BUSINESS LOAN AGREEMENT
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Principal Loan Date Maturity Loan No Call Collateral Account Officer Initials
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$900,000.00 08-21-1997 08-21-1999 9008949 000 0000000 gs196
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References in the shaded area are for Lender's use only and do not limit the applicability
of this document to any particular loan or item.
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Borrower: Colonial Downs Holdings, Inc. Lender: Citizens and Farmers Bank
0000 Xxxxx Xxxxx Xxxxx Xxxx Xxxxxxxxxxxxxx
Xxxxxxxxxx Xxxxx, XX 00000 P. O. Xxx 000
000 Xxxx Xxxxxx
Xxxx Xxxxx, XX 00000
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THIS BUSINESS LOAN AGREEMENT between Colonial Downs Holdings, Inc. ("Borrower")
and Citizens and Fanmers Bank ("Lender") is made on the following terms and
conditions. Borrower has received prior commercial loans trom Lender or has
applied to Lender tor a commercial loan or loans and other financial
accommodations, including those which may be described on any exhibit or
schedule attached to this Agreement. All such loans and tinanciat
accommodations. together with all tuture loans and financial accommodations trom
Lender to Borrower, are referred to in this Agreement individually as the "Loan"
and collectively as the "Loans." Borrower understands and agrees that: (a) in
granting, renewing, or extending any Loan, Lender Is relying upon Bonower's
representations, warranties, and agreements, as set forth in this Agreement; (b)
the granting, renewing, or extending ot any Loan by Lender at all times shall be
subject to Lenderis sole judgment and discretion; and (c) ali such Loans shall
be and shall remain subject to the following terms and conditions ot this
Agreement.
TERM. This Agreement shall be effective as of August 14, 1997, and shall
continue thereaHer until all Indebtedness of Bonrower to Lender has been
performed in full and the parties terminate this Agreement in wnting.
DEFINITIONS. The following words shall have the following meanings when used in
this Agreement. Terms not otherwise detned in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. All references
to dollar amounts shall mean amounts in lawful money of the United States of
America.
Agreement. The word "Agreement" means this Business Loan Agreement, as this
Business Loan Agreement may be amended or modified from time to time, together
with all exhibits and schedules attached to this Business Loan Agreement from
time to time.
Borrower. The word "Borrower" means Colonial Downs Holdings, Inc. and its
successors and assigns. The word "Borrower" also includes, as applicable, all
subsidianes and affiliates of Bonrower as provided below in the paragraph titled
"Subsidianes and Affiliates."
CERCLA. The word "CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended.
Collateral. The word "Collateral" means and includes without limitation all
property and assets granted as collateral security for a Loan, whether real or
personal property, whether granted directly or indirectly, whether granted now
or in the future, and whether granted in the form of a security interest,
mortgage, deed of trust, assignment, pledge, chattel mortgage, chattel trust,
factor's lien, equipment trust, conditional sale, trust receipt, lien, charge,
lien or title retention contract, lease or consignment intended as a secunty
device, or any other security or lien interest whatsoever, whether created by
law, contract, or otherwise.
ERISA. The word "ERISA" means the Employee Retirement Income Secunty Act of
1974, as amended.
Event ot Detault. The words "Event of Default" mean and include without
limitation any of the Events of Default set forth below in the section titled
"EVENTS OF DEFAULT."
Grantor. The word "Grantor" means and includes without limitation each and all
of the persons or entities granting a Security Interest in any Collateral for
the Indebtedness, and their personal representatives, successors and assigns.
Guarantor. The word "Guarantor" means and includes without limitation each and
all of the guarantors, sureties, and accommodation parties in connection with
any Indebtedness and their personal representatives, successors and assigns.
Indebtedness. The word "Indebtedness" means and includes without limitation all
Loans, including all pnncipal, interest and other fees, costs and charges, if
any, together with all other present and future liabilities and obligations of
Bonrower, or any one or more of them, to Lender, whether direct or indirect,
matured or unmatured, and whether absolute or contingent, joint, several, or
joint and several, and no xxXxx how the same may be evidenced or shall arise.
Lender. The word "Lender" means Citizens and Farmers Bank, its successors and
assigns.
Loan. The word "Loan" or "Loans" means and includes without limitation any and
all commercial loans and financial accommodations from Lender to Borrower,
whether now or hereafter existing, and however evidenced, including without
limitation those loans and financial accommodations descnbed herein or described
on any exhibit or schedule aHached to this Agreement from time to time.
Note. The word "Note" means and includes without limitation Bonrower's
promissory note or notes, if any, evidencing Borrower's Loan obligations in
favor of Lender, as well as any substitute, replacement or retnancing note or
notes therefor.
Permitted Liens. The words "PermiHed Liens" mean: (a) liens and secunty
interests secunng Indebtedness owed by Bonrower to Lender; (b) liens for taxes,
assessments, or similar charges either not yet due or being contested in good
faith; (c) liens of materialmen, mechanics, warehousemen, or camers, or other
like liens ansing in the ordinary course of business and securing obligations
which are not yet delinquent; (d) purchase money liens or purchase money secunty
interests upon or in any property acquired or held by Borrower in the ordinary
cou:se of business to secure indebtedness outstanding on the date of this
Agreement or permiHed to be incurred under the paragraph of this Agreement
titled "Indebtedness and Liens"; (e) liens and secunty interests which, as of
the date of this Agreement, have been disclosed to and approved by the Lender in
writing; and (f) those liens and secunty interests which in the aggregate
constitute an immatenal and insignidcant monetary amount with respect to the net
value of Bonrower's assets.
Related Documents. The words "Related Documents" mean and include without
limitation all promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, secunty agreements, mortgages, deeds of
trust, and all other instruments, agreements and documents, whether now or
hereafler existing, executed in connection with the Indebtedness.
Security Agreement. The words "Security Agreement" mean and include without
limitation any agreements, promises, covenants, arrangements, understandings or
other agreements, whether created by law, contract, or otherwise, evidencing,
governing, representing, or creating a Secunty I merest.
Security Interest. The words "Secunty Interest" mean and include without
limitation any and all types of liens and encumbrances, whether created by law,
contract, or otherwise.
XXXX. The word "XXXX" means the Superfund Amendments and Reauthorization Act of
1986 as now or hereafter amended.
CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the initial
Loan Advance and each subsequent Loan Advance under
08-21-1997 BUSINESS LOAN AGREEMENT Page 2
Loan No 9008949 (Continued)
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this Agreement shall be subject to the fulfillment to Lender's satisfaction of
all of the conditions set forth in this Agreement and in the Related Documents.
Loan Documents. Borrower shall provide to Lender in form satisfactory to Lender
the following documents for the Loan: (a) the Note, (b) Security Agreements
grantin, to Lender secunty interests in the Collateral, (c) Financing Statements
perfecting Lenders Security Interests; (d) evidence of insurance as required
below; and (e) any other documents required under this Agreement or by Lender or
its counsel.
Borrower's Authorization. Bonrower shall have provided in form and substance
satisfactory to Lender property certified resolutions, duly authorizing the
execution and delivery of this Agreement, the Note and the Related Documents,
and such other authorizations and other documents and instruments as Lender or
its counsel, in their sole discretion, may require.
Payment of Fees and Expenses. Borrower shall have paid to Lender all fees,
charges, and other expenses which are then due and payable as specified in this
Agreement or any Related Document.
Representations and Warranties. The representations and warranties set forth in
this Agreement, in the Related Documents, and in any document or certificate
delivered to Lender under this Agreement are true and correct.
No Event of Default. There shall not exist at the time of any advance a
condition which would constitute an Event of Default under this Agreement.
REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each disbursement of Loan
proceeds, as of the date of any renewal, extension or modification of any Loan,
and at all times any Indebtedness exists:
Organization. Borrower is a corporation which is duly organized, validly
existing, and in good standing under the laws of the state of Bonrower's
incorporation and is validly existing and in good standing in all states in
which Borrower is doing business. Bonower has the full power and authority to
own its properties and to transact the businesses in which it is presently
engaged or presently proposes to engage. Borrower also is duly qualified as a
foreign corporation and is in good standing in all states in which the failure
to so qualify would have a material adverse effect on its businesses or
financial condition.
Authorization. The execution, delivery, and performance of this Agreement and
all Related Documents by Borrower, to the extent to be executed delivered or
performed by Borrower, have been duly authonzed by all necessary action by
Bonrower; do not require the consent or approval of any other person, regulatory
authonty or governmental body; and do not conHict with, result in a violation
of, or constitute a default under (a) any provision of its articles of
incorporation or organization, or bylaws, or any agreement or other instrument
binding upon Borrower or (b) any law, governmental regulation, court decree, or
order applicable to Borrower.
Financial Information. Each financial statement of Borrower supplied to Lender
truly and completely disclosed Borrower's financial condition as of the date of
the statement, and there has been no matenal adverse change in Borrower's
financial condition subsequent to the date of the most recent financial
statement supplied to Lender. Bonrower has no matenal contingent obligations
except as disclosed in such financial statements.
Legal Effect. This Agreement constitutes, and any instrument or agreement
required hereunder to be given by Borrower when delivered will constitute,
legal, valid and binding obligations of Bonrower enforceable against Borrower in
accordance with their respective terms.
Properties. Except as contemplated by this Agreement or as previously disclosed
in Borrower's financial statements or in writing to Lender and as accepted by
Lender, and except for property tax liens for taxes not presently due and
payable, Borrower owns and has good title to all of Borrower's properties free
and clear of all Secunty Interests, and has not executed any security documents
or financing statements relating to such properties. All of Borrower's
properties are titled in Borrower's legal name, and Bonrower has not used, or
filed a financing statement under, any other name for at least the last five (5)
years.
Hazardous Substances. The terms "hazardous waste," "hazardous substance,n
"disposal," "release," and "threatened release," as used in this Agreement,
shall have the same meanings as set forth in the "CERCLA," "XXXX," the Hazardous
Matenals Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource
Conservahon and Recovery Act, 42 U.S.C. Section 6901, et seq., or other
applicable state or Federal laws, rules, or regulations adopted pursuant to any
of the foregoing. Except as disclosed to and acknowledged by Lender in wnting,
Bonower represents and warrants that: (a) During the penod of Bonrowers
ownership of the properties, there has been no use, generation, manufacture,
storage, treatment, disposal, release or threatened release of any hazardous
waste or substance by any person on, under, about or from any of the properties.
(b) Borrower has no knowledge of, or reason to believe that there has been (i)
any use, generation, manufacture, storage, treatment, disposal, release, or
threatened release of any hazardous waste or substance on, under, about or from
the properties by any pnor owners or occupants of any of the properties, or (ii)
any actual or threatened litigation or claims of any kind by any person relating
to such matters. (c) Neither Borrower nor any tenant, contractor, agent or other
authorized user of any of the properties shall use, generate, manufacture,
store, treat, dispose of, or release any hazardous waste or substance on, under,
about or from any of the properties; and any such activity shall be conducted in
compliance with all applicable federal, state, and local laws, regulations, and
ordinances, including without limitation those laws, regulations and ordinances
described above. Bonrower authorizes Lender and its agents to enter upon the
properties to make such inspections and tests as Lender may deem appropriate to
determine compliance of the properties with this section of the Agreement. Any
inspections or tests made by Lender shall be at Bonrower's expense and for
Lender's purposes only and shall not be construed to create any responsibility
or liability on the part of Lender to Borrower or to any other person. The
representations and warranties contained herein are based on Borrower's due
diligence in investigating the properties for hazardous waste and hazardous
substances. Borrower hereby (a) releases and waives any future claims against
Lender for indemnity or contribution in the event Borrower oecomes liable for
cleanup or other costs under any such laws, and b) agrees to indemnify and
hold harmless Lender against any and all claims, losses, liabilities, damages,
penalties, and expenses which Lender may directiv or indirectly sustain or
suffer resulting from a breach of this section of the Agreement or as a
consequence of any use, generation, manufacture, storage, disposal, release or
threatened release occurring pnor to Bonrower's ownership or interest in the
properties, whether or not the same was or should have been known to Borrower.
The provisions of this section of the Agreement, including the obligation to
indemnify, shall survive he payment of the Indebtedness and the termination or
expiration of this Agreement and shall not be affected by Lender's acquisition
of any interest in any of the properties, whether by foreclosure or otherwise.
Litigatton and Claims. No litigation, claim, investigation, administrative
proceeding or similar action (including those for unpaid taxes) against Borrower
is pending or threatened, and no other event has occurred which may materially
adversely affect Borrower's financial condition or properties, other than
litigation, claims, or other events, if any, that have been disclosed to and
acknowledged by Lender in writing.
Taxes. To the best of Borrower's knowledge, all tax returns and reports of
Borrower that are or were required to be filed, have been filed, and ail taxes,
assessments and other governmental charges have been paid in full, except those
presently being or to be contested by Bonrower in good faith in the ordinary
course of business and for which adequate reserves have been provided.
Lien Priority. Unless otherwise previously disclosed to Lender in wnting,
Borrower has not entered into or granted any Secunty Agreements, or permitted
the filing or attachment of any Secunty Interests on or affecting any of the
Collateral directly or indirectly secunng repayment of Borrower's Loan and Note,
that would be pnor or that may in any way be supenor to Lendeds Security
Interests and nghts in and to such Collateral.
Binding Effect. This Agreement, the Note, all Security Agreements directly or
indirectly securing repayment of Borrower's Loan and Note and all
08-21-1997 BUSINESS LOAN AGREEMENT Page 3
Loan No 9008949 (Continued)
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of the Related Documents are binding upon Borrower as well as upon Borrower's
successors, representatives and assigns, and are legally enforceable in
accordance with their respective terms.
Commercial Purposes. Borrower intends to use the Loan proceeds solely for
business or commercial related purposes.
Employee Benefit Plans. Each employee benefit plan as to which Borrower may have
any liability complies in all matenal respects with all applicable requirements
of law and regulations, and (i) no Reportable Event nor Prohibited Transaction
(as defined in ERISA) has occurred with respect to any such plan, (ii) Borrower
has not withdrawn from any such plan or initiated steps to do so, (iii) no steps
have been taken to terminate any such plan, and (iv) there are no unfunded
liabilities other than those previously disclosed to Lender in writing.
Location of Borrower's Offices and Records. Borrower's place of business, or
Borrower's Chief executive office, if Borrower has more than one place of
business, is located at 0000 Xxxxx Xxxxx Xxxxx Xxxx, Xxxxxxxxxx Xxxxx, XX 00000.
Unless Borrower has designated otherwise in wnting this location is also the
offlce or offlces where Bonrower keeps its records concerning the Collateral.
Information. All information heretofore or contemporaneously herewith furnished
by Bonrower to Lender for the purposes of or in connection with this Agreement
or any transaction contemplated hereby is, and all information hereafter
furnished by or on behalf of Borrower to Lender will be true and accurate in
every material respect on the date as of which such information is dated or
certified; and none of such information is or will be incomplete by omitting to
state any material fact necessary to make such information not misleading.
Survival of Representations and Warranties. Borrower understands and agrees that
Lender, without independent investigation, is relying upon the above
representations and warranties in making the above referenced Loan to Borrower.
Borrower further agrees that the foregoing representations and warranties shall
be continuing in nature and shall remain in fult force and effect until such
time as Borrower's Indebtedness shall be paid in full, or until this Agreement
shall be terminated in the manner provided above, whichever is the last to
occur.
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, while
this Agreement is in effect, Borrower will:
Litigation. Promptly inform Lender in writing of (a) all matenal adverse changes
in Bonrower's financial condition, and (b) all existing and all threatened
litigation, claims, investigations, administrative proceedings or similar
actions affecting Borrower or any Guarantor which could materially affect the
financial condition of Bonrower or the financial condition of any Guarantor.
Financial Records. Maintain its books and records in accordance with generally
accepted accounting pnnciples, applied on a consistent basis and permit Lender
to examine and audit Borrower's books and records at all reasonable times.
Additlonal Intormation. Furnish such additional information and statements,
lists of assets and liabilities, agings of receivables and payables, inventory
schedules, budgets, forecasts, tax returns, and other reports with respect to
Bonrower's financial condition and business operations as Lender may request
from time to time.
Insurance. Maintain fire and other nsk insurance, public liability insurance,
and such other insurance as Lender may from time to time reasonably require with
respect to Bonrower's properties and operations, in form, amounts, coverages and
with insurance companies acceptable to Lender. Borrower, upon request of Lender,
will deliver to Lender from hme to time the policies or certificates of
insurance in form satisfactory to Lender, including stipulations that coverages
will not be cancelled or diminished without at least ten (10) days' prior wntten
notice to Lender. Each insurance policy also shall include an endorsement
providing that coverage in favor of Lender will not be impaired in any way by
any act, omission or default of Borrower or any other person. In connection with
all policies covenng assets in which Lender holds or is offered a security
interest for the Loans, Borrower will provide Lender with such loss payable or
other endorsements as Lender may require.
Insurance Reports. Furnish to Lender, upon request of Lender, reports on each
existing insurance policy showing such information as Lender may reasonably
request, including without limitation the following: (a) the name of the
insurer; (b) the nsks insured; (c) the amount of the policy; (d) the properties
insured; (e) the then current property values on the basis of which insurance
has been obtained, and the manner of determining those values; and (f) the
expiration date of the policy. In addition, upon request of Lender (however not
more oflen than annually), Borrower will have an independent appraiser
satisfactory to Lender determine, as applicable, the actual cash value or
replacement cost of any Collateral. The cost of such appraisal shall be paid by
Bonrower.
Other Agreements. Comply with all terms and conditions of all other agreements,
whether now or hereaHer existing, between Bonrower and any other party and
notify Lender immediately in wnting of any default in connection with any other
such agreements.
Loan Proceeds. Use all Loan proceeds solely for Bonrowers business operations,
unless specifically consented to the contrary by Lender in wnting.
Taxes, Charges and Liens. Pay and discharge when due all of its indebtedness and
obligations, including without limitation all assessments, taxes, governmental
charges, levies and liens, of every kind and nature, imposed upon Borrower or
its properties, income, or profits, pnor to the date on which penalties would
aKach, and all lawful claims that, if unpaid, might become a lien or charge upon
any of Borrower's properties, income, or orofits. Provided however, Bonrower
will not be required to pay and discharge any such assessment, tax, charge,
xxxx, xxxx or claim so long as (a) the legality of the same shall be contested
in good faith by appropriate proceedings, and (b) Borrower shall have
established on ~is books adequate reserves with respect to such contested
assessment, tax, charge, levy, lier, or claim in accordance with generally
accepted accounting practices. Bonrower, upon demand of Lender, will furnish to
Lender evidence of payment of the assessments, taxes, charges, levies, liens and
claims and will authorize the appropnate governmental official to deliver to
Lender at any time a wriHen statement of any assessments, taxes, charges,
levies, liens and claims against Borrowers properties, income, or profits.
Performance. Perform and comply with all terms, conditions, and provisions set
forth in this Agreement and in the Related Documents in a timely manner, and
promptly notify Lender if Borrower learns of the occurrence of any event which
constitutes an Event of Default under this Agreement or under any of the Related
Documents.
Operations. Maintain executive and management personnel with substantially the
same qualifications and expenence as the present executive and management
personnel; provide wnHen notice to Lender of any change in executive and
management personnel; conduct its business affairs in a reasonable and prudent
manner and in compliance with all applicable federal, state and municipal laws,
ordinances, rules and regulations respecting its properties, charters,
businesses and operations, including without limitation, compliance with the
Amencans With Disabilities Act and with all minimum funding standards and other
requirements of ERISA and other laws applicable to Borrower's employee benefit
plans.
Inspection. Permit employees or agents of Lender at any reasonable time to
inspect any and all Collateral for the Loan or Loans and Bonrower's other
properties and to examine or audit Bonrower's books, accounts, and records and
to make copies and memoranda of Bonrower's books, accounts, and records. If
Borrower now or at any hme hereaHer maintains any records (including without
limitahon computer generated records and computer software programs for the
generation of such records) in the possession of a third party, Bonrower, upon
request of Lender, shall notify such party to permit Lender free access to such
records at all reasonable times and to provide Lender with copies of any records
it may request, all at Borrower's expense.
08-21-1997 BUSINESS LOAN AGREEMENT Page 2
Loan No 9008949 (Continued)
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Compliance Certificate. Unless waived in wnting by Lender, provide Lender at
least annually and at the time of each disbursement of Loan proceeds with a
certificate executed by Borrower's chief financial officer, or other officer or
person acceptable to Lender, certifying that the representations and warranties
set forth in this Agreement are true and correct as of the date of the
certificate and further certifying that, as of the date of the certificate, no
Event of Default exists under this Agreement.
Environmental Compliance and Reports. Bonrower shall comply in all respects with
all environmental protection federal, state and local laws, statutes,
regulations and ordinances; not cause or permit to exist, as a result of an
intentional or unintentional action or omission on its part or on the part of
any third party, on property owned and/or occupied by Bonrower, any
environmental activity where damage may result to the environment, unless such
environmental activity is pursuant to and in compliance with the conditions of a
permit issued by the appropnate federal, state or local governmental
authorities; shall furnish to Lender promptly and in any event within thirty
(30) days xXxx receipt thereof a copy of any notice, summons, lien, citation,
directive, letter or other communication from any governmental agency or
instrumentality concerning any intentional or unintentional action or omission
on Borrower's part in connection with any environmental activity whether or not
there is damage to the environment and/or other natural resources.
Additional Assurances. Make, execute and deliver to Lender such prom~ssory
notes, mortgages, deeds of trust, security agreements, f~nanc~ng statements,
instruments, documents and other agreements as Lender or its attorneys may
reasonably request to evidence and secure the Loans and to perfect all Security
Interests.
RECOVERY OF ADDITIONAL COSTS. If the imposition of or any change in any law,
rule, regulation or guideline, or the interpretation or application of any
thereof by any court or administrative or governmental authority (including any
request or policy not having the force of law) shall impose, modify or make
applicable any taxes (except U.S. federal, state or local income or franchise
taxes imposed on Lender), reserve requirements, capital adequacy requirements or
other obligations which would (a) increase the cost to Lender for extending or
maintaining the credit facilities to which this Agreement relates, (b) reduce
the amounts payable to Lender under this Agreement or the Related Documents, or
(c) reduce the rate of return on Lender's capital as a consequence of Lender's
obligations with respect to the credit facilities to which this Agreement
relates, then Borrower agrees to pay Lender such additional amounts as will
compensate Lender therefor, within five (5) days xXxx Lender's wntten demand for
such payment, which demand shall be accompanied by an explanation of such
imposition or charge and a calculation in reasonable detail of the additional
amounts payable by Bonrower, which explanation and calculations shall be
conclusive in the absence of manifest error.
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this
Agreement is in effect, Bonrower shall not, without the pnor wntten consent of
Lender:
Continuity of Operations. (a) Engage in any business activities substantially
different than those in which Borrower is presently engaged, (b) / ) cease
operations, liquidate, merge, transfer, acquire or consolidate with any other
entity, change ownership, change its name, dissolve or transfer or sell
Collateral out of the ordinary course of business, (c) pay any dividends on
Borrower's stock (other than dividends payable in its stock), provided, however
that notwithstanding the foregoing, but only so long as no Event of Default has
occurred and is continuing or would result from the payment of dividends, if
Borrower is a "Subchapter S Corporation" (as defined in the Internal Revenue
Code of 1986, as amended), Borrower may pay cash dividends on its stock to its
shareholders from time to time in amounts necessary to enable the shareholders
to pay income taxes and make estimated income tax payments to satisfy their
liabilities under federal and state law which anse solely from their status as
Shareholders of a Subchapter S Corporation because of their ownership of shares
of stock of Borrower, or (d) purchase or retire any of Bonrower's outstanding
shares or alter or amend Bonrower's capital structure.
Loans, Acquisitions and Guaranties. (a) Loan, invest in or advance money or
assets, (b) purchase, create or acquire any interest in any other enterpnse or
entity, or (c) incur any obligation as surety or guarantor other than in the
ordinary course of business.
CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to
Borrower, whether under this Agreement or under any other agreement, Lender
shall have no obligation to make Loan Advances or to disburse Loan proceeds if:
(a) Bonrower or any Guarantor is in default under the terms of this Agreement or
any of the Related Documents or any other agreement that Borrower or any
Guarantor has with Lender; (b) Bonrower or any Guarantor becomes insolvent,
files a petition in bankruptcy or similar proceedings, or is adjudged a
bankrupt; (c) there occurs a material adverse change in Borrower's financial
condition, in the financial condition of any Guarantor, or in the value of any
Collateral securing any Loan; or (d) any Guarantor seeks, claims or otherwise
aHempts to limit, modify or revoke such Guarantor's guaranty of the Loan or any
other loan with Lender.
RIGHT OF SETOFF. Borrower grants to Lender a contractual possessory secunty
interest in, and hereby assigns, conveys, delivers, pledges, and transfers to
Lender all Bonrower's nght, title and interest in and to, Borrower's accounts
with Lender (whether checking, savings, or some other account), including
without limitation all accounts held jointly with someone else and all accounts
Borrower may open in the future, excluding however all XXX and Xxxxx accounts,
and all trust accounts for which the grant of a security interest would be
prohibited by law. Borrower authorizes Lender, to the extent permiHed by
applicable law, to charge or setoff all sums owing on the Indebtedness against
any and all such accounts.
EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:
Default on Indebtedness. Failure of Borrower to make any payment when due on the
Indebtedness.
Other Detaults. Failure of Borrower or any Grantor to comply with or to perform
when due any other term, obligation, covenant or condition contained in this
Agreement or in any of the Related Documents, or failure of Borrower to comply
with or to perform any other term, obligation, covenant or condition contained
in any other agreement between Lender and Bonrower.
Default in Favor of Third Parties. Should Bonrower or any Grantor default under
any loan, extension of credit, secunty agreement, purchase or sales agreement,
or any other agreement, in favor of any other creditor or person that may
matenally affect any of Bonrower's property or Borrower's or any Grantor's
ability to repay the Loans or perform their respective obligations under this
Agreement or any of the Related Documents.
False Statements. Any warranty, representation or statement made or furnished to
Lender by or on behalf of Borrower or any Grantor under this Agreement or the
Related Documents is false or misleading in any matenal respect at the time made
or furnished, or becomes false or misleading at any time thereaHer.
Defective Collateralizatlon. This Agreement or any of the Related Documents
ceases to be in full force and effect (including failure of any Secunty
Agreement to create a valid and perfected Secunty Interest) at any time and for
any reason.
Insolvency. The dissolution or termination of Borrower's existence as a going
business, or a trustee or receiver is appointed for Borrower or for all or a
substantial portion of the assets of Borrower, or Bonrower makes a general
assignment for the benefit of Borrower's creditors, or Bonrower hles for
bankruptcy, or an involuntary bankruptcy petition is filed against Borrower and
such involuntary petition remains undismissed for sixty (60) days.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help,
08-21-1997 BUSINESS LOAN AGREEMENT Page 3
Loan No 9008949 (Continued)
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repossession or any other method, by any creditor of Borrower, any creditor of
any Grantor against any collateral securing the Indebtedness, or by any
governmental agency. This includes a garnishment, attachment, or levy on or of
any of Bonrower's deposit accounts with Lender.
Events Affecting Guarantor. Any of the preceding events occurs with respect to
any Guarantor of any of the Indebtedness or any Guarantor dies or becomes
incompetent, or revokes or disputes the validity of, or liability under, any
Guaranty of the Indebtedness.
Change In Ownership. Any change in ownership of twenty-hve percent (25%) or more
of the common stock of Borrower.
Adverse Change. A matenal adverse change occurs in Bonrower's hnancial
condition, or Lender believes the prospect of payment or performance of the
Indebtedness is impaired.
EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where
otherwise provided in this Agreement or the Related Documents, all commitments
and obligations of Lender under this Agreement or the Related Documents or any
other agreement immediately will terminate and, at Lender's option, all sums
owing in connection with the Loans, including all pnncipal, interest, and all
other fees, costs and charges, if any, will become immediately due and payable,
all without notice of any kind to Borrower, except that in the case of an Event
of Default of the type described in the "Insolvency" subsection above, such
acceleration shall be automatic and not optional. In addition, Lender shali have
all the nghts and remea~es provioed in the Related Documents or available at
law, in equity, or otnerwise. Except as may be prohibited by applicaole law, all
of Lender's rights and remedies shall be cumulative and may be exercised
singularly or concurrently. Election by Lender to pursue any remedy shall not
exclude pursuit of any other remedy, and an election to make expenditures or to
take action to perform an obligation of Borrower or of any Grantor shall not
affect Lender's nght to declare a default and to exercise its nghts and
remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:
Amendments. This Agreement, together with any Related Documents, constitutes the
entire understanding and agreement of the parties as to the matters set forth in
this Agreement. No alteration of or amendment to this Agreement shall be
effective unless given in wnting and signed by the party or parties sought to be
charged or bound by the alteration or amendment.
Applicable Law. This Agreement shall be governed by, construed and enforced in
accordance with the laws of the Commonwealth of Virginia. Lender and Bonrower
hereby waive the nght to any jury tnal in any action, proceeding, or
counterclaim brought by either party against the other.
Caption Headings. Caption headings in this Agreement are for convenience
purposes only and are not to be used to interpret or detne the provisions of
this Agreement.
Consent to Loan PartIcipstion. Borrower agrees and consents to Lender's sale or
transfer, whether now or later, of one or more participation interests in the
Loans to one or more purchasers, whether related or unrelated to Lender. Lender
may provide, without any limitation whatsoever, to any one or more purchasers,
or potential purchasers, any information or knowledge Lender may have about
Borrower or about any other matter relating to the Loan, and Borrower hereby
waives any rights to pnvacy it may have with respect to such matters. Borrower
additionally waives any and all notices of sale of participation interests, as
well as all notices of any repurchase of such participation interests. Borrower
also agrees that the purchasers of any such participation interests will be
considered as the absolute owners of such interests in the Loans and will have
all the rights granted under the participation agreement or agreements governing
the sale of such participation interests. Borrower further waives all rights of
offset or counterclaim that it may have now or later against Lender or against
any purchaser of such a participation interest and unconditionally agrees that
either Lender or such purchaser may enforce Bonrower's obligahon under the Loans
irrespective of the failure or insolvency of any holder of any interest in the
Loans. Bonrower further agrees that the purchaser of any such participation
interests may enforce its interests irrespective of any personal claims or
defenses that Borrower may have against Lender.
Costs and Expenses. Borrower agrees to pay upon demand all of Lender's
out-of-pocket expenses incurred in connection with this Agreement or in
connection with the Loans made pursuant to this Agreement. Subject to any limits
under applicable law, if Lender hires an attorney to help enforce this Agreement
or to collect any Indebtedness, Bonrower agrees to pay Lender's attorneys' fees,
and all of Lender's other collection expenses, whether or not there is a lawsuit
and including legal expenses for bankruptcy proceedings.
Notices. All notices required to be given under this Agreement shall be given in
writing, may be sent by telefacsimile, and shall be effective when actually
delivered if hand delivered or when deposited with a nationally recognized
overnight couner or deposited as certifed or registered mail in the United
States mail, first class, postage prepaid, addressed to the party to whom the
notice is to be given at the address shown above. Any party may change its
address for notices under this Agreement by giving formal wntten notice to the
other parties, specifying that the purpose of the notice is to change the
party's address. To the extent permitted by applicable law, if there is more
than one Borrower, notice to any Borrower will constitute notice to all
Borrowers. For notice purposes, Bonrower will keep Lender informed at atl times
of Borrower's current address(es).
Severability. If a court of competent jurisdiction finds any provision of this
Agreement to be invalid or unenforceable as to any person or circumstance, such
finding shall not render that provision invalid or unenforceable as to any other
persons or circumstances. If feasible, any such offending provision shall be
deemed to be modified to be within the limits of enforceability or validity;
however, if the offending provision cannot be so modifed, it shall be stricken
and all other provisions of this Agreement in all other respects shall remain
valid and enforceable.
Subsidiaries and Affiliates of Borrower. To the extent the context of any
provisions of this Agreement makes it appropnate, including without limitation
any representation, warranty or covenant, the word "Borrower" as used herein
shall include all subsidianes and afflliates of Borrower. Notwithstanding the
foregoing however, under no circumstances shall this Agreement be construed to
require Lender to make any Loan or other hnancial accommodation to any
subsidiary or affiliate of Borrower.
Successors and Assigns. All covenants and agreements contained by or on behalf
of Borrower shall bind its successors and assigns and shall inure to the benefit
of Lender, its successors and assigns. Bonrower shall not, however, have the
nght to assign its nghts under this Agreement or any interest therein, without
the prior written consent of Lender.
Survival. All warranties, representations, and agreements of Borrower in this
Agreement shall survive the making of the Loan or Loans contemplated hereby, and
shall be deemed made and redated by Bonrower at the time of the making of each
disbursement of Loan proceeds.
Time Is of the Essence. Time is of the essence in the performance of this
Agreement.
Waiver. Indulgence by Lender with respect to any of the terms and conditions of
this Agreement or the failure of Lender to exercise any of its rights under this
Agreement shall not constitute a waiver thereof, and Borrower shall remain
liable for the strict performance of such terms and conditions until this
Agreement shall be terminated. No provision of this Agreement may be waived or
mod)fied orally, but all such waivers or mod)fications shall be in wnting.
Whenever the consent of Lender is required under this Agreement, the granting of
such consent by Lender in one instance shall not constitute Lender's continuing
consent in subsequent instances, and in all cases such consent may be granted or
withheld in the sole discretion of Lender.
08-21-1997 BUSINESS LOAN AGREEMENT Page 4
Loan No 9008949 (Continued)
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BORROWER:
Colonial Downs Holdings, Inc.
By: /s/ O. Xxxxx Xxxxxxxx, III [SEAL]
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O. Xxxxx Xxxxxxxx, III, President
GRANTOR:
Citizens and Farmers Bank
By: /s/ X. X. Xxxxxxxx [SEAL]
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Authorized Officer
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