency of government binding on any Credit Party or any of their
respective Subsidiaries, (ii) conflict with, result in a breach of or constitute
(with due notice or lapse of time or both) a default under the Company
Indenture, the Company Indenture Consent Solicitation, the Santa Fe Hotel
Documents or any other Contractual Obligation of any Credit Party or any of
their respective Subsidiaries, (iii) result in or require the creation or
imposition of any Lien upon any of the properties or assets of any Credit Party
(other than any Liens created under any of the Basic Documents in favor of
Collateral Agent or Holders), or (iv) require any approval of stockholders or
any approval or consent of any Person under any Contractual Obligation of any
Credit Party or any of their respective Subsidiaries, except for such approvals
or consents which shall be obtained on or before the Effective Date and
disclosed in writing to Holders.

          C.   GOVERNMENTAL CONSENTS.  Assuming the accuracy of Initial 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 Authorities, except for the notice to be delivered by Company to the
appropriate Nevada Gaming Authorities prior to 30 days after the end of the
quarter in which the Effective Date occurs (the "LOAN NOTICE") pursuant to
Regulations 8.130 and 3.020 under the applicable Nevada Gaming Laws.

                                      31 
<PAGE>

          D.   BINDING OBLIGATION.  Each of the Basic Documents to which each
Credit Party is party has been duly executed and delivered by each such Credit
Party, as applicable, and is the legally valid and binding obligation of each
such Credit Party, as applicable, enforceable against each such Credit Party in
accordance with its respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles relating to
enforceability.

          E.   OFFERINGS.  No Credit Party or any of their respective
Subsidiaries has, directly or indirectly, offered the Notes, or any part
thereof, or (within the last six months) any similar securities for sale to, or
solicited any offer to buy any of the same from, or otherwise approached or
negotiated in respect thereof with, anyone other than Initial Holders and their
Affiliates and not more than 10 other institutional investors.  Assuming the
accuracy of the representations and warranties of Initial Holders contained in
subsection 2.9, the offer, issuance and sale of the Notes to Holders in
conformity with the terms of this Agreement constitute transactions exempt from
the registration requirements of Section 5 of the Securities Act and comply or
will comply with federal securities and state blue sky laws applicable to such
offer, sale and issuance.

          F.   USE OF PROCEEDS.  SGC and Company will use the proceeds of the
Notes as provided in subsection 5.10 hereof.

          G.   THE COMPANY INDENTURE CONSENT SOLICITATION.  The Company
Indenture Consent Solicitation has been approved by the requisite holders of the
Company Indenture Notes, and the Basic Documents are in all respects consistent
with and do not conflict with any term of the Company Indenture, the Company
Indenture Consent Solicitation or any related document.

     3.3  FINANCIAL CONDITION.  SGC and Company have heretofore delivered to 
Holders at Holders' request, the following financial statements and 
information: the audited consolidated financial statements of SGC and its 
Subsidiaries for the Fiscal Years ended September 30, 1997, 1996 and 1995 and 
the unaudited consolidated financial statements of Company for the Fiscal 
Years ended September 30, 1997, 1996 and 1995 and the unaudited consolidated 
financial statements of SGC and its Subsidiaries and the unaudited 
consolidated financial statements of Company for the fiscal quarter ended 
December 31, 1997.  All such statements were prepared in conformity with GAAP 
and fairly present the consolidated financial position of the entities 
described in such financial statements as at the respective dates thereof and 
the results of operations and cash flows (on a consolidated basis) of the 
entities described therein for each of the periods then ended.  SGC and its 
Subsidiaries do not (and will not following the issuance of the Notes) have 
any material Contingent Obligation or liability for Taxes, long-term lease or 
unusual forward or long-term commitment that is not reflected in the 
aforementioned financial statements or the notes thereto and which in any 
such case is material in relation to the

                                      32
<PAGE>

business, operations, properties, assets, condition (financial or otherwise) 
or prospects of SGC, Company, or any of their respective Subsidiaries.

     3.4  NO MATERIAL ADVERSE CHANGE; NO RESTRICTED SGC PAYMENTS.  Since
December 31, 1997, no event or change has occurred that has caused or evidences,
either in any case or in the aggregate, a Material Adverse Effect.  Since
December 31, 1997, neither SGC nor Company has directly or indirectly declared,
ordered, paid or made, or set apart any sum or property for, any Restricted SGC
Payment or agreed to do so.

     3.5  TITLE TO PROPERTIES; LIENS.  SGC and Company have (i) good, sufficient
and legal title to all fee interests constituting real property Collateral,
(ii) valid leasehold interests in all real or personal leasehold property
constituting Collateral and (iii) good title to all other property and assets
reflected in the financial statements referred to in subsection 3.3, in each
case except (a) as disclosed in the notes to such financial statements, (b) for
assets disposed of since the date of such financial statements in the ordinary
course of business or as otherwise permitted under subsection 6.4 and (c) in the
case of clause (iii) above, if the failure to have good title for such other
property and assets could not have a Material Adverse Effect.  Except as
permitted by this Agreement, the properties and assets of Company are free and
clear of Liens.

     3.6  LITIGATION; ADVERSE FACTS.  Except as disclosed in SGC's Annual Report
on Form 10-K for the Fiscal Year ending September 30, 1997 and Quarterly Report
on Form 10-Q for the quarter ended December 31, 1997, there are no actions,
suits, proceedings, arbitrations or governmental investigations (whether or not
purportedly on behalf of any Credit Party or any of their respective
Subsidiaries) at law or in equity or before or by any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, pending or, to the knowledge of any Credit
Party, threatened against any Credit Party or any of their respective
Subsidiaries or any property of any Credit Party or any of their respective
Subsidiaries that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect.  No Credit Party or any of
their respective Subsidiaries is (i) in violation of any applicable laws that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect or (ii) subject to or in default with respect to any
final judgments, writs, injunctions, decrees, rules or regulations of any court
or any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.

     3.7  PAYMENT OF TAXES.  Except to the extent permitted by subsection 5.4,
all tax returns and reports of each Credit Party and their respective
Subsidiaries required to be filed by any of them have been timely filed, and all
Taxes, assessments, fees and other governmental charges upon any Credit Party
and their respective Subsidiaries and upon their respective properties, assets,
income, businesses and franchises which are due and payable have been paid or
are being contested in good faith by appropriate proceedings.

                                      33
<PAGE>

No Credit Party knows of any proposed Tax assessment against any Credit Party 
or any of their respective Subsidiaries, and any such proposed Tax assessment 
is being actively contested by such Credit Party or Subsidiary, as 
applicable, in good faith and by appropriate proceedings; PROVIDED that such 
reserves or other appropriate provisions, if any, as shall be required in 
conformity with GAAP shall have been made or provided therefor.  No 
Governmental Authority has, during the past three years, examined, or is in 
the process of examining, any tax return of any Credit Party or any of their 
respective Subsidiaries.  No Governmental Authority has proposed (tentatively 
or definitively), asserted or assessed, or, to the knowledge of any Credit 
Party, threatened to propose or assert, any deficiency, assessment or claim 
for Taxes, no such delinquency, assessment or claim could reasonably be 
expected to have a Material Adverse Effect and, to the best knowledge of each 
Credit Party, there would be no basis for any such delinquency, assessment or 
claim.  There are no agreements, waivers or other arrangements providing for 
an extension of time with respect to the assessment of any Tax or deficiency 
against any Credit Party or any of their respective Subsidiaries or with 
respect to any tax return filed or to be filed by any Credit Party or any of 
their respective Subsidiaries.  Following the Effective Date, the assessment 
of any additional Taxes for periods for which returns have been filed is not 
expected to exceed the liability recorded therefor on the financial 
statements delivered to Holders pursuant to subsection 3.3.  There are no 
material unresolved questions or claims concerning the Tax liability of any 
Credit Party or any of their respective Subsidiaries.

     3.8  PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS.  No Credit
Party or any of their respective Subsidiaries is in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any of its Contractual Obligations, and no such default could
reasonably be expected to result in a Material Adverse Effect.  To the knowledge
of SGC and Company, no condition exists that, with the giving of notice or the
lapse of time or both, would constitute such a default.

     3.9  GOVERNMENTAL REGULATION.  No Credit Party or any of their respective
Subsidiaries is subject to regulation under the Public Utility Holding Company
Act of 1935, the Federal Power Act, the Interstate Commerce Act or the
Investment Company Act of 1940 or under any other federal or state statute or
regulation which may limit its ability to incur Indebtedness or which may
otherwise render all or any portion of the Obligations unenforceable.

     3.10 EMPLOYEE BENEFIT PLANS AND EMPLOYEE MATTERS.

          A.   Each Credit Party and each of their respective ERISA Affiliates
are in compliance in all material respects with all applicable provisions and
requirements of ERISA and the regulations and published interpretations
thereunder with respect to each Employee Benefit Plan, and have performed all
their obligations under each Employee Benefit Plan.  No ERISA Event has occurred
or is reasonably expected to occur.

                                      34
<PAGE>

          B.   Schedule 3.10 annexed hereto lists all Employee Benefit Plans. 
Except to the extent required under Section 4980B of the Internal Revenue Code,
no Employee Benefit Plan provides health or welfare benefits (through the
purchase of insurance or otherwise) for any retired or former employees of any
Credit Party or any of their respective ERISA Affiliates.  As of the most recent
valuation date for any Pension Plan, no Pension Plan has any unfunded benefit
liabilities (as defined in Section 4001(a)(18) of ERISA).

     3.11 ENVIRONMENTAL PROTECTION.  Without exception:

          (i)   the operations of Company related to the Santa Fe Hotel 
     Facility comply in all material respects with all Environmental Laws;

          (ii)  Company has obtained all Governmental Authorizations under
     Environmental Laws necessary to its operations related to the Santa Fe
     Hotel Facility, and all such Governmental Authorizations are in good
     standing, and Company is in compliance with all material terms and
     conditions of such Governmental Authorizations;

          (iii) Company has not received (a) any notice or claim to the
     effect that it is or may be liable to any Person as a result of or in
     connection with any Hazardous Material related to the Santa Fe Hotel
     Facility or (b) any letter or request for information under Section 104 of
     the Comprehensive Environmental Response, Compensation, and Liability Act
     (42 U.S.C. Section  9604) or comparable state laws with respect to the
     Santa Fe Hotel Facility, and, none of the operations of Company are the
     subject of any federal or state investigation relating to or in connection
     with any Hazardous Material at the Santa Fe Hotel Facility or any Hazardous
     Material in any other manner related to the Santa Fe Hotel Facility;

          (iv)  Company is not a party to any judicial or administrative
     proceeding alleging the violation of or liability under any Environmental
     Laws which if adversely determined could reasonably be expected to have a
     Material Adverse Effect;

          (v)   neither of Company nor the Santa Fe Hotel Facility is subject 
     to any outstanding written order or agreement with any Governmental
     Authority or private party relating to (a) any Environmental Laws or (b)
     any Environmental Claims;

          (vi)  Company has no contingent liability in connection with any
     Release of any Hazardous Material related to the Santa Fe Hotel Facility
     which could reasonably be expected to have a Material Adverse Effect;

                                      35
<PAGE>

          (vii)  Company, and, to the best knowledge of each officer of SGC
     and Company, none of its predecessors have filed any notice under any
     Environmental Law indicating past or present treatment or Release of
     Hazardous Material at the Santa Fe Hotel Facility, and none of Company's
     operations involves the generation, transportation, treatment, storage or
     disposal of hazardous waste, as defined under 40 C.F.R. Parts 260-270 or
     any state equivalent;

          (viii) except as disclosed in the Environmental Report, no
     Hazardous Material exists on, under or about the Santa Fe Hotel Facility in
     a manner that has a reasonable possibility of giving rise to an
     Environmental Claim having a Material Adverse Effect, and Company and, to
     Company's knowledge, its predecessors have not filed any notice or report
     of a Release of any Hazardous Material that has a reasonable possibility of
     giving rise to an Environmental Claim having a Material Adverse Effect;

          (ix) neither Company nor, to the best knowledge of each officer of SGC
     and Company, any of its predecessors have disposed of any Hazardous
     Material in a manner that has a reasonable possibility of giving rise to an
     Environmental Claim having a Material Adverse Effect;

          (x)  to the knowledge of SGC and Company, no underground storage tanks
     or surface impoundments are on or at the Santa Fe Hotel Facility; and

          (xi) no Lien in favor of any Person relating to or in connection with
     any Environmental Claim has been filed or has been attached to the Santa Fe
     Hotel Facility.

     3.12 SOLVENCY.  Upon the consummation of all the transactions contemplated
by this Agreement and the Basic Documents:  (i) the present fair salable value
of the assets of each Credit Party as an entirety will exceed the amount that
would be required to pay their probable liability on existing Indebtedness
(whether matured or unmatured, liquidated or unliquidated, absolute, fixed or
contingent), as they become absolute and matured; (ii) the sum of the
Indebtedness (whether matured or unmatured, liquidated or unliquidated,
absolute, fixed or contingent) of each Credit Party will not exceed the
aggregate value of all of their property, fairly valued, assuming sale in an
orderly manner and not subject to any type of distressed or forced liquidation;
(iii) the capital of each Credit Party will not be unreasonably small for such
Credit Party to carry on their businesses; and (iv) no Credit Party intends to,
nor does it or believe it will, by virtue of consummating the transactions
contemplated hereby, incur Indebtedness that will be beyond its ability to pay
as they mature.

     3.13 CERTAIN FEES.  No broker's or finder's fee or commission is or will be
payable with respect to this Agreement or any of the transactions contemplated
hereby, and SGC and Company hereby jointly and severally indemnify each Holder
against, and

                                      36
<PAGE>

agree that they shall hold each Holder harmless from, any claim, demand or 
liability for any such broker's or finder's fees alleged to have been 
incurred in connection herewith or therewith and any expenses (including 
reasonable fees, expenses and disbursements of counsel) arising in connection 
with any such claim, demand or liability.

     3.14 DISCLOSURE.    No representation or warranty of any Credit Party or
any of their respective Subsidiaries contained in any Basic Document or in any
other document, certificate or written statement furnished to any Holder by or
on behalf of any Credit Party or any of their respective Subsidiaries for use in
connection with the transactions contemplated by this Agreement, taken as a
whole, contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances in which the same were
made.


SECTION 4.  CONDITIONS TO EFFECTIVENESS

     4.1  CONDITIONS TO OBLIGATIONS OF HOLDERS TO PURCHASE NOTES ON THE
EFFECTIVE DATE.  The obligations of each Holder to purchase the Notes to be
purchased by such Holder pursuant to this Agreement are subject to the
fulfillment, at or prior to the Effective Date, of the following conditions, any
one or more of which may be waived by Holders:

          A.   CREDIT PARTY DOCUMENTS.  On or before the Effective Date, each of
SGC and Company shall deliver or cause to be delivered to Holders the following:

          (i)   Certified copies of the Articles or Certificate of 
     Incorporation of each Credit Party (including, in the case of SGC, the 
     Certificate of Designations for the SGC Preferred Stock), together with a 
     good standing certificate from the Secretary of State of the State of 
     Nevada and, to the extent generally available, a certificate or other 
     evidence of good standing as to payment of any applicable franchise or 
     similar Taxes from the appropriate taxing authority of such state, each 
     dated a recent date prior to the Effective Date;

          (ii)  Copies of the Bylaws of each Credit Party, certified as of the
     Effective Date by its corporate secretary or an assistant secretary;

          (iii) Resolutions of Board of Directors of each Credit Party 
     approving and authorizing the execution, delivery and performance of this
     Agreement and the other Basic Documents to which it is a party, certified
     as of the Effective Date by its corporate secretary or an assistant
     secretary as being in full force and effect without modification or
     amendment;

                                      37
<PAGE>

          (iv)  Signature and incumbency certificates of the officers of each
     Credit Party executing this Agreement and the other Basic Documents to
     which it is a party;

          (v)   in the case of Company, executed originals of this Agreement,
     the Notes to be issued to Holders on the Effective Date (duly executed in
     accordance with subsection 2.3, payable to such Holders and with
     appropriate insertions), the Company Deed of Trust, the Company Security
     Agreement, the Company Environmental Indemnity, the Subordination and
     Intercreditor Agreement and the other Basic Documents to which it is party;

          (vi)  in the case of SGC, executed originals of this Agreement, the
     Company Environmental Indemnity, the SGC Guaranty and the other Basic
     Documents to which it is party; and

          (vii) such other documents as any Holder may reasonably request.

          B.   LEGAL OPINIONS.  Holders shall have received (i) originally
executed copies of one or more favorable written opinions of Gibson, Dunn &
Crutcher LLP and Jones Vargas, counsel for the Credit Parties, dated as of the
Effective Date and setting forth substantially the matters in the opinions
designated in Exhibit VIII-A and Exhibit VIII-B annexed hereto, respectively,
and as to such other matters as Holders may reasonably request, and shall be
entitled to rely on all opinions delivered to Company Indenture Trustee in
connection with the amendment of the Company Indenture, and (ii) evidence
satisfactory to Holders that the Credit Parties have requested such counsel to
deliver such opinions to Holders.

          C.   OFFICERS' CERTIFICATE REGARDING CERTAIN CONDITIONS.  The
following conditions shall be satisfied and each Credit Party shall have
delivered to Holders an Officers' Certificate, in form and substance
satisfactory to Holders, to that effect:

          (i)   The representations and warranties of each Credit Party, as the
     case may be, contained herein and in the other Basic Documents shall be
     true, correct and complete in all material respects on and as of the
     Effective Date to the same extent as though made on and as of that date;

          (ii)  No event shall have occurred and be continuing as of the
     Effective Date, or would result from the consummation of the issuance of
     the Notes or the other transactions contemplated by the Basic Documents,
     that would constitute an Event of Default or a Potential Event of Default;

          (iii) Each Credit Party shall have performed all agreements and
     satisfied all conditions which this Agreement and the other Basic Documents
     provide shall

                                      38
<PAGE>

     be performed or satisfied by each such Credit Party on or before the
     Effective Date; and

          (iv) No Credit Party has given notice to Collateral Agent or any
     Holder under Nevada Revised Statute Section 106 or otherwise that any
     Indebtedness evidenced by any Note issued on or after the Effective Date
     will not be secured by the Lien so created by the Company Deed of Trust or
     any other Basic Document.

          D.   PERFECTION OF SECURITY INTERESTS AND RELATED MATTERS.  Company
shall have taken or caused to be taken such actions in such a manner so that
Collateral Agent, for the benefit of Holders, has a valid and perfected first
priority security interest in all Collateral, in which a Lien is purported to be
granted by the Basic Documents or any of them, executed as of the Effective
Date.  Such actions shall include, without limitation:  (i) evidence that
original counterparts of the Company Deed of Trust and the Subordination and
Intercreditor Agreement have been recorded in all locations to the extent
necessary or desirable, in the judgment of Collateral Agent, to create a valid
and enforceable first priority Lien (subject only to Permitted Liens) on the
Santa Fe Hotel Facility in favor of Collateral Agent for the benefit of Holders;
(ii) the delivery to Collateral Agent of Uniform Commercial Code financing
statements, executed by Company as to the Collateral granted by Company for all
jurisdictions as may be necessary or desirable to perfect Collateral Agent's
security interest in such Collateral; and (iii) evidence reasonably satisfactory
to Collateral Agent that all other filings, recordings and other actions
Collateral Agent deems necessary or advisable to establish, preserve and perfect
the first priority Liens (subject only to Permitted Liens) granted to Collateral
Agent, for the benefit of Holders, in the Collateral shall have been made.

          E.   TITLE POLICY FOR SANTA FE HOTEL FACILITY.  Holders shall have
received a 1970 Form B American Land Title Association ("ALTA") extended
coverage mortgagee form of title insurance policy, together with all
endorsements required by Holders, in the amount of not less than $14,000,000
(the "TITLE POLICY") (with proof of the payment of the premiums thereon) or
commitment therefor in form and substance acceptable to Holders issued by United
Title of Nevada, Inc. ("TITLE COMPANY"), insuring the Lien of the Company Deed
of Trust to be a first priority Lien against the Santa Fe Hotel Facility, free
and clear of all defects, encumbrances and exceptions, except those provided for
herein or approved by Holders and their counsel in writing, together with such
affirmative insurance as Holders may require.  The Title Policy shall contain,
among other things:

          (i)   full coverage against mechanic's Liens (filed and inchoate),
     parties in possession and survey matters;

          (ii)  a foundation endorsement;

          (iii) a contiguity endorsement;


                                      39
<PAGE>

          (iv)   a zoning endorsement;

          (v)    a reference to the survey but no survey exceptions except those
     theretofore approved in writing by Holders and their counsel;

          (vi)   Form 100 and 116.1 endorsements;

          (vii)  an access to public streets endorsement; and

          (viii) such other items and endorsements requested by Holders.

          F.   UCC AND JUDGMENT SEARCHES.  Holders shall have received current
searches of the UCC filing offices and judgment searches with the Offices of the
Secretary of State of Nevada and the local recorder's office in Clark County and
elsewhere showing no security interests or judgments affecting the Santa Fe
Hotel Premises, the Santa Fe Hotel Improvements, Company or SGC other than those
provided for herein.

          G.   SANTA FE HOTEL SURVEY.  Holders shall have received a current
survey prepared by a surveyor acceptable to Holders and licensed as a land
surveyor in the State of Nevada, that shall (a) be satisfactory, in form, scope
and substance, to Holders, and (b) contain the legal description of the Santa Fe
Hotel Facility in form, scope and substance satisfactory to Holders, with a
surveyor's certification in a form acceptable to Holders from the surveyor to
Holders and Title Company and other Persons reasonably requested by Holders.

          H.   FLOOD INSURANCE.  Holders shall have been provided with
satisfactory evidence, which may be in the form of a letter from an insurance
broker, municipal engineer, land surveyor or other knowledgeable source
unaffiliated with Company, as to whether (a) the Santa Fe Hotel Premises are
located in an area designated by the Department of Housing and Urban Development
as having special flood or mudslide hazards, and (b) the community in which the
Santa Fe Hotel Premises are located is participating in the National Flood
Insurance Program.  If both of the aforesaid conditions exist, Holders shall
receive satisfactory policies of flood insurance covering the Santa Fe Hotel
Improvements as required by the Flood Act.

          I.   INSURANCE.  Holders shall have received evidence, satisfactory to
Holders, of insurance required to be procured and maintained pursuant to
subsection 5.5 hereof, Section 8 of the Company Security Agreement and Section 6
of the Company Deed of Trust indicating that, with respect to casualty
insurance, such policies of insurance have been endorsed to name Collateral
Agent, on behalf of Holders, as loss payee pursuant to a standard mortgagee
clause, and, with respect to liability insurance, such policies of insurance
name Collateral Agent, on behalf of Holders, as an additional insured.


                                      40
<PAGE>

          J.   PRELIMINARY SANTA FE HOTEL APPRAISAL.  Holders shall have
received and approved a preliminary Santa Fe Hotel Appraisal.

          K.   NECESSARY CONSENTS AND APPROVALS.  On or before the Effective
Date, SGC and Company shall have obtained all consents and approvals to the
transactions contemplated under this Agreement and the other Basic Documents of
any Person required under any Contractual Obligation or other obligation
(including obligations imposed by law) of SGC or Company or any of their
respective Affiliates and of any Governmental Authority, including without
limitation all consents and approvals relating to the subordination of the Lien
of the Company Indenture Deed of Trust to the Lien of the Company Deed of Trust.
Such consents and approvals shall be in full force and effect, and any
applicable waiting periods shall have expired by the Effective Date without any
action taken or threatened to be taken by any competent Governmental Authority
which might restrain, prevent or otherwise impose adverse conditions on the
transactions contemplated under this Agreement.

          L.   ENVIRONMENTAL INFORMATION.  Holders shall have received and
approved the Environmental Report and a reliance letter in favor of Collateral
Agent from the consultant who prepared the Environmental Report, in a form
satisfactory to Holders.

          M.   CHANGES IN STRUCTURE.  Any changes in the management, capital or
ownership structure of SGC or its Subsidiaries not previously disclosed to
Holders shall be satisfactory to Holders in all respects.

          N.   NO MATERIAL ADVERSE EFFECT.  Since December 31, 1997, no Material
Adverse Effect (in the sole opinion of Holders) shall have occurred.

          O.   COMPLETION OF PROCEEDINGS.  All corporate and other proceedings
taken or to be taken in connection with the transactions contemplated hereby and
all documents incidental thereto not previously found acceptable by Holders and
its counsel shall be satisfactory in form and substance to Holders and such
counsel, and Holders and its counsel shall have received all such counterpart
originals or certified copies of such documents as Holders may reasonably
request.

          P.   NO INJUNCTIONS, RESTRAINING ORDER OR ADVERSE LITIGATION.  No
order, judgment or decree of any court, arbitrator or Governmental Authority
shall purport to enjoin or restrain any Holder from acquiring any Notes on the
Effective Date.  As of the Effective Date, there shall not be pending or, to the
knowledge of SGC or Company, threatened, any action, suit, proceeding,
governmental investigation or arbitration against SGC, Company or any of their
respective Subsidiaries or any property of SGC, Company or any of their
respective Subsidiaries that has not been disclosed by SGC or Company in writing
pursuant to subsection 3.6 prior to the execution of this Agreement, and there
shall have occurred no development not so disclosed in any such action, suit,
proceeding, 

                                  41
<PAGE>

governmental investigation or arbitration so disclosed, that, in either 
event, in the opinion of Holders, could be expected to have a Material 
Adverse Effect; and no injunction or other restraining order shall have been 
issued and no hearing to cause an injunction or other restraining order to be 
issued shall be pending or noticed with respect to any action, suit or 
proceeding seeking to enjoin or otherwise prevent the consummation of, or to 
recover any damages or obtain relief as a result of, the transactions 
contemplated by this Agreement, the Basic Documents or the acquisition of the 
Notes hereunder.

          Q.   NO VIOLATION OF LAW.  The acquisition of the Notes shall not
violate any law including, without limitation, Regulation G, Regulation T or
Regulation X of the Board of Governors of the Federal Reserve System.

          R.   SANTA FE HOTEL DOCUMENTS.  On the Effective Date (i) Holders
shall have received copies of all Santa Fe Hotel Documents in existence on the
Effective Date, all in form and substance approved by Holders (which approval
shall not be unreasonably withheld or delayed); (ii) Holders shall have received
an Officers' Certificate from SGC and Company stating that the applicable Santa
Fe Hotel Documents to which such Person is a party are in full force and effect
and no material term or condition thereof has been amended, modified or waived,
that all agreements and conditions contained in the Santa Fe Hotel Documents and
any agreements or documents referred to therein required to be performed or
complied with by SGC, Company and their respective Affiliates and, to the
knowledge of SGC and Company, the other parties thereto on or before the
Effective Date shall have been so performed or satisfied and that none of SGC,
Company or any of their respective Affiliates, or, to the knowledge of SGC or
Company, any other party to any Santa Fe Hotel Documents is in default in the
performance of or compliance with any of the terms or provisions thereof.

          S.   OTHER INDEBTEDNESS DOCUMENTS.  On the Effective Date (i) Holders
shall have received any agreements or other documents relating to all
Indebtedness described on Schedule 3.1D annexed hereto; and (ii) Holders shall
have received an Officers' Certificate from SGC and Company stating that such
documents are in full force and effect and no term or condition thereof has been
amended, modified or waived, and that neither SGC nor any of its Subsidiaries is
in default in the performance of or compliance with any of the terms or
provisions thereof.

          T.   PAYMENT OF FEES AND EXPENSES.  Without limiting the provisions of
subsection 9.2, Company shall have paid by wire transfer of immediately
available funds, the reasonable fees, charges and disbursements arising in
connection with the preparation, execution and delivery of the Basic Documents,
including but not limited to the reasonable fees and expenses of counsel to
SunAmerica and CSFB, O'Melveny & Myers LLP, Henderson & Nelson and Cadwalader
Wickersham & Taft, as applicable, and the reasonable fees and expenses of
Company's counsel, Gibson, Dunn & Crutcher LLP and Jones Vargas, to the extent
an invoice therefor is received by Company not less than one Business Day prior
to the Effective Date; the appraisers retained to deliver the Santa Fe 

                                  42
<PAGE>

Hotel Appraisal; environmental and other consultants; closing costs; escrow 
fees; title issuance premiums; title search and survey costs; and the 
reasonable out-of-pocket expenses of Holders; PROVIDED that the selection of 
the appraiser and any environmental or other consultant or experts shall not 
be made without Company's prior consent, which shall not be unreasonably 
withheld.

          U.   USE OF PROCEEDS.  SGC and Company shall be prepared to use the
Note proceeds in accordance with subsection 5.10 hereof.

          V.   SUBORDINATION AND INTERCREDITOR AGREEMENT.  Company, SunAmerica
and Company Indenture Trustee shall have entered into the Subordination and
Intercreditor Agreement, and the same shall have been recorded in the
appropriate county records.


SECTION 5.     AFFIRMATIVE COVENANTS OF SGC AND COMPANY

          SGC and Company each hereby covenants and agrees that, until payment
in full of the Obligations, unless Requisite Holders shall otherwise give
written consent, SGC and Company shall perform, and shall cause each of its
respective Subsidiaries to perform, all covenants in this Section 5.

     5.1  FINANCIAL STATEMENTS AND RELATED INFORMATION.  SGC and Company shall
maintain and cause the other Credit Parties to maintain a system of accounting
established in accordance with sound business practices to permit preparation of
financial statements in conformity with GAAP.  SGC and Company shall deliver to
each Holder:

          A.   QUARTERLY, ANNUAL AND OTHER REPORTS:  

          (i)   QUARTERLY FINANCIALS:  as soon as available and in any event
     within 45 days after the end of each of the first three fiscal quarters of
     each Fiscal Year, the unaudited consolidated balance sheet of Company and
     its Subsidiaries as at the end of such fiscal quarter and the related
     unaudited consolidated statement of income of Company and its Subsidiaries
     for such fiscal quarter and for the period from the beginning of the then
     current Fiscal Year to the end of such fiscal quarter, setting forth in
     each case in comparative form the corresponding figures for the
     corresponding periods of the previous Fiscal Year, all in reasonable detail
     and certified by the chief financial officer of Company that they fairly
     present the financial condition of Company and its Subsidiaries as at the
     dates indicated and the results of their operations for the periods
     indicated, subject to changes resulting from normal year-end adjustments;

          (ii)  ANNUAL FINANCIALS:  as soon as available and in any event within
     90 days after the end of each Fiscal Year, the unaudited consolidated
     balance sheet of 

                                  43
<PAGE>

     Company and its Subsidiaries as at the end of such Fiscal Year and the 
     related unaudited consolidated statement of income of Company and its 
     Subsidiaries for such Fiscal Year, setting forth in each case in 
     comparative form the corresponding figures for the previous Fiscal Year,
     all in reasonable detail and certified by the chief financial officer of
     Company that they fairly present the financial condition of Company and its
     Subsidiaries as at the dates indicated and the results of their operations
     for the periods indicated; and

          (iii) COMMISSION FILINGS:  as soon as available all annual and
     quarterly reports and such other information, documents and reports that
     SGC is required to file with the Commission pursuant to Sections 13 and
     15(d) of the Exchange Act

          B.    OFFICERS' CERTIFICATES:  together with each delivery of 
quarterly and annual financial statements of SGC and Company pursuant to 
subsection 5.1A above, an Officers' Certificate of SGC and Company, as the 
case may be, stating that the signers have reviewed the terms of this 
Agreement and have made, or caused to be made under their supervision, a 
review in reasonable detail of the transactions and condition of SGC or 
Company, as the case may be, and their respective Subsidiaries during the 
accounting period covered by such financial statements and that such review 
has not disclosed the existence during or at the end of such accounting 
period, and that the signers do not have knowledge of the existence as at the 
date of such Officers' Certificate, of any condition or event that 
constitutes an Event of Default or Potential Event of Default, or, if any 
such condition or event existed or exists, specifying the nature and period 
of existence thereof and what action SGC, Company and their respective 
Subsidiaries have taken, are taking and propose to take with respect thereto;

          C.    RECONCILIATION STATEMENTS:  if, as a result of any change in
accounting principles and policies from those used in the preparation of the
audited financial statements referred to in subsection 3.3, the consolidated
financial statements of SGC or Company and their respective Subsidiaries
delivered pursuant to subsection 5.1A will differ in any material respect from
the consolidated financial statements that would have been delivered pursuant to
such subsections had no such change in accounting principles and policies been
made, then together with the first delivery of financial statements pursuant to
subsection 5.1A following such change, a written statement of the chief
accounting officer or chief financial officer of SGC or Company, as the case may
be, setting forth the differences which would have resulted if such financial
statements had been prepared without giving effect to such change;

          D.    COMMISSION FILINGS AND PRESS RELEASES:  promptly upon their
becoming available, copies of (a) all financial statements, reports, notices and
proxy statements sent or made available generally by SGC or Company to their
respective security holders, (b) all regular and periodic reports and all
registration statements (other than on Form S-8 or a similar form) and
prospectuses, if any, filed by SGC or any of its Subsidiaries with any
securities exchange or with the Commission or any governmental or 

                                  44
<PAGE>

private regulatory authority, and (c) all press releases and other statements 
made available generally by SGC or any of its Subsidiaries to the public 
concerning material developments in the business of SGC or any of its 
Subsidiaries;

          E.   EVENTS OF DEFAULT, ETC.:  promptly upon any officer of any Credit
Party obtaining knowledge (i) of any condition or event that constitutes an
Event of Default or Potential Event of Default, or becoming aware that any
Holder has given any notice or taken any other action with respect to a claimed
Event of Default or Potential Event of Default, (ii) that any Person has given
any notice to SGC, Company or any of their respective Subsidiaries or taken any
other action with respect to a claimed default or event or condition of the type
referred to in subsection 7.2, or (iii) of the occurrence of any event or change
that has caused or evidences, either in any case or in the aggregate, a Material
Adverse Effect, an Officers' Certificate specifying the nature and period of
existence of such condition, event or change, or specifying the notice given or
action taken by any such Person and the nature of such claimed Event of Default,
Potential Event of Default, default, event or condition, and what action SGC,
Company and their respective Subsidiaries have taken, are taking and propose to
take with respect thereto;

          F.   LITIGATION OR OTHER PROCEEDINGS:  promptly upon any officer of
any Credit Party obtaining knowledge of (X) the institution of, or non-frivolous
threat of, any action, suit, proceeding (whether administrative, judicial or
otherwise), governmental investigation or arbitration against SGC, Company or
any of their Subsidiaries or any property of SGC, Company or any of their
Subsidiaries (collectively, "PROCEEDINGS") not previously disclosed in writing
by SGC or Company to Holders or (Y) any material development in any Proceeding
that, in any case:

               (1)  if adversely determined, has a reasonable possibility of
          giving rise to a Material Adverse Effect; or

               (2)  seeks to enjoin or otherwise prevent the consummation of, or
          to recover any damages or obtain relief as a result of, the
          transactions contemplated hereby;

written notice thereof together with such other information as may be reasonably
available to SGC, Company or any of their respective Subsidiaries to enable
Holders and their counsel to evaluate such matters;

          G.   AMENDMENTS TO CERTAIN DOCUMENTS:  with reasonable promptness but
in any event within three Business Days of the execution thereof, copies of any
amendment, supplement or modification to any Santa Fe Hotel Document (including
the Company Indenture and related documents), and copies of any agreement (or
any amendment, supplement or modification to any agreement) evidencing
Indebtedness in excess of $1,000,000 of SGC or any of its Subsidiaries or any
security agreement, deed of 

                                  45
<PAGE>

trust or other document relating thereto or any agreement or document 
relating to the Santa Fe Hotel Facility;

          H.   ERISA EVENTS:  promptly upon becoming aware of the occurrence of
or forthcoming occurrence of any ERISA Event, a written notice specifying the
nature thereof, what action SGC, Company or any of their respective ERISA
Affiliates has taken, is taking or proposes to take with respect thereto and,
when known, any action taken or threatened by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto; and upon the request of
any Holder copies of each Schedule B (Actuarial Information) to the annual
report (Form 5500 Series) filed by SGC, Company or any of their respective ERISA
Affiliates with the Internal Revenue Service with respect to each Pension Plan
and such other documents or governmental reports or filings relating to any
Employee Benefit Plan as any Holder shall reasonably request;

          I.   ENVIRONMENTAL AUDITS AND REPORTS:  promptly upon receipt thereof,
copies of all environmental audits and reports, whether or not prepared by or on
behalf of any Credit Party or by Independent consultants, with respect to any
environmental matters relating to the Santa Fe Hotel Facility;

          J.   SANTA FE HOTEL APPRAISAL:  within 45 days after the Effective
Date, the Santa Fe Hotel Appraisal;

          K.   ESTOPPEL CERTIFICATES:  within 60 days after the Effective Date,
estoppel certificates, in the form provided by Holders to Company prior to the
Effective Date, executed by existing lessees of the Santa Fe Hotel Premises;
PROVIDED that SGC and Company shall only be obligated to use best efforts to
obtain such estoppel certificates; and

          L.   OTHER INFORMATION:  with reasonable promptness, such other
information and data with respect to any Credit Party or any of their respective
Subsidiaries as from time to time may be reasonably requested by Collateral
Agent or any Holder.

     5.2  INSPECTION.  No more than once a fiscal quarter unless an Event of
Default or Potential Event of Default has occurred and is continuing, SGC and
Company shall permit any authorized representative designated by any Holder or
Holders of at least a majority in principal amount of the Notes, at such
Person's own expense (unless a Potential Event of Default or an Event of Default
has occurred and is continuing, in which case at SGC's and Company's expense),
to visit and inspect any Credit Party's properties or the properties of any of
their respective Subsidiaries, including their financial and accounting records,
and to make copies and take extracts therefrom, and to discuss their affairs,
finances and accounts with the chief financial officer and any other Persons
approved by the chief financial officer, under the chief financial officer's

                                  46
<PAGE>

direction, and, unless an Event of Default shall have occurred and be
continuing, all upon at least three Business Days' notice and at reasonable
times during normal business hours.

     5.3  CORPORATE EXISTENCE, ETC.  Except as permitted under subsections 6.4
and 6.5, SGC and Company shall preserve and keep in full force and effect their
respective corporate existence and the corporate existence of each other Credit
Party (if any) and all rights and franchises material to their respective
businesses; PROVIDED, HOWEVER, that SGC and Company shall not be required to
preserve any such right, license or franchise, or corporate or other existence
of any other Credit Party (other than SGC or Company), if the Board of Directors
of SGC and such Credit Party, as the case may be, shall determine in good faith
in accordance with their respective charters that the preservation thereof is no
longer desirable in the conduct of the business of SGC and its Subsidiaries,
taken as a whole, and Company and that the loss thereof is not adverse in any
material respect to Holders and will not have a Material Adverse Effect.

     5.4  PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.  SGC and Company
shall, and shall cause each of their respective Subsidiaries to, pay all Taxes,
assessments and other governmental charges imposed upon it or any of its
properties or assets or in respect of any of its income, businesses or
franchises before any penalty accrues thereon, and all claims (including,
without limitation, claims for labor, services, materials and supplies) for sums
that have become due and payable and that by law have or may become a Lien upon
any of its properties or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto; PROVIDED that no such charge or claim
need be paid if being contested in good faith by appropriate proceedings timely
instituted and diligently conducted and if such reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall have been
made therefor.  SGC and Company shall not, nor shall they permit any of their
respective Subsidiaries to, file or consent to the filing of any consolidated
income tax return with any Person (other than SGC, Company or any of their
respective Subsidiaries).  To the extent that the terms and provisions of the
Company Deed of Trust regarding payment of Taxes and assessments on the Santa Fe
Hotel Facility conflict with the terms and provisions of this Agreement, the
terms and provisions of the Company Deed of Trust shall govern.

     5.5  MAINTENANCE OF PROPERTIES; INSURANCE.  SGC and Company shall, and
shall cause each of their respective Subsidiaries to, maintain or cause to be
maintained in good repair, working order and condition, ordinary wear and tear
excepted, all material properties used or useful in the business of SGC, Company
and their respective Subsidiaries (including, without limitation, intellectual
property) and from time to time shall make or cause to be made all appropriate
repairs, renewals and replacements thereof.  SGC and Company shall maintain or
cause to be maintained, with financially sound and reputable insurers, insurance
with respect to their respective properties and businesses and the properties
and businesses of their respective Subsidiaries against loss or damage of the
kinds customarily carried or maintained under similar circumstances by
corporations of established reputation engaged in similar businesses.  To the
extent that 

                                  47
<PAGE>

the terms and provisions regarding the payment of insurance contained in the 
Company Deed of Trust conflict with the terms and provisions of this 
subsection 5.5, the terms and provisions of the Company Deed of Trust shall 
govern.

     5.6  COMPLIANCE WITH LAWS, ETC.

          A.   GENERALLY.  SGC and Company shall, and shall cause each of 
their respective Subsidiaries to, comply in all material respects with the 
requirements of all applicable laws, rules, regulations and orders of any 
Governmental Authority, including but not limited to all applicable 
Environmental Laws and Gaming Laws, noncompliance with which could reasonably 
be expected to cause a Material Adverse Effect.

          B.   LOAN NOTICE.  Prior to 30 days after the end of the quarter in
which the Effective Date occurs, Company shall deliver to the appropriate Nevada
Gaming Authorities, with copies to each Holder, the Loan Notice.

     5.7  ENVIRONMENTAL DISCLOSURE AND INSPECTION.

          A.   Company shall exercise due diligence in order to comply and use
its best efforts to cause (i) all tenants under any leases or occupancy
agreements affecting any portion of the Santa Fe Hotel Facility and (ii) all
other Persons on or occupying such property, to comply with all Environmental
Laws.

          B.   After the occurrence and during the continuance of an Event of
Default or otherwise at any time upon the reasonable request of any Holder or
Holders holding not less than 50% of the principal amount of the Notes, Company
agrees that such Holder or Holders may, from time to time and in its or their
sole and absolute discretion, retain, at Company's expense, an Independent
Financial Advisor to review any report relating to Hazardous Material prepared
by or for Company and, whether or not any such report exists, upon reasonable
notice to Company, conduct its own investigation of the Santa Fe Hotel Facility,
and SGC and Company each agree to use their respective best efforts to obtain
permission for the professional consultant of such Holder or Holders to conduct
its own investigation of the Santa Fe Hotel Facility.  Company hereby grants to
Collateral Agent and its agents, employees, consultants and contractors the
right to enter into or on the Santa Fe Hotel Facility to perform such tests on
such property as are reasonably necessary to conduct such a review and/or
investigation.  Any such investigation of the Santa Fe Hotel Facility shall be
conducted, unless otherwise agreed to by Company and the requesting Holder,
during normal business hours and, to the extent reasonably practicable, shall be
conducted with prior notice.  Company and Holders each hereby acknowledge and
agree that any report of any investigation conducted at the request of Holders
pursuant to this subsection 5.7 shall be obtained and shall be used by such
Holder(s) for the purposes of Holders' internal credit analysis, to monitor the
Notes and to protect Holders' security interests created by the Basic Documents.

                                  48
<PAGE>

          C.   Company shall promptly advise Holders in writing and in
reasonable detail of (i) any Release of any Hazardous Material on or relating to
the Santa Fe Hotel Facility required to be reported to any Governmental
Authority under any applicable Environmental Laws, (ii) any and all written
communications with respect to any Environmental Claims or with respect to any
Release of Hazardous Material required to be reported to any Governmental
Authority, (iii) any remedial action taken by Company or, to Company's or SGC's
knowledge, any other Person in response to (X) any Hazardous Material on, under
or about the Santa Fe Hotel Facility, or (Y) any Environmental Claim that
reasonably could have a Material Adverse Effect, (iv) Company's discovery of any
occurrence or condition on any real property adjoining or in the vicinity of the
Santa Fe Hotel Facility that reasonably could cause the Santa Fe Hotel Facility
or any part thereof to be subject to (X) any restrictions on the ownership or
transferability thereof or (Y) any material restriction on the occupancy or use
thereof under any Environmental Laws, and (v) any request for information from
any Governmental Authority that indicates such Governmental Authority is
investigating whether Company may be potentially responsible for a Release of
Hazardous Material.

          D.   Company shall promptly notify Holders of any action that Company
has taken or proposes to take that reasonably could be expected to subject
Company to Environmental Claims, Environmental Laws, or environmental rules or
regulations (including, without limitation, laws, rules and regulations
requiring additional environmental permits or licenses) not theretofore
applicable to the Santa Fe Hotel Facility or operations of Company.

          E.   Company shall, at its own expense, provide copies of such
documents or information as any Holder may reasonably request in relation to any
matters disclosed pursuant to this subsection 5.7.

     5.8  REMEDIAL ACTION REGARDING HAZARDOUS MATERIAL.  Company shall promptly
take any and all necessary remedial action in connection with the presence,
storage, use, disposal, transportation or Release of any Hazardous Material on,
under or about the Santa Fe Hotel Facility in order to comply in all material
respects with all applicable Environmental Laws and Governmental Authorizations.
In the event Company undertakes any remedial action with respect to any
Hazardous Material on, under or about the Santa Fe Hotel Facility, Company shall
conduct and complete such remedial action in compliance with all applicable
Environmental Laws and other applicable legal requirements (including lawful
policies, orders and directives of federal, state and local Governmental
Authorities).

     5.9  DISPOSAL OF COMPANY STOCK.  SGC shall own not less than all of the
Capital Stock and other equity securities of Company.

     5.10 USE OF PROCEEDS.  Company shall use the Cash proceeds of the Notes to
(a) purchase from PDS on the Effective Date certain gaming and other equipment

                                  49
<PAGE>

currently leased from PDS (as further described in the Company Indenture Consent
Solicitation) for a purchase price not to exceed $10.7 million in the aggregate,
(b) purchase additional gaming equipment from PDS in an amount not to exceed
$1.9 million, (c) either (X) purchase two pylon signs, (Y) build an approximate
250-space, one-level parking structure on a portion of the Santa Fe Hotel
Premises or (Z) make improvements to the Santa Fe Hotel Facility or purchase
furniture, fixtures or equipment for use at the Santa Fe Hotel Facility, in any
case in an amount not to exceed $1.4 million, and (d) pay all fees and costs
payable by Company and/or SGC in connection with the transactions described
herein and in the other Basic Documents.

     5.11 RIGHT OF FIRST REFUSAL.  In the event that SGC, Company or any of
their respective Affiliates desire to refinance the Notes or the Company
Indenture Notes pursuant to any debt financing with a Person other than
SunAmerica or one or more of its Affiliates (such financing, a "THIRD PARTY
FINANCING"), SGC and Company shall first obtain from such Person a bona fide
written proposal (a "THIRD PARTY PROPOSAL") to provide such Third Party
Financing which shall state all of the material terms and conditions of the
Third Party Financing, including the applicable principal amount, interest rate,
maturity and amortization and fees thereof, and SGC and Company shall deliver
copies of such Third Party Proposal to SunAmerica together with other
information reasonably required by SunAmerica with respect to such Third Party
Financing.

     SunAmerica or one or more of its designees shall then have the right to
provide any Third Party Financing upon the same terms and conditions stated in
the Third Party Proposal by giving written notice of their willingness to
provide such financing to Company within 5 Business Days of receipt by
SunAmerica of such Third Party Proposal and other information referred to in the
preceding paragraph, it being understood that if SunAmerica or one or more of
its designees elects to provide Third Party Financing, such Persons shall have a
reasonable period of time, and in any event not less than 30 days, to close such
Third Party Financing.  If SunAmerica or one or more of its designees elect or
are deemed to elect not to provide such Third Party Financing, then Company may
enter into the Third Party Financing on the same terms and conditions as set
forth in the Third Party Proposal delivered to SunAmerica.  If the terms of the
Third Party Financing are changed from those set forth in the Third Party
Proposal delivered to the SunAmerica in any manner that is favorable to the
lender, then Company shall be obligated to deliver to SunAmerica written notice
of such changes, and SunAmerica or one of more of its designees shall again have
a right to provide the Third Party Financing on the basis of such changed terms
in accordance with the terms and provisions (and within the time periods set
forth) above.  If Company fails to consummate the Third Party Financing within
six (6) months after delivery of the Third Party Proposal to SunAmerica, then
Company shall be obligated to redeliver the Third Party Proposal to SunAmerica
prior to consummating such Third Party Financing with a third party, and
SunAmerica or one or more of its designees shall again have a right to provide
the Third Party Financing in accordance with the terms and provisions (and
within the time periods set forth) above.

                                  50
<PAGE>

          In no event shall this subsection 5.11 or any election by any Holder
to provide a Third Party Financing constitute a deferral or waiver of any
required payment under any Basic Document or other term or provision of any
Basic Document.

     5.12 PERMITTED GROUND LEASE AND PERMITTED GROUND LEASE ENCUMBRANCES.  

          A.   Neither Company nor any of its Subsidiaries shall enter into any
proposed Permitted Ground Lease, unless such proposed Permitted Ground Lease
(i) contains customary language expressly subordinating the interests of the
ground lessee under such Permitted Ground Lease to the Lien of Holders created
under the Basic Documents and (ii) is otherwise in form and substance reasonably
satisfactory to Requisite Holders.  Upon approval by Requisite Holders of such
proposed Permitted Ground Lease, Collateral Agent shall deliver to the ground
lessee on behalf of Holders a customary non-disturbance and attornment
agreement, in form and substance reasonably satisfactory to Requisite Holders
and the ground lessee, for the benefit of the ground lessee under the Permitted
Ground Lease.

          B.   Neither Company nor any of its Subsidiaries shall permit the
creation of any proposed Permitted Ground Lease Encumbrance on any property
leased to a third party developer under the Permitted Ground Lease, unless the
terms and provisions of such proposed Permitted Ground Lease Encumbrance are in
form and substance reasonably satisfactory to Requisite Holders.  Upon approval
by Requisite Holders of any such proposed Permitted Ground Lease Encumbrance,
Collateral Agent shall execute and acknowledge for recordation such
subordination agreements, in form and substance reasonably satisfactory to
Requisite Holders, as may be reasonably requested by the beneficial owner of
such Permitted Ground Lease Encumbrance and/or Company for the purpose of
subordinating the Lien of the Basic Documents to such Permitted Ground Lease
Encumbrance.

     5.13 CERTAIN ADDITIONAL COVENANTS.  Company represents, warrants and
covenants as follows:

          (i)   Company has done or caused to be done and shall do all things
     necessary to observe organizational formalities and preserve its existence.

          (ii)  Company shall maintain all of its books, records, financial
     statements and bank accounts separate from those of its Affiliates. 
     Company assets shall not be listed as assets on the financial statement of
     any entity other than on the consolidated financial statements of SGC. 
     Company shall maintain its books, records, resolutions and agreements as
     official records.

          (iii) Company shall be, and at all times shall hold itself out to
     the public as, a legal entity separate and distinct from any other entity
     (including any Affiliate of Company), shall correct any known
     misunderstanding regarding its status as a 

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<PAGE>

     separate entity, shall conduct business in its own name, shall not identify
     itself or any of its Affiliates as a division or part of any other 
     Affiliate or Person and shall maintain and utilize a separate telephone 
     number and separate stationery, invoices and checks.

          (iv)  Company shall not commingle the funds and other assets of
     Company with those of any of its Affiliates or any other Person and
     shall hold all of its assets in its own name.

          (v)   The stationery, invoices, and checks utilized by Company or
     utilized to collect its funds or pay its expenses shall bear its own name
     and shall not bear the name of any other entity unless such entity is
     clearly designated as being Company's agent.


SECTION 6.     NEGATIVE COVENANTS OF SGC AND COMPANY

          SGC and Company each hereby covenants and agrees that, until payment
in full of all of the Obligations, unless Requisite Holders shall otherwise give
prior written consent, SGC and Company shall perform, and shall cause each of
their respective Subsidiaries to perform, all covenants set forth in this
Section 6.

     6.1  RESTRICTED SGC PAYMENTS AND LOWDEN FAMILY PAYMENTS.  SGC shall not,
and shall not permit any of its Subsidiaries to, directly or indirectly,
declare, make or pay any Restricted SGC Payment.

          SGC and Company shall not, and shall not permit any of their
Subsidiaries to, directly or indirectly, declare, make or pay Lowden Family
Payments except that (i) Paul Lowden may be paid a salary during each fiscal
year not to exceed the salary and bonus paid to Paul Lowden during the fiscal
year ended September 30, 1997, as disclosed in writing by SGC to Initial Holders
prior to November 25, 1997 (the "LOWDEN FAMILY DISCLOSURE"), (ii) the other
members of the Lowden Family that are currently employed by Company as disclosed
in the Lowden Family Disclosure may be paid a salary not to exceed the amount
set forth in the Lowden Family Disclosure and (iii) Paul Lowden and the other
members of the Lowden Family described in clause (ii) above may receive health
benefits extended generally to employees or executive officers of SGC or its
Subsidiaries and may also receive other non-Cash benefits described in the
Lowden Family Disclosure and payable generally to other employees or executive
officers of SGC and its Subsidiaries.

     6.2  RESTRICTED COMPANY PAYMENTS AND RESTRICTED INVESTMENTS.  Company shall
not, and shall not permit any Subsidiary to, directly or indirectly, make a
Restricted Company Payment or a Restricted Investment unless (a) after giving
effect thereto, no Event of Default or Potential Event of Default shall have
occurred and be continuing and 

                                      52
<PAGE>

(b) after giving effect thereto, the aggregate amount of all Restricted 
Company Payments and Restricted Investments does not exceed (1) 50% of 
cumulative Consolidated Net Income (or if such cumulative Consolidated Net 
Income is a loss, minus 100% of such loss) accrued after December 29, 1993, 
less any negative extraordinary charges not reflected in such cumulative 
Consolidated Net Income, PLUS (2) net proceeds from any issuance (other than 
an issuance to a Subsidiary) by Company of its Capital Stock (excluding 
Exchangeable Stock or Redeemable Stock), PLUS (3) 100% of the principal 
amount of any loans or advances made or Indebtedness guaranteed, if such 
loans, advances or guarantees constitute Restricted Investments, to the 
extent that such principal is repaid by a Person other than Company or a 
Subsidiary.  Notwithstanding the foregoing, Company and its Subsidiaries may 
make Restricted Company Payments in the form of dividends paid within 60 days 
after the date of their declaration, if at the date of declaration the 
payment would have been a permitted Restricted Company Payment.  Payments 
pursuant to usual and customary indemnification arrangements for directors 
and officers shall be excluded from the definitions of Restricted Company 
Payments and Restricted Investments.

     6.3  LIENS AND RELATED MATTERS.  (a)  Company shall not, and shall not
permit any Subsidiary to, directly or indirectly, create, incur, assume or
suffer to exist or otherwise cause or suffer to become effective any Lien on any
right, title or interest to any Collateral (a "RESTRICTED ENCUMBRANCE");
PROVIDED, HOWEVER, that a Restricted Encumbrance shall be permitted if: (i) such
Restricted Encumbrance is a Permitted Lien and is junior to the Lien of the
Basic Documents; or (ii) (a) such Restricted Encumbrance is junior to the Lien
of the Basic Documents, (b) the aggregate principal amount of the Indebtedness
secured by such Restricted Encumbrance does not exceed 75% of the aggregate cost
of the improvements, projects and assets with respect to which such Indebtedness
is incurred (except where such Restricted Encumbrance secures only repayment of
Indebtedness incurred pursuant to clause (v) of the definition of Permitted
Additional Indebtedness, in which case the portion thereof that is used to fund
capital additions and capital improvements to the Collateral does not exceed 75%
of the aggregate costs of such capital additions and capital improvements), (c)
except in the case of Indebtedness incurred pursuant to clause (v) of the
definition of Permitted Additional Indebtedness, such Restricted Encumbrance
secures Indebtedness that does not mature or require payments of principal or
partial redemption prior to the maturity of the Notes, and (d) the net proceeds
from such Indebtedness are used either for capital expenditures or working
capital purposes or for future capital additions or improvements to the
Collateral or, pending such use, invested in Marketable Securities pledged to
Collateral Agent as additional security for the Notes by instruments reasonably
satisfactory to Collateral Agent.

     (b)  If Company, or any other Credit Party other than SGC, shall create or
assume any Lien upon any of its properties or assets, whether now owned or
hereafter acquired, other than Liens excepted by the provisions of subsection
6.3(a), it shall make or cause to be made effective provision whereby the
Obligations will be secured by such Lien equally 

                                      53
<PAGE>

and ratably with any and all other Indebtedness secured thereby as long as 
any such Indebtedness shall be so secured; PROVIDED that, notwithstanding the 
foregoing, this covenant shall not be construed as a consent by Requisite 
Holders to the creation or assumption of any such Lien not permitted by the 
provisions of subsection 6.3(a).

     (c)  Except with respect to specific property encumbered to secure payment
of particular Indebtedness permitted hereunder, neither Company nor any other
Credit Party (other than SGC) shall enter into any agreement prohibiting the
creation or assumption of any Lien upon any of its properties or assets, whether
now owned or hereafter acquired.

     6.4  FUNDAMENTAL CHANGES.  Company shall 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 Company may own the
Capital Stock in its Subsidiaries set forth on Schedule 3.1B annexed hereto, so
long as, until payment in full of the Obligations, such scheduled Subsidiaries
remain inactive, (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 sales of personal
property assets with a net book value not to exceed $1,000,000 in the aggregate;
PROVIDED, HOWEVER, that nothing in this subsection 6.4 shall prohibit the grant
or creation of any Lien permitted under subsection 6.3.

     6.5  MERGERS AND CONSOLIDATIONS OF SGC.  SGC shall not consolidate or merge
with or into or sell, assign, transfer or lease all or substantially all of its
properties or assets as an entirety to any Person unless: (i) either (a) SGC
shall be the continuing Person or (b) the Person formed by or surviving any such
consolidation or merger (if other than SGC) is a corporation organized and
existing under the laws of the United States, any State or the District of
Columbia, and the corporation formed by or surviving any such consolidation or
merger assumes all of the Obligations of SGC; (ii) immediately after giving
effect to the transaction, no Event of Default or Potential Event of Default
shall have occurred and be continuing; and (iii) such transaction shall not
result in or cause the loss of any Gaming License.

          In connection with any consolidation, merger, transfer or lease
contemplated by this subsection 6.5, SGC shall deliver, or cause to be
delivered, to Collateral Agent, in form and substance reasonably satisfactory to
Collateral Agent, an Officers' Certificate and an opinion of counsel, each
stating that such consolidation, merger, transfer or lease and the supplemental
agreement in respect thereto comply with this subsection 6.5 and that all
conditions precedent herein provided for relating to such transaction have been
complied with.  Upon any consolidation or merger or any transfer of all or
substantially all of the assets of SGC in accordance with this subsection 6.5,
the successor corporation formed by such consolidation or into which SGC is
merged or to which such transfer is made, shall succeed to, and be substituted
for, and may exercise every right and power of, 

                                      54
<PAGE>

SGC under this Agreement with the same effect as if such successor 
corporation had been named as SGC herein.

     6.6  ADDITIONAL INDEBTEDNESS OF COMPANY.  Company shall not, and shall not
permit any Subsidiary to, directly or indirectly, create, incur, issue, assume,
guarantee or suffer to exist, or otherwise in any manner become or remain liable
with respect to, any Indebtedness other than the Notes and the Company Indenture
Notes and other than Permitted Additional Indebtedness.

     6.7  TRANSACTIONS WITH AFFILIATES.  Neither Company nor any of its
Subsidiaries shall (i) enter into any loan or advance to or guarantee with, or
for the benefit of, any Affiliate of Company or any Subsidiary, or (ii) sell,
lease, transfer or otherwise dispose of any of its property, services or assets
to, or purchase any property, services or assets from, any such Affiliate,
except in either case to the extent any such transaction referenced in clause
(i) or (ii) above would be permitted as a Restricted Company Payment or a
Restricted Investment pursuant to subsection 6.2 (each of the transactions
listed in the foregoing sentence, an "AFFILIATE TRANSACTION").  Notwithstanding
the foregoing, any transaction otherwise prohibited by the preceding sentence
shall be permitted if (a) such transaction is on commercially reasonable terms
available in third-party, arm's-length transactions and (b)(1) in the case of a
transaction involving or having a value of more than $1 million but less than $3
million, Company has delivered to Collateral Agent an Officers' Certificate to
the effect that clause (a) has been satisfied or (2) in the case of a
transaction or series of transactions with an Affiliate involving or having a
value of $3 million or more within any consecutive 12 month period, Company has
caused to be delivered to Collateral Agent an opinion of an Independent
Financial Advisor to the effect that the transaction is fair to Company or the
relevant Subsidiary, as the case may be, from a financial point of view.  This
covenant shall not apply to any contract, agreement, loan, advance or other
arrangement in existence as of the date hereof.

     6.8  SALE AND LEASEBACK.  Company shall not, and shall not permit any
Subsidiary to, enter into any arrangement with any lender or investor or to
which such lender or investor is a party providing for the lease by Company or
any Subsidiary of real property or any other asset that has been or is to be
sold or transferred by Company or any Subsidiary to such lender or investor or
to any Person to whom the funds have been or are to be advanced by such lender
or investor, which advance is secured by such property, assets or rental
obligations of Company or any Subsidiary (each such transaction, a
"SALE/LEASEBACK").  Notwithstanding the foregoing, Company and any Subsidiary
may enter into any such Sale/Leaseback transaction provided that the cumulative
net Cash proceeds of all such Sale/Leaseback transactions shall not exceed $5
million.

     6.9  AMENDMENTS TO DOCUMENTS.  Company shall not amend, modify, supplement,
extend, renew, alter or otherwise change the terms of any Santa Fe Hotel
Document 

                                      55
<PAGE>

except with the consent of Holders of more than 50% of the Notes, which 
consent shall not be unreasonably withheld.

     6.10 STAY, EXTENSION AND USURY LAWS.  No Credit Party shall, nor shall they
permit any of their respective Subsidiaries to (to the extent each may lawfully
do so), at any time insist upon, plead or in any manner whatsoever claim or take
the benefit or advantage of, any stay or extension law or any usury law or other
law that would prohibit or forgive any Credit Party from paying all or a portion
of the principal of or premium, if any, or interest on the Notes as contemplated
herein, wherever enacted, now or at any time hereinafter in force, or that may
materially affect the covenants or the performance by any Credit Party of their
respective Obligations hereunder in a manner inconsistent with the provisions
hereof.  Each of SGC and Company expressly waives all benefit or advantage of
any such law.  If a court of competent jurisdiction prescribes that any Credit
Party may not waive its rights to take the benefit or advantage of any stay or
extension law or any usury law or other law in accordance with the prior
sentence, then the Obligation to pay interest on the Notes shall be reduced to
the maximum legal limit under applicable law governing the interest payable in
connection with the Notes, and any amount of interest or premium, if any, paid
by any Credit Party that is deemed illegal shall be deemed to have been a
prepayment of principal (without penalty) on the Notes.

     6.11 GOVERNMENT REGULATION.  SGC and Company shall not, and shall not
permit any of their respective Subsidiaries to, be or become subject to,
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act or the Investment Company Act of 1940 or
under any other federal or state statute or regulation which may limit its
ability to incur Indebtedness or which may otherwise render all or any portion
of the Obligations unenforceable.

     6.12 CONDUCT OF BUSINESS.  Company shall not, and shall not permit any
Subsidiary to, engage in or conduct any business activity, or enter into any
Contractual Obligation, other than activities and Contractual Obligations
relating to the operations of Permitted Lines of Business and present or future
gaming and hotel operations of Company.

     6.13 LIMITATION ON TAX SHARING PAYMENTS AND AGREEMENTS.  Notwithstanding
any agreement to the contrary, Company shall not, and shall not permit any of
its Subsidiaries to, make any payment to SGC or any of its Subsidiaries (other
than Company or any of its Subsidiaries) with respect to any liability for Taxes
for any taxable period in excess of the lesser of (i) the Company Separate Tax
for such taxable period or (ii) the Company Allocable Share of SGC's
consolidated or combined group's actual Tax liability for such taxable period.

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<PAGE>

SECTION 7.  EVENTS OF DEFAULT

          If any one or more of the following conditions or events ("EVENTS OF
DEFAULT") shall occur:

     7.1  FAILURE TO MAKE PAYMENTS WHEN DUE.  Failure by Company to pay any
installment of principal of any Note when due, whether at stated maturity, by
acceleration, by notice of voluntary prepayment, by mandatory prepayment,
redemption or otherwise; or failure by Company to pay any interest on any Note
or any other amount due under this Agreement within 15 days after the date due;
or

     7.2  DEFAULT IN OTHER AGREEMENTS.  (i) Failure of any Credit Party or any
of their respective Subsidiaries to pay when due any principal of or interest on
any Indebtedness (other than Indebtedness referred to in subsection 7.1) in an
aggregate principal amount of $5,000,000 or more, in each case beyond the end of
any grace period provided therefor; or (ii) breach or default by any Credit
Party or any of their respective Subsidiaries with respect to any other material
term of any items of Indebtedness with an aggregate principal amount of
$5,000,000 or more or any loan agreement, mortgage, indenture or other agreement
relating to such Indebtedness, including but not limited to the Company
Indenture, if the effect of such breach or default is to cause that Indebtedness
to become or be declared due and payable prior to its stated maturity or the
stated maturity of any underlying obligation, as the case may be; or
(iii) breach or default by Company under any Santa Fe Hotel Document if such
breach or default is not cured within any applicable grace period; PROVIDED that
any such failure, breach or default with respect to the Pioneer Indenture, which
failure, breach or default does not involve any voluntary or involuntary case
under the Bankruptcy Code or under any other applicable bankruptcy, insolvency
or similar law now or hereafter in effect, shall not be considered an Event of
Default hereunder so long as no claim is made on, under or in respect of the
guaranty given by SGC in respect thereof.

     7.3  BREACH OF CERTAIN COVENANTS.  Failure of SGC or Company to perform or
comply with any term or condition contained in subsection 2.5, 5.3, 5.9, 5.10 or
5.11 or Section 6 of this Agreement; or

     7.4  BREACH OF WARRANTY.  Any representation, warranty, certification or
other statement made by any Credit Party or any of their respective Subsidiaries
in any Basic Document shall be false in any material respect on the date as of
which made; or

     7.5  OTHER DEFAULTS UNDER BASIC DOCUMENTS.  Any Credit Party shall default
in the performance of or compliance with any term contained in this Agreement or
any of the other Basic Documents, other than any such term referred to in any
other subsection of this Section 7, and such default shall not have been
remedied or waived within 30 days after the earlier of (i) an officer of any
Credit Party becoming aware of such default or (ii) receipt by SGC or Company of
notice from any Holder of such default; or

                                      57
<PAGE>

     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 Company
and its successors; or

     7.7  VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.  (i) Any Credit
Party or any of their respective material Subsidiaries shall have an order for
relief entered with respect to it or commence a voluntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, or shall consent to the entry of an order for
relief in an involuntary case, or to the conversion of an involuntary case to a
voluntary case, under any such law, or shall consent to the appointment of or
taking possession by a receiver, trustee or other custodian for all or a
substantial part of its property; or any Credit Party or any of their respective
material Subsidiaries shall make any assignment for the benefit of creditors; or
(ii) any Credit Party or any of their respective material Subsidiaries shall be
unable, or shall fail generally, or shall admit in writing its inability, to pay
its debts as such debts become due; or the Board of Directors of any Credit
Party or any of their respective material Subsidiaries (or any committee
thereof) shall adopt any resolution or otherwise authorize any action to approve
any of the actions referred to in clause (i) above or this clause (ii); or

     7.8  JUDGMENTS AND ATTACHMENTS.  Any money judgment, writ or warrant of
attachment or similar process involving in the aggregate at any time an amount
in excess of $5,000,000 (in either case not adequately covered by insurance as
to which a solvent and unaffiliated insurance company has acknowledged coverage)
shall be entered or filed against any Credit Party or any of their respective
Subsidiaries or any of their respective assets and shall remain undischarged,
unvacated, unbonded or unstayed for a period of 60 

                                      58
<PAGE>

days (or in any event later than five days prior to the date of any proposed 
sale thereunder); or

     7.9  DISSOLUTION.  Any order, judgment or decree shall be entered against
any Credit Party or any of their respective material Subsidiaries decreeing the
dissolution or split up of any Credit Party or that Subsidiary and such order
shall remain undischarged or unstayed for a period in excess of 30 days; or

     7.10 EMPLOYEE BENEFIT PLANS.  There shall occur one or more ERISA Events
which individually or in the aggregate results in or might reasonably be
expected to result in liability of the Credit Parties or any of their ERISA
Affiliates in excess of $500,000 during the term of this Agreement; or there
shall exist an amount of unfunded benefit liabilities (as defined in Section
4001(a)(18) of ERISA), individually or in the aggregate for all Pension Plans of
the Credit Parties and their ERISA Affiliates (excluding for purposes of such
computation any Pension Plans with respect to which assets exceed benefit
liabilities), which exceeds $500,000; or

     7.11 MATERIAL ADVERSE EFFECT.  Any event or change shall occur that has
caused or evidences, either in any case or in the aggregate, a Material Adverse
Effect; or

     7.12 INVALIDITY OF COMPANY ENVIRONMENTAL INDEMNITY OR THE SGC GUARANTY. 
The Company Environmental Indemnity or any guaranty of the Obligations,
including, without limitation, the SGC Guaranty, for any reason, other than the
satisfaction in full of all Obligations, ceases to be in full force and effect
or is declared to be null and void, or any guarantor or indemnitor, including
but not limited to SGC or Company, denies that it has any further liability
under any indemnity or guaranty or under any make-well agreement or under the
Company Environmental Indemnity or gives notice to such effect, in each case, to
the extent it relates to the Obligations; or

     7.13 IMPAIRMENT OF COLLATERAL.  (A) A judgment creditor of any Credit Party
or any of their respective Subsidiaries shall obtain possession of any portion
of the Collateral under the Basic Documents by any means, including, without
limitation, levy, distraint, replevin or self-help, (B) any substantial portion
of the Collateral shall be taken by eminent domain or condemnation, (C) any of
the Basic Documents shall cease for any reason to be in full force and effect,
or any party thereto shall purport to disavow its Obligations thereunder or
shall declare that it does not have any further Obligations thereunder or shall
contest the validity or enforceability thereof, or Holders shall cease to have a
valid and perfected first priority security interest in any Collateral therein
except as permitted under the terms of such Basic Document, or (D) Collateral
Agent's security interests or Liens, in each case on behalf of Holders, in
Collateral under the Basic Documents shall become otherwise impaired or
unenforceable; or

     7.14 OWNERSHIP OF COMPANY.  SGC shall cease to own all of the Capital Stock
of Company.

                                      59
<PAGE>

THEN in addition to all other remedies of Collateral Agent or Holders hereunder,
under the other Basic Documents or at law or equity, (i) upon the occurrence of
any Event of Default described in subsection 7.6 or 7.7 with respect to SGC,
Company or any of Company's Subsidiaries, each of the unpaid principal amount of
and accrued interest on the Notes (to the full extent permitted by applicable
law) and all other Obligations shall automatically become immediately due and
payable, without presentment, demand, protest or other requirements of any kind,
all of which are hereby expressly waived by SGC and Company and (ii) upon the
occurrence and during the continuation of any other Event of Default, Requisite
Holders may, by written notice to Company, declare all or a portion of the
amounts described in clause (i) above relating to the Notes and all other
Obligations owed to Holders of the Notes to be, and the same shall forthwith
become immediately due and payable.  Company acknowledges, and the parties
hereto agree, that each Holder has the right to maintain its investment in the
Notes free from repayment by Company (except as herein specifically provided
for).

          Notwithstanding anything to the contrary contained in the preceding
paragraph except for the last sentence thereof, if at any time after an
acceleration of Obligations pursuant to such paragraph SGC and Company shall pay
all arrears of interest and all payments on account of principal which shall
have become due otherwise than as a result of such acceleration (with interest
on principal, premium (if any) and, to the extent permitted by law, on overdue
interest, at the rates specified in this Agreement and Late Charges) and all
Events of Default and Potential Events of Default (other than non-payment of the
principal of and accrued interest as aforesaid on the Obligations, in each case
which is due and payable solely by virtue of acceleration) shall be remedied or
waived pursuant to subsection 9.1, then Requisite Holders, by written notice to
SGC and Company, may at their option rescind and annul such acceleration and its
consequences; but such action shall not affect any subsequent Event of Default
or Potential Event of Default or impair any right consequent thereon.  The
provisions of this paragraph are intended merely to bind Holders to a decision
which may be made at the election of the percentage of Holders referenced above
and are not intended to benefit any Credit Party and do not grant any Credit
Party the right to require Holders to rescind or annul any acceleration
hereunder, even if the conditions set forth herein are met.

          SGC and Company hereby waive to the extent not prohibited by
applicable law which cannot itself be waived (i) all presentments, demands for
performance, notices of nonperformance (except to the extent required by the
provisions hereof), (ii) any requirement of diligence or promptness on the part
of any Holder of Notes in the enforcement of its rights under the provisions of
this Agreement, (iii) any and all notices of every kind and description which
may be required to be given by any statute or rule of law (except to the extent
required by the provisions of this Agreement), and (iv) to the extent permitted
by applicable law, any defense of any kind (other than payment) which it may now
or hereafter have with respect to its liability under the Notes.

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<PAGE>

          No course of dealing between any Credit Party or any of their
respective Subsidiaries and any Holder shall operate as a waiver of any of the
rights of any Holder under any Basic Document.  No delay or omission in
exercising any right under any Basic Document shall operate as a waiver of such
right or any other right.  A waiver on any one occasion shall not be construed
as a bar to or waiver of any right or remedy on any other occasion.  The
remedies provided in this Section 7 are in addition to all rights and remedies
available to each Holder under the Basic Documents or any other document or by
law or equity.

          In consideration of, among other things, Holders' agreement to acquire
the Notes, to the extent permitted by applicable law, Company agrees that if a
petition is filed by or against it commencing a case under the Bankruptcy Code,
or if Company is the subject of any insolvency, bankruptcy, receivership,
readjustment of Indebtedness, dissolution, reorganization, liquidation or
similar proceeding, under state or federal law, voluntary or involuntary,
Collateral Agent on behalf of Holders shall be immediately and absolutely
entitled to, and Company hereby consents to, the following relief, singly,
alternatively or cumulatively, and Company shall not object to, contest or
oppose any motion, application, complaint or other proceeding by Collateral
Agent to obtain such relief, and Company shall take all actions necessary to
enable Collateral Agent to obtain such relief, including:  (a) Collateral Agent
shall be entitled to the immediate termination of the automatic stay imposed by
Section 362 of the Bankruptcy Code so as to enable it to exercise all of its
rights and remedies under this Agreement and the other Basic Documents or
applicable law; (b) Collateral Agent shall be entitled to the immediate
dismissal of such case pursuant to Section 305(a)(1) of the Bankruptcy Code
(with attorney's fees and other costs), and Company agrees that such dismissal
shall be in the interests of creditors and itself; and (c) Collateral Agent
shall be entitled to the immediate dismissal of such case under Section 1112(b)
of the Bankruptcy Code for cause, and Company agrees that the filing of such
case by it shall per se be deemed to have been commenced in bad faith and solely
for the improper purpose of impeding once again the exercise of Collateral
Agent's rights and remedies with attendant unnecessary delay and needless cost.


SECTION 8.  COLLATERAL AGENT AND RELATIONS AMONG HOLDERS, ETC.

     8.1  APPOINTMENT OF COLLATERAL AGENT, POWERS AND IMMUNITIES.  Each 
Holder of Notes hereby irrevocably appoints and authorizes Collateral Agent 
to act as its agent under the Basic Documents with such powers as are 
expressly delegated to Collateral Agent by the terms of this Agreement and 
the other Basic Documents, together with such other powers as are reasonably 
incidental thereto. Collateral Agent (which term as used in this sentence and 
in subsections 8.5 and 8.6 hereof shall include reference to its Affiliates 
and the officers, directors, employees and agents of Collateral Agent and of 
its Affiliates): (a) shall not have any duties or responsibilities except 
those expressly set forth in this Agreement or in any other Basic Document, 
or be a trustee for any Holder; (b) shall not be required to take any action 
which is contrary to this Agreement or any

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other Basic Document or applicable law; (c) shall not be required to initiate 
or conduct any litigation or collection proceedings hereunder or under any 
other Basic Document; and (d) shall not be responsible for any action taken 
or omitted to be taken by it hereunder or under any other Basic Document or 
under any other document or instrument referred to or provided for herein or 
therein or in connection herewith or therewith, except for its own gross 
negligence or willful misconduct.  Neither Collateral Agent nor any Holder 
nor any of their respective Affiliates shall be responsible to any other 
Holder for any recitals, statements, representations or warranties made by 
any Credit Party or any other Person contained in this Agreement or in any 
certificate or other document referred to or provided for in, or received by 
any Holder under, this Agreement or any other Basic Document, for the value, 
validity, effectiveness, genuineness, enforceability or sufficiency of this 
Agreement, any other Basic Document or any other document referred to or 
provided for herein or therein, for the creation, perfection or priority of 
any Lien on or in any of the Collateral or for any failure by any Credit 
Party or any other Person to perform its Obligations hereunder or thereunder. 
Collateral Agent may employ agents and attorneys-in-fact and shall not be 
responsible for the negligence or misconduct of any such agents of 
attorneys-in-fact selected by it with reasonable care.  Except as otherwise 
provided under this Agreement, Collateral Agent shall take such action under 
the Basic Documents to which it is a party as shall be directed by Requisite 
Holders.  As to any matters not expressly provided for by any Basic Document, 
Collateral Agent shall not be required to take any action or exercise any 
discretion, but shall be required to act or to refrain from acting upon 
instructions of Requisite Holders and shall in all cases be fully protected 
in acting, or in refraining from acting, hereunder or under any other Basic 
Document in accordance with the instructions of Requisite Holders, and such 
instructions of Requisite Holders and any action taken or failure to act 
pursuant thereto shall be binding on all Holders.  These provisions of this 
Section 8 are solely for the benefit of Collateral Agent and Holders and none 
of Company or the other Credit Parties shall have any rights as a third party 
beneficiary of any of the provisions hereof.

     8.2  RELIANCE BY COLLATERAL AGENT.  Collateral Agent shall be entitled to
rely upon any certificate, notice or other document (including any cable,
telegram, telecopy or telex) believed by it to be genuine and correct and to
have been signed or sent by or on behalf of the proper Person or Persons, and
upon advice and statements of legal counsel, Independent Financial Advisors and
other experts selected by Collateral Agent.  Collateral Agent agrees to make
such demands and give such notices under the Basic Documents as Requisite
Holders may request, to take such action to enforce the Basic Documents or any
guaranty or undertaking under the Basic Documents and to foreclose upon, collect
and dispose of the Collateral or any portion thereof, or enforce any such
guaranty or undertaking, and to release any part of the Collateral as may be
directed by Requisite Holders; PROVIDED, HOWEVER, that neither the consent nor
the direction of Requisite Holders shall be required for the release of any part
of the Collateral which is otherwise permitted under this Agreement or the other
Basic Documents.  Collateral Agent may at any time request directions from
Requisite Holders with respect to this


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Agreement or the other Basic Documents as to any course of action or other 
matter relating hereto or to such other Basic Documents.  Except as otherwise 
provided herein or in the other Basic Documents, directions given by 
Requisite Holders to Collateral Agent hereunder shall be binding on all 
Holders for all purposes.  Each Holder agrees not to take any action 
whatsoever to enforce any term or provision of this Agreement or any of the 
other Basic Documents, or to enforce any of its rights in respect of the 
Collateral or in connection with any guaranties or undertakings given in any 
of the Basic Documents, except through Collateral Agent in accordance with 
this Agreement.

     8.3  DEFAULTS.  Collateral Agent shall not be deemed to have knowledge or
notice of the occurrence of a Potential Event of Default or Event of Default
unless Collateral Agent has received written notice from any Holder or Company
referring to this Agreement, describing such Potential Event of Default or Event
of Default and stating that such notice is a "Notice of Default."  In the event
that Collateral Agent receives such a notice of the occurrence of a Potential
Event of Default or Event of Default, Collateral Agent shall give notice thereof
to Holders.  Collateral Agent shall (subject to the last sentence of subsection
8.5 hereof) take such action with respect to such Potential Event of Default or
Event of Default as shall be reasonably directed by Requisite Holders; PROVIDED
that, unless and until Collateral Agent shall have received such directions,
Collateral Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Potential Event of Default
or Event of Default as it shall deem advisable in the best interest of Holders
except to the extent that this Agreement expressly requires that such action be
taken, or not taken, only with the consent or upon the authorization of
Requisite Holders or all Holders.

     8.4  RIGHTS AS HOLDER.  With respect to the Notes held by Collateral Agent,
it shall have the same rights and powers hereunder as any Holder and may
exercise the same as though it was not acting as Collateral Agent, and the terms
"Holder" or "Holders" shall, unless the context otherwise indicates, include
Collateral Agent in its individual capacity.  Collateral Agent may (without
having to account therefor to any Holder) accept deposits from, extend credit
(on a secured or unsecured basis) to and generally engage in any kind of
financing, insurance, trust or other business with any Credit Party or any of
its Affiliates, as if it was not acting as Collateral Agent.  Each Holder and
its Affiliates may (without having to account therefor to Collateral Agent, or
any other Holder) accept deposits from, extend credit (on a secured or unsecured
basis) to and generally engage in any kind of financing, insurance, trust or
other business with any Credit Party or any of its Affiliates, as if it was not
acting as Holder.

     8.5  INDEMNIFICATION.  Each Holder agrees to indemnify Collateral Agent (to
the extent not reimbursed by SGC or Company), ratably in accordance with the
principal amount of Notes purchased by it, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may at any time
(including, without limitation, at any time following the payment of principal
of and/or interest on the Notes) be imposed on, incurred by or

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asserted against Collateral Agent in any way relating to or arising out of 
this Agreement, any other Basic Document or any documents contemplated by or 
referred to herein or therein or the transactions contemplated hereby or 
thereby (including the costs and expenses which SGC or Company is obligated 
to pay hereunder) or the enforcement of any of the terms hereof or thereof or 
of any such other documents; PROVIDED that no Holder shall be liable for any 
of the foregoing to the extent they arise from Collateral Agent's gross 
negligence or wilful misconduct.  Collateral Agent shall be fully justified 
in refusing to take or to continue to take any action hereunder or under the 
other Basic Documents unless it shall first be indemnified to its 
satisfaction by Holders against any and all liability and expense which may 
be incurred by it by reason of taking or continuing to take any such action.

     8.6  NON-RELIANCE ON COLLATERAL AGENT AND OTHER HOLDERS.  Each Holder
represents that it has, independently and without reliance on Collateral Agent
or any other Holder, and based on such documents and information as it has
deemed appropriate, made its own appraisal of the financial condition and
affairs of each Credit Party and their Affiliates and made its own decision to
purchase the Notes and agrees that it shall, independently and without reliance
upon Collateral Agent or any other Holder, continue to make its own appraisals
and decisions in taking or not taking action under this Agreement as it shall
deem appropriate at the time.  Neither Collateral Agent nor any Holder shall be
required to keep informed as to the performance or observance by any Credit
Party or any of their Affiliates under this Agreement or any other document
referred to or provided for herein or to make inquiry of, or to inspect the
properties or books of, any Credit Party or any of their Affiliates.  Neither
Collateral Agent nor any Holder shall have any duty or responsibility to provide
any Holder with any credit or other information concerning any Credit Party or
any of their Affiliates which may come into the possession of Collateral Agent
or such Holder or any of its or their Affiliates.

     8.7  RESIGNATION OR REMOVAL OF COLLATERAL AGENT.  Subject to the
appointment and acceptance of a successor Collateral Agent as provided below,
Collateral Agent may resign at any time by giving notice thereof to Holders, SGC
and Company, and Collateral Agent may be removed at any time with or without
cause by Requisite Holders.  Upon any such resignation or removal, Requisite
Holders shall have the right to appoint a successor Collateral Agent.  If no
successor Collateral Agent shall have been so appointed by Requisite Holders and
shall have accepted such appointment within 30 days after the retiring
Collateral Agent's giving of notice of resignation or Requisite Holders' removal
of the retiring Collateral Agent, then the retiring Collateral Agent may, on
behalf of Holders, appoint a successor Collateral Agent, which shall be a
financial institution with a combined capital and surplus of at least
$500,000,000.  Upon the acceptance of any appointment as Collateral Agent
hereunder by a successor Collateral Agent, such successor Collateral Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Collateral Agent, and the retiring Collateral Agent
shall be discharged from its duties and obligations hereunder.  Upon the


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<PAGE>

acceptance of any appointment as Collateral Agent, the retiring or removed
Collateral Agent under this Agreement shall promptly (i) transfer to such
successor Collateral Agent all sums, securities and other items of Collateral
held under any Basic Document, together with all records and other documents
necessary or appropriate in connection with the performance of the duties of the
successor Collateral Agent under each Basic Document and this Agreement, and
(ii) execute and deliver to such successor Collateral Agent such amendments to
financing statements, and take such other actions, as may be necessary or
appropriate in connection with the assignment to such successor of the security
interests created under each of the Basic Documents.  After any retiring
Collateral Agent's resignation or removal hereunder as Collateral Agent, the
provisions of this paragraph shall continue in effect for its benefit in respect
of any actions taken or omitted to be taken by it while it was acting as
Collateral Agent.

     8.8  AUTHORIZATION.  Collateral Agent is hereby authorized by Holders to
execute, deliver and perform in accordance with its terms each of the Basic
Documents to which Collateral Agent is or is intended to be a party, and each
Holder agrees to be bound by all of the agreements of Collateral Agent contained
in such Basic Documents.


SECTION 9.  MISCELLANEOUS

     9.1  AMENDMENTS AND WAIVERS.

          A.   No amendment, modification, termination or waiver of any
provision of this Agreement, the Notes or the other Basic Documents, or consent
to any departure by any Credit Party therefrom, shall in any event be effective
without the written concurrence of Requisite Holders or, to the extent expressly
provided herein, Holders of the percentage of and type of Notes expressly
provided herein; PROVIDED that any such amendment, modification, termination,
waiver or consent which:  (i) reduces the requisite percentage of Holders or the
principal balance of the Notes that must consent to an amendment or waiver of an
Event of Default; (ii) reduces the rate of or changes the time for payment of
interest on any Notes; (iii) reduces the principal amount of or extends the
final maturity of any Note, or reduces the redemption price of the Notes;
(iv) changes the currency of payment for any payment on the Notes; (v) changes
the definition of or the requirements of SGC or Company or any of their
respective Subsidiaries upon the occurrence of a Change in Control; (vi) changes
in any manner the provisions contained in this subsection 9.1A; or (vii) reduces
the requisite percentage of Holders or the principal balance of the Notes
necessary to amend or modify the provisions as set forth in clauses (i) through
(vii) shall be effective only with respect to the applicable Holders consenting
thereto if evidenced by a writing signed by or on behalf of such Holders. 
Holders of the requisite percentage of Notes considering any such proposed
amendment, modification, termination or waiver may elect to approve or
disapprove any such proposal in their sole discretion except as otherwise
expressly provided herein.  Any waiver or consent shall be effective only in the
specific instance and for the specific purpose for

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<PAGE>

which it was given.  No notice to or demand on any Credit Party in any case 
shall entitle any Credit Party to any other or further notice or demand in 
similar or other circumstances.  Any amendment, modification, termination, 
waiver or consent effected in accordance with this subsection 9.1 shall be 
binding upon each Holder at the time outstanding, and each future Holder, if 
signed by SGC, on SGC and, if signed by Company, on Company.

          B.   Solely for the purpose of determining whether Holders of the
requisite percentage of the Notes then outstanding approved or consented to any
amendment, modification, termination or waiver to be given under this Agreement
or the Notes, or have directed the taking of any action provided herein or in
the Notes to be taken upon the direction of Holders of a specified percentage of
the aggregate amount of Notes then outstanding, Notes directly or indirectly
owned by any Credit Party or any of their respective Subsidiaries shall be
deemed not to be outstanding.

     9.2  EXPENSES.  Whether or not the transactions contemplated hereby shall
be consummated, SGC and Company jointly and severally agree to pay promptly
(i) all the actual reasonable costs and expenses of preparation of the Basic
Documents and of creating and perfecting Liens in favor of Collateral Agent,
SunAmerica and the other Holders or otherwise relating to the Collateral
pursuant to any Basic Document, including filing and recording fees and
expenses, title insurance, environmental studies and surveys; (ii) all the
reasonable costs of furnishing all opinions by counsel for each Credit Party
(including without limitation any opinions requested by Collateral Agent or any
other Holder as to any legal matters arising hereunder) and of each Credit
Party's performance of and compliance with all agreements and conditions on its
part to be performed or complied with under this Agreement and the other Basic
Documents including, without limitation, with respect to confirming compliance
with environmental and insurance requirements; (iii) the reasonable fees,
expenses and disbursements of counsel to Collateral Agent and any Holder holding
a majority in principal amount of the Notes (including allocated costs of
internal counsel) in connection with the negotiation, preparation, execution and
administration of the Basic Documents and any consents, amendments, waivers or
other modifications hereto or thereto and any other documents or matters
requested by any Credit Party; (iv) all other actual reasonable costs and
expenses incurred by Collateral Agent or any Holder holding a majority of the
principal amount of the Notes in connection with the negotiation, preparation
and execution of the Basic Documents and the transactions contemplated hereby
and thereby; and (v) after the occurrence of an Event of Default, all costs and
expenses, including reasonable attorneys' fees (including allocated costs of
internal counsel) and costs of settlement, incurred by Collateral Agent and any
Holder in enforcing any Obligations of or in collecting any payments due from
any Credit Party hereunder or under the other Basic Documents by reason of such
Event of Default or in connection with any refinancing or restructuring of the
credit arrangements provided under this Agreement in the nature of a "work-out"
or pursuant to any insolvency or bankruptcy proceedings.

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     9.3  INDEMNITY.  In addition to the payment of expenses pursuant to
subsection 9.2, whether or not the transactions contemplated hereby shall be
consummated, SGC and Company jointly and severally agree to defend, indemnify,
pay and hold harmless Collateral Agent, each Holder, and the officers,
directors, employees, agents and Affiliates of Collateral Agent and each Holder
(collectively called the "INDEMNITEES") from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature whatsoever
(including without limitation the reasonable fees and disbursements of counsel
for such Indemnitees) in connection with any investigative, administrative or
judicial proceeding commenced or threatened by any Person (whether or not any
such Indemnitee shall be designated as a party or a potential party thereto),
whether direct, indirect or consequential and whether based on any federal,
state or foreign laws, statutes, rules or regulations (including without
limitation securities and commercial laws, statutes, rules or regulations and
Environmental Laws), on common law or equitable cause or on contract or
otherwise, that may be imposed on, incurred by, or asserted against any such
Indemnitee, in any manner relating to or arising out of this Agreement or the
other Basic Documents or the transactions contemplated hereby or thereby
(including without limitation Holders' agreement to purchase any Notes or the
use or intended use of the proceeds of such purchase) or the statements
contained in any commitment letter delivered by any Holder to any Credit Party
with respect thereto (collectively called the "INDEMNIFIED LIABILITIES");
PROVIDED that SGC and Company shall not have any Obligation to any Indemnitee
hereunder with respect to any Indemnified Liabilities to the extent such
Indemnified Liabilities arise solely from the gross negligence or willful
misconduct of that Indemnitee as determined by a final judgment of a court of
competent jurisdiction.  To the extent that the undertaking to defend,
indemnify, pay and hold harmless set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, SGC and
Company shall contribute the maximum portion that it is permitted to pay and
satisfy under applicable law to the payment and satisfaction of all Indemnified
Liabilities incurred by the Indemnitees or any of them.

     9.4  RATABLE SHARING.

          A.   Holders of 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 such Holder
with respect to the Notes hereunder or under the other Basic Documents
(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 such 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


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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 
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 
such Holder with respect thereto as fully as if such Holder were owed the 
amount of the participation held by such 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 such 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 such
Holder, as applicable, to or for the credit or the account of SGC or Company or
any other Credit Party against and on account of the Obligations and liabilities
of SGC or Company or such other Credit Party to Collateral Agent or any Holder,
as applicable.

     9.5  INDEPENDENCE OF COVENANTS.  All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or would otherwise be within the limitations of, another covenant shall not
avoid the occurrence of an Event of Default or Potential Event of Default if
such action is taken or condition exists.

     9.6  NOTICES.  Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given shall be in writing
and may be personally served, telexed or sent by telefacsimile or United States
mail or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex if sent
prior to 5:00 p.m. on a Business Day (and otherwise such facsimile or telex
shall be deemed received on the next Business Day), or three Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed.  For the purposes hereof, the address of each party hereto shall be
as set forth under such party's name on the signature pages hereof or such other
address as


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shall be designated by such Person in a written notice delivered to the other 
parties hereto.

     9.7  SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.

          A.   All representations, warranties and agreements made in or
pursuant to the Basic Documents shall survive the execution and delivery of this
Agreement and the purchase of the Notes hereunder.

          B.   Notwithstanding anything in this Agreement or implied by law to
the contrary, the agreements of SGC and Company set forth in subsections 3.13,
9.2, 9.3 and 9.4 and the agreements of Holders set forth in subsection 9.4 shall
survive the payment of the Notes and the termination of this Agreement.

     9.8  FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.  No failure or
delay on the part of any Holder in the exercise of any power, right or privilege
hereunder or under any other Basic Document shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other power, right or
privilege.  All rights and remedies existing under this Agreement and the other
Basic Documents are cumulative to, and not exclusive of, any rights or remedies
otherwise available.

     9.9  MARSHALLING; PAYMENTS SET ASIDE.  No Holder shall be under any
obligation to marshal any assets in favor of any Credit Party or any other party
or against or in payment of any or all of the Obligations.  To the extent that
SGC or Company or any other Credit Party makes a payment or payments to any
Holder, any Holder enforces any security interests or exercises its rights of
set-off, and such payment or payments or the proceeds of such enforcement or
set-off or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to a trustee,
receiver or any other party under any bankruptcy law, any other state or federal
law, common law or any equitable cause, then, to the extent of such recovery,
the Obligation or part thereof originally intended to be satisfied, and all
Liens, rights and remedies therefor or related thereto, shall be revived and
continued in full force and effect as if such payment or payments had not been
made or such enforcement or set-off had not occurred.

     9.10 SEVERABILITY.  In case any provision in or obligation under this
Agreement or the other Basic Documents shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.

     9.11 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF HOLDERS' RIGHTS.  The
obligations of Holders hereunder are several, and no Holder shall be responsible
for the

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obligations of any other Holder hereunder.  Nothing contained herein or in 
any other Basic Document, and no action taken by Holders pursuant hereto or 
thereto, shall be deemed to constitute Holders as a partnership, an 
association, a Joint Venture or any other kind of entity. The amounts payable 
at any time hereunder to each Holder shall be a separate and independent 
debt, and each Holder shall be entitled to protect and enforce its rights 
arising out of this Agreement, and it shall not be necessary for any other 
Holder to be joined as an additional party in any proceeding for such purpose.

     9.12 HEADINGS.  Section and subsection headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.

     9.13 APPLICABLE LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEVADA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

     9.14 SUCCESSORS AND ASSIGNS.  This Agreement shall be binding upon the
parties hereto and their respective successors and assigns and shall inure to
the benefit of the parties hereto and the successors and assigns of Holders. 
Subject to subsection 2.8, SunAmerica and any other Holder may assign the Notes
to its Affiliates or one or more entities, and upon such assignment, any such
Affiliate or entity shall become a Holder for all purposes of the Basic
Documents.  Holders shall have the right to sell participations in their Notes;
PROVIDED that, if no Event of Default has occurred and is continuing, Company
shall have the right to consent (which consent shall not be unreasonably
withheld or delayed) to the sale of any participation in the Notes that causes
either Initial Holder to hold less than 51% of the principal amount of Notes
acquired by such Initial Holder on the date hereof.  Neither SGC's, Company's or
any other Credit Party's rights or Obligations hereunder or under the other
Basic Documents nor any interest herein or therein may be assigned or delegated
by SGC, Company or such other Credit Party without the prior written consent of
all Holders.

     9.15 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.  ALL JUDICIAL 
PROCEEDINGS BROUGHT AGAINST ANY CREDIT PARTY ARISING OUT OF OR RELATING TO 
THIS AGREEMENT OR ANY OTHER BASIC DOCUMENT OR ANY OBLIGATION MAY BE BROUGHT 
IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF 
NEVADA, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT COMPANY ACCEPTS FOR 
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, 
THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE 
OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT 
RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT, SUCH OTHER BASIC DOCUMENT 
OR SUCH OBLIGATION. SGC and Company hereby agree that service of all process 
in any such proceeding in any such court may be made by registered or 
certified mail, return receipt requested, to SGC

                                      70
<PAGE>

or Company, as applicable, at its address provided in subsection 9.6, such 
service being hereby acknowledged by SGC and Company to be sufficient for 
personal jurisdiction in any action against SGC or Company, as applicable, in 
any such court and to be otherwise effective and binding service in every 
respect.  Nothing herein shall affect the right to serve process in any other 
manner permitted by law or shall limit the right of any Holder to bring 
proceedings against SGC or Company in the courts of any other jurisdiction.

     9.16 WAIVER OF JURY TRIAL.  EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER BASIC
DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS
TRANSACTION OR THE RELATIONSHIP THAT IS BEING ESTABLISHED.  The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including without limitation contract claims, tort claims, breach of duty claims
and all other common law and statutory claims.  Each party hereto acknowledges
that this waiver is a material inducement to enter into a business relationship,
that each has already relied on this waiver in entering into this Agreement, and
that each shall continue to rely on this waiver in their related future
dealings.  Each party hereto further warrants and represents that it has
reviewed this waiver with its legal counsel and that it knowingly and
voluntarily waives its jury trial rights following consultation with such legal
counsel.  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
BASIC DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE
SECURITIES MADE HEREUNDER.  In the event of litigation, this Agreement may be
filed as a written consent to a trial by the court.

     9.17 COUNTERPARTS; EFFECTIVENESS.  This Agreement and any amendments,
waivers, consents or supplements hereto or in connection herewith may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.  This Agreement shall become
effective upon the execution of a counterpart hereof by each of the parties
hereto.

     9.18 CONFLICTS WITH OTHER BASIC DOCUMENTS.  To the fullest extent possible,
the terms and provisions of the other Basic Documents shall be read in
conjunction with the terms and provisions of this Agreement and shall supplement
the terms and provisions hereof.  To the extent that any terms and provisions
hereunder conflict with the terms and provisions of any of the other Basic
Documents, the stricter provisions shall govern.


                                      71
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.


                         SANTA FE GAMING CORPORATION (formerly named Sahara
                         Gaming Corporation),
                         a Nevada corporation

                         By: /s/ Thomas K. Land

                         Its: Senior Vice President and Chief Financial Officer

                         Notice Address:

                         Santa Fe Gaming Corporation
                         2535 Las Vegas Blvd., South
                         Las Vegas, Nevada  89109
                         Attention:     Thomas Land




                         SANTA FE HOTEL INC.,
                         a Nevada corporation

                         By: /s/ Thomas K. Land

                         Its: Senior Vice President and Chief Financial Officer


                         Notice Address:

                         Santa Fe Hotel Inc.
                         2535 Las Vegas Blvd., South
                         Las Vegas, Nevada  89109
                         Attention:     Thomas Land



                                       S-1
<PAGE>

                         SUNAMERICA LIFE INSURANCE COMPANY


                         By /s/ Stephen Hanover

                         Its: Authorized Agent

                         Notice Address:

                         SunAmerica Life Insurance Company
                         1 SunAmerica Center
                         Century City
                         Los Angeles, California  90067-6022
                         Attention:     Peter McMillan
                                        Steven Hanover




                         CREDIT SUISSE FIRST BOSTON MORTGAGE
                         CAPITAL LLC


                         By:/s/ Richard Luftig

                         Its: Vice President

                         Notice Address:

                         Credit Suisse First Boston Mortgage
                         Capital LLC
                         11 Madison Avenue
                         New York, New York  10010
                         Attention:     Richard Luftig


                                       S-2
<PAGE>

                                    SCHEDULE 2


                         INFORMATION RELATING TO HOLDERS


                                                               Principal Amount
Name and Address of Purchaser                                       of Notes
-----------------------------                                  ----------------

SunAmerica Life Insurance Company                                  $7,000,000
One SunAmerica Center
Century City
Los Angeles, California  90067

(1)  All payments by wire transfer of
     immediately available funds to:

     WIRE INSTRUCTIONS
     CITIBANK
     ABA # 021-001-089
     A/C # 40573831
     RE:  SunAmerica Life Insurance Company/
          Santa Fe Hotel Inc.

          with sufficient information
          to identify the source and
          application of such funds.

(2)  All notices of payments and written
     confirmations of such wire transfers:

     SunAmerica Investments, Inc.
     c/o SunAmerica Center
     Investment Accounting 36-05
     Los Angeles, California  90067-6022


                                 Schedule 2-1
<PAGE>

Credit Suisse First Boston Mortgage                                $7,000,000
Capital LLC
11 Madison Avenue
New York, New York  10010

(1)  All payments by transfer of
     immediately available funds to:

     NEW WIRE INSTRUCTIONS

     CITIBANK NYC
     ABA #  021-0000-89
     A/C #  09253506
     Attn:  STEWART HOCHBERG

          with sufficient information
          to identify the source and
          application of such funds.

(2)  All notices of payments and written
     confirmations of such wire transfers:

     Credit Suisse First Boston Mortgage
     Capital LLC
     11 Madison Avenue
     New York, New York  10010

     Attention:  Richard Luftig



                                  Schedule 2-2