Exhibit 4.26
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LOAN AND SECURITY AGREEMENT
by and among
XXXXXX ENTERTAINMENT, INC.
and
EACH OF ITS SUBSIDIARIES THAT ARE SIGNATORIES HERETO
as Borrowers,
and
FOOTHILL CAPITAL CORPORATION
as Lender,
Dated as of July 12, 2002
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TABLE OF CONTENTS
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1. DEFINITIONS AND CONSTRUCTION ..................................................................1
1.1 Definitions ..........................................................................1
1.2 Accounting Terms ....................................................................14
1.3 UCC .................................................................................14
1.4 Construction ........................................................................14
1.5 Schedules and Exhibits ..............................................................15
2. LOAN AND TERMS OF PAYMENT ....................................................................15
2.1 Revolver Advances ...................................................................15
2.2 Borrowing Procedures and Settlements ................................................16
2.3 Payments ............................................................................16
2.4 Overadvances ........................................................................18
2.5 Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations .........18
2.6 Crediting Payments ..................................................................19
2.7 Designated Accounts .................................................................20
2.8 Maintenance of Loan Account; Statements of Obligations ..............................20
2.9 Fees ................................................................................20
2.10 Letters of Credit ...................................................................21
2.11 Capital Requirements ................................................................23
2.12 Joint and Several Liability of Borrowers ............................................24
2.13 Promissory Note .....................................................................26
3. CONDITIONS; TERM OF AGREEMENT ...............................................................27
3.1 Conditions Precedent to the Initial Extension of Credit .............................27
3.2 Conditions Subsequent to the Initial Extension of Credit ............................30
3.3 Conditions Precedent to all Extensions of Credit other than Special Advances ........30
3.4 Conditions Precedent to Special Advances ............................................31
3.5 Term ................................................................................31
3.6 Effect of Termination ...............................................................31
3.7 Early Termination ...................................................................32
4. CREATION OF SECURITY INTEREST ................................................................32
4.1 Grant of Security Interest ..........................................................32
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4.2 Delivery of Additional Documentation Required .......................................33
4.3 Power of Attorney ...................................................................33
5. REPRESENTATIONS AND WARRANTIES ...............................................................33
5.1 No Encumbrances .....................................................................34
5.2 Due Organization and Qualification; Subsidiaries ....................................34
5.3 Due Authorization; No Conflict ......................................................35
5.4 Litigation ..........................................................................36
5.5 No Material Adverse Change ..........................................................36
5.6 Fraudulent Transfer .................................................................37
5.7 Employee Benefits ...................................................................37
5.8 Brokerage Fees ......................................................................37
5.9 Leases ..............................................................................37
5.10 Insurance ...........................................................................37
5.11 Complete Disclosure .................................................................37
5.12 Indebtedness ........................................................................37
5.13 No Default ..........................................................................38
6. AFFIRMATIVE COVENANTS ........................................................................38
6.1 Accounting System ...................................................................38
6.2 Financial Statements, Reports, Certificates .........................................38
6.3 Estoppel Statement ..................................................................41
6.4 Taxes ...............................................................................42
6.5 Insurance ...........................................................................42
6.6 Litigation ..........................................................................44
6.7 Compliance with Laws ................................................................44
6.8 Brokerage Commissions ...............................................................45
6.9 Existence ...........................................................................45
6.10 Disclosure Updates ..................................................................45
6.11 Black Hawk Bonds ....................................................................45
7. NEGATIVE COVENANTS ..........................................................................46
7.1 Indebtedness ........................................................................46
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7.2 Liens ...............................................................................46
7.3 Restrictions on Fundamental Changes .................................................46
7.4 Disposal of Assets ..................................................................47
7.5 Change Name .........................................................................47
7.6 Guarantee ...........................................................................47
7.7 Nature of Business ..................................................................47
7.8 Prepayments and Amendments ..........................................................47
7.9 Change of Control ...................................................................48
7.10 Distributions .......................................................................48
7.11 Accounting Methods ..................................................................48
7.12 Investments .........................................................................48
7.13 Transactions with Affiliates ........................................................48
7.14 Suspension ..........................................................................48
7.15 Use of Proceeds .....................................................................48
7.16 Financial Covenants .................................................................49
7.17 Stay, Extension and Usury Laws ......................................................50
7.18 Impairment of Security Interests ....................................................50
7.19 No Joint Assessment .................................................................50
7.20 Principal Place of Business .........................................................50
7.21 ERISA ...............................................................................50
7.22 Fiscal Year .........................................................................50
8. EVENTS OF DEFAULT ............................................................................50
8.1 Failure to Pay ......................................................................50
8.2 Failure to Comply with Terms of this Agreement ......................................51
8.3 Seizure of Assets ...................................................................51
8.4 Voluntary Insolvency Proceeding .....................................................51
8.5 Involuntary Insolvency Proceeding ...................................................51
8.6 Interruption of Business ............................................................51
8.7 Liens ...............................................................................51
8.8 Judgment Lien .......................................................................51
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8.9 Event of Default Under Indenture ....................................................51
8.10 Event of Default Under Black Hawk Bonds .............................................52
8.11 Default Under Other Agreements ......................................................52
8.12 Subordinated Indebtedness ...........................................................52
8.13 Misrepresentation ...................................................................52
8.14 Failure of Lien .....................................................................52
8.15 Unenforceability of Agreement .......................................................52
8.16 Termination of Guaranty .............................................................52
8.17 Default under any Mortgage ..........................................................52
9. THE LENDER'S RIGHTS AND REMEDIES ............................................................53
9.1 Rights and Remedies .................................................................53
9.2 Remedies Cumulative .................................................................53
10. TAXES AND EXPENSES ..........................................................................54
11. WAIVERS; INDEMNIFICATION .....................................................................54
11.1 Demand; Protest .....................................................................54
11.2 Indemnification .....................................................................54
12. NOTICES ......................................................................................55
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER ...................................................56
14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS ...................................................57
14.1 Assignments and Participations ......................................................57
14.2 Successors ..........................................................................59
15. AMENDMENTS; WAIVERS ..........................................................................59
15.1 Consents and Waivers ................................................................59
15.2 No Waivers; Cumulative Remedies .....................................................59
16. GENERAL PROVISIONS ...........................................................................59
16.1 Effectiveness .......................................................................59
16.2 Section Headings ....................................................................59
16.3 Interpretation ......................................................................60
16.4 Severability of Provisions ..........................................................60
16.5 Withholding Taxes ...................................................................60
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16.6 Amendments in Writing ...............................................................60
16.7 Counterparts; Telefacsimile Execution ...............................................60
16.8 Revival and Reinstatement of Obligations ............................................61
16.9 Integration .........................................................................61
16.10 Parent as Agent for Borrowers .......................................................61
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LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this "Agreement"), is entered into as of
July 12, 2002, between and among the FOOTHILL CAPITAL CORPORATION, a California
corporation (together with its successors and assigns, "Lender"), and XXXXXX
ENTERTAINMENT, INC., a Delaware corporation, ("Parent"), and each of Parent's
Subsidiaries identified as a "Borrower" on the signature pages hereof (such
Subsidiaries, together with Parent, are referred to hereinafter each
individually as a "Borrower", and individually and collectively, jointly and
severally, as the "Borrowers").
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 Definitions. As used in this Agreement, the following terms shall have
the following definitions:
"Administrative Borrower" has the meaning set forth in Section 16.10.
"Advances" has the meaning set forth in Section 2.1.
"Affiliate" means, as applied to any Person, any other Person who,
directly or indirectly, controls, is controlled by, or is under common
control with, such Person. For purposes of this definition, "control" means
the possession, directly or indirectly, of the power to direct the
management and policies of a Person, whether through the ownership of
Stock, by contract, or otherwise.
"Agreement" has the meaning set forth in the preamble hereto.
"Applicable Prepayment Premium" means, as of any date of
determination, an amount equal to one-tenth of one percent (0.10%) of the
Maximum Revolver Amount times the number of months remaining until the
Maturity Date (based on the date of such determination and each monthly
anniversary thereof, and, with respect to any partial period for the
calendar month in which the Maturity Date occurs, pro-rated based on a
thirty (30) day month and number of days elapsed).
"Appraisal Value" means the quick sale value of the Real Property
Collateral as set forth on Schedule 1.1 hereto, as such amount may be
updated from time to time by Lender in its Permitted Discretion, including
in connection with such periodic appraisals as Lender may require from time
to time pursuant to Section 6.2(h).
"Assignee" has the meaning set forth in Section 14.1(a).
"Authorized Person" means any officer or employee of Administrative
Borrower designated in writing by an officer of the Administrative
Borrower.
"Available Cash" means, for any Person as of any date of
determination, the amount of such Person's cash or Cash Equivalents
available for immediate use, but
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not including the aggregate amount of any cash (or Cash Equivalents)
reserves required by applicable law.
"Availability" means, as of any date of determination, if such date is
a Business Day, and determined at the close of business on the immediately
preceding Business Day, if such date of determination is not a Business
Day, the amount that Borrowers are entitled to borrow as Advances under
Section 2.1 (after giving effect to all then outstanding Obligations and
all sublimits and reserves applicable hereunder).
"Bankruptcy Code" means the United States Bankruptcy Code, as in
effect from time to time.
"Base Rate" means, the rate of interest announced within Xxxxx Fargo
at its principal office in San Francisco as its "prime rate", with the
understanding that the "prime rate" is one of Xxxxx Fargo's base rates (not
necessarily the lowest of such rates) and serves as the basis upon which
effective rates of interest are calculated for those loans making reference
thereto and is evidenced by the recording thereof after its announcement in
such internal publication or publications as Xxxxx Fargo may designate.
"Base Rate Margin" means one and three-quarters (1.75) percentage
points.
"Benefit Plan" means a "defined benefit plan" (as defined in Section
3(35) of ERISA) for which any Borrower or any Subsidiary or ERISA Affiliate
of any Borrower has been an "employer" (as defined in Section 3(5) of
ERISA) within the past six years.
"Black Hawk Bonds" shall mean the Special Assessment Bonds, Series
1999A and 1999B, originally dated February 15, 1999, issued by the Black
Hawk Business Improvement District, Xxxxxx, Colorado, Special Improvement
District No. 1997-2 pursuant to resolution of the board of directors
thereof dated February 17, 1999.
"Board of Directors" means the board of directors (or comparable
managers) of Parent or any committee thereof duly authorized to act on
behalf thereof.
"Bond Assessment Payments" means the payments assessed by the board of
directors of the Black Hawk Business Improvement District, Xxxxxx County,
Colorado, pursuant to resolution dated January 26, 2000, with respect to
the Black Hawk Bonds, including the payments listed in the Assessment Roll
defined therein and attached thereto.
"Borrower" and "Borrowers" have the respective meanings set forth in
the preamble to this Agreement.
"Borrowing" means a borrowing hereunder of an Advance.
"Borrowing Base" has the meaning set forth in Section 2.1.
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"Business Day" means any day that is not a Saturday, Sunday, or other
day on which national banks are authorized or required to close.
"Capital Lease" means a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP.
"Capital Expenditures" means, with respect to any Person, all
expenditures (by the expenditure of cash or the incurrence of Indebtedness)
by such Person during any measuring period for any fixed assets or
improvements or for replacements, substitutions or additions thereto that
have a useful life of more than one year and that are required to be
capitalized under GAAP.
"Cash Equivalents" means:
(a) United States dollars;
(b) securities issued or directly and fully guaranteed or insured
by the United States government or any agency or instrumentality
thereof (provided that the full faith and credit of the United States
is pledged in support thereof) having maturities of not more than six
months from the date of acquisition;
(c) certificates of deposit and eurodollar time deposits with
maturities of six months or less from the date of acquisition,
bankers' acceptances with maturities not exceeding six months and
overnight bank deposits, in each case, with any domestic commercial
bank having capital and surplus in excess of $500,000,000;
(d) repurchase Obligations with a term of not more than seven
days for underlying securities of the types described in clauses (b)
and (c) above entered into with any financial institution meeting the
qualifications specified in clause (c) above;
(e) commercial paper maturing within six months after the date of
acquisition and having a rating of at least a-1 from Moody's or P-1
from S&P; and
(f) money market funds at least 95% of the assets of which
constitute Cash Equivalents of the kinds described in clauses (a)
through (e) of this definition.
"Casino Entities" means each of Black Hawk/Xxxxxx Entertainment LLC, a
Colorado limited liability company, and Xxxxxx Hotel Venture, a Colorado
partnership.
"Change of Control" means (a) any "Change of Control" as defined in
the Indenture as in effect on the date hereof, or (b) with respect to any
Borrower other than Parent, Parent ceases to, directly or indirectly, own
and control 100% of the outstanding capital Stock of each such Borrower.
"Closing Date" means the date of the making of the initial Advance (or
other extension of credit) hereunder.
"Closing Date Projections" means the set of Projections of Borrowers
(separately including Projections for the Casino Entities) for the 3 year
period following
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the Closing Date (on a year by year basis, and for the 1 year period
following the Closing Date, on a month by month basis), in form and
substance (including as to scope and underlying assumptions) satisfactory
to Lender.
"Collateral" means the assets of Borrowers described in Schedule 1.2
hereto.
"Compliance Certificate" means a certificate substantially in the form
of Exhibit C-1 delivered by the chief financial officer of Parent to
Lender.
"Daily Balance" means, with respect to each day during the term of
this Agreement, the amount of a liquidated monetary Obligation owed at the
end of such day.
"Default" means an event, condition, or default that, with the giving
of notice, the passage of time, or both, would be an Event of Default.
"Designated Account" means, for each Borrower, that certain deposit
account designated as such on Schedule 1.3 for such Borrower, or such other
deposit account located within the United States that has been designated
as such, in writing, by such Borrower (for the purpose of Advances
allocated to such Borrower) to Lender.
"Disbursement Letter" means an instructional letter executed and
delivered by Administrative Borrower to Lender regarding the extensions of
credit to be made on the Closing Date, the form and substance of which is
satisfactory to Lender.
"Dollars" or "$" means United States dollars.
"EBITDA" means, for any Person and with respect to any fiscal period,
consolidated net earnings (or loss) minus extraordinary gains, plus
interest expense, income taxes, and depreciation and amortization for such
period, as determined in accordance with GAAP.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto.
"ERISA Affiliate" means (a) any Person subject to ERISA whose
employees are treated as employed by the same employer as the employees of
a Borrower under IRC Section 414(b), (b) any trade or business subject to
ERISA whose employees are treated as employed by the same employer as the
employees of a Borrower under IRC Section 414(c), (c) solely for purposes
of Section 302 of ERISA and Section 412 of the IRC, any organization
subject to ERISA that is a member of an affiliated service group of which a
Borrower is a member under IRC Section 414(m), or (d) solely for purposes
of Section 302 of ERISA and Section 412 of the IRC, any Person subject to
ERISA that is a party to an arrangement with a Borrower and whose employees
are aggregated with the employees of a Borrower under IRC Section 414(o).
"Event of Default" has the meaning set forth in Section 8.
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"Event of Loss" means, with respect to any property or asset (tangible
or intangible real or personal) constituting Collateral, any of the
following:
(1) any loss, destruction or damage of such property or asset;
(2) any institution of any proceedings for the condemnation or
seizure of such property or asset or for the exercise of any right of
eminent domain;
(3) any actual condemnation, seizure or taking by exercise of the
power of eminent domain or otherwise of such property or asset, or
confiscation of such property or asset.
"Exchange Act" means the Securities Exchange Act of 1934, as in effect
from time to time.
"FEIN" means Federal Employer Identification Number.
"Funding Date" means the date on which a Borrowing occurs.
"GAAP" means generally accepted accounting principles as in effect
from time to time in the United States, consistently applied.
"Gaming Law" means any gaming laws or regulations (including the
Specific Gaming Laws) of any jurisdiction to which any Borrower or
Guarantor is or may at any time after the date hereof be subject.
"Governing Documents" means, with respect to any Person, the
certificate or articles of incorporation, by-laws, or other organizational
documents of such Person.
"Governmental Authority" means any federal, state, local, or other
governmental or administrative body, instrumentality, department, or agency
or any court, tribunal, administrative hearing body, arbitration panel,
commission, or other similar dispute-resolving panel or body.
"Guarantor" means each of Diversified Opportunities Group Ltd., an
Ohio limited liability company, Gold Dust West Casino, Inc., a Nevada
corporation, together with any other Person which from time to time becomes
a Guarantor pursuant to the terms hereof.
"Guaranty" means that certain general continuing guaranty executed and
delivered by each Guarantor in favor of Lender, in form and substance
satisfactory to Lender.
"Hazardous Materials" means (a) substances that are defined or listed
in, or otherwise classified pursuant to, any applicable laws or regulations
as "hazardous substances," "hazardous materials," "hazardous wastes,"
"toxic substances," or any other formulation intended to define, list, or
classify substances by reason of deleterious properties such as
ignitability, corrosivity, reactivity, carcinogenicity, reproductive
toxicity, or "EP toxicity", (b) oil, petroleum, or petroleum derived
substances, natural
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gas, natural gas liquids, synthetic gas, drilling fluids, produced waters,
and other wastes associated with the exploration, development, or
production of crude oil, natural gas, or geothermal resources, (c) any
flammable substances or explosives or any radioactive materials, and (d)
asbestos in any form or electrical equipment that contains any oil or
dielectric fluid containing levels of polychlorinated biphenyls in excess
of 50 parts per million.
"Hazardous Materials Indemnity Agreement" means that certain Hazardous
Materials Indemnity Agreement, dated as of the date hereof, executed by
Black Hawk Gaming & Development Company, Inc., a Colorado corporation,
Black Hawk/Xxxxxx Entertainment, LLC, a Colorado limited liability company,
Xxxxxx Hotel Venture, a Colorado joint venture partnership, and Xxxxxx
Ventures, Inc., a Colorado corporation in favor of Lender.
"Indebtedness" means (a) all obligations for borrowed money, (b) all
obligations evidenced by bonds, debentures, notes, or other similar
instruments and all reimbursement or other obligations in respect of
letters of credit, bankers acceptances, interest rate swaps, or other
financial products, (c) all obligations under Capital Leases, (d) all
obligations or liabilities of others secured by a Lien on any asset of a
Borrower or its Subsidiaries that are a Borrower or Guarantor, irrespective
of whether such obligation or liability is assumed, (e) all obligations for
the deferred purchase price of assets (other than trade debt incurred in
the ordinary course business and repayable in accordance with customary
trade practices), and (f) any obligation guaranteeing or intended to
guarantee (whether directly or indirectly guaranteed, endorsed, co-made,
discounted, or sold with recourse) any obligation of any other Person.
"Indemnified Liabilities" has the meaning set forth in Section 11.2.
"Indemnified Person" has the meaning set forth in Section 11.2.
"Indenture" means that certain Indenture dated as of February 8, 2002,
among Parent, the Subsidiary Guarantors (as defined therein) named therein,
and Indenture Trustee. Each reference to the term "Indenture" shall, unless
otherwise indicated, refer to such Indenture as amended, supplemented,
restated, or otherwise modified from time to time in compliance with
Section 7.8 hereof.
"Indenture Intercreditor Agreement" means that certain intercreditor
agreement, dated as of July 12, 2002, by and between Indenture Trustee and
Lender.
"Indenture Reserve" means a reserve against availability under the
Advances to be implemented and adjusted from time to time by Lender based
on the following:
(a) In the event that consolidated trailing twelve month EBITDA
for the Casino Entities is less than sixteen million Dollars
($16,000,000), but more than thirteen million Dollars ($13,000,000),
the Indenture Reserve shall be an amount equal to one million Dollars
($1,000,000).
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(b) In the event that consolidated trailing twelve month EBITDA
for the Casino Entities is less than thirteen million Dollars
($13,000,000), the Indenture Reserve shall be an amount equal to three
million Dollars ($3,000,000).
(c) All adjustments in the Indenture Reserve shall be implemented
on a prospective basis, commencing on the first Business Day after the
date of delivery to Lender of the financial statements evidencing the
need for an adjustment. In the event that Borrowers shall fail to
timely deliver any monthly, quarterly or annual financial statements,
or any certificate setting forth EBITDA calculations, within the time
frame specified in Section 6.2, Lender may, at its sole discretion, in
addition to any other remedy provided for in this -----------
Agreement, increase or maintain the Indenture Reserve at the highest
level set forth above, until the first Business Day following the
delivery of those financial statements demonstrating that such a
reserve is not required.
"Indenture Trustee" means Xxxxx Fargo Bank Minnesota National
Association, in its capacity as trustee under the Indenture, together with
an successor thereto in such capacity under the Indenture.
"Insolvency Proceeding" means any proceeding commenced by or against
any Person under any provision of the Bankruptcy Code or under any other
state or federal bankruptcy or insolvency law, assignments for the benefit
of creditors, formal or informal moratoria, compositions, extensions
generally with creditors, or proceedings seeking reorganization,
arrangement, or other similar relief.
"Investment" means, with respect to any Person, any investment by such
Person in any other Person (including Affiliates) in the form of loans,
guarantees, advances, or capital contributions (excluding (a) commission,
travel, and similar advances to officers and employees of such Person made
in the ordinary course of business, and (b) bona fide accounts arising in
the ordinary course of business consistent with past practices), purchases
or other acquisitions for consideration of Indebtedness or Stock, and any
other items that are or would be classified as investments on a balance
sheet prepared in accordance with GAAP.
"IRC" means the Internal Revenue Code of 1986, as in effect from time
to time.
"L/C" has the meaning set forth in Section 2.10(a).
"L/C Disbursement" means a payment made by the Lender pursuant to a
Letter of Credit.
"L/C Undertaking" has the meaning set forth in Section 2.10(a).
"Lender" has the meaning set forth in the preamble to this Agreement.
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"Lender's Account" means an account at a bank designated by Lender
from time to time as the account into which Borrowers shall make all
payments to Lender under this Agreement and the other Loan Documents;
unless and until Lender notifies Administrative Borrower, Lender's Account
shall be that certain deposit account listed on Schedule 1.4.
"Lender's Liens" means the Liens granted by Borrowers to Lender under
this Agreement or the other Loan Documents.
"Lender Expenses" means all (a) costs or expenses (including taxes,
and insurance premiums) required to be paid by a Borrower under any of the
Loan Documents that are paid or incurred by Lender, (b) fees or charges
paid or incurred by Lender in connection with Lender's transactions with
Borrowers, including, fees or charges for photocopying, notarization,
couriers and messengers, telecommunication, public record searches
(including tax lien, litigation, and UCC), filing, recording, publication,
appraisal (including periodic Real Property Collateral appraisals or
business valuations to the extent of the fees and charges (and up to the
amount of any limitation) contained in this Agreement), real estate
surveys, real estate title policies and endorsements, and environmental
audits, (c) costs and expenses incurred by Lender in the disbursement of
funds to or for the account of Borrowers (by wire transfer or otherwise),
(d) charges paid or incurred by Lender resulting from the dishonor of
checks issued or endorsed by any Borrower or Guarantor or otherwise
delivered for payment or application to the Obligations, (e) reasonable
costs and expenses paid or incurred by Lender to correct any default or
enforce any provision of the Loan Documents, or in gaining possession of,
maintaining, handling, preserving, storing, shipping, selling, preparing
for sale, or advertising to sell the Collateral, or any portion thereof,
irrespective of whether a sale is consummated, (f) audit fees and expenses
of Lender related to audit examinations of the books and records of
Borrowers to the extent of the fees and charges (and up to the amount of
any limitation) contained in this Agreement, (g) reasonable costs and
expenses of third party claims or any other suit paid or incurred by Lender
in enforcing or defending the Loan Documents or in connection with the
transactions contemplated by the Loan Documents or Lender's relationship
with any Borrower or any guarantor of the Obligations, (h) Lender's
reasonable fees and expenses (including attorneys fees) incurred in
advising, structuring, drafting, reviewing, administering, or amending the
Loan Documents, and (i) Lender's reasonable fees and expenses (including
attorneys fees) incurred in terminating, enforcing (including attorneys
fees and expenses incurred in connection with a "workout," a
"restructuring," or an Insolvency Proceeding concerning any Borrower or in
exercising rights or remedies under the Loan Documents), or defending the
Loan Documents, irrespective of whether suit is brought, or in taking any
Remedial Action concerning the Collateral.
"Lender-Related Person" means Lender, Lender's Affiliates, and the
officers, directors, employees, and agents of Lender.
"Lender's Liens" means the Liens granted by Borrowers to Lender under
this Agreement or the other Loan Documents.
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"Letter of Credit" means an L/C or an L/C Undertaking, as the context
requires.
"Letter of Credit Usage" means, as of any date of determination, the
aggregate undrawn amount of all outstanding Letters of Credit plus 100% of
the amount of outstanding time drafts accepted by an Underlying Issuer as a
result of drawings under Underlying Letters of Credit.
"Lien" means any interest in an asset securing an obligation owed to,
or a claim by, any Person other than the owner of the asset, whether such
interest shall be based on the common law, statute, or contract, whether
such interest shall be recorded or perfected, and whether such interest
shall be contingent upon the occurrence of some future event or events or
the existence of some future circumstance or circumstances, including the
lien or security interest arising from a mortgage, deed of trust,
encumbrance, pledge, hypothecation, assignment, deposit arrangement,
security agreement, conditional sale or trust receipt, or from a lease,
consignment, or bailment for security purposes and also including
reservations, exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions, leases, and other title exceptions and
encumbrances affecting Real Property Collateral.
"Loan Account" has the meaning set forth in Section 2.8.
"Loan Documents" means this Agreement, the Promissory Note, any other
note or notes executed by a Borrower in connection with this Agreement and
payable to Lender, the Disbursement Letter, the Guaranty, the Letters of
Credit, the Mortgages, the Officers' Certificate, and any other agreement
entered into, now or in the future, by any Borrower and Lender in
connection with this Agreement.
"Material Adverse Change" means (a) a material adverse change in the
business, prospects, operations, results of operations, assets, liabilities
or condition (financial or otherwise) of Borrowers taken as a whole, (b) a
material impairment of a Borrower's ability to perform its obligations
under the Loan Documents to which it is a party or of Lender's ability to
enforce the Obligations or realize upon the Collateral, or (c) a material
impairment of the enforceability or priority of the Lender's Liens with
respect to the Collateral as a result of an action or failure to act on the
part of a Borrower.
"Maturity Date" has the meaning set forth in Section 3.5.
"Maximum Allocated Amount" means, for each Borrower, the maximum
aggregate amount of Advances and Letter of Credit Obligations allocated to
such Borrower as set forth in Schedule 1.5 hereto, and as adjusted from
time to time by Lender in its Permitted Discretion in connection with
changes to the Appraisal Value.
"Maximum Revolver Amount" means ten million dollars ($10,000,000).
"Mortgages" means, individually and collectively, one or more
mortgages, deeds of trust, or deeds to secure debt, executed and delivered
by a Borrower in favor of
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Lender, in form and substance satisfactory to Lender, that encumber the
Real Property Collateral and the related improvements thereto.
"Net Loss Proceeds" means the aggregate cash proceeds received by any
Borrower in respect of any Event of Loss, including, without limitation,
insurance proceeds, condemnation awards or damages awarded by any judgment,
net of the direct costs in recovery of such Net Loss Proceeds (including,
without limitation, legal, accounting, appraisal and insurance adjuster
fees and any relocation expenses incurred as a result thereof), amounts
required to be applied to the repayment of Indebtedness secured by a Prior
Lien (including, without limitation, any Permitted Lien which is a Prior
Lien) on the asset or assets that were the subject of such Event of Loss,
and any taxes paid or payable as a result thereof.
"Obligations" means all loans, Advances, debts, principal, interest
(including any interest that, but for the provisions of the Bankruptcy
Code, would have accrued), contingent reimbursement obligations with
respect to outstanding Letters of Credit, premiums, liabilities (including
all amounts charged to Borrowers' Loan Account pursuant hereto),
obligations, fees, charges, costs, Lender Expenses (including any fees or
expenses that, but for the provisions of the Bankruptcy Code, would have
accrued), lease payments, guaranties, covenants, and duties of any kind and
description owing by Borrowers to Lender pursuant to or evidenced by the
Loan Documents and irrespective of whether for the payment of money,
whether direct or indirect, absolute or contingent, due or to become due,
now existing or hereafter arising, and including all interest not paid when
due and all Lender Expenses that Borrowers are required to pay or reimburse
by the Loan Documents, by law, or otherwise. Any reference in this
Agreement or in the Loan Documents to the Obligations shall include all
amendments, changes, extensions, modifications, renewals replacements,
substitutions, and supplements, thereto and thereof, as applicable, both
prior and subsequent to any Insolvency Proceeding.
"Officers' Certificate" means the representations and warranties of
officers form submitted by Lender to Administrative Borrower, together with
Borrowers' completed responses to the inquiries set forth therein, the form
and substance of such responses to be satisfactory to Lender.
"Overadvance" has the meaning set forth in Section 2.4.
"Parent" has the meaning set forth in the preamble to this Agreement.
"Participant" has the meaning set forth in Section 14.1(e).
"Permitted Discretion" means a determination made in good faith and in
the exercise of reasonable (from the perspective of a secured asset-based
lender) business judgment.
"Permitted Dispositions" means (a) with respect to the Collateral, (i)
sales or other dispositions of equipment that is substantially worn,
damaged, or obsolete in the ordinary course of business, or (ii) the
transfer of Collateral solely between or among the Borrowers, provided,
that such Collateral shall remain subject to any Lien created
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pursuant to the Loan Documents (without any adverse effect on such Lien or
the enforceability or priority thereof), and (b) with respect to assets
other than the Collateral, any sale or other disposition expressly
permitted pursuant to the terms of the Indenture as in effect on the date
hereof.
"Permitted Investments" means any investment in (a) Cash Equivalents
and (b) any Investment expressly permitted pursuant to the terms of the
Indenture as in effect on the date hereof, so long as, both before and
after giving effect to such Investment (1) no Default or Event of Default
shall have occurred and be continuing, (2) the sum of Availability plus
Available Cash is not less than $7,000,000, (3) no such Investment involves
or affects the management or ownership of any Collateral, and (4) if such
Investment involves the creation of a new subsidiary of any Borrower, such
subsidiary becomes a Guarantor hereunder pursuant to terms and
documentation satisfactory to Lender in its Permitted Discretion.
"Permitted Liens" means (a) Liens held by Lender, (b) Liens for unpaid
taxes that either (i) are not yet delinquent, or (ii) do not constitute an
Event of Default hereunder and are the subject of Permitted Protests, (c)
Liens set forth on Schedule 1.6, (d) the interests of lessors under
operating leases, (e) Liens arising by operation of law in favor of
warehousemen, landlords, carriers, mechanics, materialmen, laborers, or
suppliers, incurred in the ordinary course of business and not in
connection with the borrowing of money, and which Liens either (i) are for
sums not yet delinquent, or (ii) are the subject of Permitted Protests, (f)
Liens arising from deposits made in connection with obtaining worker's
compensation or other unemployment insurance, (g) Liens or deposits to
secure performance of bids, tenders, or leases incurred in the ordinary
course of business and not in connection with the borrowing of money, (h)
Liens with respect to the Collateral that are exceptions to the commitments
for title insurance issued in connection with the Mortgages, as accepted by
Lender, (i) with respect to Collateral, Liens arising after the Closing
Date pursuant to Purchase Money Obligations, provided that: (i) the
Indebtedness secured by any such Lien (including any refinancings thereof)
does not exceed 100% of the cost of the property being acquired at the time
of the incurrence of the Indebtedness and (ii) any such Liens are permitted
pursuant to the Indenture as in effect on the date hereof, attach only to
the property being financed pursuant to the Purchase Money Obligation (and
proceeds thereof) and do not encumber any other property of the Borrowers,
it being understood that all Indebtedness to a single lender shall be
considered to be a single Permitted Purchase Money Obligation, whether
drawn at one time or from time to time), and (j) with respect to any assets
other than the Collateral, Liens expressly permitted under the Indenture as
in effect on the date hereof.
"Permitted Protest" means the right of the applicable Borrower or its
Subsidiaries to protest any Lien (other than any such Lien that secures the
Obligations), taxes (other than payroll taxes or taxes that are the subject
of a United States federal tax lien), or rental payment, provided that (a)
a reserve with respect to such obligation is established on the books of
Borrowers in such amount as is required under GAAP, (b) any such protest is
instituted promptly and prosecuted diligently by the applicable Borrower or
its Subsidiary, as applicable, in good faith, and (c) Lender is satisfied
that,
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while any such protest is pending, there will be no impairment of the
enforceability, validity, or priority of any of the Lender's Liens.
"Person" means natural persons, corporations, limited liability
companies, limited partnerships, general partnerships, limited liability
partnerships, joint ventures, trusts, land trusts, business trusts, or
other organizations, irrespective of whether they are legal entities, and
governments and agencies and political subdivisions thereof.
"Personal Property Collateral" means all Collateral other than Real
Property.
"Projections" means the forecasted (a) balance sheets, (b) profit and
loss statements, and (c) cash flow statements for Parent (on a consolidated
basis) and, separately, the Casino Entities, all prepared on a consistent
basis with Parent's historical financial statements, together with
appropriate supporting details and a statement of underlying assumptions.
"Promissory Note" shall have the meaning ascribed to it in Section
2.13.
"Purchase Money Obligation" means, for any Borrower, any obligations
of such Borrower to any seller or any other Person incurred or assumed to
finance the purchase, or the cost of construction or improvement, of real
or personal property to be used in the business of such Borrower in an
amount that is not more than 100% of the cost, or fair market value, as
appropriate, of such property, and incurred within 90 days after the date
of such acquisition (excluding accounts payable to trade creditors incurred
in the ordinary course of business).
"Real Property" means any estates or interests in real property now
owned or hereafter acquired by any Borrower and the improvements thereto.
"Real Property Collateral" means the parcel or parcels of Real
Property identified on Schedule A to the definition of "Collateral"
attached hereto as Schedule 1.2, and any other Real Property at any time
subject to a Mortgage in favor of Lender securing the Obligations.
"Record" means information that is inscribed on a tangible medium or
which is stored in an electronic or other medium and is retrievable in
perceivable form.
"Remedial Action" means all actions taken to (a) clean up, remove,
remediate, contain, treat, monitor, assess, evaluate, or in any way address
Hazardous Materials in the indoor or outdoor environment, (b) prevent or
minimize a release or threatened release of Hazardous Materials so they do
not migrate or endanger or threaten to endanger public health or welfare or
the indoor or outdoor environment, (c) perform any pre-remedial studies,
investigations, or post-remedial operation and maintenance activities, or
(d) conduct any other actions authorized by 42 USC ss. 9601.
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"Revolver Usage" means, as of any date of determination, the sum of
(a) the then extant amount of outstanding Advances, plus (b) the then
extant amount of the Letter of Credit Usage.
"SEC" means the United States Securities and Exchange Commission and
any successor thereto.
"Solvent" means, with respect to any Person on a particular date, that
such Person is not insolvent (as such term is defined in the Uniform
Fraudulent Transfer Act).
"Special Advances" means advances made by Lender after the occurrence
and during the continuation of a Default or Event of Default, provided,
however, that both before and after making any Special Advances, (1) the
aggregate amount of amount of Special Advances shall not exceed $7,000,000
and (2) the Borrowers shall have Availability of at least $3,000,000.
"Specific Gaming Laws" means C.R.S. 12-47.1-833 and Regulation
47.1-310 promulgated thereunder, all as amended, supplemented or otherwise
modified from time to time and together with any successor or replacement
gaming laws or regulations in the State of Colorado.
"Stated Maturity" has the meaning set forth in the Indenture as in
effect on the date hereof.
"Stock" means all shares, options, warrants, interests,
participations, or other equivalents (regardless of how designated) of or
in a Person, whether voting or nonvoting, including common stock, preferred
stock, or any other "equity security" (as such term is defined in Rule
3a11-1 of the General Rules and Regulations promulgated by the SEC under
the Exchange Act).
"Subject Property" means any property that is the subject of an Event
of Loss.
"Subsidiary" of a Person means a corporation, partnership, limited
liability company, or other entity in which that Person directly or
indirectly owns or controls the shares of Stock having ordinary voting
power to elect a majority of the board of directors (or appoint other
comparable managers) of such corporation, partnership, limited liability
company, or other entity.
"Taxes" has the meaning set forth in Section 16.5.
"UCC" means, generally, the Uniform Commercial Code as the same may,
from time to time, be enacted and in effect in the State of New York;
provided, however, that solely for the purposes of the provisions hereof
relating to the attachment, perfection or priority of Lender's security
interest in any Collateral and for purposes of definitions relating to such
provisions, (a) subject to clause (b) below, the term "UCC" shall mean the
Uniform Commercial Code as enacted and in effect in the State of Colorado
and (b) in the event that, by reason of mandatory provisions of law, any or
all
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of the attachment, perfection or priority of Lender's security interest in
any Collateral is governed by the Uniform Commercial Code as enacted and in
effect in any other jurisdiction, the term "UCC" shall mean the Uniform
Commercial Code as enacted and in effect in such other jurisdiction.
"Underlying Issuer" means a third Person which is the beneficiary of
an L/C Undertaking and which has issued a letter of credit at the request
of Lender for the benefit of Borrowers.
"Underlying Letter of Credit" means a letter of credit that has been
issued by an Underlying Issuer.
"Voidable Transfer" has the meaning set forth in Section 16.8.
"Xxxxx Fargo" means Xxxxx Fargo Bank, National Association, a national
banking association.
1.2 Accounting Terms. All accounting terms not specifically defined herein
shall be construed in accordance with GAAP. When used herein, the term
"financial statements" shall include the notes and schedules thereto. Whenever
the term "Borrowers" or the term "Parent" is used in respect of a financial
covenant or a related definition, it shall be understood to mean Parent and its
Subsidiaries on a consolidated basis unless the context clearly requires
otherwise.
1.3 UCC. Any terms used in this Agreement that are defined in the UCC shall
be construed and defined as set forth in the UCC unless otherwise defined
herein.
1.4 Construction. Unless the context of this Agreement or any other Loan
Document clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the term "including" is
not limiting, and the term "or" has, except where otherwise indicated, the
inclusive meaning represented by the phrase "and/or." The words "hereof,"
"herein," "hereby," "hereunder," and similar terms in this Agreement or any
other Loan Document refer to this Agreement or such other Loan Document, as the
case may be, as a whole and not to any particular provision of this Agreement or
such other Loan Document, as the case may be. Section, subsection, clause,
schedule, and exhibit references herein are to this Agreement unless otherwise
specified. Any reference in this Agreement or in the other Loan Documents to any
agreement, instrument, or document shall include all alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements, thereto and thereof, as applicable (subject to any
restrictions on such alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, joinders, and supplements
set forth herein). Any reference herein to any Person shall be construed to
include such Person's successors and assigns. Any requirement of a writing
contained herein or in the other Loan Documents shall be satisfied by the
transmission of a Record and any Record transmitted shall constitute a
representation and warranty as to the accuracy and completeness of the
information contained therein.
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1.5 Schedules and Exhibits. All of the schedules and exhibits attached to
this Agreement shall be deemed incorporated herein by reference.
2. LOAN AND TERMS OF PAYMENT.
2.1 Revolver Advances.
(a) Subject to the terms and conditions of this Agreement, and during
the term of this Agreement, Lender agrees to make advances ("Advances") to
Borrowers (allocated among the Borrowers pursuant to Section 2.1(b)) in an
amount at any one time outstanding not to exceed an amount equal to the
lesser of (i) the Maximum Revolver Amount less the Letter of Credit Usage
and less the Indenture Reserve, or (ii) the Borrowing Base less the Letter
of Credit Usage and less the Indenture Reserve. For purposes of this
Agreement, "Borrowing Base," as of any date of determination, shall mean
the sum of:
(x) the lesser of (i) the consolidated trailing twelve (12) month
EBITDA for the Casino Entities or (ii) up to seventy-five percent 75%
of the Appraisal Value of the Real Property Collateral, minus
(y) the aggregate amount outstanding under the Black Hawk Bonds,
minus
(z) the aggregate amount of reserves, if any, established by
Lender under Section 2.1(c).
(b) Subject to the terms and conditions herein, Advances shall be made
to the applicable Borrowers as requested in writing by Administrative
Borrower acting on behalf of the Borrowers subject to the following
limitations (in addition to any other limitations set forth in this
Agreement):
(i) In no event shall the aggregate amount of Advances allocated
to any Borrower and Letter of Credit Usage with respect to Letters of
Credit issued with respect to such Borrower, exceed the Maximum
Allocated Amount for such Borrower; and
(ii) Advances on any Funding Date shall be in an aggregate
minimum amount of $100,000 and integral multiples of $100,000 in
excess of such amount.
(c) Anything to the contrary in this Section 2.1 notwithstanding,
Lender shall have the right to establish reserves in such amounts, and with
respect to such matters, as Lender in its Permitted Discretion shall deem
necessary or appropriate, against the Borrowing Base, including reserves
with respect to (i) sums that Borrowers are required to pay (such as taxes,
assessments, insurance premiums, or, in the case of leased assets, rents or
other amounts payable under such leases) and has failed to pay
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under any Section of thisAgreement or any other Loan Document, and (ii)
amounts owing by Borrowers to any Person to the extent secured by a Lien
on, or trust over, any of the Collateral (other than any existing Permitted
Lien set forth on Schedule 1.6 which is specifically identified thereon as
entitled to have priority over the Lender's Liens), which Lien or trust, in
the Permitted Discretion of Lender likely would have a priority superior to
the Lender's Liens (such as Liens or trusts in favor of landlords,
warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or
Liens or trusts for ad valorem, excise, sales, or other taxes where given
priority under applicable law) in and to such item of the Collateral.
(d) Lender shall have no obligation to make additional Advances
hereunder to the extent such additional Advances would cause the Revolver
Usage to exceed the Maximum Revolver Amount.
(e) Amounts borrowed pursuant to this Section may be repaid and,
subject to the terms and conditions of this Agreement, reborrowed at any
time during the term of this Agreement.
2.2 Borrowing Procedures and Settlements.
(a) Procedure for Borrowing. Each Borrowing shall be made by a written
request by an Authorized Person delivered to Lender (which notice must be
received by Lender no later than 10:00 a.m. (California time) on the
Business Day that is the requested Funding Date specifying (i) the amount
of such Borrowing, (ii) the requested Funding Date, which shall be a
Business Day, and (iii) Borrowers' calculation as to Availability (showing
each component thereof) as calculated pursuant to Section 2.1(a), including
a certification as to the accuracy of such calculation and the satisfaction
of all the conditions precedent for such Advance (as set forth in Section 3
hereof), and (iv) the applicable Borrowers to whom such Advance is to be
made (and the amount of such Advance allocated, without duplication, to
each such Borrower). At Lender's election, in lieu of delivering the
above-described request in writing, any Authorized Person may give Lender
telephonic notice of such request by the required time, with such
telephonic notice to be confirmed in writing within 24 hours of the giving
of such notice.
(b) Making of Advances. If Lender has received a timely request for a
Borrowing in accordance with the provisions hereof, and subject to the
satisfaction of the applicable terms and conditions set forth herein,
Lender shall make the proceeds of such Advance available to Borrowers on
the applicable Funding Date by transferring available funds equal to such
proceeds to each applicable Borrower (as allocated among the Borrowers in
accordance with Section 2.1(b)) to its Designated Account.
2.3 Payments.
(a) Payments by Borrowers. Except as otherwise expressly provided
herein, all payments by Borrowers shall be made to Lender's Account and
shall be made in immediately available funds, no later than 11:00 a.m.
(California time) on the date specified herein. Any payment received by
Lender later than 11:00 a.m. (California
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time), shall be deemed to have been received on the following Business Day
and any applicable interest or fee shall continue to accrue until such
following Business Day.
(b) Application, and Reversal of Payments.
(i) All payments shall be remitted to Lender and all such
payments (other than payments received while no Default or Event of
Default has occurred and is continuing and which relate to the payment
of principal or interest of specific Obligations or which relate to
the payment of specific fees), and all proceeds of Collateral received
by Lender, shall be applied as follows:
A. first, to pay any Lender Expenses then due to Lender
under the Loan Documents, until paid in full,
B. second, to pay any fees then due to Lender under the Loan
Documents, until paid in full,
C. third, ratably to pay interest due in respect of Advances
until paid in full,
D. fourth, to pay the principal of all Advances (allocated
to the applicable Borrower with respect to such payment, as
determined by Lender in its Permitted Discretion, and taking into
account for any payment any concurrent written request from
Administrative Borrower as to application thereof, and thereafter
to Advances allocated to all other Borrowers on a pro rata basis,
provided, that, if there shall have occurred and be continuing an
Event of Default at such time, such payments shall be allocated
to the Borrowers as determined by Lender in its sole discretion
at such time) until all Advances are paid in full,
E. fifth, if an Event of Default has occurred and is
continuing, to be held by Lender, as cash collateral in an amount
up to 105% of the then extant Letter of Credit Usage until paid
in full,
F. sixth, to pay any other Obligations that are due and
payable until paid in full, and
G. seventh, to Borrowers (to be wired, as allocated among
the Borrowers, to the Designated Account for each Borrower) or
such other Person entitled thereto under applicable law.
(ii) In each instance, so long as no Event of Default has
occurred and is continuing, this Section 2.3(b) shall not be deemed to
apply to any payment by Borrowers specified by Borrowers to be for the
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payment of specific Obligations then due and payable (or prepayable)
under any provision of this Agreement.
(iii) For purposes of the foregoing, "paid in full" means payment
of all amounts owing under the Loan Documents according to the terms
thereof, including loan fees, service fees, professional fees,
interest (and specifically including interest accrued after the
commencement of any Insolvency Proceeding), default interest, interest
on interest, and expense reimbursements, whether or not the same would
be or is allowed or disallowed in whole or in part in any Insolvency
Proceeding.
(iv) In the event of a direct conflict between the priority
provisions of this Section 2.3 and other provisions contained in any
other Loan Document, it is the intention of the parties hereto that
such priority provisions in such documents shall be read together and
construed, to the fullest extent possible, to be in concert with each
other. In the event of any actual, irreconcilable conflict that cannot
be resolved as aforesaid, the terms and provisions of this Section 2.3
shall control and govern.
2.4 Overadvances. If, at any time or for any reason, the aggregate
amount of Advances and Letter of Credit Usage is greater than either the
Dollar or percentage limitations set forth in Sections 2.1 or 2.10, (an
"Overadvance"), Borrowers immediately shall pay to Lender, in cash, the
amount of such excess, which amount shall be used by Lender to reduce the
Obligations in accordance with Section 2.3(b). In addition, Borrowers
hereby promise to pay the Obligations (including principal, interest, fees,
costs, and expenses) in Dollars in full to Lender as and when due and
payable under the terms of this Agreement and the other Loan Documents.
2.5 Interest Rates and Letter of Credit Fee: Rates, Payments, and
Calculations.
(a) Interest Rates. Except as provided in clause (c) below, all
Obligations (except for undrawn Letters of Credit) that have been
charged to the Loan Account pursuant to the terms hereof shall bear
interest on the Daily Balance thereof at a per annum rate equal to the
Base Rate plus the Base Rate Margin.
(b) Letter of Credit Fee. Borrowers shall pay Lender a Letter of
Credit fee (in addition to the charges, commissions, fees, and costs
set forth in Section 2.10(e)) which shall accrue at a rate equal to
three percent (3%) per annum times the Daily Balance of the undrawn
amount of all outstanding Letters of Credit.
(c) Default Rate. Upon the occurrence and during the continuation
of an Event of Default,
(i) all Obligations (except for undrawn Letters of Credit)
that have been charged to the Loan Account pursuant to the terms
hereof shall bear interest on the Daily Balance thereof at a per
annum rate equal to
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four (4) percentage points above the per annum rate otherwise
applicable hereunder, and
(ii) the Letter of Credit fee provided for above shall be
increased to four (4) percentage points above the per annum rate
otherwise applicable hereunder.
(d) Payment. Interest, Letter of Credit fees, and all other fees
payable hereunder shall be due and payable, in arrears, on the first
day of each month at any time that Obligations or obligation to extend
credit hereunder are outstanding. Borrowers hereby authorize Lender,
from time to time, without prior notice to Borrowers, to charge such
interest and fees, all Lender Expenses (as and when incurred), the
charges, commissions, fees, and costs provided for in Section 2.10(e)
(as and when accrued or incurred), the fees and costs provided for in
Section 2.9 (as and when accrued or incurred), and all other payments
as and when due and payable under any Loan Document to Borrowers' Loan
Account, which amounts thereafter shall constitute Advances hereunder
and shall accrue interest at the rate then applicable to Advances
hereunder. Any interest not paid when due shall be charged to
Borrowers' Loan Account and shall thereafter constitute Advances
hereunder and shall accrue interest at the rate then applicable to
Advances.
(e) Computation. All interest and fees chargeable under the Loan
Documents shall be computed on the basis of a 360 day year for the
actual number of days elapsed. In the event the Base Rate is changed
from time to time hereafter, the rates of interest hereunder based
upon the Base Rate automatically and immediately shall be increased or
decreased by an amount equal to such change in the Base Rate as to
interest accruing from and after that date.
(f) Intent to Limit Charges to Maximum Lawful Rate. In no event
shall the interest rate or rates payable under this Agreement, plus
any other amounts paid in connection herewith, exceed the highest rate
permissible under any law that a court of competent jurisdiction
shall, in a final determination, deem applicable. Borrowers and
Lender, in executing and delivering this Agreement, intend legally to
agree upon the rate or rates of interest and manner of payment stated
within it; provided, however, that, anything contained herein to the
contrary notwithstanding, if said rate or rates of interest or manner
of payment exceeds the maximum allowable under applicable law, then,
ipso facto, as of the date of this Agreement, Borrowers are and shall
be liable only for the payment of such maximum as allowed by law, and
payment received from Borrowers in excess of such legal maximum,
whenever received, shall be applied to reduce the principal balance of
the Obligations to the extent of such excess.
2.6 Crediting Payments. The receipt of any payment item by Lender shall not
be considered a payment on account unless such payment item is a wire transfer
of immediately available federal funds made to the Lender's Account or unless
and until such payment item is honored when presented for payment. Should any
payment item not be honored when presented for payment, then Borrowers shall be
deemed not to have made such payment and interest shall be calculated
accordingly. Anything to the
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contrary contained herein notwithstanding, any payment item shall be deemed
received by Lender only if it is received into the Lender's Account on a
Business Day on or before 11:00 a.m. (California time). If any payment item is
received into the Lender's Account on a non-Business Day or after 11:00 a.m.
(California time) on a Business Day, it shall be deemed to have been received by
Lender as of the opening of business on the immediately following Business Day.
2.7 Designated Accounts. Lender is authorized to make the Advances, and
Lender is authorized to issue the Letters of Credit, under this Agreement based
upon telephonic or other instructions received from anyone purporting to be an
Authorized Person, or without instructions if pursuant to Section 2.5(d). Each
Borrower agrees to establish and maintain, or cause to be established and
maintained, a Designated Account for the purpose of receiving the proceeds of
the Advances requested by Borrowers (and allocated to such Borrower) and made by
Lender hereunder. Unless otherwise agreed by Lender and each applicable
Borrower, any Advance requested by Borrowers and made by Lender hereunder shall
be made to the Designated Account of each Borrower in an amount equal to each
such Borrower's allocated share of the Advance. Each Designated Account shall be
owned by the applicable Borrower, or by another Borrower for the benefit of each
applicable Borrower having designated such account as its Designated Account.
2.8 Maintenance of Loan Account; Statements of Obligations. Lender shall
maintain an account on its books in the name of Borrowers (the "Loan Account")
on which Borrowers will be charged with all Advances made by Lender to Borrowers
or for Borrowers' account, the Letters of Credit issued by Lender for Borrowers'
account, and with all other payment Obligations hereunder or under the other
Loan Documents when the same become due and payable pursuant to Section 2.5(d)
or any other provision hereunder or under any other Loan Document, including,
accrued interest, fees and expenses, and Lender Expenses. In accordance with
Section 2.6, the Loan Account will be credited with all payments received by
Lender from Borrowers or for Borrowers' account. Lender shall render statements
regarding the Loan Account to Administrative Borrower, including principal,
interest, fees, and including an itemization of all charges and expenses
constituting Lender Expenses owing, and such statements shall be conclusively
presumed to be correct and accurate and constitute an account stated between
Borrowers and Lender unless, within 60 days after receipt thereof by
Administrative Borrower, Administrative Borrower shall deliver to Lender written
objection thereto describing the error or errors contained in any such
statements.
2.9 Fees. Borrowers shall pay to Lender the following fees and charges,
which fees and charges shall be non-refundable when paid (irrespective of
whether this Agreement is terminated thereafter):
(a) Unused Line Fee. On the first day of each month during the term of
this Agreement, an unused line fee in the amount equal to three-quarters
percent (.75%) per annum times the result of (a) the Maximum Revolver
Amount, less (b) the sum of (i) the average Daily Balance of Advances that
were outstanding during the
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immediately preceding month, plus (ii) the average Daily Balance of the
Letter of Credit Usage during the immediately preceding month,
(b) Servicing Fee. On the first day of each month during the term of
this Agreement, a servicing fee in the amount of $4,000.00 for services
rendered during the preceding month,
(c) Commitment Fee. On the earlier of (i) the Closing Date or (ii)
Lender's issuance of a commitment letter, a commitment fee of one and
one-quarter percent (1.25%) of the Maximum Revolver Amount.
2.10 Letters of Credit.
(a) Subject to the terms and conditions of this Agreement, Lender
agrees to issue letters of credit for the account of Borrowers (each, an
"L/C") or to purchase participations or execute indemnities or
reimbursement obligations (each such undertaking, an "L/C Undertaking")
with respect to letters of credit issued by an Underlying Issuer (as of the
Closing Date, the prospective Underlying Issuer is to be Xxxxx Fargo) for
the account of Borrowers (allocated among the Borrowers as set forth in the
applicable request for issuance delivered by Administrative Borrower). To
request the issuance of an L/C or an L/C Undertaking (or the amendment,
renewal, or extension of an outstanding L/C or L/C Undertaking),
Administrative Borrower shall hand deliver or telecopy (or transmit by
electronic communication, if arrangements for doing so have been approved
by Lender) to Lender (reasonably in advance of the requested date of
issuance, amendment, renewal, or extension) a notice requesting the
issuance of an L/C or L/C Undertaking, or identifying the L/C or L/C
Undertaking to be amended, renewed, or extended, the date of issuance,
amendment, renewal, or extension, the date on which such L/C or L/C
Undertaking is to expire, the amount of such L/C or L/C Undertaking, the
name and address of the beneficiary thereof (or of the Underlying Letter of
Credit, as applicable), the Borrower(s) for whose account such L/C or L/C
Undertaking is being requested (and amount attributable, without
duplication, to each such Borrower) and such other information as shall be
necessary to prepare, amend, renew, or extend such L/C or L/C Undertaking.
If requested by Lender, Borrowers also shall be an applicant under the
application with respect to any Underlying Letter of Credit that is to be
the subject of an L/C Undertaking. Lender shall have no obligation to issue
a Letter of Credit if any of the following would result after giving effect
to the requested Letter of Credit:
(i) the Letter of Credit Usage would exceed the Borrowing Base
less the amount of outstanding Advances and less the Indenture
Reserve, or
(ii) the Letter of Credit Usage would exceed $5,000,000,
(iii) the Letter of Credit Usage allocated to any Borrower,
together with the outstanding Advances allocated to such Borrower,
would exceed the Maximum Allocated Amount for such Borrower, or
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(iv) the Letter of Credit Usage would exceed the Maximum Revolver
Amount less the then existing amount of outstanding Advances and less
the Indenture Reserve.
(b) Borrowers and Lender acknowledge and agree that certain Underlying
Letters of Credit may be issued to support letters of credit that already
are outstanding as of the Closing Date. Each Letter of Credit (and
corresponding Underlying Letter of Credit) shall be in form and substance
acceptable to Lender (in the exercise of its Permitted Discretion),
including the requirement that the amounts payable thereunder must be
payable in Dollars. If Lender is obligated to advance funds under a Letter
of Credit, Borrowers immediately shall reimburse such L/C Disbursement to
Lender by paying to Lender an amount equal to such L/C Disbursement not
later than 11:00 a.m., California time, on the date that such L/C
Disbursement is made, if Administrative Borrower shall have received
written or telephonic notice of such L/C Disbursement prior to 10:00 a.m.,
California time, on such date, or, if such notice has not been received by
Administrative Borrower prior to such time on such date, then not later
than 11:00 a.m., California time, on (i) the Business Day that
Administrative Borrower receives such notice, if such notice is received
prior to 10:00 a.m., California time, on the date of receipt, and, in the
absence of such reimbursement, the L/C Disbursement immediately and
automatically shall be deemed to be an Advance hereunder and, thereafter,
shall bear interest at the rate then applicable to the Advances under
Section 2.5. To the extent an L/C Disbursement is deemed to be an Advance
hereunder, Borrowers' obligation to reimburse such L/C Disbursement shall
be discharged and replaced by the resulting Advance.
(c) Each Borrower hereby agrees to indemnify, save, defend, and hold
Lender harmless from any loss, cost, expense, or liability, and reasonable
attorneys fees incurred by Lender arising out of or in connection with any
Letter of Credit; provided, however, that no Borrower shall be obligated
hereunder to indemnify for any loss, cost, expense, or liability that is
caused by the gross negligence or willful misconduct of Lender. Each
Borrower agrees to be bound by the Underlying Issuer's regulations and
interpretations of any Underlying Letter of Credit or by Lender's
interpretations of any L/C issued by Lender to or for such Borrower's
account, even though this interpretation may be different from such
Borrower's own, and each Borrower understands and agrees that Lender shall
not be liable for any error, negligence, or mistake, whether of omission or
commission, in following Borrowers' instructions or those contained in the
Letter of Credit or any modifications, amendments, or supplements thereto.
Each Borrower understands that the L/C Undertakings may require Lender to
indemnify the Underlying Issuer for certain costs or liabilities arising
out of claims by Borrowers against such Underlying Issuer. Each Borrower
hereby agrees to indemnify, save, defend, and hold Lender harmless with
respect to any loss, cost, expense (including reasonable attorneys fees),
or liability incurred by Lender under any L/C Undertaking as a result of
Lender's indemnification of any Underlying Issuer; provided, however, that
no Borrower shall be obligated hereunder to indemnify for any loss, cost,
expense, or liability that is caused by the gross negligence or willful
misconduct of Lender.
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(d) Each Borrower hereby authorizes and directs any Underlying Issuer
to deliver to Lender all instruments, documents, and other writings and
property received by such Underlying Issuer pursuant to such Underlying
Letter of Credit and to accept and rely upon Lender's instructions with
respect to all matters arising in connection with such Underlying Letter of
Credit and the related application.
(e) Any and all charges, commissions, fees, and costs incurred by
Lender relating to Underlying Letters of Credit shall be Lender Expenses
for purposes of this Agreement and immediately shall be reimbursable by
Borrowers to Lender for the account of Lender; it being acknowledged and
agreed by each Borrower that, as of the Closing Date, the issuance charge
imposed by the prospective Underlying Issuer is .825% per annum times the
face amount of each Underlying Letter of Credit, that such issuance charge
may be changed from time to time, and that the Underlying Issuer also
imposes a schedule of charges for amendments, extensions, drawings, and
renewals.
(f) If by reason of (i) any change in any applicable law, treaty,
rule, or regulation or any change in the interpretation or application
thereof by any Governmental Authority, or (ii) compliance by the Underlying
Issuer or Lender with any direction, request, or requirement (irrespective
of whether having the force of law) of any Governmental Authority or
monetary authority, including Regulation D of the Federal Reserve Board, as
from time to time in effect (and any successor thereto):
(i) any reserve, deposit, or similar requirement is or shall be
imposed or modified in respect of any Letter of Credit issued
hereunder, or
(ii) there shall be imposed on the Underlying Issuer or Lender
any other condition regarding any Underlying Letter of Credit or any
Letter of Credit issued pursuant hereto;
and the result of the foregoing is to increase, directly or indirectly, the cost
to Lender of issuing, making, guaranteeing, or maintaining any Letter of Credit
or to reduce the amount receivable in respect thereof by Lender, then, and in
any such case, Lender may (to the extent not so prohibited by applicable law),
at any time within a reasonable period after the additional cost is incurred or
the amount received is reduced, notify Administrative Borrower, and Borrowers
shall pay within five (5) days of demand such amounts as Lender may specify to
be necessary to compensate Lender for such additional cost or reduced receipt,
together with interest on such amount from the date of such demand until payment
in full thereof at the rate then applicable to Advances hereunder. The
determination by Lender of any amount due pursuant to this Section, as set forth
in a certificate setting forth the calculation thereof in reasonable detail,
shall, in the absence of manifest or demonstrable error, be final and conclusive
and binding on all of the parties hereto.
2.11 Capital Requirements. If, after the date hereof, Lender determines
that (i) the adoption of or change in any law, rule, regulation or guideline
regarding capital requirements for banks or bank holding companies, or any
change in the interpretation or application thereof by any Governmental
Authority charged with the administration
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thereof, or (ii) compliance by Lender or its parent bank holding company with
any guideline, request or directive of any such entity regarding capital
adequacy (whether or not having the force of law), will have the effect of
reducing the return on Lender's or such holding company's capital as a
consequence of Lender's obligations hereunder to a level below that which Lender
or such holding company could have achieved but for such adoption, change, or
compliance (taking into consideration Lender's or such holding company's then
existing policies with respect to capital adequacy and assuming the full
utilization of such entity's capital) by any amount deemed by Lender to be
material, then Lender may notify Administrative Borrower thereof. Following
receipt of such notice, Borrowers agree to pay (to the extent not so prohibited
by applicable law) Lender on demand the amount of such reduction of return of
capital as and when such reduction is determined, payable within 90 days after
presentation by Lender of a statement in the amount and setting forth in
reasonable detail Lender's calculation thereof and the assumptions upon which
such calculation was based (which statement shall be deemed true and correct
absent manifest error). In determining such amount, Lender may use any
reasonable averaging and attribution methods.
2.12 Joint and Several Liability of Borrowers.
(a) Each of Borrowers is accepting joint and several liability
hereunder and under the other Loan Documents in consideration of the
financial accommodations to be provided by the Lender under this Agreement,
for the mutual benefit, directly and indirectly, of each of Borrowers and
in consideration of the undertakings of the other Borrowers to accept joint
and several liability for the Obligations.
(b) Notwithstanding any allocations of Advances among Borrowers (and
without any limitation based on or relating to the Maximum Allocated Amount
as to any Borrower), each of Borrowers, jointly and severally, hereby
irrevocably and unconditionally accepts, not merely as a surety but also as
a co-debtor, joint and several liability with the other Borrowers, with
respect to the payment and performance of all of the Obligations
(including, without limitation, any Obligations arising under this Section
2.12), it being the intention of the parties hereto that all the
Obligations shall be the joint and several obligations of each Person
composing Borrowers without preferences or distinction among them.
(c) If and to the extent that any of Borrowers shall fail to make any
payment with respect to any of the Obligations as and when due or to
perform any of the Obligations in accordance with the terms thereof, then
in each such event the other Persons composing Borrowers will make such
payment with respect to, or perform, such Obligation.
(d) The Obligations of each Borrower under the provisions of this
Section 2.12 constitute the absolute and unconditional, full recourse
Obligations of each Person composing Borrowers enforceable against each
such Borrower to the full extent of its properties and assets, irrespective
of the validity, regularity or enforceability of this Agreement or any
other circumstances whatsoever.
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(e) Except as otherwise expressly provided in this Agreement, each
Person composing Borrowers hereby waives notice of acceptance of its joint
and several liability, notice of any Advances or Letters of Credit issued
under or pursuant to this Agreement, notice of the occurrence of any
Default, Event of Default, or of any demand for any payment under this
Agreement, notice of any action at any time taken or omitted by Lender
under or in respect of any of the Obligations, any requirement of diligence
or to mitigate damages and, generally, to the extent permitted by
applicable law, all demands, notices and other formalities of every kind in
connection with this Agreement (except as otherwise provided in this
Agreement). Each Person composing Borrowers hereby assents to, and waives
notice of, any extension or postponement of the time for the payment of any
of the Obligations, the acceptance of any payment of any of the
Obligations, the acceptance of any partial payment thereon, any waiver,
consent or other action or acquiescence by Lender at any time or times in
respect of any default by any Person composing Borrowers in the performance
or satisfaction of any term, covenant, condition or provision of this
Agreement, any and all other indulgences whatsoever by Lender in respect of
any of the Obligations, and the taking, addition, substitution or release,
in whole or in part, at any time or times, of any security for any of the
Obligations or the addition, substitution or release, in whole or in part,
of any Person composing Borrowers. Without limiting the generality of the
foregoing, each of Borrowers assents to any other action or delay in acting
or failure to act on the part of Lender with respect to the failure by any
Person composing Borrowers to comply with any of its respective
Obligations, including, without limitation, any failure strictly or
diligently to assert any right or to pursue any remedy or to comply fully
with applicable laws or regulations thereunder, which might, but for the
provisions of this Section 2.12 afford grounds for terminating, discharging
or relieving any Person composing Borrowers, in whole or in part, from any
of its Obligations under this Section 2.12, it being the intention of each
Person composing Borrowers that, so long as any of the Obligations
hereunder remain unsatisfied, the Obligations of such Person composing
Borrowers under this Section 2.12 shall not be discharged except by
performance and then only to the extent of such performance. The
Obligations of each Person composing Borrowers under this Section 2.12
shall not be diminished or rendered unenforceable by any winding up,
reorganization, arrangement, liquidation, reconstruction or similar
proceeding with respect to any Person composing Borrowers or Lender. The
joint and several liability of the Persons composing Borrowers hereunder
shall continue in full force and effect notwithstanding any absorption,
merger, amalgamation or any other change whatsoever in the name,
constitution or place of formation of any of the Persons composing
Borrowers or Lender.
(f) Each Person composing Borrowers represents and warrants to Lender
that such Borrower is currently informed of the financial condition of
Borrowers and of all other circumstances which a diligent inquiry would
reveal and which Borrower believes or has reason to believe bear upon the
risk of nonpayment of the Obligations. Each Person composing Borrowers
further represents and warrants to Lender that such Borrower has read and
understands the terms and conditions of the Loan Documents. Each Person
composing Borrowers hereby covenants that such Borrower will continue to
keep informed of Borrowers' financial condition, the financial condition of
other
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guarantors, if any, and of all other circumstances which Borrower believes
or has reason to believe bear upon the risk of nonpayment or nonperformance
of the Obligations.
(g) The provisions of this Section 2.12 are made for the benefit of
Lender and its respective successors and assigns, and may be enforced by it
or them from time to time against any or all of the Persons composing
Borrowers as often as occasion therefor may arise and without requirement
on the part of Lender, any successor, or any assign first to marshal any of
its or their claims or to exercise any of its or their rights against any
of the other Persons composing Borrowers or to exhaust any remedies
available to it or them against any of the other Persons composing
Borrowers or to resort to any other source or means of obtaining payment of
any of the Obligations hereunder or to elect any other remedy. The
provisions of this Section 2.12 shall remain in effect until all of the
Obligations shall have been paid in full or otherwise fully satisfied. If
at any time, any payment, or any part thereof, made in respect of any of
the Obligations, is rescinded or must otherwise be restored or returned by
Lender upon the insolvency, bankruptcy or reorganization of any of the
Persons composing Borrowers, or otherwise, the provisions of this Section
2.12 will forthwith be reinstated in effect, as though such payment had not
been made.
(h) Each of the Persons composing Borrowers hereby agrees that it will
not enforce any of its rights of contribution or subrogation against the
other Persons composing Borrowers with respect to any liability incurred by
it hereunder or under any of the other Loan Documents, any payments made by
it to Lender with respect to any of the Obligations or any collateral
security therefor until such time as all of the Obligations have been paid
in full in cash. Any claim which any Borrower may have against any other
Borrower with respect to any payments to Lender hereunder or under any
other Loan Documents are hereby expressly made subordinate and junior in
right of payment, without limitation as to any increases in the Obligations
arising hereunder or thereunder, to the prior payment in full in cash of
the Obligations and, in the event of any insolvency, bankruptcy,
receivership, liquidation, reorganization or other similar proceeding under
the laws of any jurisdiction relating to any Borrower, its debts or its
assets, whether voluntary or involuntary, all such Obligations shall be
paid in full in cash before any payment or distribution of any character,
whether in cash, securities or other property, shall be made to any other
Borrower therefor.
(i)Each of the Persons composing Borrowers hereby agrees that, after
the occurrence and during the continuance of any Default or Event of
Default, the payment of any amounts due with respect to the indebtedness
owing by any Borrower to any other Borrower is hereby subordinated to the
prior payment in full in cash of the Obligations. Each Borrower hereby
agrees that after the occurrence and during the continuance of any Default
or Event of Default, such Borrower will not demand, xxx for or otherwise
attempt to collect any indebtedness of any other Borrower owing to such
Borrower until the Obligations shall have been paid in full in cash. If,
notwithstanding the foregoing sentence, such Borrower shall collect,
enforce or receive any amounts in respect of such indebtedness, such
amounts shall be collected, enforced and received by such Borrower as
trustee for the Lender, and such Borrower shall deliver any such
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amounts to Lender for application to the Obligations in accordance with
Section 2.3(b), or as may otherwise be required pursuant to the Indenture
Intercreditor Agreement.
2.13 Promissory Note. Borrowers shall execute and deliver to Lender a note
(the "Promissory Note") to evidence Lender's commitment to lend up to the
Maximum Revolver Amount. The Promissory Note shall be in the principal amount of
the Maximum Revolver Amount, dated the date hereof, and substantially in the
form of Exhibit 2.13 hereto. The Promissory Note shall represent the obligation
of the Borrowers to pay the Maximum Revolver Amount or, if less, the aggregate
unpaid principal amount of all Advances to Borrower together with interest
thereon as prescribed in Section 2.5.
3. CONDITIONS; TERM OF AGREEMENT
3.1 Conditions Precedent to the Initial Extension of Credit. The obligation
of Lender to make the initial Advance (or otherwise to extend any credit
provided for hereunder), is subject to the fulfillment, to the satisfaction of
Lender, of each of the conditions precedent set forth below:
(a) the Closing Date shall occur on or before July 26, 2002;
(b) Lender shall have received all financing statements required by
Lender, duly executed by the applicable Borrowers, and Lender shall have
received searches reflecting the filing of all such financing statements;
(c) Lender shall have received each of the following documents, in
form and substance satisfactory to Lender, duly executed, and each such
document shall be in full force and effect:
(i) the Disbursement Letter,
(ii) the Promissory Note,
(iii) the Mortgages,
(iv) the Officers' Certificate,
(v) Hazardous Materials Indemnity,
(vi) the Guaranty executed by each of Diversified Opportunities
Group Ltd., an Ohio limited liability company, and Gold Dust West
Casino, Inc., a Nevada corporation,
(vii) Indenture Intercreditor Agreement,
(d) Lender shall have received a certificate from the Secretary of
each Borrower attesting to the resolutions of such Borrower's Board of
Directors authorizing its execution, delivery, and performance of this
Agreement and the other Loan Documents to which such Borrower is a party
and authorizing specific officers of such Borrower to execute the same;
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(e) Lender shall have received copies of each Borrower's Governing
Documents, as amended, modified, or supplemented to the Closing Date,
certified by the Secretary of such Borrower;
(f) Lender shall have received a certificate of status with respect to
each Borrower for which such certificates are issued by any Governmental
Authority, dated within 30 days of the Closing Date, such certificate to be
issued by the appropriate officer of the jurisdiction of organization of
such Borrower, which certificate shall indicate that such Borrower is in
good standing in such jurisdiction;
(g) Lender shall have received certificates of status with respect to
each Borrower, each dated within 30 days of the Closing Date, such
certificates to be issued by the appropriate officer of the jurisdictions
(other than the jurisdiction of organization of such Borrower) in which its
failure to be duly qualified or licensed would constitute a Material
Adverse Change, which certificates shall indicate that such Borrower is in
good standing in such jurisdictions;
(h) Lender shall have received a certificate from the Secretary of
each Guarantor attesting to the resolutions of such Guarantor's Board of
Directors authorizing its execution, delivery, and performance of the Loan
Documents to which such Guarantor is a party and authorizing specific
officers of such Guarantor to execute the same;
(i) Lender shall have received copies of each Guarantor's Governing
Documents, as amended, modified, or supplemented to the Closing Date,
certified by the Secretary of such Guarantor;
(j) Lender shall have received a certificate of status with respect to
each Guarantor, dated within 30 days of the Closing Date, such certificate
to be issued by the appropriate officer of the jurisdiction of organization
of such Guarantor, which certificate shall indicate that such Guarantor is
in good standing in such jurisdiction;
(k) Lender shall have received certificates of status with respect to
each Guarantor, each dated within 30 days of the Closing Date, such
certificates to be issued by the appropriate officer of the jurisdictions
(other than the jurisdiction of organization of such Guarantor) in which
its failure to be duly qualified or licensed would constitute a Material
Adverse Change, which certificates shall indicate that such Guarantor is in
good standing in such jurisdictions;
(l) Lender shall have received such certificates of insurance,
together with the endorsements thereto, as are required by Section 6.5, the
form and substance of which shall be satisfactory to Lender;
(m) Lender shall have received opinions of Borrowers' counsel in form
and substance satisfactory to Lender;
(n) Lender shall have received satisfactory evidence (including a
certificate of the chief financial officer of Parent) that all tax returns
required to be filed by Borrowers have been timely filed and all taxes upon
Borrowers or their properties,
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assets, income, and franchises (including Real Property taxes and payroll
taxes) have been paid prior to delinquency, except such taxes that are the
subject of a Permitted Protest;
(o) Lender shall have received an initial report of the type specified
in Section 6.2(l) setting forth the EBITDA for the Casino Entities for the
twelve (12) month period ending on May 31, 2002;
(p) After giving effect to the initial extensions of credit hereunder,
the amount of the Borrowing Base less the Letter of Credit Usage and less
the Indenture Reserve shall be not less than $9,000,000;
(q) Lender shall have completed its business, legal, and collateral
due diligence, including a collateral audit and review of Borrowers' books
and records and verification of Borrowers' representations and warranties
to Lender, the results of which shall be satisfactory to Lender;
(r) Lender shall have received completed reference checks with respect
to Borrowers' senior management, the results of which are satisfactory to
Lender in its Permitted Discretion;
(s) Lender shall have received Borrowers' Closing Date Projections,
the results of which are satisfactory to Lender in its Permitted
Discretion;
(t) Borrowers shall pay all Lender Expenses incurred in connection
with the transactions evidenced by this Agreement;
(u) Lender shall have received (i) appraisals of the Real Property
Collateral satisfactory to Lender, and (ii) mortgagee title insurance
policies (or marked commitments to issue the same) for the Real Property
Collateral issued by a title insurance company satisfactory to Lender (each
a "Mortgage Policy" and, collectively, the "Mortgage Policies") in amounts
satisfactory to Lender assuring Lender that the Mortgages on such Real
Property Collateral are valid and enforceable first priority mortgage Liens
on such Real Property Collateral free and clear of all defects and
encumbrances except Permitted Liens, and the Mortgage Policies otherwise
shall be in form and substance satisfactory to Lender;
(v) Lender shall have received a phase-I environmental report and a
real estate survey with respect to each parcel composing the Real Property
Collateral; the environmental consultants and surveyors retained for such
reports or surveys, the scope of the reports or surveys, and the results
thereof shall be acceptable to Lender;
(w) Lender shall have received copies of each of the Indenture and the
Black Hawk Bonds, together with all applicable documents setting forth any
Borrower's material rights and obligations relating thereto, and including
a certificate of the Secretary of the applicable Borrower certifying each
such document as being a true, correct, and complete copy thereof;
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(x) Borrowers shall have delivered all notices (including any
applicable notice required to be delivered to applicable Governmental
Authorities under any Gaming Law) and received all licenses, approvals and
evidence of other actions required by any Governmental Authority in
connection with the execution and delivery by Borrowers of this Agreement
or any other Loan Document or with the consummation of the transactions
contemplated hereby and thereby; and
(y) all other documents and legal matters in connection with the
transactions contemplated by this Agreement shall have been delivered,
executed, or recorded and shall be in form and substance satisfactory to
Lender.
3.2 Conditions Subsequent to the Initial Extension of Credit. The
obligation of Lender to continue to make Advances (or otherwise extend credit
hereunder) is subject to the fulfillment, on or before the date applicable
thereto, of each of the conditions subsequent set forth below (the failure by
Borrowers to so perform or cause to be performed constituting an Event of
Default):
(a) within 30 days of the Closing Date, deliver to Lender certified
copies of the policies of insurance, together with the endorsements
thereto, as are required by Section 6.5, the form and substance of which
shall be satisfactory to Lender and its counsel.
3.3 Conditions Precedent to all Extensions of Credit other than Special
Advances. The obligation of Lender to make all Advances (or to extend any other
credit hereunder) other than Special Advances shall be subject to the following
conditions precedent:
(a) the representations and warranties contained in this Agreement and
the other Loan Documents shall be true and correct in all material respects
on and as of the date of such extension of credit, as though made on and as
of such date (except to the extent that such representations and warranties
relate solely to an earlier date);
(b) no Default or Event of Default shall have occurred and be
continuing on the date of such extension of credit, nor shall either result
from the making thereof;
(c) no injunction, writ, restraining order, or other order of any
nature prohibiting, directly or indirectly, the extending of such credit
shall have been issued and remain in force by any Governmental Authority
against any Borrower, Lender, or any of their Affiliates;
(d) no applicable Governmental Authority shall, under any Gaming Law,
have delivered notice to, or initiated any proceeding against, Lender or
any Borrower requesting or requiring any material modification to, or the
termination or invalidation of, any Loan Document or material provision
thereof, unless, for any such notice or proceeding, Lender shall be
satisfied, in its sole discretion, that such notice or proceeding has been,
or will be, resolved without impairment of Lender's rights under the
applicable Loan Documents; and
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(e) no Material Adverse Change shall have occurred.
3.4 Conditions Precedent to Special Advances. The obligation of Lender to
make any Special Advances shall be subject to the following conditions
precedent:
(a) the representations and warranties contained in this Agreement and
the other Loan Documents shall be true and correct in all material respects
on and as of the date of such extension of credit, as though made on and as
of such date (except to the extent that such representations and warranties
relate solely to an earlier date);
(b) no Default or Event of Default shall have occurred and be
continuing on the date of such extension of credit, nor shall either result
from the making thereof, in each case either (i) under Sections 8.1, 8.3,
8.4, 8.5, 8.6, 8.8, 8.9, 8.10, 8.12, 8.13, 8.14, 8.15 or 8.16 or Section
8.2(a) to the extent relating to a breach of Sections 6.2 or 6.6 or (ii)
under any other provision of this Agreement or any Loan Document where
Lender determines, in its Permitted Discretion, that such Default of Event
of Default could have a material adverse effect on the value of the
Collateral or Lender's interest therein or the repayment in full of the
Obligations pursuant to the terms of this Agreement;
(c) no injunction, writ, restraining order, or other order of any
nature prohibiting, directly or indirectly, the extending of such credit
shall have been issued and remain in force by any Governmental Authority
against any Borrower, Lender, or any of their Affiliates;
(d) no applicable Governmental Authority shall, under any Gaming Law,
have delivered notice to, or initiated any proceeding against, Lender or
any Borrower requesting or requiring any material modification to, or the
termination or invalidation of, any Loan Document or material provision
thereof, unless, for any such notice or proceeding, Lender shall be
satisfied, in its sole discretion, that such notice or proceeding has been,
or will be, resolved without impairment of Lender's rights under the
applicable Loan Documents; and
(e) no Material Adverse Change shall have occurred.
3.5 Term. This Agreement shall become effective upon the execution and
delivery hereof by Borrowers and Lender and shall continue in full force and
effect for a term ending on July 12, 2007 (the "Maturity Date"). The foregoing
notwithstanding, Lender, shall have the right to terminate its obligations under
this Agreement immediately and without notice upon the occurrence and during the
continuation of an Event of Default.
3.6 Effect of Termination. On the date of termination of this Agreement,
all Obligations (including contingent reimbursement obligations of Borrowers
with respect to any outstanding Letters of Credit) immediately shall become due
and payable without notice or demand (including either (i) providing cash
collateral to be held by Lender in an amount equal to 105% of the then extant
Letter of Credit Usage, or (ii) causing the original Letters of Credit to be
returned to the Issuing Lender). No termination of this
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Agreement, however, shall relieve or discharge Borrowers of their duties,
Obligations, or covenants hereunder and the Lender's Liens in the Collateral
shall remain in effect until all Obligations have been fully and finally
discharged and Lender's obligations to provide additional credit hereunder have
been terminated. When this Agreement has been terminated and all of the
Obligations have been fully and finally discharged and Lender's obligations to
provide additional credit under the Loan Documents have been terminated
irrevocably, Lender will, at Borrowers' sole expense, execute and deliver any
UCC termination statements, lien releases, mortgage releases, re-assignments of
trademarks, discharges of security interests, and other similar discharge or
release documents (and, if applicable, in recordable form) as are reasonably
necessary to release, as of record, the Lender's Liens and all notices of
security interests and liens previously filed by Lender with respect to the
Obligations.
3.7 Early Termination. Borrowers have the option, at any time upon 90 days
prior written notice by Administrative Borrower to Lender, to terminate this
Agreement by paying to Lender, in cash, the Obligations (including either (i)
providing cash collateral to be held by Lender in an amount equal to 105% of the
then extant Letter of Credit Usage, or (ii) causing the original Letters of
Credit to be returned to Lender), in full, together with the Applicable
Prepayment Premium. If Administrative Borrower has sent a notice of termination
pursuant to the provisions of this Section, then Lender's obligations to extend
credit hereunder shall terminate and Borrowers shall be obligated to repay the
Obligations (including either (i) providing cash collateral to be held by Lender
in an amount equal to 105% of the then extant Letter of Credit Usage, or (ii)
causing the original Letters of Credit to be returned to Lender), in full,
together with the Applicable Prepayment Premium, on the date set forth as the
date of termination of this Agreement in such notice. In the event of the
termination of this Agreement and repayment of the Obligations at any time prior
to the Maturity Date, for any other reason, including (a) termination upon the
election of Lender to terminate after the occurrence of an Event of Default, (b)
foreclosure and sale of Collateral, (c) sale of the Collateral in any Insolvency
Proceeding, or (iv) restructure, reorganization or compromise of the Obligations
by the confirmation of a plan of reorganization, or any other plan of
compromise, restructure, or arrangement in any Insolvency Proceeding, then, in
view of the impracticability and extreme difficulty of ascertaining the actual
amount of damages to Lender or profits lost by Lender as a result of such early
termination, and by mutual agreement of the parties as to a reasonable
estimation and calculation of the lost profits or damages of Lender, Borrowers
shall pay the Applicable Prepayment Premium to Lender, measured as of the date
of such termination.
4.CREATION OF SECURITY INTEREST.
4.1 Grant of Security Interest. Borrowers, by this Agreement and the
Mortgages, hereby grant to Lender a continuing security interest in all of their
right, title, and interest in all currently existing and hereafter acquired or
arising Collateral in order to secure prompt repayment of any and all of the
Obligations in accordance with the terms and conditions of the Loan Documents
and in order to secure prompt performance by Borrowers of each of their
covenants and duties under the Loan Documents. The Lender's Liens in and to the
Personal Property Collateral shall attach to all Personal
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Property Collateral without further act on the part of Lender or Borrower.
Anything contained in this Agreement or any other Loan Document to the contrary
notwithstanding, except for Permitted Dispositions hereunder, Borrower shall
have no authority, express or implied, to dispose of any item or portion of the
Collateral.
4.2 Delivery of Additional Documentation Required. In furtherance of the
grant of a security interest in the Collateral pursuant to Section 4.1 above,
Borrower shall execute and deliver to Lender the Mortgages with respect to the
Real Property Collateral, and at any time upon the request of Lender, Borrower
shall execute and deliver to Lender, any and all financing statements, original
financing statements in lieu of continuation statements, fixture filings,
security agreements, pledges, assignments, endorsements of certificates of
title, and all other documents (the "Additional Documents") that Lender may
request in its Permitted Discretion, in form and substance satisfactory to
Lender, to perfect and continue perfected or better perfect the Lender's Liens
in the Collateral (whether now owned or hereafter arising or acquired), to
create and perfect Liens in favor of Lender in any Collateral acquired after the
Closing Date, and in order to fully consummate all of the transactions
contemplated hereby and under the other Loan Documents. To the maximum extent
permitted by applicable law, Borrower authorizes Lender to execute any such
Additional Documents in Borrower's name and authorizes Lender to file such
executed Additional Documents in any appropriate filing office.
4.3 Power of Attorney. Each Borrower hereby irrevocably makes, constitutes,
and appoints Lender (and any of Lender's officers, employees, or agents
designated by Lender) as Borrower's true and lawful attorney, with power to (a)
if Borrower refuses to, or fails timely to execute and deliver any financing
statements, original financing statements in lieu of continuation statements,
future filings, endorsements or certificates of title, sign the name of Borrower
on any such document, (b) at any time that an Event of Default has occurred and
is continuing, sign Borrower's name on any invoice or xxxx of lading relating to
the Collateral, drafts against account debtors, or notices to account debtors,
in each case solely to the extent relating to the Collateral (c) send requests
for verification of accounts, (d) at any time that an Event of Default has
occurred or is continuing, endorse Borrower's name on any collection item that
may come into Lender's possession, (e) at any time that an Event of Default and
acceleration has occurred and is continuing, make, settle, and adjust all claims
under Borrower's policies of insurance and make all determinations and decisions
with respect to such policies of insurance, in each case to the extent such
policies of insurance relate to the Collateral, and (f) at any time that an
Event of Default has occurred and is continuing and after acceleration, settle
and adjust disputes and claims respecting any Collateral consisting of accounts
or general intangibles directly with account debtors, for amounts and upon terms
that Lender determines to be commercially reasonable, and Lender may cause to be
executed and delivered any documents and releases that Lender determines to be
necessary. The appointment of Lender as each Borrower's attorney, and each and
every one of its rights and powers, being coupled with an interest, is
irrevocable until all of the Obligations have been fully and finally repaid and
performed and Lender's obligations to extend credit hereunder are terminated.
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5. REPRESENTATIONS AND WARRANTIES.
In order to induce Lender to enter into this Agreement, each Borrower makes
(with respect to itself and each of its Subsidiaries that is a Borrower or
Guarantor) the following representations and warranties to Lender which shall be
true, correct, and complete, in all material respects, as of the date hereof,
and shall be true, correct, and complete, in all material respects, as of the
Closing Date, and at and as of the date of the making of each Advance (or other
extension of credit) made thereafter, as though made on and as of the date of
such Advance (or other extension of credit) (except to the extent that such
representations and warranties relate solely to an earlier date) and such
representations and warranties shall survive the execution and delivery of this
Agreement:
5.1 No Encumbrances. Each Borrower has good and indefeasible title to its
Collateral, free and clear of Liens except for Permitted Liens.
5.2 Due Organization and Qualification; Subsidiaries.
(a) Each Borrower is duly organized and existing and in good standing
under the laws of the jurisdiction of its organization and qualified to do
business in any state where the failure to be so qualified reasonably could
be expected to have a Material Adverse Change.
(b) Set forth on Schedule 5.2(b), is a complete and accurate
description of the authorized capital Stock of each Borrower, by class,
and, as of the Closing Date, a description of the number of shares of each
such class that are issued and outstanding. Other than as described on
Schedule 5.2(b), there are no subscriptions, options, warrants, or calls
relating to any shares of each Borrower's capital Stock, including any
right of conversion or exchange under any outstanding security or other
instrument. No Borrower is subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any shares of its
capital Stock or any security convertible into or exchangeable for any of
its capital Stock.
(c) Set forth on Schedule 5.2(c), is a complete and accurate list of
each Borrower's direct and indirect Subsidiaries, including a list
indicating the ownership percentages of each, and, for each Subsidiary that
is a Borrower or Guarantor, a list showing: (i) the jurisdiction of their
organization; (ii) the number of shares of each class of common and
preferred Stock authorized for each of such Subsidiaries; and (iii) the
number and the percentage of the outstanding shares of each such class
owned directly or indirectly by the applicable Borrower. All of the
outstanding capital Stock of each such Subsidiary has been validly issued
and is fully paid and non-assessable.
(d) Except as set forth on Schedule 5.2(c), there are no
subscriptions, options, warrants, or calls relating to any shares of any
Borrower's or Guarantor's capital Stock, including any right of conversion
or exchange under any outstanding security or other instrument. No Borrower
or any of its respective Subsidiaries that is a Borrower or Guarantor is
subject to any obligation (contingent or otherwise) to repurchase or
otherwise acquire or retire any shares of any capital Stock of any
Subsidiary that is a
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Borrower or Guarantor or any security convertible into or exchangeable for
any such capital Stock.
5.3 Due Authorization; No Conflict.
(a) As to each Borrower, the execution, delivery, and performance by
such Borrower of this Agreement and the Loan Documents to which it is a
party have been duly authorized by all necessary action on the part of such
Borrower.
(b) As to each Borrower, the execution, delivery, and performance by
such Borrower of this Agreement and the Loan Documents to which it is a
party do not and will not (i) violate any provision of federal, state, or
local law or regulation applicable to any Borrower, the Governing Documents
of any Borrower, or any order, judgment, or decree of any court or other
Governmental Authority binding on any Borrower, (ii) conflict with, result
in a breach of, or constitute (with due notice or lapse of time or both) a
default having a material adverse effect with respect to any material
contractual obligation of any Borrower, (iii) result in or require the
creation or imposition of any Lien of any nature whatsoever upon any
properties or assets of Borrower, other than Permitted Liens, or (iv)
require any approval of any Borrower's interestholders or any approval or
consent of any Person under any material contractual obligation of any
Borrower.
(c) The execution, delivery, and performance by each Borrower of this
Agreement and the Loan Documents to which such Borrower is a party do not
and will not require any registration with, consent (other than such
consent that has already been obtained), or approval of, or notice to, or
other action with or by, any Governmental Authority or other Person, except
for (i) the filing of financing statements, fixture filings, and Mortgages
and (ii) with respect to the Specific Gaming Laws, the notices (and, if
requested by the applicable Governmental Authority, such further
information) required to be delivered by the Casino Entities thereunder and
such potential approval requirements as may arise after the date hereof
based on the rights of the applicable Governmental Authorities thereunder
to invalidate or require modifications of contracts entered into in
violation of applicable Gaming Laws (based upon considerations set forth in
the Specific Gaming Law as they may pertain to Lender), all of which
notices (and any further information relating thereto having been requested
by any applicable Governmental Authority) have been, as of the Closing Date
and any date thereafter on which the representations herein are tested or
restated, delivered to the applicable Governmental Authorities.
(d) As to each Borrower, this Agreement and the other Loan Documents
to which such Borrower is a party, and all other documents contemplated
hereby and thereby, when executed and delivered by such Borrower will be
the legally valid and binding obligations of such Borrower, enforceable
against such Borrower in accordance with their respective terms, in each
case (i) except as enforcement may be limited by equitable principles or by
bankruptcy, insolvency, reorganization, moratorium, or similar laws
relating to or limiting creditors' rights generally, and (ii) subject to
the rights of applicable Governmental Authorities (to require the
modification or invalidation
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of any Loan Document) under the Specific Gaming Laws based upon
considerations set forth therein as they may pertain to Lender (it being
understood that in no event shall any provision of this Agreement be deemed
a consent by Lender to any exercise of such rights by any applicable
Governmental Authority).
(e) The Lender's Liens are or will be (as of the Closing Date and the
date of each Advance) validly created, perfected, and first priority Liens,
subject only to Permitted Liens.
(f) The execution, delivery, and performance by Guarantor of the Loan
Documents to which it is a party have been duly authorized by all necessary
action on the part of Guarantor.
(g) The execution, delivery, and performance by Guarantor of the Loan
Documents to which it is a party do not and will not (i) violate any
provision of federal, state, or local law or regulation applicable to
Guarantor, the Governing Documents of Guarantor, or any order, judgment, or
decree of any court or other Governmental Authority binding on Guarantor,
(ii) conflict with, result in a breach of, or constitute (with due notice
or lapse of time or both) a default under any material contractual
obligation of Guarantor, (iii) result in or require the creation or
imposition of any Lien of any nature whatsoever upon any properties or
assets of Guarantor, other than Permitted Liens, or (iv) require any
approval of Guarantor's interestholders or any approval or consent of any
Person under any material contractual obligation of Guarantor (other than
such consent that has already been obtained).
(h) The execution, delivery, and performance by Guarantor of the Loan
Documents to which Guarantor is a party do not and will not require any
registration with, consent, or approval of, or notice to, or other action
with or by, any Governmental Authority or other Person.
(i) The Loan Documents to which Guarantor is a party, and all other
documents contemplated hereby and thereby, when executed and delivered by
Guarantor will be legally valid and binding obligations of Guarantor,
enforceable against Guarantor in accordance with their respective terms,
except as enforcement may be limited by equitable principles or by
bankruptcy, insolvency, reorganization, moratorium, or similar laws
relating to or limiting creditors' rights generally.
5.4 Litigation. Other than those matters disclosed on Schedule 5.4, there
are no actions, suits, or proceedings pending or, to the best knowledge of
Borrowers, threatened against Borrowers, or any of their Subsidiaries, as
applicable, except for (a) matters that are fully covered by insurance (subject
to customary deductibles), and (b) matters arising after the Closing Date that,
if decided adversely to Borrowers, or any of their Subsidiaries, as applicable,
reasonably could not be expected to result in a Material Adverse Change.
5.5 No Material Adverse Change. All financial statements relating to
Borrowers or Guarantors that have been delivered by Borrowers to Lender have
been prepared in accordance with GAAP (except, in the case of unaudited
financial statements,
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for the lack of footnotes and being subject to year-end audit adjustments) and
present fairly in all material respects, Borrowers' (or Guarantors', as
applicable) financial condition as of the date thereof and results of operations
for the period then ended. There has not been a Material Adverse Change with
respect to Borrowers (or Guarantor's, as applicable) since the date of the
latest financial statements submitted to Lender on or before the Closing Date.
5.6 Fraudulent Transfer.
(a) each Borrower is Solvent.
(b) No transfer of property is being made by any Borrower and no
obligation is being incurred by any Borrower in connection with the
transactions contemplated by this Agreement or the other Loan Documents
with the intent to hinder, delay, or defraud either present or future
creditors of Borrowers.
5.7 Employee Benefits. None of Borrowers, any of their Subsidiaries, or any
of their ERISA Affiliates maintains or contributes to any Benefit Plan.
5.8 Brokerage Fees. Borrowers have not utilized the services of any broker
or finder in connection with Borrowers' obtaining financing from Lender under
this Agreement and no brokerage commission or finders fee is payable by
Borrowers in connection herewith.
5.9 Leases. Borrowers enjoy peaceful and undisturbed possession under all
leases material to the business of Borrowers and to which Borrowers are a party
or under which Borrowers are operating. All of such leases are valid and
subsisting and no material default by Borrowers exists under any of them.
5.10 Insurance. Schedule (5.10) lists all insurance policies maintained, as
of the Closing Date, for current occurrences by Borrower in connection with the
Real Property Collateral, and Borrower has delivered certificates of all such
insurance policies showing Lender as an additional insured party, together with
additional loss payable endorsements, to Lender. All such policies are issued by
financially sound and responsible insurance companies authorized to do business
in the state where the Real Property Collateral is located and having a claims
paying ability rating of "AA" or better.
5.11 Complete Disclosure. All factual information (taken as a whole)
furnished by or on behalf of Borrowers in writing to Lender (including all
information contained in the Schedules hereto or in the other Loan Documents)
for purposes of or in connection with this Agreement, the other Loan Documents
or any transaction contemplated herein or therein is, and all other such factual
information (taken as a whole) hereafter furnished by or on behalf of Borrowers
in writing to the Lender will be, true and accurate, in all material respects,
on the date as of which such information is dated or certified and, to the best
of each Borrower's knowledge after due inquiry and investigation, not incomplete
by omitting to state any fact necessary to make such information (taken as a
whole) not misleading in any material respect at such time in light of the
circumstances under which such information was provided. On the Closing Date,
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the Closing Date Projections represent, and as of the date on which any other
Projections are delivered to Lender, such additional Projections represent
Borrowers' good faith best estimate of its future performance for the periods
covered thereby.
5.12 Indebtedness. Set forth on Schedule 5.12 is a true and complete list
of all Indebtedness of (or to be paid from assessments on property owned by)
each Borrower outstanding immediately prior to the Closing Date that is to
remain outstanding after the Closing Date, including the Black Hawk Bonds and
all other Indebtedness of any special improvement district the payment of which
is to be made in whole or in any material part from assessments against all or
any part of the Collateral, and such Schedule accurately reflects the aggregate
principal amount of such Indebtedness and the principal terms thereof.
5.13 No Default. No Borrower is in Default of any provision of any payment
or performance obligations with respect to the Indenture or the Black Hawk
Bonds.
6. AFFIRMATIVE COVENANTS.
Each Borrower covenants and agrees that, so long as any credit hereunder
shall be available and until full and final payment of the Obligations,
Borrowers shall and shall cause each of their respective Subsidiaries to do all
of the following:
6.1 Accounting System. Maintain a system of accounting that enables
Borrowers to produce financial statements in accordance with GAAP and maintain
records pertaining to the Collateral that contain information as from time to
time reasonably may be requested by Lender.
6.2 Financial Statements, Reports, Certificates. Deliver to Lender:
(a) whether or not actually required by the SEC, so long as any
Obligations are outstanding, within the time periods specified in the
Commission's rules and regulations (or such shorter time period or may be
specified herein) and at any other time that such information may actually
be distributed to any other Person:
(i) all quarterly and annual financial information that would be
required to be contained in a filing with the SEC on Forms 10-Q and
10-K if the Parent were required to file such forms, including a
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and, with respect to the annual information
only, a report thereon by the Parent's certified independent
accountants,
(ii) as soon as available, but in any event within 30 days (45
days in the case of a month that is the end of one of the first 3
fiscal quarters in a fiscal year) after the end of each month during
each of Parent's fiscal years, a company prepared consolidated
quarterly and annual financial information required by subsection (i)
which shall include, with respect to the Casino Entities, a reasonably
detailed presentation (including the financial condition and results
of operations of
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the Casino Entities) separate from the financial condition and results
of operations of the Parent's other Subsidiaries,
(iii) on a monthly basis, as soon as available, but in any event
within 20 days after the end of each month, monthly financial
statements of the kind required in clauses (i) and (ii) above, with
respect only to the Casino Entities, including balance sheets,
statements of cash flows and operations and other applicable
information indicating financial condition and results of operations
of the Casino Entities for such month.
(iv) all current reports that would be required to be filed with
the SEC on Form 8K if the Parent were required to file such reports,
(v) any information that would be required to be filed or
disclosed pursuant to Rule 144A(d)(4) under the Securities Act if the
Parent were required to comply with such rule, and
(vi) any other information that the Parent may from time to time
provide to its shareholders generally.
(b) To accompany each financial statement or report delivered to the
Lender pursuant to Section 6.2(a), a Compliance Certificate signed by the
chief financial officer of Parent to the effect that:
(i) the financial statements delivered pursuant to Section 6.2(a)
have been prepared in accordance with GAAP (except for the lack of
footnotes and being subject to year-end audit adjustments) and fairly
present in all material respects the financial condition of Parent and
its Subsidiaries,
(ii) the representations and warranties of Borrowers contained in
this Agreement and the other Loan Documents are true and correct in
all material respects on and as of the date of such certificate, as
though made on and as of such date (except to the extent that such
representations and warranties relate solely to an earlier date),
(iii) to such officer's best knowledge, after due inquiry and
investigation, there does not exist any condition or event that
constitutes a Default or Event of Default (or, to the extent of any
non-compliance, describing such non-compliance as to which he or she
may have knowledge and what action Borrowers have taken, are taking,
or propose to take with respect thereto), and
(iv) in connection with the year-end financial statements
required to be delivered under this Section 6.2: (1) a review of the
activities of the Borrowers during the preceding fiscal year has been
made under the supervision of the signing Officers with a view to
determining whether the Borrowers have kept, observed, performed and
fulfilled their
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Obligations under this Loan Agreement and the Loan Documents, and (2)
no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest on the Advances is
prohibited, or if such event has occurred, a description of the event
and what action the Borrower is taking or proposes to take with
respect thereto.
(c) as soon as available, but in any event within 90 days after the
end of each of Parent's fiscal years, so long as not contrary to the then
current recommendations of the American Institute of Certified Public
Accountants, the year-end financial statements delivered pursuant to
Section 6.2(a) shall be accompanied by a written statement of the
Borrowers' independent public accountants (who shall be a firm of
established national reputation) that in making the examination necessary
for certification of such financial statements, (1) such accountants do not
have knowledge of the existence of any Default or Event of Default under
Section 7.16 and (2) nothing has come to their attention that would lead
them to believe that any Borrower has violated any provisions of Section 6
or Section 7 hereof or, if any such violation has occurred, specifying the
nature and period of existence thereof, it being understood that such
accountants shall not be liable directly or indirectly to any Person for
any failure to obtain knowledge of any such violation. Borrowers agree that
their independent certified public accountants are authorized to
communicate with Lender and to release to Lender whatever financial
information concerning Borrowers that Lender reasonably may request. Each
Borrower waives the right to assert a confidential relationship, if any, it
may have with any accounting firm or service bureau in connection with any
information requested by Lender pursuant to or in accordance with this
Agreement, and agree that Lender may contact directly any such accounting
firm or service bureau in order to obtain such information.
(d) if and when filed by any Borrower and as requested by Lender, (1)
satisfactory evidence of payment of applicable excise taxes in each
jurisdictions in which (i) any Borrower conducts business or is required to
pay any such excise tax, (ii) where any Borrower's failure to pay any such
applicable excise tax would result in a Lien on the properties or assets of
any Borrower, or (iii) where any Borrower's failure to pay any such
applicable excise tax reasonably could be expected to result in a Material
Adverse Change, (2) copies of Borrowers' federal income tax returns, and
any amendments thereto, filed with the Internal Revenue Service, and (3)
within thirty days (30) after the end of each month, a tax payment report
summarizing the Borrowers' tax payments for that month.
(e) as soon as a Borrower has knowledge of any event or condition that
constitutes a Default or an Event of Default, notice thereof and a
statement of the curative action that Borrowers propose to take with
respect thereto,
(f) as soon as practicable after receipt or concurrently with delivery
to the Indenture Trustee, the Black Hawk Business Improvement District or
other Person, as applicable, copies of all material written notices
received or given by any Borrower pursuant to the Indenture or the Black
Hawk Bonds, and, as soon as any Borrower has
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knowledge of any matured or unmatured event of default with respect to the
Indenture or the Black Hawk Bonds, notice of such event of default,
(g) within the same time period specified by the Gaming Authorities
(as defined in the Indenture as in effect on the date hereof) or under
applicable Gaming Law, copies of any notice, report, statement, or
certificate required to be delivered by any Borrower to the Gaming
Authorities.
(h) To the extent not otherwise included and separately itemized in
the financial reports to be provided above (as determined by Lender in its
Permitted Discretion), statements of the operation of the Real Property
Collateral (including a current rent roll (to the extent there are any
leases in effect), quarterly operating statements, a cash flow report for
such quarter and payments, a capital expense disbursement report, and a
comparison of the budgeted income and expenses and the actual income and
expenses for such month and year to date for the Real Property Collateral)
as of the last day of each quarter, to be delivered within thirty (30) days
after the end of each quarter, and yearly statements of the operation of
the Real Property Collateral, including, one time each year upon Lender's
request in its sole discretion, updated appraisals of the Real Property
Collateral (specifically including the Appraisal Value), to be delivered
within ninety (90) days after the end of each fiscal year; provided,
however, that Lender may require updated appraisals more than once a year
at any time upon the occurrence and during the continuance of an Event of
Default. Upon request by Lender, Borrower shall provide the operating
statement for the Real Property Collateral to Lender on a monthly basis.
(i) An annual budget for the Casino Entities and the Real Property
Collateral for Lender's review and approval within thirty (30) days prior
to the beginning of each calendar year, and quarterly updates comparing the
budget with actual results on a quarterly and year to date basis.
(j) Within thirty (30) days prior to the beginning of each calendar
year, copies of Parent's Projections, in form and substance (including as
to scope and underlying assumptions) satisfactory to Lender, in its
Permitted Discretion, for the forthcoming 3 years, year by year, and for
the forthcoming fiscal year, month by month, including separate Projections
for the Casino Entities.
(k) for each month that is the date on which a financial covenant in
Section 7.16 is to be tested, a Compliance Certificate delivered to Lender
concurrently with the delivery of the financial statements required
pursuant to Sections 6.2(a) and (b), but in no case later than 20 days
after the end of such period, demonstrating, in reasonable detail,
compliance at the end of such period with the applicable financial
covenants contained in Section 7.16.
(l) concurrently with the delivery of the monthly financial statements
delivered pursuant to Section 6.2(a)(iii), a summary indicating EBITDA for
the Casino Entities for such month, and including, for purposes of
calculation of the Borrowing Base, EBITDA for the Casino Entities for the
preceding twelve (12) month period having
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ended on the last day of such month, accompanied by such supporting detail
and documentation as may be requested by Lender.
(m) Upon the request of Lender, any other report reasonably requested
relating to the financial condition of Borrowers.
6.3 Estoppel Statement. Deliver to Lender, upon request, an estoppel
certificate from each tenant under any Lease; provided that such certificate may
be in the form required under such Lease; provided further that no Borrower
shall be required to deliver such certificates more frequently than two (2)
times in any calendar year for any particular Lease.
6.4 Taxes. Cause all assessments and taxes, whether real, personal, or
otherwise, due or payable by, or imposed, levied, or assessed against Borrowers
or any of their assets to be paid in full or discharged, before delinquency or
before the expiration of any extension period, except to the extent that the
validity of such assessment or tax shall be the subject of a Permitted Protest.
Borrowers will make timely payment or deposit of all tax payments and
withholding taxes required of it by applicable laws, including those laws
concerning F.I.C.A., F.U.T.A., state disability, and local, state, and federal
income taxes, and will, upon request, furnish Lender with proof satisfactory to
Lender indicating that the applicable Borrower has made such payments or
deposits. Borrowers shall prepare and timely file with the appropriate
governmental agencies all tax returns required to be filed for any period (or
portion thereof), taking into account any extension of time to file granted to
or obtained on behalf of any Borrower, and each such tax return shall be
complete and accurate in all material respects. Borrowers shall deliver
satisfactory evidence of payment of applicable excise taxes in each jurisdiction
in which any Borrower is required to pay any such excise tax.
6.5 Insurance.
(a) At Borrowers' expense, maintain the policies of insurance
providing coverage as in effect on the date hereof and as may be required
from time to time pursuant to the Indenture (or, in the event that at any
time the Indenture should cease to be in effect, as is required pursuant to
the Indenture as in effect on the date hereof), covering loss or damage by
fire, theft, explosion, and all other hazards and risks as ordinarily are
insured against by other Persons engaged in the same or similar businesses.
All such policies of insurance relating to the Collateral shall be in such
amounts and with such insurance companies as are reasonably satisfactory to
Lender. Borrowers shall deliver copies of all such policies relating to
Collateral to Lender. For each policy relating to property of the Casino
Entities, Borrowers shall (to the extent permitted by law) name Lender as
additional insured. In addition, Borrower shall deliver a satisfactory
lender's loss payable endorsement naming Lender as loss payee for each
insurance policy covering Collateral. Borrower shall (i) pay, as they
become due, all premiums for such insurance and (ii) not later than ten
(10) days prior to the expiration of each policy to be furnished pursuant
to the provisions of this Section 6.5, deliver a renewed policy or
policies, certificates thereof, or duplicate or originals thereof. Each
policy of insurance or endorsement shall contain a clause requiring the
insurer to give not less than 30 days
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prior written notice to Lender in the event of cancellation of the policy
for any reason whatsoever. If Borrower at any time or times hereafter shall
fail to obtain or maintain any of the policies of insurance required above
and relating to the Real Property Collateral, or to pay all premiums
relating thereto, Lender may at any time or times thereafter obtain and
maintain such policies of insurance and pay such premiums and take any
other action with respect thereto that Lender deems advisable and Borrower
shall pay to Lender on demand such premium or premiums so paid by Lender
with interest from the time of payment at the Default Rate. Lender shall
have no obligation to obtain insurance for the Borrower or pay any premiums
therefor. By doing so, Lender shall not deemed to have waived any Default
or Event of Default arising from Borrower's failure to maintain such
insurance or pay premiums therefor. All sums so disbursed, including
reasonable attorney's fees, court costs and other charges related thereto,
shall be payable on demand by Borrower to Lender and shall be additional
Obligations hereunder secured by the Collateral.
(b) If any required insurance shall expire, be withdrawn, become void
by breach of any condition thereof by Borrower or by any lessee of any part
of any Collateral, or become void or unsafe by reason of the failure or
impairment of any insurer, or if for any other reasonable reason whatsoever
such insurance shall become reasonably unsatisfactory to Lender, Borrower
shall promptly obtain new or additional insurance reasonably satisfactory
to Lender. Borrowers shall not take out separate insurance concurrent in
form or contributing in the event of loss with that required to be
maintained under this Section 6.5 unless, (i) for any policy relating to
property of the Casino Entities, Borrower (to the extent permitted by law)
names Lender as an additional insured, and (ii) with respect to policies
covering Collateral, Borrower provides Lender with a satisfactory loss
payable endorsement naming Lender as a loss payee for such insurance
policy. Administrative Borrower shall immediately notify Lender whenever
such separate insurance is taken out, specifying the insurer thereunder,
the full particulars as to the policies evidencing the same, and providing
copies of such policies, including (to the extent required by this Section
6.5(b)) evidence showing that Lender is named as an additional insured
party and a satisfactory lender's loss payable endorsement naming Lender as
a loss payee.
(c) Give Lender prompt notice of any Event of Loss of $50,000 or more
whether it is covered by such insurance or not. Borrower shall deposit with
the Lender all Net Loss Proceeds in excess of $50,000 that are received as
payment for an Event of Loss under any insurance policy required by this
Section 6.5 (other than liability insurance policies), provided, however,
that if an Event of Default has occurred and is continuing, Borrower shall
deposit all Net Loss Proceeds with the Lender. For any Event of Loss
resulting in Net Loss Proceeds in an aggregate amount not in excess of
$3,000,000, so long as no Event of Default has occurred and is continuing,
and subject to the conditions and limitations set forth in Section 6.5(d),
such Net Loss Proceeds may, at the request of Administrative Borrower, be
used by (and disbursed to) Borrowers to restore the Subject Property in
accordance with Section 6.5(d). For any Event of Loss resulting in Net Loss
Proceeds in an aggregate amount in excess of $3,000,000, all such Net Loss
Proceeds shall, at Lender's option to be exercised in its sold discretion,
be made
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available to Borrowers pursuant to Section 6.5(d) below or be applied by
Lender to the Obligations in any manner consistent with the terms of this
Agreement.
(d) Subject to the terms and conditions of this Section 6.5, all Net
Loss Proceeds (from an Event of Loss where the aggregate Net Loss Proceeds
are not in excess of $3,000,000) deposited with Lender may be disbursed to
Borrower for payment of the costs of restoring the Subject Property so
damaged or taken to its value, utility and condition immediately prior to
such damage, provided, that:
(i) the Borrower delivers to the Lender within 90 days of such
Event of Loss a written opinion satisfactory to the Lender in its
Permitted Discretion from a reputable contractor that the Subject
Property can be rebuilt, repaired, replaced or constructed in, and
operated in substantially the same condition it existed prior to the
Event of Loss within in 360 days of the Event of Loss;
(ii) the Borrower delivers to the Lender an Officer's Certificate
certifying that the Borrower has available from Net Loss Proceeds or
other sources sufficient funds to complete the rebuilding, repair, or
replacement of construction described in subsection (d)(i) to this
Section 6.5;
(iii) no Event of Default shall have occurred and be continuing
without being waived or cured; and
(iv) in the reasonable judgment of Lender, (1) the Subject
Property can be restored substantially to the value, utility and
condition thereof immediately prior to such damage or condemnation,
(2) the Net Loss Proceeds deposited with Lender, together with such
supplemental amounts deposited by Borrower with Lender for the
purpose, shall be sufficient to complete the rebuilding, repair, or
replacement described in subsection (d)(i) to this Section 6.5, (3)
the repairs contemplated in subsection (d)(i) to this Section 6.5 can
be expected to be expected to be completed no later than six (6)
months after the Maturity Date, and (4) such Event of Loss, together
with the time to required to restore or repair the Subject Property,
shall not materially adversely affect the ability of Borrower to pay
and perform its obligations under this Loan Agreement and the other
Loan Documents during such restoration or thereafter.
If Lender advances funds under this Section 6.5, such funds will be advanced by
Lender from time to time as the restoration work progresses upon the written
request of Borrower subject to Borrowers' compliance with the conditions set
forth in this Section 6.5 and any other reasonable requirements and conditions
that Lender may impose from time to time it is Permitted Discretion. If the
conditions set forth in this Section 6.5(d) are not satisfied, all Net Loss
Proceeds deposited with Lender shall be applied by Lender in its sole discretion
in any manner consistent with the terms of this Agreement.
6.6 Litigation. Each Borrower shall give prompt notice to Lender of any
Litigation or governmental proceedings pending or threatened against any
Borrower
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which might materially adversely affect the Collateral or Borrowers' ability to
perform the Obligations hereunder or under any other Loan Document.
6.7 Compliance with Laws. Comply with the requirements of all applicable
laws, rules, regulations, and orders of any Governmental Authority, including
the Fair Labor Standards Act and the Americans With Disabilities Act, other than
laws, rules, regulations, and orders the non-compliance with which, individually
or in the aggregate, would not result in and reasonably could not be expected to
result in a Material Adverse Change.
6.8 Brokerage Commissions. Pay any and all brokerage commission or finders
fees incurred in connection with or as a result of Borrowers' obtaining
financing from Lender under this Agreement. Borrowers agree and acknowledge that
payment of all such brokerage commissions or finders fees shall be the sole
responsibility of Borrowers, and each Borrower agrees to indemnify, defend, and
hold Lender harmless from and against any claim of any broker or finder arising
out of Borrowers' obtaining financing from Lender under this Agreement. Lender
has not engaged any broker in connection with this transaction.
6.9 Existence. At all times preserve and keep in full force and effect each
Borrower's valid existence and good standing and any rights, licenses, permits
and franchises material to Borrowers' businesses and comply with all legal
requirements applicable to it and the Collateral.
6.10 Disclosure Updates. Promptly and in no event later than 5 Business
Days after obtaining knowledge thereof, (a) notify Lender if any written
information, exhibit, or report furnished to Lender contained any untrue
statement of a material fact or omitted to state any material fact necessary to
make the statements contained therein not misleading in light of the
circumstances in which made, and (b) correct any material defect or error that
may be discovered therein or in any Loan Document or in the execution,
acknowledgement, filing, or recordation thereof.
6.11 Black Hawk Bonds. At all times, make all applicable payments
(including prompt payment of all Bond Assessment Payments), and otherwise
exercise all rights of Borrowers and comply with all applicable obligations of
Borrowers, so as to cause the Blackhawk Business Improvement District to at all
times comply with all obligations under or relating to the Black Hawk Bonds.
Without limiting the foregoing, Borrowers shall deliver to Lender a schedule
setting forth all applicable payments on or with respect to the Bond Assessment
Payments or the Black Hawk Bonds (and shall update the same promptly upon any
change thereto), and shall, on or before any applicable due date, provide
written evidence to Lender of the payment in full thereof. In the event that
Borrowers shall fail to make any such payment (or provide evidence to Lender
thereof), Lender shall, in addition to any other rights or remedies hereunder,
have the right in its sole discretion to make such payment on behalf of the
applicable Borrower, and Borrowers shall promptly reimburse Lender in full for
any such payment so made by Lender, together with any costs or expenses of
Lender in connection therewith, all with interest from the time of payment by
Lender at the Default Rate.
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Lender shall have no obligation to make any such payment. By doing so, Lender
shall not be deemed to have waived any Default or Event of Default arising from
any Borrower's failure to make such payment. All sums so disbursed, including
reasonable attorney's fees, court costs and other charges related thereto, shall
be payable on demand by Borrowers to Lender and shall be additional Obligations
hereunder secured by the Collateral.
7. NEGATIVE COVENANTS.
Each Borrower covenants and agrees that, so long as any credit hereunder
shall be available and until full and final payment of the Obligations,
Borrowers will not and will not permit any of their respective Subsidiaries to
do any of the following without the express prior written consent of the Lender:
7.1 Indebtedness. Create, incur, assume, permit, guarantee, or otherwise
become or remain, directly or indirectly, liable with respect to any
Indebtedness, except:
(a) Indebtedness evidenced by this Agreement and the other Loan
Documents, together with Indebtedness owed to Underlying Issuers with
respect to Underlying Letters of Credit;
(b) Indebtedness set forth on Schedule 5.12;
(c) other additional Indebtedness (including refinancings, renewals,
or extensions of Indebtedness) incurred after date hereof expressly
permitted pursuant to the terms of the Indenture as in effect on the date
hereof (and continuance or renewal of any Permitted Liens associated
therewith) so long as: (i) the terms and conditions thereof do not, in
Lender's judgment, materially impair the prospects of repayment of the
Obligations by Borrowers or materially impair Borrowers' creditworthiness,
(ii) with respect to Indebtedness permitted pursuant to the Indenture as in
effect on the date hereof for Purchase Money Obligations, such Indebtedness
is secured only by Permitted Liens described in clause (i) of the
definition thereof, (iii) no such other additional Indebtedness permitted
under the Indenture is secured by Liens on the Collateral other than
Permitted Liens described in clause (i) of the definition thereof in
connection with Purchase Money Obligations, (iv) for any such refinancing,
renewal or extension, if the Indebtedness that is refinanced, renewed, or
extended was subordinated in right of payment to the Obligations, then the
terms and conditions of the refinancing, renewal, or extension Indebtedness
must include subordination terms and conditions that are at least as
favorable to Lender as those that were applicable to the refinanced,
renewed, or extended Indebtedness, and (v) the aggregate amount of
additional permitted Indebtedness of the Casino Entities incurred after the
date hereof (but not including any permitted, refinancings, renewals or
extensions of existing Indebtedness) does not exceed $5,000,000.
7.2 Liens. Create, incur, assume, or permit to exist, directly or
indirectly, any Lien on or with respect to any of its property or assets, of any
kind, whether now owned or hereafter acquired, or any income or profits
therefrom or assign any right to receive income therefrom, except for Permitted
Liens (including Liens that are replacements of
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Permitted Liens to the extent that the original Indebtedness is refinanced,
renewed, or extended under Section 7.1(c) and so long as the replacement Liens
only encumber those assets that secured the refinanced, renewed, or extended
Indebtedness).
7.3 Restrictions on Fundamental Changes. Unless (i) the resulting or
surviving entity is a Borrower hereunder, (ii) Lender receives at least thirty
(30) days prior notice, (iii) such notice is accompanied by statements or
fixture filings (as applicable) and any other document that Lender may request
in its sole discretion for purposes of preserving Lender's rights hereunder and
under the other Loan Documents, (iv) all actions necessary to perfect and
continue Lender's Liens are taken and (v) Lender's Liens are perfected and shall
remain so without any impairment to the priority or enforceability thereof:
(a) Enter into any merger, consolidation, reorganization, or
recapitalization, or reclassify its Stock.
(b) Liquidate, wind up, or dissolve itself (or suffer any liquidation
or dissolution).
7.4 Disposal of Assets. Other than Permitted Dispositions, convey, sell,
lease, license, assign, transfer, or otherwise dispose of any of the assets of
any Borrower without the prior written consent of the Lender.
7.5 Change Name. Change any Borrower's name, FEIN, corporate structure or
identity, or add any new fictitious name; provided, however, that a Borrower may
change its name upon at least 30 days prior written notice by Administrative
Borrower to Lender of such change and so long as, at the time of such written
notification, such Borrower provides any financing statements or fixture filings
necessary to perfect and continue perfected Lender's Liens.
7.6 Guarantee. Guarantee or otherwise become in any way liable with respect
to the obligations of any third Person, except (a) for the existing guaranties
granted pursuant to the Indenture, (b) with respect to Parent only, as may be
expressly permitted in the Indenture as in effect on the date hereof, and (c) by
endorsement of instruments or items of payment for deposit to the account of
Borrowers or which are transmitted or turned over to Lender or the Indenture
Trustee.
7.7 Nature of Business. Make any change in the principal nature of
Borrowers' business.
7.8 Prepayments and Amendments.
(a) prepay, redeem, defease, purchase, or otherwise acquire any
Indebtedness of any Borrower, except (i) in connection with a refinancing
permitted by Section 7.1(c), (ii) the Obligations in accordance with this
Agreement, (iii) any mandatory prepayment or repurchase of the Notes
pursuant to the Indenture, and (iv) any prepayment or redemption of
Indebtedness expressly permitted pursuant to the terms of the Indenture as
in effect on the date hereof so long as, both before and after giving
effect
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to such prepayment or redemption, (1) no Default or Event of Default shall
have occurred and be continuing, and (2) the sum of Availability plus
Available Cash is not less than $7,000,000.
(b) Except with respect to the Indenture Documents or in connection
with any refinancing permitted by Section 7.1(c), directly or indirectly,
amend, modify, alter, increase, or change any of the terms or conditions of
any agreement, instrument, document, indenture, or other writing evidencing
or concerning Indebtedness permitted under Sections 7.1(b) or (c).
(c) Change or amend, or permit the change or amendment to, the terms
of any Indenture Document or the Black Hawk Bonds if the effect of such
amendment is to: (i) increase the interest rate thereunder; (ii) change the
dates upon which payments of principal or interest are due other than to
extend such dates; (iii) change any default or event of default other than
to delete or make less restrictive any default provision therein, or add
any covenant with respect thereto; (iv) change the redemption or prepayment
provisions thereof other than to extend the dates therefor or to reduce the
premiums payable in connection therewith; or (v) materially increase the
obligations of the Borrowers thereunder or otherwise confer additional
material rights in a manner adverse to Lender or any Borrower.
7.9 Change of Control. Cause, permit, or suffer, directly or indirectly,
any Change of Control.
7.10 Distributions. Make any distribution or declare or pay any dividends
(in cash or other property, other than common Stock) on, or purchase, acquire,
redeem, or retire any of any Borrower's Stock, of any class, whether now or
hereafter outstanding except distributions or declaration and payment of
dividends by a Borrower to another Borrower or Guarantor, or, with respect to
Parent, as may expressly be permitted pursuant to the terms of the Indenture as
in effect on the date hereof, provided, however, that both before and after
giving effect to such distribution (1) no Default or Event of Default shall have
occurred and be continuing, and (2) the sum of Availability plus Available Cash
is not less than $7,000,000.
7.11 Accounting Methods. Modify or change its method of accounting (other
than as may be required to conform to GAAP) or enter into, modify, or terminate
any agreement currently existing, or at any time hereafter entered into with any
third party accounting firm or service bureau for the preparation or storage of
Borrowers' accounting records without said accounting firm or service bureau
agreeing to provide Lender information regarding the Collateral or Borrowers'
financial condition.
7.12 Investments. Except for Permitted Investments, directly or indirectly,
make or acquire any Investment, or incur any liabilities (including contingent
obligations) for or in connection with any Investment.
7.13 Transactions with Affiliates. Directly or indirectly enter into or
permit to exist any transaction with any Affiliate of any Borrower except for
transactions that are in the ordinary course of Borrowers' business, upon fair
and reasonable terms, that are
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fully disclosed to Lender, and that are no less favorable to Borrowers than
would be obtained in an arm's length transaction with a non-Affiliate.
7.14 Suspension. Suspend or go out of a substantial portion of its
business.
7.15 Use of Proceeds. Use the proceeds of the Advances for any purpose
other than (a) on the Closing Date, to pay transactional fees, costs, and
expenses incurred in connection with this Agreement, the other Loan Documents,
and the transactions contemplated hereby and thereby, and (b) thereafter,
consistent with the terms and conditions hereof, for its lawful and permitted
purposes, but at all times exclusively by or for the benefit of all Borrowers
collectively, including use of such proceeds for (i) operations or funding of
any Casino Entity, (ii) use by any Casino Entity for any lawful and permitted
purpose, (iii) preservation and maintenance of the Collateral, or (iv) the
payment of obligations (including legally enforceable guaranty obligations)
payable by all Borrowers on a joint and several basis.
7.16 Financial Covenants. With respect to the Casino Entities, considered
on a consolidated basis:
(a) Minimum EBITDA. Fail to maintain EBITDA, measured on a fiscal
quarter-end basis, of not less than the required amount set forth in the
following table for the applicable period set forth opposite thereto:
-------------------------------- --------------------------------
Applicable Amount Applicable Period
--------------------------------- --------------------------------
$10,000,000 For the 12 month period ending
7/31/02 and each fiscal quarter
end thereafter.
--------------------------------- --------------------------------
(b) Capital Expenditures. For each fiscal year ending during the term
of this Agreement, make Capital Expenditures in such fiscal year in excess
of $7,300,000; provided, that for each such fiscal year commencing after
the date hereof, after Lender's receipt, and based upon its review and
approval, of the Projections and the budget required to be delivered
pursuant to Sections 6.2(i) and (j) hereunder within 30 days prior to the
commencement of, and with respect to, such fiscal year, Lender shall review
and, in its Permitted Discretion, at such time revise the maximum Capital
Expenditures amount for such fiscal year. Borrowers shall, promptly after
Lender's determination of any such revision and notice thereof to
Borrowers, acknowledge and agree in writing to be bound thereby.
7.17 Stay, Extension and Usury Laws. Insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, extension or
usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Loan Agreement; and Borrower (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it shall not, by resort to any
such law, hinder, delay or impede the execution of any
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power herein granted to the Lender, but shall suffer and permit the execution of
every such power as though no such law has been enacted.
7.18 Impairment of Security Interests.
(a) Take or omit to take any action with respect to the Collateral
that might or would have the result of affecting or impairing the security
interest in the Collateral in favor of the Lender, or
(b) Grant any Person (other than the Lender) any interest whatsoever
in the Collateral that is not a Permitted Lien.
7.19 No Joint Assessment. Suffer, permit or initiate the joint assessment
of the Real Property Collateral (i) with any other real property constituting a
tax lot separate from the Real Property Collateral, and (ii) with any portion of
the Real Property Collateral which may be deemed to constitute personal
property, or any other procedure whereby the lien of any taxes which may be
levied against such personal property shall be assessed or levied or charged to
the Real Property Collateral.
7.20 Principal Place of Business. Change its principal place of business
without first giving Lender thirty (30) days prior notice.
7.21 ERISA. Engage in any transaction which would cause any obligation, or
action taken or to be taken, hereunder (or the exercise by Lender of any of its
rights under this Loan Agreement or the other Loan Documents) to be a non-exempt
(under a statutory or administrative class exemption) prohibited transaction
under ERISA.
7.22 Fiscal Year. Adopt or maintain a fiscal year different from that of
Parent.
8. EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an event of
default (each, an "Event of Default") under this Agreement:
8.1 Failure to Pay. If Borrowers fail to pay when due and payable or when
declared due and payable, all or any portion of the Obligations (whether of
principal, interest (including any interest which, but for the provisions of the
Bankruptcy Code, would have accrued on such amounts), fees and charges due
Lender, reimbursement of Lender Expenses, or other amounts constituting
Obligations);
8.2 Failure to Comply with Terms of this Agreement.
(a) If Borrowers fail or neglect to perform, keep or observe any of
the provisions of Sections 6.2, 6.3, 6.5, 6.6, 6.10, 6.11, or 7 of this
Agreement, or
(b) If Borrowers fail or neglect to perform, keep or observe any of
the provisions of this Agreement or any of the other Loan Documents (but
not including any Mortgage) (other than any provision embodied in or
covered by any other clause of this Section 8) and the same shall remain
unremedied for thirty (30) days or more, provided,
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however, that if any such breach relates to or is based on compliance with
the terms of the Indenture, the thirty (30) day period provided hereunder
shall apply only to the extent that it is not a duplication of any
applicable cure period provided under the Indenture.
8.3 Seizure of Assets. If any material portion of any Borrower's assets is
attached, seized, subjected to a writ or distress warrant, levied upon, or comes
into the possession of any third Person;
8.4 Voluntary Insolvency Proceeding. If an Insolvency Proceeding is
commenced by any Borrower;
8.5 Involuntary Insolvency Proceeding. If an Insolvency Proceeding is
commenced against any Borrower and any of the following events occur: (a) the
applicable Borrower or the Subsidiary consents to the institution of the
Insolvency Proceeding against it, (b) the petition commencing the Insolvency
Proceeding is not timely controverted, (c) the petition commencing the
Insolvency Proceeding is not dismissed within 60 calendar days of the date of
the filing thereof; provided, however, that, during the pendency of such period,
Lender shall be relieved of its obligation to extend credit hereunder, (d) an
interim trustee is appointed to take possession of all or any substantial
portion of the properties or assets of, or to operate all or any substantial
portion of the business of, any Borrower or any of its Subsidiaries, or (e) an
order for relief shall have been entered therein;
8.6 Interruption of Business. If any Borrower is enjoined, restrained, or
in any way prevented by court order from continuing to conduct all or any
material part of its business affairs;
8.7 Liens. If a notice of Lien, levy, or assessment is filed of record with
respect to any Borrower's or any of its Subsidiaries' assets by the United
States, or any department, agency, or instrumentality thereof, or by any state,
county, municipal, or governmental agency, or if any taxes or debts owing at any
time hereafter to any one or more of such entities becomes a Lien, whether
xxxxxx or otherwise, upon any Borrower's assets and the same is not paid before
such payment is delinquent;
8.8 Judgment Lien. If a judgment or other claim becomes a Lien or
encumbrance upon any material portion of any Borrower's assets or the
Collateral;
8.9 Event of Default Under Indenture. If there occurs an "Event of Default"
under and as defined in the Indenture, or any condition or event requiring a
mandatory redemption or prepayment of all or a material portion of the "Notes"
issued thereunder;
8.10 Event of Default Under Black Hawk Bonds. If there occurs an "Event of
Default" under and as defined in the Black Hawk Bonds, or any condition or event
requiring a mandatory redemption or prepayment of all or a material portion of
such Black Hawk Bonds;
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8.11 Default Under Other Agreements. If there is a default in any other
material agreement to which any Borrower or any of its Subsidiaries is a party
and such default (a) occurs at the final maturity of the obligations thereunder,
or (b) results in a right by the other party thereto, irrespective of whether
exercised, to accelerate the maturity of the applicable Borrower's or its
Subsidiaries' obligations thereunder, to terminate such agreement, or to refuse
to renew such agreement pursuant to an automatic renewal right therein;
8.12 Subordinated Indebtedness. If any Borrower or any of its Subsidiaries
makes any payment on account of Indebtedness that has been contractually
subordinated in right of payment to the payment of the Obligations, except to
the extent such payment is permitted by the terms of the subordination
provisions applicable to such Indebtedness;
8.13 Misrepresentation. If any misstatement or misrepresentation exists now
or hereafter in any warranty, representation, statement, or Record made to
Lender by any Borrower, its Subsidiaries, or any officer, employee, agent, or
director of any Borrower or any of its Subsidiaries;
8.14 Failure of Lien. If this Agreement or any other Loan Document that
purports to create a Lien, shall, for any reason, fail or cease to create a
valid and perfected and, except to the extent permitted by the terms hereof or
thereof, first priority Lien on or security interest in the Collateral covered
hereby or thereby; or
8.15 Unenforceability of Agreement. Any material provision of any Loan
Document shall at any time for any reason be declared to be null and void, or
the validity or enforceability thereof shall be contested by any Borrower, or a
proceeding shall be commenced by any Borrower, or by any Governmental Authority
having jurisdiction over any Borrower, seeking to establish the invalidity or
unenforceability thereof, or any Borrower shall deny that any Borrower has any
liability or obligation purported to be created under any Loan Document.
8.16 Termination of Guaranty. If the obligation of any Guarantor under its
Guaranty is limited or terminated by operation of law or by such Guarantor
thereunder.
8.17 Default under any Mortgage. If there occurs a default or an event of
default under any Mortgage.
9. THE LENDER'S RIGHTS AND REMEDIES.
9.1 Rights and Remedies. Upon the occurrence, and during the continuation,
of an Event of Default, the Lender (at its election but without notice of its
election and without demand) may do any one or more of the following, all of
which are authorized by Borrowers:
(a) Declare all Obligations, whether evidenced by this Agreement, by
any of the other Loan Documents, or otherwise, immediately due and payable;
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(b) Cease advancing money or extending credit to or for the benefit of
Borrowers under this Agreement, under any of the Loan Documents, or under any
other agreement between Borrowers and Lender; provided, however, that, without
limiting any other rights and remedies of Lender under this Section 9.1 or
otherwise, Lender shall continue making Special Advances subject to the
conditions set forth in Section 3.4 hereof so long as (and only for so long as)
Lender shall not, in its sole discretion, have declared all Obligations
immediately due and payable pursuant to clause (a) above;
(c) Terminate this Agreement and any of the other Loan Documents as to
any future liability or obligation of Lender, but without affecting any of the
Lender's Liens in the Collateral and without affecting the Obligations;
(d) Without notice to or demand upon any Borrower or Guarantor,
exercise all rights and remedies under the Mortgages and other Loan Documents;
(e) Without notice to any Borrower (such notice being expressly
waived), and without constituting a retention of any collateral in satisfaction
of an obligation (within the meaning of the UCC), set off and apply to the
Obligations any and all (i) balances and deposits of any Borrower held by
Lender, or (ii) Indebtedness at any time owing to or for the credit or the
account of any Borrower held by Lender;
(f) Hold, as cash collateral, any and all balances and deposits of any
Borrower held by Lender to secure the full and final repayment of all of the
Obligations; and
(g) Have all other rights and remedies available to it at law or in
equity pursuant to any other Loan Documents.
9.2 Remedies Cumulative. The rights and remedies of Lender under this
Agreement, the other Loan Documents, and all other agreements shall be
cumulative. Lender shall have all other rights and remedies not inconsistent
herewith as provided under the UCC, by law, or in equity. No exercise by Lender
of one right or remedy shall be deemed an election, and no waiver by Lender of
any Event of Default shall be deemed a continuing waiver. No delay by Lender
shall constitute a waiver, election, or acquiescence by it.
10. TAXES AND EXPENSES.
If any Borrower fails to pay any monies (whether taxes, assessments,
insurance premiums, or, in the case of leased properties or assets, rents or
other amounts payable under such leases) due to third Persons, or fails to make
any deposits or furnish any required proof of payment or deposit, all as
required under the terms of this Agreement, then, Lender, in its sole discretion
and without prior notice to any Borrower, may, except as limited by applicable
Gaming Laws, do any or all of the following: (a) make payment of the same or any
part thereof, (b) set up such reserves in Borrowers' Loan Account as Lender
deems necessary to protect Lender from the exposure created by such failure, or
(c) in the case of the failure to comply with Section 6.5 hereof, obtain and
maintain insurance policies of the type described in Section 6.5 and take any
action with
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respect to such policies as Lender deems prudent. Any such amounts paid by
Lender shall constitute Lender Expenses and any such payments shall not
constitute an agreement by Lender to make similar payments in the future or a
waiver by Lender of any Event of Default under this Agreement. Lender need not
inquire as to, or contest the validity of, any such expense, tax, or Lien and
the receipt of the usual official notice for the payment thereof shall be
conclusive evidence that the same was validly due and owing.
11. WAIVERS; INDEMNIFICATION.
11.1 Demand; Protest. Each Borrower waives demand, protest, notice of
protest, notice of default or dishonor, notice of payment and nonpayment,
nonpayment at maturity, release, compromise, settlement, extension, or renewal
of documents, instruments, chattel paper, and guarantees at any time held by
Lender on which any such Borrower may in any way be liable.
11.2 Indemnification. Each Borrower shall pay, indemnify, defend, and hold
the Lender-Related Persons, each Participant, and each of their respective
officers, directors, employees, agents, and attorneys-in-fact (each, an
"Indemnified Person") harmless (to the fullest extent permitted by law) from and
against any and all claims, demands, suits, actions, investigations,
proceedings, and damages, and all reasonable attorneys fees and disbursements
and other costs and expenses actually incurred in connection therewith (as and
when they are incurred and irrespective of whether suit is brought), at any time
asserted against, imposed upon, or incurred by any of them (a) in connection
with or as a result of or related to the execution, delivery, enforcement,
performance, or administration of this Agreement, any of the other Loan
Documents, or the transactions contemplated hereby or thereby, and (b) with
respect to any investigation, litigation, or proceeding related to this
Agreement, any other Loan Document, or the use of the proceeds of the credit
provided hereunder (irrespective of whether any Indemnified Person is a party
thereto), or any act, omission, event, or circumstance in any manner related
thereto (all the foregoing, collectively, the "Indemnified Liabilities"). The
foregoing to the contrary notwithstanding, Borrowers shall have no obligation to
any Indemnified Person under this Section 11.2 with respect to any Indemnified
Liability that a court of competent jurisdiction finally determines to have
resulted from the gross negligence or willful misconduct of such Indemnified
Person. This provision shall survive the termination of this Agreement and the
repayment of the Obligations. If any Indemnified Person makes any payment to any
other Indemnified Person with respect to an Indemnified Liability as to which
Borrowers were required to indemnify the Indemnified Person receiving such
payment, the Indemnified Person making such payment is entitled to be
indemnified and reimbursed by Borrowers with respect thereto. WITHOUT
LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH
RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART CAUSED BY OR ARISE
OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY OTHER
PERSON.
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12. NOTICES.
Unless otherwise provided in this Agreement, all notices or demands by
Borrowers or Lender to the other relating to this Agreement or any other Loan
Document shall be in writing and (except for financial statements and other
informational documents which may be sent by first-class mail, postage prepaid)
shall be personally delivered or sent by registered or certified mail (postage
prepaid, return receipt requested), overnight courier, electronic mail (at such
email addresses as the Administrative Borrower or Lender, as applicable, may
designate to each other in accordance herewith), or telefacsimile to Borrowers
in care of Administrative Borrower or to Lender, as the case may be, at its
address set forth below:
If to Administrative
Borrower: XXXXXX ENTERTAINMENT, INC.
000 Xxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxx
Fax No.: 000.000.0000
with copies to: XXXXX & XXXXXXXXX LLP
000 X. 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxx, Esq.
Fax No.: 000.000.0000
If to Lender: FOOTHILL CAPITAL CORPORATION
0000 Xxxxxxxx Xxxxxx
Xxxxx 0000 Xxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attn: Structured Finance Group
Fax No.: 000.000.0000
with copies to PAUL, HASTINGS, XXXXXXXX & XXXXXX LLP
000 Xxxxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxxx, Esq.
Fax No. 000.000.0000
Lender and Borrowers may change the address at which they are to receive
notices hereunder, by notice in writing in the foregoing manner given to the
other party. All notices or demands sent in accordance with this Section 12,
other than notices by Lender in connection with enforcement rights against the
Collateral under the provisions of the UCC, shall be deemed received on the
earlier of the date of actual receipt or 3 Business Days after the deposit
thereof in the mail. Each Borrower
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acknowledges and agrees that notices sent by Lender in connection with the
exercise of enforcement rights against Collateral under the provisions of the
UCC shall be deemed sent when deposited in the mail or personally delivered, or,
where permitted by law, transmitted by telefacsimile or any other method set
forth above.
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(EXCEPT AS EXPRESSLY PROVIDED TO THE CONTRARY HEREIN (WITH RESPECT TO THE UCC)
OR IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT), THE
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS
OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER
OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND
LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN NEW YORK, PROVIDED,
HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER
PROPERTY MAY BE BROUGHT, AT LENDER'S OPTION, IN THE COURTS OF ANY JURISDICTION
WHERE LENDER ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. BORROWERS AND LENDER WAIVE, TO THE EXTENT PERMITTED UNDER
APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON
CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN
ACCORDANCE WITH THIS SECTION 13(b).
BORROWERS AND LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN
DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. BORROWERS AND LENDER REPRESENT THAT EACH HAS REVIEWED THIS
WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
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14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.
14.1 Assignments and Participations.
(a) Lender may assign and delegate to one or more assignees (each an
"Assignee") all, or any ratable part of all, of the Obligations and the other
rights and obligations of Lender hereunder and under the other Loan Documents;
provided, however, that Borrowers may continue to deal solely and directly with
Lender in connection with the interest so assigned to an Assignee until (i)
written notice of such assignment, together with payment instructions,
addresses, and related information with respect to the Assignee, have been given
to Administrative Borrower by Lender and the Assignee an appropriate assignment
and acceptance agreement.
(b) From and after the date that Lender provides Administrative
Borrower with such written notice and executed assignment and acceptance
agreement, (i) the Assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such assignment and acceptance agreement, shall have the assigned and
delegated rights and obligations of a Lender under the Loan Documents, and (ii)
Lender shall, to the extent that rights and obligations hereunder and under the
other Loan Documents have been assigned and delegated by it pursuant to such
assignment and acceptance agreement, relinquish its rights (except with respect
to Section 11.2 hereof) and be released from its future obligations under this
Agreement (and in the case of an assignment and acceptance agreement covering
all or the remaining portion of Lender's rights and obligations under this
Agreement and the other Loan Documents, Lender shall cease to be a party hereto
and thereto), and such assignment shall affect a novation between Borrowers and
the Assignee.
(c) Immediately upon Borrower's receipt of such fully executed
assignment and acceptance agreement, this Agreement shall be deemed to be
amended to the extent, but only to the extent, necessary to reflect the addition
of the Assignee and the resulting adjustment of the rights and duties of Lender
arising therefrom.
(d) Upon the request of Lender, any Assignee or Borrower in connection
with an assignment to an Assignee pursuant to this Section 14.1, the parties
hereto shall amend the Loan Documents and take such other actions, in each case,
in such manner as Lender may in its Permitted Discretion require in order to (i)
cause the Lender (or its designee) to be an agent hereunder, (ii) cause this
Agreement to be in the form of an agented loan and (iii) continue the perfection
of the security interests granted pursuant to the Loan Documents in favor of the
agent and the Lenders hereunder.
(e) Lender may at any time sell to one or more commercial banks,
financial institutions, or other Persons not Affiliates of Lender (a
"Participant") participating interests in Obligations and the other rights and
interests of Lender hereunder and under the other Loan Documents, provided,
however, that (i) Lender shall remain the "Lender" for all purposes of this
Agreement and the other Loan Documents and the Participant receiving the
participating interest in the Obligations and the other rights and interests of
Lender hereunder shall not constitute a "Lender" hereunder or
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under the other Loan Documents and Lender's obligations under this Agreement
shall remain unchanged, (ii) Lender shall remain solely responsible for the
performance of such obligations, (iii) Borrowers and Lender shall continue to
deal solely and directly with each other in connection with Lender's rights and
obligations under this Agreement and the other Loan Documents, (iv) Lender shall
not transfer or grant any participating interest under which the Participant has
the right to approve any amendment to, or any consent or waiver with respect to,
this Agreement or any other Loan Document, except to the extent such amendment
to, or consent or waiver with respect to this Agreement or of any other Loan
Document would (A) extend the final maturity date of the Obligations hereunder
in which such Participant is participating, (B) reduce the interest rate
applicable to the Obligations hereunder in which such Participant is
participating, (C) release all or a material portion of the Collateral or
guaranties (except to the extent expressly provided herein or in any of the Loan
Documents) supporting the Obligations hereunder in which such Participant is
participating, (D) postpone the payment of, or reduce the amount of, the
interest or fees payable to such Participant through Lender, or (E) change the
amount or due dates of scheduled principal repayments or prepayments or
premiums; and (v) all amounts payable by Borrowers hereunder shall be determined
as if Lender had not sold such participation; except that, if amounts
outstanding under this Agreement are due and unpaid, or shall have been declared
or shall have become due and payable upon the occurrence of an Event of Default,
each Participant shall be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement. The rights of any Participant only shall be
derivative through Lender and no Participant shall have any rights under this
Agreement or the other Loan Documents or any direct rights as to the Borrowers,
the Collateral, or otherwise in respect of the Obligations. No Participant shall
have the right to participate directly in the making of decisions by Lender.
(f) In connection with any such assignment or participation or
proposed assignment or participation, a Lender may disclose all documents and
information which it now or hereafter may have relating to Borrowers or
Borrowers' business.
(g) Any other provision in this Agreement notwithstanding, Lender may
at any time create a security interest in, or pledge, all or any portion of its
rights under and interest in this Agreement in favor of any Federal Reserve Bank
in accordance with Regulation A of the Federal Reserve Bank or U.S. Treasury
Regulation 31 CFR ss.203.14, and such Federal Reserve Bank may enforce such
pledge or security interest in any manner permitted under applicable law.
(h) Any assignment or participation of all or any rights under this
Agreement or any other Loan Document shall in all events be subject to
applicable Gaming Laws (including any notice requirements to gaming authorities,
and potential required approvals or findings of suitability by such authorities,
or the rights of any applicable authority to invalidate, restrict or condition
any such assignment or participation).
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14.2 Successors. This Agreement shall bind and inure to the benefit of the
respective successors and assigns of each of the parties; provided, however,
that Borrowers may not assign this Agreement or any rights or duties hereunder
without Lender's prior written consent and any prohibited assignment shall be
absolutely void ab initio. No consent to assignment by Lender shall release any
Borrower from its Obligations. Lender may assign this Agreement and the other
Loan Documents and its rights and duties hereunder and thereunder pursuant to
Section 14.1 hereof and, except as expressly required pursuant to Section 14.1
hereof, no consent or approval by any Borrower is required in connection with
any such assignment.
15. AMENDMENTS; WAIVERS.
15.1 Consents and Waivers. No waiver of any provision of this Agreement or
any other Loan Document, and no consent with respect to any departure by
Borrowers therefrom, shall be effective unless the same shall be in writing and
signed by Lender and Administrative Borrower (on behalf of all Borrowers) and
then any such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
15.2 No Waivers; Cumulative Remedies. No failure by Lender to exercise any
right, remedy, or option under this Agreement or, any other Loan Document, or
delay by Lender in exercising the same, will operate as a waiver thereof. No
waiver by Lender will be effective unless it is in writing, and then only to the
extent specifically stated. No waiver by Lender on any occasion shall affect or
diminish Lender's rights thereafter to require strict performance by Borrowers
of any provision of this Agreement. Lender's rights under this Agreement and the
other Loan Documents will be cumulative and not exclusive of any other right or
remedy that Lender may have.
16. GENERAL PROVISIONS.
16.1 Effectiveness. This Agreement shall be binding and deemed effective
when executed by Borrowers and Lender.
16.2 Section Headings. Headings and numbers have been set forth herein for
convenience only. Unless the contrary is compelled by the context, everything
contained in each Section applies equally to this entire Agreement.
16.3 Interpretation. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against Lender or Borrowers,
whether under any rule of construction or otherwise. On the contrary, this
Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto.
16.4 Severability of Provisions. Each provision of this Agreement shall be
severable from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.
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16.5 Withholding Taxes. All payments made by Borrowers hereunder or under
any note will be made without setoff, counterclaim, or other defense, except as
required by applicable law other than for Taxes (as defined below). All such
payments will be made free and clear of, and without deduction or withholding
for, any present or future taxes, levies, imposts, duties, fees, assessments or
other charges of whatever nature now or hereafter imposed by any jurisdiction
(other than the United States) or by any political subdivision or taxing
authority thereof or therein (other than of the United States) with respect to
such payments (but excluding, any tax imposed by any jurisdiction or by any
political subdivision or taxing authority thereof or therein (i) measured by or
based on the net income or net profits of Lender, or (ii) to the extent that
such tax results from a change in the circumstances of Lender, including a
change in the residence, place of organization, or principal place of business
of Lender, or a change in the branch or lending office of Lender participating
in the transactions set forth herein) and all interest, penalties or similar
liabilities with respect thereto (all such non-excluded taxes, levies, imposts,
duties, fees, assessments or other charges being referred to collectively as
"Taxes"). If any Taxes are so levied or imposed, each Borrower agrees to pay the
full amount of such Taxes, and such additional amounts as may be necessary so
that every payment of all amounts due under this Agreement or under any note,
including any amount paid pursuant to this Section 16.5 after withholding or
deduction for or on account of any Taxes, will not be less than the amount
provided for herein; provided, however, that Borrowers shall not be required to
increase any such amounts payable to Lender if the increase in such amount
payable results from Lender's own willful misconduct or gross negligence.
Borrowers will furnish to Lender as promptly as possible after the date the
payment of any Taxes is due pursuant to applicable law certified copies of tax
receipts evidencing such payment by Borrowers.
16.6 Amendments in Writing. This Agreement only can be amended by a writing
signed by Lender and each of the Borrowers.
16.7 Counterparts; Telefacsimile Execution. This Agreement may be executed
in any number of counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, shall be deemed to be an original,
and all of which, when taken together, shall constitute but one and the same
Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile shall be equally as effective as delivery of an original executed
counterpart of this Agreement. Any party delivering an executed counterpart of
this Agreement by telefacsimile also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement. The foregoing shall apply to each other Loan Document mutatis
mutandis.
16.8 Revival and Reinstatement of Obligations. If the incurrence or payment
of the Obligations by any Borrower or Guarantor or the transfer to Lender of any
property should for any reason subsequently be declared to be void or voidable
under any state or federal law relating to creditors' rights, including
provisions of the Bankruptcy Code relating to fraudulent conveyances,
preferences, or other voidable or recoverable payments of money or transfers of
property (collectively, a "Voidable Transfer"), and if Lender is required to
repay or restore, in whole or in part, any such Voidable Transfer, or
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elects to do so upon the reasonable advice of its counsel, then, as to any such
Voidable Transfer, or the amount thereof that Lender is required or elects to
repay or restore, and as to all reasonable costs, expenses, and attorneys fees
of Lender related thereto, the liability of Borrowers or Guarantor automatically
shall be revived, reinstated, and restored and shall exist as though, and to the
same extent as if, such Voidable Transfer had never been made.
16.9 Integration. This Agreement, together with the other Loan Documents,
reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.
16.10 Parent as Agent for Borrowers. Each Borrower hereby irrevocably
appoints Parent as the borrowing agent and attorney-in-fact for all Borrowers
(the "Administrative Borrower") which appointment shall remain in full force and
effect unless and until Lender shall have received prior written notice signed
by each Borrower that such appointment has been revoked and that another
Borrower has been appointed Administrative Borrower. Each Borrower hereby
irrevocably appoints and authorizes the Administrative Borrower (i) to provide
Lender with all notices with respect to Advances and Letters of Credit obtained
for the benefit of any Borrower and all other notices and instructions under
this Agreement and (ii) to take such action as the Administrative Borrower deems
appropriate on its behalf to obtain Advances and Letters of Credit and to
exercise such other powers as are reasonably incidental thereto to carry out the
purposes of this Agreement. It is understood that handling of the Loan Account
and Collateral of Borrowers in a combined fashion, as more fully set forth
herein, is solely as an accommodation to Borrowers, and that Lender shall not
incur liability to any Borrower as a result hereof. Each Borrower expects to
derive benefit, directly or indirectly, from any handling of the Loan Account
and the Collateral in a combined fashion and for any Borrowing made to any other
Borrower, since the successful operation of each Borrower is dependent on the
continued successful performance of the integrated group. To induce Lender to do
so, and in consideration thereof, each Borrower hereby jointly and severally
agrees to indemnify Lender harmless against any and all liability, expense, loss
or claim of damage or injury, made against Lender by any Borrower or by any
third party whosoever, arising from or incurred by reason of (a) the handling of
the Loan Account and Collateral of Borrowers as herein provided, (b) Lender's
relying on any instructions of the Administrative Borrower, or (c) any other
action taken by Lender hereunder or under the other Loan Documents, except that
Borrowers will have no liability to any Lender-Related Person under this Section
16.10 with respect to any liability that has been finally determined by a court
of competent jurisdiction to have resulted solely from the gross negligence or
willful misconduct of such Lender-Related Person.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first above written.
Borrowers:
XXXXXX ENTERTAINMENT, INC.,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------------
BLACK HAWK GAMING & DEVELOPMENT COMPANY, INC.
a Colorado corporation.
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------------
Xxxxxxx X. Xxxxx,
President
XXXXXX VENTURES, INC.
a Colorado corporation
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------------
Xxxxxxx X. Xxxxx,
President
XXXXXX HOTEL VENTURE
a Colorado partnership
By: BLACK HAWK GAMING &
DEVELOPMENT COMPANY, INC,
a Colorado corporation,
Its Joint Venture Partner
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Xxxxxxx X. Xxxxx,
President
By: XXXXXX VENTURES, INC.,
a Colorado corporation,
Its Joint Venture Partner
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Xxxxxxx X. Xxxxx,
President
BLACK HAWK/XXXXXX ENTERTAINMENT LLC
a Colorado limited liability company
By: BLACK HAWK GAMING & DEVELOPMENT
COMPANY, INC.,
a Colorado corporation,
Its Manager
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Xxxxxxx X. Xxxxx,
President
Lender:
FOOTHILL CAPITAL CORPORATION,
a California corporation
By: /s/ Xxxxxxx Xxxxxxxx
----------------------------------------
Title: S.V.P.
EXHIBITS AND SCHEDULES
Exhibit C-1 Form of Compliance Certificate
Exhibit 2.13 Form of Promissory Note
Schedule 1.1 Appraisal Value
Schedule 1.2 Collateral Description
Schedule 1.3 Initial Designated Accounts
Schedule 1.4 Lender's Account
Schedule 1.5 Maximum Allocated Amount
Schedule 1.6 Permitted Liens/Existing Liens
Schedule 1.7 Real Property Collateral
Schedule 5.2(b) Capitalization of Borrower
Schedule 5.2(c) Capitalization of Borrower's Subsidiaries
Schedule 5.4 Litigation
Schedule 5.10 List of Insurance Policies
Schedule 5.12 Pre-Closing Indebtedness
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Schedule 1.1
Appraisal Value
Aggregate Appraisal Value for Real Property Collateral: $58,590,000
Schedule 1.2
Collateral Description
Section 1. "Collateral" or "Credit Agreement Collateral" means all of the
Black Hawk/Xxxxxx Entities' (as hereafter defined) right, title and interest in,
to and under the following property, whether now existing or hereafter arising
or acquired from time to time (collectively, the "Collateral"; the following
capitalized terms have the meaning set forth in Section 2 of this Schedule 1.2):
1. Owned Premises;
2. Leased Premises;
3. Leases;
4. Rents and other income, issues and profits derived
from items 1-3, inclusive, above;
5. Equipment; and
6. Proceeds.
Section 2. Definitions. As used in this Schedule 1-2, the following terms
shall have the following meanings. All capitalized terms used but not otherwise
defined herein have the meanings given to them in the Credit Agreement (as
defined below). Such definitions shall be equally applicable to the singular and
plural forms of the terms defined.
"Alteration" shall mean any and all alterations, installations,
improvements, additions, modifications or changes of a structural nature of or
to the Leased Premises or Owned Premises.
"Black Hawk" shall mean Black Hawk Gaming & Development, Inc., a Colorado
corporation.
"Black Hawk/Xxxxxx Entities" shall mean, collectively, Black Hawk, Black
Hawk/Xxxxxx and Xxxxxx.
"Black Hawk/Xxxxxx" shall mean Black Hawk/Xxxxxx Entertainment, LLC, a
Colorado limited liability company.
"Credit Agreement" shall mean that certain Loan and Security Agreement
between and among Lender and Xxxxxx Entertainment, Inc., a Delaware corporation,
Xxxxxx Ventures, Inc., a Colorado corporation, and the Black Hawk/Xxxxxx
Entities, as Borrowers.
"Equipment" shall mean all "equipment", as such term is defined in the UCC,
now owned or hereafter acquired by any Black Hawk/Xxxxxx Entity, wherever
located and, in any event, including all such Black Hawk/Xxxxxx Entity's
machinery and
equipment, including processing equipment, conveyors, machine tools, data
processing and computer equipment, including embedded software and peripheral
equipment and all engineering, processing and manufacturing equipment, gaming
machines and devices, office machinery, furniture, materials handling equipment,
tools, attachments, accessories, automotive equipment, trailers, trucks,
forklifts, molds, dies, stamps, motor vehicles, rolling stock and other
equipment of every kind and nature, trade fixtures and fixtures not forming a
part of real property, together with all additions and accessions thereto,
replacements therefor, all parts therefor, all substitutes for any of the
foregoing, fuel therefor, and all manuals, drawings, instructions, warranties
and rights with respect thereto, and all products and proceeds thereof and
condemnation awards and insurance proceeds with respect thereto.
"Fixture" shall mean (1) all machinery, apparatus, equipment, fittings,
fixtures, improvements and articles of personal property of every kind,
description and nature whatsoever now or hereafter attached or affixed to the
Owned Land or any other Improvement or used in connection with the use and
enjoyment of the Owned Land or any other Improvement or the maintenance or
preservation thereof, which by the nature of their location thereon or
attachment thereto are fixtures under the UCC or any other applicable law
including, without limitation, all utility systems, fire sprinkler and security
systems, drainage facilities, lighting facilities, all water, sanitary and storm
sewer, drainage, electricity, steam, gas, telephone and other utility equipment
and facilities, pipes, fittings and other items of every kind and description
now or hereafter attached to or located on the Owned Land which by the nature of
their location thereon or attachment thereto are real property under applicable
law, HVAC equipment, boilers, electronic data processing, telecommunications or
computer equipment, gaming machines or devices, refrigeration, electronic
monitoring, water or lighting systems, power, sanitation, waste removal,
elevators, maintenance or other systems or equipment and all additions thereto
and betterments, renewals, substitutions and replacements thereof and (2) all of
the Black Hawk/Xxxxxx Entities' estate, right, title and interest in, to and
under all machinery, apparatus, equipment, fittings, fixtures, improvements and
articles of personal property of every kind, description and nature whatsoever
now or hereafter attached or affixed to the Leased Land or any other Improvement
or used in connection with the use and enjoyment of the Leased Land or any other
Improvement or the maintenance or preservation thereof, which by the nature of
their location thereon or attachment thereto are fixtures under the UCC or any
other applicable law including, without limitation, all utility systems, fire
sprinkler and security systems, drainage facilities, lighting facilities, all
water, sanitary and storm sewer, drainage, electricity, steam, gas, telephone
and other utility equipment and facilities, pipes, fittings and other items of
every kind and description now or hereafter attached to or located on the Leased
Land which by the nature of their location thereon or attachment thereto are
real property under applicable law, HVAC equipment, boilers, electronic data
processing, telecommunications or computer equipment, gaming machines or
devices, refrigeration, electronic monitoring, water or lighting systems, power,
sanitation, waste removal, elevators, maintenance or other systems or equipment
and all additions thereto and betterments, renewals, substitutions and
replacements thereof to the extent of the Black Hawk/Xxxxxx Entities' estate,
right, title and interest therein.
"Xxxxxx" shall mean Xxxxxx Hotel Venture, a Colorado joint venture.
"Governmental Authority" shall mean any federal, state, local, foreign or
other governmental, quasi-governmental or administrative (including
self-regulatory) body, instrumentality, department, agency, authority, board,
bureau, commission, office of any nature whatsoever or other subdivision
thereof, or any court, tribunal, administrative hearing body, arbitration panel
or other similar dispute-resolving body, whether now or hereafter in existence,
or any officer or official thereof, having jurisdiction over the Black
Hawk/Xxxxxx Entities or the Credit Agreement Collateral or any portion thereof.
"Improvements" shall mean (1) all buildings, structures and other
improvements of every kind or description and any and all Alterations now or
hereafter located, attached or erected on the Owned Land including, without
limitation, (i) all Fixtures of the type described in clause (1) of the
definition thereof, (ii) all attachments, railroad tracks, foundations,
sidewalks, drives, roads, curbs, streets, ways, alleys, passages, passageways,
sewer rights, parking areas, driveways, fences and walls and (iii) all materials
now or hereafter located on the Owned Land intended for the construction,
reconstruction, repair, replacement, alteration, addition or improvement of or
to such buildings, Fixtures, structures and improvements, all of which materials
shall be deemed to be part of the Improvements immediately upon delivery thereof
on the Owned Land and to be part of the improvements immediately upon their
incorporation therein; and (2) all of the Black Hawk/Xxxxxx Entities' estate,
right, title and interest in, to and under all buildings, structures and other
improvements of every kind or description and any and all Alterations now or
hereafter located, attached or erected on the Leased Land including, without
limitation, (i) all Fixtures of the type described in clause (2) of the
definition thereof, (ii) all attachments, railroad tracks, foundations,
sidewalks, drives, roads, curbs, streets, ways, alleys, passages, passageways,
sewer rights, parking areas, driveways, fences and walls and (iii) all materials
now or hereafter located on the Leased Land intended for the construction,
reconstruction, repair, replacement, alteration, addition or improvement of or
to such buildings, Fixtures, structures and improvements, all of which materials
shall be deemed to be part of the Improvements immediately upon delivery thereof
on the Leased Land and to be part of the improvements immediately upon their
incorporation therein.
"Landlord" shall mean any landlord, sublandlord, lessor, sublessor
franchisor, licensor or grantor, as applicable.
"Leased Land" shall mean, in the case of Xxxxxx, the land described in
Schedule A annexed hereto as Parcels 1, 2, 3, 4, 5 and 7 and any and all
easements, rights-of-way, strips and gores of land, waters, water courses, water
rights, mineral, gas and oil rights and all power, air, light and other rights,
estates, titles, interests, privileges, liberties, servitudes, licenses,
tenements, hereditaments and appurtenances whatsoever, in any way demised under
the Mortgaged Leases or belonging, relating or appertaining thereto, or any part
thereof, or which hereafter shall in any way be demised under the Mortgaged
Leases or belong, relate or be appurtenant thereto.
"Leased Premises" shall mean, collectively, (1) the lessee's interest and
estate in the Mortgaged Leases and all recorded or unrecorded extensions,
amendments, supplements and restatements thereof, and (2) all right, title and
interest of the lessee under the Mortgaged Leases in and to (i) the Leased Land
and (ii) Improvements of the type described in clause (2) of the definition
thereof.
"Leases" shall mean, collectively, any and all interests of the Black
Hawk/Xxxxxx Entities, as Landlord, in all leases and subleases of space,
tenancies, franchise agreements, licenses, occupancy, rental, access or
concession agreements and any other agreements pursuant to which any Person is
granted a possessory interest in or right to use or occupy all or any portion of
the Credit Agreement Collateral, in each case whether now existing or hereafter
entered, into, whether or not of record, relating in any manner to the Owned
Premises or the Leased Premises or the use or occupancy thereof and any and all
amendments, modifications, supplements, replacements, extensions, renewals
and/or guarantees, if any thereof, whether now in effect or hereafter coming
into effect.
"Lender" shall mean Foothill Capital Corporation, together with its
successors or assigns under the Credit Agreement.
"Mortgaged Leases" shall mean the leases described on Schedule B attached
hereto.
"Net Loss Proceeds" shall have the meaning assigned to such term in the
Indenture as in effect on the date hereof.
"Owned Premises" shall mean, collectively, (i) the Owned Land and (ii)
Improvements of the type described in clause (1) of the definition thereof
described.
"Owned Land" shall mean (i) in the case of Black Hawk, the land described
in Schedule A annexed hereto as Parcels 1, 2, 3, 4 and 5 and (ii) in the case of
Black Hawk/Xxxxxx, the land described in Schedule A annexed hereto as Parcel 6,
in each case together with Black Hawk's or Black Hawk/Xxxxxx'x, as the case may
be, reversionary rights therein and all of the Black Hawk/Xxxxxx Entities'
rights in and to any and all easements, rights-of-way, strips and gores of land,
waters, water courses, water rights, mineral, gas and oil rights and all power,
air, light and other rights, estates, titles, interests, privileges, liberties,
servitudes licenses, covenants, conditions, restrictions, tenements,
hereditaments and appurtenances whatsoever, in any way belonging, relating or
appertaining thereto, or any part thereof, or which hereafter shall in any way
belong, relate or be appurtenant thereto.
"Person" shall have the meaning assigned to such term in the Indenture as
in effect on the date hereof.
"Premises" shall mean, collectively, the Owned Premises and the Leased
Premises.
"Proceeds" shall mean, collectively, any and all cash proceeds and noncash
proceeds and shall include, without limitation, all (i) proceeds of the
conversion, voluntary or involuntary, of any of the Credit Agreement Collateral
or any portion thereof into cash or liquidated claims, (ii) proceeds of any
insurance (except payments made to a Person, other than the Black Hawk/Xxxxxx
Entities or any Subsidiary thereof, that is not a party to the Financing
Documents), indemnity, warranty, guaranty or claim payable to the Lender, the
Indenture Trustee or to the Black Hawk/Xxxxxx Entities from time to time with
respect to any of the Credit Agreement Collateral including, without limitation,
all Net Loss Proceeds relating thereto, (iii) payments (in any form whatsoever)
made or due and payable to the Black Hawk/Xxxxxx Entities from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any portion of the Credit Agreement Collateral by any
Governmental Authority (or any Person acting on behalf of a Governmental
Authority) including, without limitation, all Net Loss Proceeds relating
thereto, (iv) products of the Credit Agreement Collateral and (v) other amounts
from time to time paid or payable under or in connection with any of the Credit
Agreement Collateral.
"Rents" shall mean, collectively, any and all rents, additional rents,
royalties, issues, cash, guaranties, letters of credit, bonds, sureties or
securities deposited under any Lease to secure performance of the Tenant's
obligations thereunder, revenues, earnings, profits and income, advance rental
payments, payments incident to assignment, sublease or surrender of a Lease,
claims for forfeited deposits and claims for damages, now due or hereafter to
become due, with respect to any Lease, any indemnification against, or
reimbursement for, sums paid and costs and expenses incurred by the Black
Hawk/Xxxxxx Entities under any Lease or otherwise, and any award in the event of
the bankruptcy of any Tenant under or guarantor of a lease.
"Tenant" shall mean any tenant, lessee, sublessee, franchisee, licensee,
grantee or obligee, as applicable.
"UCC" means, generally, the Uniform Commercial Code as the same may, from
time to time, be enacted and in effect in the State of New York; provided,
however, that solely for the purposes of the provisions hereof relating to the
attachment, perfection or priority of Lender's security interest in any
Collateral and for purposes of definitions relating to such provisions, (a)
subject to clause (b) below, the term "UCC" shall mean the Uniform Commercial
Code as enacted and in effect in the State of Colorado and (b) in the event
that, by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of Lender's security interest in any Collateral is
governed by the Uniform Commercial Code as enacted and in effect in any other
jurisdiction, the term "UCC" shall mean the Uniform Commercial Code as enacted
and in effect in such other jurisdiction.
Schedule A to Collateral Description
Legal Description of Real Property (by Parcel)
PARCEL 1:
XXXX 0, 0, 0 XXX XXX XXXXXXXX 30 FEET OF XXX 0, XXXXX 00,
XXXX XX XXXXX XXXX,
XXXXXXXX WITH THAT PORTION OF MAIN STREET ADJOINING SAID LOTS CONVEYED TO XXXXXX
GOLD, INC., A COLORADO CORPORATION AND BLACK HAWK GAMING & DEVELOPMENT COMPANY,
INC. FKA MOUNTAIN CASINO PROPERTIES BY PROPERTY LINE AGREEMENT RECORDED FEBRUARY
26, 1996, IN BOOK 595 AT PAGE 145,
TOGETHER WITH THAT PORTION OF MAIN STREET ADJOINING SAID LOTS CONVEYED TO BLACK
HAWK GAMING & DEVELOPMENT COMPANY, INC. FKA MOUNTAIN CASINO PROPERTIES BY
PROPERTY LINE AGREEMENT RECORDED FEBRUARY 26, 1996, IN BOOK 595 AT PAGE 183,
EXCEPT ANY PORTION CONVEYED TO CITY OF BLACK HAWK IN PROPERTY LINE AGREEMENT,
RECORDED FEBRUARY 26, 1996, IN BOOK 595 AT PAGE 145,
AND EXCEPT ANY PORTION CONVEYED TO CITY OF BLACK HAWK BY QUIT CLAIM DEED
RECORDED APRIL 10, 1996, IN BOOK 597 AT PAGE 000, XXXXXX XX XXXXXX, XXXXX XX
XXXXXXXX.
PARCEL 2:
A PARCEL OF GROUND IN THE CITY OF BLACK HAWK, DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT WHICH LIES N. 48(degree)06' W., 10 FEET FROM THE SOUTHEAST
CORNER OF XXX 0, XXXXX 00, XXXX XX XXXXX XXXX; THENCE N. 43(degree)33' E.,
100.05 FEET; THENCE S. 48(degree)06' E., 10 FEET; THENCE N. 43(degree)33' E.,
48.12 FEET; THENCE S. 51(degree)34' E., 93.30 FEET; THENCE S. 38(degree)29' W.,
152.36 FEET; THENCE N. 57(degree)59' W., 10 FEET; THENCE N. 48(degree)06' W.,
106.66 FEET TO THE PLACE OF BEGINNING, SOMETIMES DESCRIBED AS THE EAST 10 FEET
OF XXX 0, XXXXX 00, XXXX XX XXXX XXXX XX. 00 AND THE WEST 10 FEET OF MILL SITE
NO. 30 AND TRACT,
TOGETHER WITH THAT PORTION OF MAIN STREET ADJOINING SAID PARCEL CONVEYED TO
XXXXXX GOLD, INC., A COLORADO CORPORATION AND BLACK HAWK GAMING & DEVELOPMENT
COMPANY, INC. FKA
MOUNTAIN CASINO PROPERTIES BY PROPERTY LINE AGREEMENT RECORDED FEBRUARY 26,
1996, IN BOOK 595 AT PAGE 145,
TOGETHER WITH THAT PORTION OF MAIN STREET ADJOINING SAID PARCEL CONVEYED TO
BLACK HAWK GAMING & DEVELOPMENT COMPANY, INC. FKA MOUNTAIN CASINO PROPERTIES BY
PROPERTY LINE AGREEMENT RECORDED FEBRUARY 26, 1996, IN BOOK 595 AT PAGE 183,
EXCEPTING THEREFROM THOSE PORTIONS OF MILL SITE 29 GRANTED TO THE COUNTY OF
XXXXXX BY INSTRUMENTS RECORDED NOVEMBER 6, 1939, IN BOOK 214 AT PAGE 69, AND
APRIL 8, 1940, IN BOOK 214 AT PAGE 225,
AND EXCEPT ANY PORTION CONVEYED TO CITY OF BLACK HAWK IN PROPERTY LINE
AGREEMENT, RECORDED FEBRUARY 26, 1996, IN BOOK 595 AT PAGE 145,
AND EXCEPT ANY PORTION CONVEYED TO CITY OF BLACK HAWK IN PROPERTY LINE AGREEMENT
RECORDED FEBRUARY 26, 1996, IN BOOK 595 AT PAGE 183,
AND EXCEPT ANY PORTION CONVEYED TO CITY OF BLACK HAWK BY QUIT CLAIM DEED
RECORDED APRIL 10, 1996, IN BOOK 597 AT PAGE 138,
AND EXCEPT ANY PORTION CONVEYED TO CITY OF BLACK HAWK BY QUIT CLAIM DEED
RECORDED APRIL 10, 1996, IN BOOK 597 AT PAGE 160,
AND EXCEPT ANY PORTION CONVEYED TO BLACK HAWK/XXXXXX ENTERTAINMENT, LLC BY QUIT
CLAIM DEED RECORDED MARCH 24, 1997, IN BOOK 617 AT PAGE 192,
AND EXCEPT ANY PORTION CONVEYED TO THE COLORADO CENTRAL RAILROAD COMPANY BY DEED
RECORDED IN BOOK 72 AT PAGE 363,
AND EXCEPT THOSE PORTIONS OF MILL SITE 29 GRANTED TO THE COUNTY OF XXXXXX BY
INSTRUMENTS RECORDED NOVEMBER 6, 1939, IN BOOK 214 AT PAGE 69 AND APRIL 8, 1940,
IN BOOK 214 AT PAGE 000,
XXXXXX XX XXXXXX, XXXXX XX XXXXXXXX.
PARCEL 3:
THE EAST 15 FEET OF XXX 00,
XXX XX XXX 00, XXXXX 35, AND
ALL OF XXX 0, XXXXX 00,
XXXX XX XXXXX XXXX,
XXXXXXXX WITH AND SUBJECT TO PERPETUAL EASEMENT RECORDED APRIL 15, 1997, IN BOOK
618 AT PAGE 295, AND
TOGETHER WITH AND SUBJECT TO ANY PORTION CONVEYED TO BLACK HAWK GAMING &,
DEVELOPMENT COMPANY, INC., A COLORADO CORPORATION AND XXXXXX HOTEL VENTURE, A
COLORADO JOINT VENTURE BY EASEMENT, BOUNDARY AND REAL ESTATE CONVEYANCE
AGREEMENT RECORDED MARCH 8, 1994, IN BOOK 560 AT PAGE 428.
EXCEPT ANY PORTION CONTAINED IN DEED RECORDED MARCH 8, 1994, IN BOOK 560 AT PAGE
424,
AND EXCEPT ANY PORTION CONVEYED TO CITY OF BLACK HAWK IN PROPERTY LINE
AGREEMENT, RECORDED FEBRUARY 26, 1996, IN BOOK 595 AT PAGE 145,
AND EXCEPT ANY PORTION CONVEYED TO 000 XXXX XXXXXX LIMITED LIABILITY COMPANY BY
AGREEMENT RECORDED MARCH 8, 1994, IN BOOK 560 AT PAGE 428.
AND EXCEPT ANY PORTION CONVEYED TO CITY OF BLACK HAWK BY QUIT CLAIM DEED
RECORDED APRIL 10, 1996, IN BOOK 597 AT PAGE 000,
XXXXXX XX XXXXXX, XXXXX XX XXXXXXXX.
PARCEL 4:
THAT PORTION OF THE NINETY NINE (99) LODE A MINING CLAIM, SAID 99 LODE AS
DESCRIBED IN QUIT CLAIM DEED RECORDED DECEMBER 13, 1899, IN BOOK 150 AT PAGE
317, THAT LIES WITHIN THE BOUNDARIES OF PARCELS 1, 2, 3 AND 5, SHOWN HEREIN,
CITY OF BLACK HAWK,
COUNTY OF XXXXXX, STATE OF COLORADO.
PARCEL 5:
THAT PART OF MILL SITE #30, CITY OF BLACK HAWK, DESCRIBED AS FOLLOWS:
COMMENCING AT THE SOUTHEASTERLY CORNER OF MILL SITE 30 AT THE BEND POINT ON MAIN
STREET; THENCE N. 35(degree)41' E., 12.0 FEET BETWEEN MILL SITES 30 AND 31, TO
THE POINT OF BEGINNING; THENCE N. 35(degree)41' E., 103.61 FEET BETWEEN MILL
SITES 30 AND 31 TO THE SOUTHWESTERLY RIGHT XX XXX XXXX XX XXXXXXX #000; THENCE
N. 51(degree)34' W., 486.91 FEET ALONG THE HIGHWAY RIGHT OF WAY; THENCE S.
38(degree)29' W., 152.36 FEET MORE OR LESS FROM A BEND POINT; THENCE S.
57(degree)59' E., 264.08 FEET
ALONG MAIN STREET; THENCE S. 56(degree)24' E., 230.29 FEET, MORE OR LESS, TO THE
POINT OF BEGINNING;
EXCEPT ANY PORTION THEREOF LYING WITHIN TRACT DESCRIBED IN BOOK 170 AT PAGE 225,
SOMETIMES REFERRED TO AS THE WEST 10 FEET OF MILL SITE #30;
AND EXCEPT ANY PORTION THEREOF LYING WITHIN TRACT DESCRIBED IN BOOK 195 AT PAGE
527;
AND EXCEPT ANY PORTION CONVEYED TO CITY OF BLACK HAWK IN PROPERTY LINE
AGREEMENT, RECORDED FEBRUARY 26, 1996, IN BOOK 595 AT PAGE 145,
AND EXCEPT ANY PORTION CONVEYED TO CITY OF BLACK HAWK IN PROPERTY LINE AGREEMENT
RECORDED FEBRUARY 26, 1996, IN BOOK 595 AT PAGE 183,
AND EXCEPT ANY PORTION CONVEYED TO CITY OF BLACK HAWK BY QUIT CLAIM DEED
RECORDED APRIL 10, 1996, IN BOOK 597 AT PAGE 138,
AND EXCEPT ANY PORTION CONVEYED TO CITY OF BLACK HAWK BY QUIT CLAIM DEED
RECORDED APRIL 10, 1996, IN BOOK 597 AT PAGE 160,
AND EXCEPT ANY PORTION CONVEYED TO BLACK HAWK/XXXXXX ENTERTAINMENT, LLC BY QUIT
CLAIM DEED RECORDED MARCH 24, 1997, IN BOOK 617 AT PAGE 192,
AND EXCEPT ANY PORTION CONVEYED TO THE COLORADO CENTRAL RAILROAD COMPANY BY DEED
RECORDED IN BOOK 72 AT PAGE 000,
XXXXXX XX XXXXXX, XXXXX XX XXXXXXXX.
PARCEL 6:
A TRACT OF LAND SITUATED IN MILL SITES 30, 31, 32 AND 34, IN THE CITY OF BLACK
HAWK. SITUATED IN THE XXXXX XX XXXXXXX 0, XXXXXXXX 0 XXXXX, XXXXX 72 WEST OF THE
6TH P.M., AND IN BLACK HAWK/XXXXXX SUBDIVISION FILING NO. 1 MINOR SUBDIVISION
PLAT, RECORDED OCTOBER 9, 1998, IN BOOK 653 AT PAGE 44, AND THE 1ST AMENDMENT
RECORDED OCTOBER 9, 1998, IN BOOK 653 AT PAGE 45, AND THE SECOND AMENDMENT
RECORDED OCTOBER 9,1998, IN BOOK 653 AT PAGE 46,
XXXXXX COUNTY, COLORADO, MORE PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT A POINT WHICH BEARS S. 66(degree)30'08" E., A DISTANCE OF 2923.98
FEET FROM THE W 1/4 CORNER OF SAID SECTION 7, ALSO BEING CORNER #21 OF THE
SECURITY PLACER MINERAL SURVEY NO. 5864 AND
SITUATED ON THE NORTHEASTERLY RIGHT-OF-WAY OF MAIN STREET AS SHOWN ON A.D.G.
ENGINEERING INC. REALIGNMENT MAPS FOR THE CITY OF BLACK HAWK; THENCE ALONG THE
SAID NORTHEASTERLY RIGHT-OF-WAY THE FOLLOWING ELEVEN (11) COURSES:
N. 39(degree)01'53" W., A DISTANCE OF 241.62 FEET TO A POINT;
N. 35(degree)04'41" W., A DISTANCE OF 58.02 FEET TO A POINT;
N. 43(degree)11'28" W., A DISTANCE OF 55.15 FEET TO A POINT;
N. 48(degree)17'59" W., A DISTANCE OF 28.82 FEET TO A POINT;
N. 60(degree)47'16" W., A DISTANCE OF 211.15 FEET TO A POINT;
N. 35(degree)40'25" E., A DISTANCE OF 3.31 FEET TO A POINT;
N. 61(degree)49'18" W., A DISTANCE OF 53.33 FEET TO A POINT;
N. 57(degree)09'32" W., A DISTANCE OF 94.26 FEET TO A POINT;
N. 52(degree)54'00" W., A DISTANCE OF 78.00 FEET TO A POINT;
N. 57(degree)25'53" W., A DISTANCE OF 76.00 FEET TO A POINT;
N. 60(degree)09'14" W., A DISTANCE OF 73.21 FEET TO A POINT;
THENCE DEPARTING SAID RIGHT-OF-WAY N. 32(degree)45'26" E., A DISTANCE OF 117.52
FEET TO A POINT ON THE PROPOSED SOUTHWESTERLY RIGHT-OF-WAY OF COLORADO HIGHWAY
#119;
THENCE ALONG SAID PROPOSED RIGHT-OF-WAY THE FOLLOWING FOUR (4) COURSES;
S. 51(degree)35'41" E., A DISTANCE OF 834.94 FEET TO A POINT;
N. 50(degree)56'24" E., A DISTANCE OF 9.11 FEET TO A POINT;
S. 39(degree)03'36" E., A DISTANCE OF 40.98 FEET TO A POINT;
S. 51(degree)35'41" E., A DISTANCE OF 34.03 FEET TO A POINT;
THENCE ON A CURVE TO THE LEFT CONTAINING A CENTRAL ANGLE OF 6(degree)51'22", A
RADIUS OF 1403.00 FEET, AN ARC LENGTH OF 167.89 FEET, A CHORD BEARING OF S.
55(degree)01'22" E., A CHORD DISTANCE OF 167.79 FEET TO A POINT;
THENCE CONTINUING ALONG SAID RIGHT-OF-WAY S. 66(degree)16'40" E., A DISTANCE OF
93.28 FEET TO A POINT;
THENCE S. 23(degree)43'20" W., A DISTANCE OF 9.66 FEET TO A POINT OF CURVATURE;
THENCE ON A NON TANGENT CURVE TO THE LEFT CONTAINING A CENTRAL ANGLE OF
6(degree)28'03", A RADIUS OF 1403.00 FEET, AN ARC LENGTH OF 158.37 FEET, A CHORD
BEARING OF S. 65(degree)30'54" E., A CHORD DISTANCE OF 158.29 FEET TO A POINT;
THENCE DEPARTING SAID PROPOSED RIGHT-OF-WAY S. 22(degree)25'26" W., A DISTANCE
OF 4.35 FEET TO A POINT;
THENCE N. 69(degree)00'00" W., A DISTANCE OF 50.12 FEET TO A POINT;
THENCE N. 67(degree)30'00" W., A DISTANCE OF 30.14 FEET TO A POINT;
THENCE S. 18(degree)59'09" W., A DISTANCE OF 75.65 FEET TO A POINT ON THE
AFOREMENTIONED RIGHT-OF-WAY OF MAIN STREET;
THENCE ALONG SAID RIGHT-OF-WAY OF MAIN STREET THE FOLLOWING FOUR (4) COURSES:
N. 71(degree)00'51" W., A DISTANCE OF 34.52 FEET TO A POINT;
N. 69(degree)35'02" W., A DISTANCE OF 52.24 FEET TO A POINT;
N. 71(degree)47'03" W., A DISTANCE OF 35.89 FEET TO A POINT;
N. 66(degree)13'42" W., A DISTANCE OF 197.56 FEET TO THE POINT OF BEGINNING,
COUNTY OF XXXXXX, STATE OF COLORADO
PARCEL 7:
THE THIRD FLOOR OF A THREE LEVEL PARKING GARAGE LOCATED ON LOT 1A AS SHOWN ON
THAT CERTAIN BLACK HAWK/XXXXXX SUBDIVISION, FILING XX. 0 0XX XXXXXXX, X XXXXX
XXXXXXXXXXX XXXX, RECORDED OCTOBER 9, 1998, IN BOOK 653 AT PAGE 46, IN THE
OFFICE OF THE CLERK AND RECORDER OF XXXXXX COUNTY, COLORADO TOGETHER WITH RAMP
ACCESS SERVING ONLY SAID THIRD FLOOR,
COUNTY OF XXXXXX, STATE OF COLORADO.
Schedule B to Collateral Description
Mortgaged Leases
1. That certain Xxxxxx Land Lease by and between Black Hawk Gaming & Development
Company, Inc., as Lessor, and Xxxxxx Hotel Venture, as Lessee, affecting the
Leased Land and commonly known as the Xxxxxx Hotel property and Millsite 29 and
part of Millsite 30 situated in the City of Black Hawk, County of Xxxxxx, State
of Colorado. A Memorandum of Lease relating to such lease was recorded on April
24, 1998 in the real property records of Xxxxxx County, Colorado in Book 639,
Page 124, as Document No. 95479.
2. That certain Parking Garage Lease Agreement by and between Black Hawk/Xxxxxx
Entertainment LLC, as Landlord, and Xxxxxx Hotel Venture, as Tenant, affecting
the Leased Land and the Parking Garage Improvement on Parcel 6 of the Owned Land
situated in the City of Black Hawk, County of Xxxxxx, State of Colorado. A
Memorandum of Lease relating to such lease was recorded on April 24, 1998 in the
real property records of Xxxxxx County, Colorado in Book 639, Page 129, as
Document No. 95480.
Schedule 1.3
Initial Designated Accounts
Xxxxxx Entertainment, Inc.:
Account number 4439824459 of Borrowers maintained with the Xxxxx Fargo Bank,
N.A., whose office is located at 3800 Xxxxxx Xxxxxx Parkway, 0xx Xxxxx , Xxx
Xxxxx, XX 00000, and whose ABA number is 000000000.
Black Hawk Gaming & Development Company, Inc.:
Account number 4439824459 of Borrowers maintained with the Xxxxx Fargo Bank,
N.A., whose office is located at 3800 Xxxxxx Xxxxxx Parkway, 0xx Xxxxx , Xxx
Xxxxx, XX 00000, and whose ABA number is 000000000.
Xxxxxx Ventures, Inc.:
Account number 4439824459 of Borrowers maintained with the Xxxxx Fargo Bank,
N.A., whose office is located at 3800 Xxxxxx Xxxxxx Parkway, 0xx Xxxxx , Xxx
Xxxxx, XX 00000, and whose ABA number is 000000000.
Xxxxxx Hotel Venture:
Account number 4439824459 of Borrowers maintained with the Xxxxx Fargo Bank,
N.A., whose office is located at 3800 Xxxxxx Xxxxxx Parkway, 0xx Xxxxx , Xxx
Xxxxx, XX 00000, and whose ABA number is 000000000.
Black Hawk/Xxxxxx Entertainment LLC:
Account number 4439824459 of Borrowers maintained with the Xxxxx Fargo Bank,
N.A., whose office is located at 3800 Xxxxxx Xxxxxx Parkway, 0xx Xxxxx , Xxx
Xxxxx, XX 00000, and whose ABA number is 000000000.
Schedule 1.4
Lender's Account
An account at a bank designated by Lender from time to time as the
account into which Borrower shall make all payments to Lender for the benefit of
the Lender Group and into which the Lender Group shall make all payments to
Lender under this Agreement and the other Loan Documents; unless and until
Lender notifies Borrower and the Lender Group to the contrary, Lender's Account
shall be that certain deposit account bearing account number 323-266193 and
maintained by Lender with The Chase Manhattan Bank, 4 New York Plaza, 15th
Floor, New York, New York 10004, ABA #000000000.
Schedule 1.5
Maximum Allocated Amount
----------------------------------------------------------- ----------------------------------------------------
Borrower(s) Initial Maximum Allocated Amount
----------------------------------------------------------- ----------------------------------------------------
Xxxxxx Entertainment, Inc. $100,000
----------------------------------------------------------- ----------------------------------------------------
Black Hawk/Xxxxxx Entertainment LLC $10,000,000
----------------------------------------------------------- ----------------------------------------------------
Black Hawk Gaming & Development $4,000,000 (in the aggregate, for all such
Company, Inc., Xxxxxx Ventures, Inc., and Borrowers on a collective basis)
Xxxxxx Hotel Venture
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