PROMISSORY NOTE
|
$38,000,000
|
Reno,
Nevada
|
August
22, 2008
|
FOR
VALUE
RECEIVED, GameTech International, Inc., a Delaware corporation (“Borrower,”
whether one or more) hereby promises to pay to the order of U.S. Bank National
Association (together with any and all of its successors and assigns and/or
any
other holder of this Note, “Holder”) as Agent, without offset, in immediately
available funds in lawful money of the United States of America, at P.O. Box
790401, St. Louis, MO 63179-0401, the principal sum of THIRTY EIGHT MILLION
DOLLARS ($38,000,000) together with interest on the unpaid principal balance
of
this Note from day to day outstanding as hereinafter provided.
1. Payment
Schedule and Maturity Date.
The
entire principal balance of this Note then unpaid shall be due and payable
in
full on August 31, 2013 (the “Maturity Date”), the final maturity of this Note.
Accrued unpaid interest shall be due and payable on September 30, 2008 and
on
the last day of each succeeding month thereafter until all principal and accrued
interest owing on this Note shall have been fully paid and satisfied. Principal
is payable in quarterly installments of $1,117,647.06 each, beginning October
31, 2008, and on the same date of each THIRD month thereafter (except that
if a
given month does not have such a date, the last day of such month), plus a
final
payment equal to all unpaid principal and accrued unpaid interest on the
Maturity Date.
2. Security;
Loan Documents.
This
Note is issued pursuant to the terms of a Loan Agreement of even date herewith
between Borrower, U.S. Bank National Association, as Agent, U.S. Bank National
Association and Bank of the West, as Lenders and the Lenders that become a
party
thereto in the future (the “Loan
Agreement”).
Capitalized terms used herein and not otherwise defined shall have the meaning
set forth in the Loan Agreement. The security for this Note includes the Deed
of
Trust and the Security
Agreements.
3. Interest
Rate.
Interest on each advance hereunder shall accrue at an annual rate (the
“Applicable Rate”) equal to 2.80% plus the one-month LIBOR rate quoted by Agent
from Reuters Screen LIBOR01 Page or any successor thereto , which shall be
that
one-month LIBOR rate in effect two New York Banking Days prior to the Reprice
Date, adjusted for any reserve requirement and any subsequent costs arising
from
a change in government regulation, such rate to be reset monthly on each Reprice
Date. The term “New York Banking Day” means any date (other than a Saturday or
Sunday) on which commercial banks are open for business in New York, New York.
The term “Reprice Date” means the last day of each month. If the initial advance
under this Note occurs other than on the Reprice Date, the initial one-month
LIBOR rate shall be that one-month LIBOR rate in effect two New York Banking
Days prior to the date of the initial advance, which rate plus the percentage
described above shall be in effect until the next Reprice Date. Agent’s internal
records of applicable interest rates shall be determinative in the absence
of
manifest error. In
the
event after the date of initial funding any governmental authority subjects
Agent or any Lender to any new or additional charge, fee, withholding or tax
of
any kind with respect to any loans hereunder or changes the method of taxation
of such loans or changes the reserve or deposit requirements applicable to
such
loans, the Borrower shall pay to Agent or such Lender such additional amounts
as
will compensate Agent or such Lender for such costs or lost income resulting
therefrom as reasonably determined by the Agent.
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3.1 Computations
and Determinations.
All
interest shall be computed on the basis of a year of 360 days and paid for
the
actual number of days elapsed (including the first day but excluding the last
day). Agent shall determine each interest rate applicable to any and all of
the
indebtedness to Lenders evidenced, governed or secured by or arising under
this
Note or any other Loan Document (the “Indebtedness”),
in
accordance with this Note and its determination thereof shall be conclusive
in
the absence of manifest error. The books and records of Agent shall be
prima facie
evidence
of all sums owing to Agent from time to time under this Note, but the failure
to
record any such information shall not limit or affect the obligations of
Borrower under the Loan Documents.
3.2 Unavailability
of Rate.
If
Agent
determines that no adequate basis exists for determining the one- month LIBOR
Rate or that the one-month LIBOR Rate will not adequately and fairly reflect
the
cost to Lenders of funding the Loan, or that any applicable law or regulation
or
compliance therewith by Lenders prohibits or restricts or makes impossible
the
charging of interest based on the one-month LIBOR Rate and Agent so notifies
Borrower, then until Agent notifies Borrower that the circumstances giving
rise
to such suspension no longer exist, interest shall accrue and be payable on
the
unpaid principal balance of this Note from the date Agent so notifies Borrower
until the Maturity Date of this Note (whether by acceleration, declaration,
extension or otherwise) at a fluctuating rate of interest equal to the prime
rate announced by Agent from time to time, adjusted each time that such prime
rate changes.
3.3 Increased
Cost and Reduced Return.
If at
any time after the date hereof, Agent (which shall include, for purposes of
this
Section, any corporation controlling Agent) determines that the adoption or
modification of any applicable law regarding taxation, Agent’s or any Lender’s
required levels of reserves, deposits, insurance or capital (including any
allocation of capital requirements or conditions), or similar requirements,
or
any interpretation or administration thereof by any state, commonwealth,
federal, foreign, territorial or other court or governmental department,
commission, board, bureau, district, authority, agency, central bank, or
instrumentality, or any arbitration authority, or compliance of Agent or any
Lender with any of such requirements, has or would have the effect of (a)
increasing Agent’s or any Lender’s costs relating to the Indebtedness or (b)
reducing the yield or rate of return of Lenders on the Indebtedness, to a level
below that which such Lender could have achieved but for the adoption or
modification of any such requirements, Borrower shall, within fifteen (15)
days
of any request by Agent, pay to Agent such additional amounts as (in Agent’s
sole judgment, after good faith and reasonable computation) will compensate
such
Lender for such increase in costs or reduction in yield or rate of return of
such Lender. No failure by Agent to immediately demand payment of any additional
amounts payable hereunder shall constitute a waiver of Agent’s right to demand
payment of such amounts at any subsequent time. Nothing herein contained shall
be construed or so operate as to require Borrower to pay any interest, fees,
costs or charges greater than is permitted by applicable Law.
3.4 Default
Rate.
Any
principal of, and to the extent permitted by applicable law, any interest on
this Note, and any other sum payable hereunder, which is not paid when due
shall
bear interest, from the date due and payable until paid, payable on demand,
at a
rate per annum (the “Default
Rate”)
equal
to the Applicable Rate plus three percent (3%).
4. Prepayment.
Borrower may prepay the principal balance of this Note, in full at any time
or
in part from time to time, without fee, premium or penalty, provided that:
(a)
no prepayment may be made which in Agent’s judgment would contravene or
prejudice funding under any applicable permanent loan commitment or tri-party
agreement or the like; (b) Agent shall have actually received from Borrower
prior written notice by no later than 11:00 a.m. PST on the day of prepayment
of
(i) Borrower’s intent to prepay, (ii) the amount of principal which will be
prepaid (the “Prepaid Principal”), and (iii) the date on which the prepayment
will be made; and (c) each prepayment shall be in the amount of 100% of the
Prepaid Principal, plus any other sums which have become due to Lenders under
the Loan Documents on or before the date of prepayment but have not been paid.
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5. Late
Charges.
If
Borrower shall fail to make any payment under the terms of this Note within
fifteen (15) days after the date such payment is due, Borrower shall pay to
Agent on demand a late charge equal to five percent (5%) of such payment. Such
fifteen (15) day period shall not be construed as in any way extending the
due
date of any payment. The “late charge” is imposed for the purpose of defraying
the expenses of Agent incident to handling such delinquent payment, and is
not a
penalty. This charge shall be in addition to, and not in lieu of, any other
remedy Agent may have and is in addition to any fees and charges of any agents
or attorneys which Agent may employ upon the occurrence of a Default
(hereinafter defined) hereunder, whether authorized herein or by law.
6. Certain
Provisions Regarding Payments.
All
payments made as scheduled on this Note shall be applied, to the extent thereof,
to late charges, to accrued but unpaid interest, unpaid principal, and any
other
sums due and unpaid to Agent under the Loan Documents, in such manner and order
as Agent may elect in its sole discretion. All permitted prepayments on this
Note shall be applied, to the extent thereof, to accrued but unpaid interest
on
the amount prepaid, to the remaining principal installments, and any other
sums
due and unpaid to Agent under the Loan Documents, in such manner and order
as
Agent may elect in its sole discretion, including but not limited to application
to principal installments in inverse order of maturity. Except to the extent
that specific provisions are set forth in this Note or another Loan Document
with respect to application of payments, all payments received by Agent shall
be
applied, to the extent thereof, to the Obligations in such manner and order
as
Agent may elect in its sole discretion, any instructions from Borrower or anyone
else to the contrary notwithstanding. Remittances in payment of any part of
the
indebtedness other than in the required amount in immediately available U.S.
funds shall not, regardless of any receipt or credit issued therefor, constitute
payment until the required amount is actually received by Agent in immediately
available U.S. funds and shall be made without offset, demand, counterclaim,
deduction, or recoupment (each of which is hereby waived) and accepted subject
to the condition that any check or draft may be handled for collection in
accordance with the practice of the collecting bank or banks. Acceptance by
the
holder hereof of any payment in an amount less than the amount then due on
any
indebtedness shall be deemed an acceptance on account only, notwithstanding
any
notation on or accompanying such partial payment to the contrary, and shall
not
in any way excuse the existence of a Default.
7. Defaults.
(a) It
shall
be a default (“Default”) under this Note and each of the other Loan Documents if
(i) any principal, interest or other amount of money due under this Note is
not
paid in full within five (5) Business Days after it is due, regardless of how
such amount may have become due; (ii) any covenant, agreement, condition,
representation or warranty herein is not fully and timely performed, observed
or
kept; or (iii) there shall occur any Event of Default under the Loan Agreement.
Upon the occurrence of a Default beyond any applicable cure period, Agent shall
have the rights to declare the unpaid principal balance and accrued but unpaid
interest on this Note, and all other amounts due hereunder and under the other
Loan Documents, at once due and payable (and upon such declaration, the same
shall be at once due and payable), to foreclose any liens and security interests
securing payment hereof and to exercise any of its other rights, powers and
remedies under this Note, under any other Loan Document, or at law or in
equity.
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(b) All
of
the rights, remedies, powers and privileges (together, “Rights”) of Agent
provided for in this Note and in any other Loan Document are cumulative of
each
other and of any and all other Rights at law or in equity. The resort to any
Right shall not prevent the concurrent or subsequent employment of any other
appropriate Right. No single or partial exercise of any Right shall exhaust
it,
or preclude any other or further exercise thereof, and every Right may be
exercised at any time and from time to time. No failure by Agent to exercise,
nor delay in exercising any Right, including but not limited to the right to
accelerate the maturity of this Note, shall be construed as a waiver of any
Default or as a waiver of any Right. Without limiting the generality of the
foregoing provisions, the acceptance by Agent from time to time of any payment
under this Note which is past due or which is less than the payment in full
of
all amounts due and payable at the time of such payment, shall not (i)
constitute a waiver of or impair or extinguish the right of Agent to accelerate
the maturity of this Note or to exercise any other Right at the time or at
any
subsequent time, or nullify any prior exercise of any such Right, or (ii)
constitute a waiver of the requirement of punctual payment and performance
or a
novation in any respect.
(c) If
any
holder of this Note retains an attorney in connection with any Default or at
maturity or to collect, enforce or defend this Note or any other Loan Document
in any lawsuit or in any probate, reorganization, bankruptcy, arbitration or
other proceeding, or if Borrower sues any holder in connection with this Note
or
any other Loan Document and does not prevail, then Borrower agrees to pay to
each such holder, in addition to principal, interest and any other sums owing
to
Agent hereunder and under the other Loan Documents, all costs
and
expenses incurred by such holder in trying to collect this Note or in any such
suit or proceeding, including, without limitation, reasonable attorneys’ fees
and expenses, investigation costs and all court costs, whether or not suit
is
filed hereon, whether before or after the Maturity Date, or whether in
connection with bankruptcy, insolvency or appeal, or whether collection is
made
against Borrower or any guarantor or endorser or any other person primarily
or
secondarily liable hereunder.
8. Commercial
Purpose.
Borrower warrants that the Loan is being made solely to acquire or carry on
a
business or commercial enterprise, and/or Borrower is a business or commercial
organization. Borrower further warrants that all of the proceeds of this Note
shall be used for commercial purposes and stipulates that the Loan shall be
construed for all purposes as a commercial loan, and is made for other than
personal, family, household or agricultural purposes.
9. WAIVER
OF JURY TRIAL.
XXXXXXXX WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH BORROWER
AND
AGENT MAY BE PARTIES, ARISING OUT OF, IN CONNECTION WITH OR IN ANY WAY
PERTAINING TO, THIS NOTE, THE LOAN AGREEMENT, THE DEED OF TRUST OR ANY OF THE
OTHER LOAN DOCUMENTS. IT IS AGREED AND UNDERSTOOD THAT THIS WAIVER CONSTITUTES
A
WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTION OR
PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS NOTE.
THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY XXXXXXXX, AND
BORROWER HEREBY REPRESENTS THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE
BEEN
MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY
WAY
MODIFY OR NULLIFY ITS EFFECT. XXXXXXXX FURTHER REPRESENTS AND WARRANTS THAT
IT
HAS BEEN REPRESENTED IN THE SIGNING OF THIS NOTE AND IN THE MAKING OF THIS
WAIVER BY INDEPENDENT LEGAL COUNSEL, OR HAS HAD THE OPPORTUNITY TO BE
REPRESENTED BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND
THAT
IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.
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10. Service
of Process.
Subject
to applicable law, Xxxxxxxx hereby consents to process being served in any
suit,
action, or proceeding instituted in connection with this Note by (a) the mailing
of a copy thereof by certified mail, postage prepaid, return receipt requested,
to Borrower and (b) serving a copy thereof upon the registered agent or any
member or manager of Borrower and appointed by Xxxxxxxx as Xxxxxxxx’s agent for
service of process. Subject to applicable law, Borrower irrevocably agrees
that
such service shall be deemed to be service of process upon Borrower in any
such
suit, action, or proceeding. Nothing in this Note shall affect the right of
Agent to serve process in any manner otherwise permitted by law and nothing
in
this Note will limit the right of Agent otherwise to bring proceedings against
Borrower in the courts of any jurisdiction or jurisdictions.
11. Heirs,
Successors and Assigns.
The
terms of this Note and of the other Loan Documents shall bind and inure to
the
benefit of the heirs, devisees, representatives, successors and assigns of
the
parties. The foregoing sentence shall not be construed to permit Borrower to
assign the Loan except as otherwise permitted under the Loan Documents. As
further provided in the Loan Agreement, a Lender may, at any time, sell,
transfer, or assign this Note, the Deed of Trust and the other Loan Documents,
and any or all servicing rights with respect thereto, or grant participations
therein or issue mortgage pass-through certificates or other securities
evidencing a beneficial interest in a rated or unrated public offering or
private placement.
12. General
Provisions.
Time is
of the essence with respect to Xxxxxxxx’s obligations under this Note. If more
than one person or entity executes this Note as Borrower, all of said parties
shall be jointly and severally liable for payment of the indebtedness evidenced
hereby. Borrower and all sureties, endorsers, guarantors and any other party
now
or hereafter liable for the payment of this Note in whole or in part, hereby
severally (a) waive demand, presentment for payment, notice of dishonor and
of
nonpayment, protest, notice of protest, notice of intent to accelerate, notice
of acceleration and all other notices (except any notices which are specifically
required by this Note or any other Loan Document), filing of suit and diligence
in collecting this Note or enforcing any of the security herefor; (b) agree
to
any substitution, subordination, exchange or release of any such security or
the
release of any party primarily or secondarily liable hereon; (c) agree that
Agent shall not be required first to institute suit or exhaust its remedies
hereon against Borrower or others liable or to become liable hereon or to
perfect or enforce its rights against them or any security herefor; (d) consent
to any extensions or postponements of time of payment of this Note for any
period or periods of time and to any partial payments, before or after maturity,
and to any other indulgences with respect hereto, without notice thereof to
any
of them; and (e) submit (and waive all rights to object) to non-exclusive
personal jurisdiction of any state or federal court sitting in the State of
Nevada, and venue in the city or county in which payment is to be made as
specified in Section 1 of this Note, for the enforcement of any and all
obligations under this Note and the Loan Documents; (f) waive the benefit of
all
homestead and similar exemptions as to this Note; (g) agree that their liability
under this Note shall not be affected or impaired by any determination that
any
security interest or lien taken by Agent to secure this Note is invalid or
unperfected; and (h) hereby subordinate any and all rights against Borrower
and
any of the security for the payment of this Note, whether by subrogation,
agreement or otherwise, until this Note is paid in full. A determination that
any provision of this Note is unenforceable or invalid shall not affect the
enforceability or validity of any other provision and the determination that
the
application of any provision of this Note to any person or circumstance is
illegal or unenforceable shall not affect the enforceability or validity of
such
provision as it may apply to other persons or circumstances. This Note may
not
be amended except in a writing specifically intended for such purpose and
executed by the party against whom enforcement of the amendment is sought.
Subject to Section 8.17 of the Loan Agreement, Agent is hereby authorized to
disseminate any information it now has or hereafter obtains pertaining to the
Loan, including, without limitation, any security for this Note and credit
or
other information on Borrower, any of its principals and any guarantor of this
Note, to any actual or prospective assignee or participant with respect to
the
Loan, to any of Agent’s affiliates, to any regulatory body having jurisdiction
over Agent, and to any other parties as necessary or appropriate in Agent’s
reasonable judgment, as further provided in the Loan Agreement. Captions and
headings in this Note are for convenience only and shall be disregarded in
construing it. THIS NOTE, AND ITS VALIDITY, ENFORCEMENT AND INTERPRETATION,
SHALL BE GOVERNED BY NEVADA LAW (WITHOUT REGARD TO ANY CONFLICT OF LAWS
PRINCIPLES) AND APPLICABLE UNITED STATES FEDERAL LAW.
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13. Notices;
Time.
All
notices, requests, consents, approvals or demands (collectively, “Notice”)
required or permitted by this Note to be given by any party to any other party
hereunder shall be given in accordance with the notice provisions contained
in
the Loan Agreement. Whenever a time of day is referred to herein, unless
otherwise specified such time shall be the local time in the city in which
this
Note is payable.
THE
LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT
BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES.
THERE
ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.
IN
WITNESS WHEREOF, Xxxxxxxx has duly executed this Note as of the date first
above
written.
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