AMENDMENT, WAIVER, AND RELEASE TO THE AMENDED AND RESTATED SECURITY AGREEMENT
AMENDMENT, WAIVER, AND
RELEASE
TO THE AMENDED AND RESTATED
SECURITY AGREEMENT
This Amendment, Waiver, and Release to
the Amended and Restated Security Agreement (“Agreement”) is made as of July 19,
2010, by and between Xxxxxx X. Xxxxxx, an individual who resides in Tyler, Xxxxx
County, Texas, as her separate property (“Xxxxxx”), and Nevada Gold &
Casinos, Inc., a Nevada corporation, with its principal place of business at 00
Xxxxx Xxxxxx Xxxx, Xxxxx 000X, Xxxxxxx, Xxxxx, 00000-0000 (“NGC”); Gold Mountain
Development, L.L.C., a Colorado limited liability company (“GMD”); CGC Holdings,
L.L.C., a Nevada limited liability company (“CGC”); Colorado Grande Enterprises,
Inc.,a Colorado corporation (“CGE”); and Nevada Gold BVR, L.L.C.,a Nevada
limited liability company (“NGBVR”); all as parties to the ARSA (as defined in
the Recitals below) and, together with NG Washington, LLC, a Washington limited
liability company (“NGW”), each in their respective separate capacities as “NGC
Guarantors” under the Loan Guaranty Agreement (as defined in the Recitals
below).
Recitals
A. NGC
currently owes Xxxxxx loans in an aggregate principal amount of Six Million and
No/100 Dollars ($6,000,000.00) (the “Xxxxxx’ Loan Proceeds”) pursuant to that
certain Amended and Restated Promissory Note from NGC to Xxxxxx dated July 7,
2009 (the “Note”), and secured at least in part by that certain Amended and
Restated Security Agreement (“ARSA”), also dated July 7, 2009, between Xxxxxx
and NGC, GMD, CGC, CGE, and NGBVR (collectively referred to with NGC as the “NGC
Loan Parties”).
B. The
NGC Guarantors are party to that certain guaranty agreement dated July 7, 2009
(“Loan Guaranty Agreement”) in which the NGC Guarantors each guaranty the
payment of all of NGC’s obligations to Xxxxxx under the Note, the ARSA, and the
other Loan Documents. The phrase “Loan Documents” is used throughout
this Agreement as it is defined in the ARSA.
C. XX
Xxxxxxxxxx XX, LLC (“NGWII”), is a newly-formed wholly-owned subsidiary of NGC
(and is not a Loan Party). NGWII entered into an asset purchase
agreement dated April 14, 2010 (“Asset Purchase Agreement”), with Xxxxx Xxxxxxxx
Limited in its capacity as court-appointed receiver (“Receiver”), in which NGWII
agreed to purchase from Receiver (the “Acquisition”), and subsequently operate,
seven mini-casinos in the State of Washington (the “New Card
Rooms”).
D. Concurrently
with the execution of the Asset Purchase Agreement, NGWII entered into a term
sheet dated April 14, 2010 (“Term Sheet”), with Fortress Credit Corp. (“FCC”),
in which FCC, on behalf of itself and its affiliates (collectively referred to
as “Fortress”), indicated its willingness, on an expressly non-binding and
uncommitted basis, to provide to NGWII or to one or more newly-formed
subsidiaries or affiliates of NGC, a portion of the purchase price consideration
for the New Card Rooms in an aggregate amount not to exceed Five Million Seventy
Thousand and No/100 Dollars ($5,070,000.00) (the “Fortress Credit Facility” and,
together with the Acquisition, the “Specified Transactions”).
E. Pursuant
to the Term Sheet, Fortress requires, among other things, that NGC and its new
subsidiaries and/or affiliates formed exclusively for the purposes of the
Specified Transactions (including, without limitation, NGWII) (collectively
referred to as the “New NGC Entities”), grant to Fortress a first priority,
perfected security interest in all of NGC’s ownership interests in the New NGC
Entities and in all of the assets of the New NGC Entities.
F. NGC
proposes to distribute to NGWII and permit NGWII to apply the Xxxxxx’ Loan
Proceeds, which remain in the “Projects Fund” to satisfy in cash the balance of
the purchase price consideration for the New Card Rooms not financed by the
Fortress Credit Facility. The “Projects Fund” is more particularly
described in Section II(D) of the ARSA and in the Agreement Regarding Use of
Proceeds of IC-BH Sale and Regarding Remaining Amount Due under the Amended and
Restated Credit Facility (as amended) dated November 13, 2007, between Xxxxxx,
NGC, and Black Hawk Gold, Ltd.
G. The
ARSA and the other Loan Documents contain prohibitions and other restrictions on
the ability of NGC to grant to third parties first priority liens over its
ownership interests in its newly-formed entities formed for the purpose of
acquiring assets and for these entities to grant first priority liens over their
respective assets.
H. NGC
has requested that Xxxxxx agree to amend the ARSA and the other Loan Documents
to permit NGC and the New NGC Entities to enter into the Fortress Credit
Facility and to perform their respective obligations under it (as contemplated
by the Term Sheet), and Xxxxxx has agreed to this request upon the terms and
subject to the conditions contained in this Agreement.
Agreements
For good and valuable consideration,
the receipt and sufficiency of which is mutually acknowledged, the parties to
this Agreement agree as follows:
1. Defined
Terms. Capitalized terms not defined in this Agreement
(including the Preamble and Recitals above) shall have the meanings ascribed to
them in the ARSA.
2. Amendments to ARSA and other
Loan Documents. By this Agreement, Xxxxxx agrees to and does
amend any and all provisions of the Loan Documents prohibiting, limiting, or
otherwise restricting in any way NGC’s and the New NGC Entities’ entry into the
Fortress Credit Facility and performance of their respective obligations
contained in the Term Sheet (the “Fortress Transactions”) for the benefit of
NGC, the New NGC Entities, and Fortress by completely removing those
restrictions. NGC and the New NGC Entities have Xxxxxx consent to
grant Fortress priority perfected security interests and liens (the “Permitted
Fortress Liens”) over the respective assets of NGC and the New NGC Entities, as
more particularly described in Recital E above and the Term Sheet, to secure
NGC’s obligations under the Fortress Credit Facility. The assets
excluded from the ARSA by this Agreement are referred to as the “Excluded
Collateral.”
3. Release. To
the extent Xxxxxx’ has any security interest in the Excluded Collateral, Xxxxxx
releases all her security interests in the Excluded Collateral and authorizes
NGC to file the UCC-3 financing statement(s) in the form attached to this
Agreement as Exhibit A with the appropriate filing office(s) in the applicable
state(s).
4. Confirmations.
x. Xxxxxx
confirms to NGC and Fortress that, from and including the date of this
Agreement, Xxxxxx has no security interest in the Excluded Collateral and that
the Excluded Collateral do not and will not constitute at any time Collateral
(as that term is defined in the ARSA) securing any obligations owed by NGC to
Xxxxxx pursuant to or under the Loan Documents.
b. NGC
ratifies and confirms that the Loan Documents are and remain in full force and
effect in accordance with their respective terms, as amended by this
Agreement. In addition, each of the NGC Guarantors acknowledges,
agrees, accepts, and consents to the terms and provisions of this Agreement and
of the Loan Documents as amended by this Agreement. Except as
expressly provided in this Agreement, this Agreement does not constitute a
waiver or modification of any of the terms or provisions set forth in the Loan
Documents and shall not impair any right that Xxxxxx may now or subsequently
have under or in connection with the Loan Documents.
5. Waiver. For
the benefit of NGC and Fortress, Xxxxxx irrevocably waives any and all known or
unknown Defaults or Events of Default (if any) and any and all of her other
rights and remedies under the Loan Documents arising on or before the date of
this Agreement caused by NGC’s and any New NGC Entity’s acts or omissions in
connection with the Fortress Transactions.
6. No
Impairment. Except as expressly provided in this Agreement,
the amendments and waivers granted in this Agreement by Xxxxxx do not impair
Xxxxxx’ right to insist upon strict compliance with the Loan
Documents. The Loan Documents, as waived and amended by this
Agreement, continue to bind and inure to the benefit of Xxxxxx, NGC, the NGC
Guarantors, and their respective successors and permitted assigns.
7. Notices. Any
and all notices or communications related in any way to this Agreement may be
given by certified mail with return receipt requested, by receipted courier, by
overnight delivery service, or by hand delivery and sent to the persons at the
addresses set forth for each party below, or they may be given by facsimile
transmission or by e-mail transmission if the intended recipient has
affirmatively stated that notice may be delivered by facsimile or e-mail and the
intended recipient has provided a valid facsimile number and/or e-mail
address. Any notice delivered by facsimile or e-mail sent or for
which a return receipt is received at any time before 5:00 p.m. on a business
day shall be deemed to be delivered on that date. Any facsimile or
e-mail notice not received by 5:00 p.m. on a business day shall be deemed to be
received on the first following business day.
[This
space has been intentionally left blank.]
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Notices
to NGC:
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with a copy sent contemporaneously to: | ||
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Xxxxxx
X. Xxxxxxx, CEO
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Xxxxxx X. East, General Counsel | ||
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Nevada
Gold & Casinos, Inc.
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Nevada Gold & Casinos, Inc. | ||
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00
Xxxxx Xxxxxx Xxxx, Xxxxx 000X
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00 Xxxxx Xxxxxx Xxxx, Xxxxx 000X | ||
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Xxxxxxx,
Xxxxx 00000-0000
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Xxxxxxx, Xxxxx 00000-0000 | ||
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Facsimile
number: (000) 000-0000
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Facsimile number: (000) 000-0000 | ||
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E-mail:
XXxxxxxx@XxxxxxXxxx.xxx
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E-mail: XXxxx@XxxxxxXxxx.xxx | ||
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Notice
may be delivered by facsimile or
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Notice may be delivered by facsimile or | ||
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e-mail
with proof of receipt.
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e-mail with proof of receipt. | ||
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Notices
to Xxxxxx:
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Xxx.
Xxxxxx X. Xxxxxx
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0000
Xxxx Xxxx
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Xxxxx,
Xxxxx 00000-0000
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with
copies sent contemporaneously to:
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Xxxxxx
X. Xxxxxx
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and
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W.
Xxxxxxx Xxxxxxxxx
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Attorney
at Law
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0000
Xxxx Xxxxxxx, Xxxxx 000
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||
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0000
Xxxx Xxxxxxx, Xxxxx 000
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Xxxxxxx,
Xxxxx 00000-0000
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||
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The
Xxxxxxxxx, Xxxxx 00000-0000
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Facsimile
number: (000) 000-0000
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||
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Facsimile
number: (000) 000-0000
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Notice
may be delivered by facsimile
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||
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E-mail
address: XXxxxxx@XXxxxxxXxx.xxx
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with
proof of receipt.
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||
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Notice
may be delivered by facsimile or
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e-mail
with proof of receipt.
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NGC
understands and agrees that any notice given or attempted to be given by it to
Xxxxxx is not effective unless the notice was contemporaneously
provided to all other persons identified above or subsequently identified to NGC
by Xxxxxx and shall be deemed to have been given to Xxxxxx upon providing notice
to Xx. Xxxxxx and Xx. Xxxxxxxxx as set forth above. Any of the above
contact information or designated representatives for the purpose of notice may
be changed by a party or an authorized representative of a party providing
written notice in the manner set forth above to the other party, and the new
contact information or representative will then become effective. For
all purposes under this Agreement, any notice given by Xx. Xxxxxx or Xx.
Xxxxxxxxx (or other any other legal counsel or financial advisor designated by
Xxxxxx) on behalf of Xxxxxx shall constitute notice by Xxxxxx.
8. Severability. If
any provision of this Agreement is determined to be in violation of any law,
rule, or regulation, or to be otherwise unenforceable, that determination shall
not affect the validity of any other provisions of this Agreement, but all other
provisions shall remain in full force and effect.
9. Counterparts;
Execution. This Agreement may be executed in any number of
counterparts and by a different party on separate counterparts, each of which,
when executed and delivered, will be deemed an original, and all of which, when
taken together, shall constitute one and the same agreement. Delivery
of an executed counterpart of this Agreement via facsimile transmission or in
PDF format by electronic mail shall be binding and as effective as delivery of a
manually-executed counterpart, and may be used as admissible evidence that the
party transmitting the signed Agreement intends to be bound by the terms set
forth in it.
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10. Entire
Agreement. This Agreement supersedes and is in lieu of any and
all prior or contemporaneous agreements, communications, or understandings,
whether written or unwritten, verbal or tacit, or implied by prior dealings,
between the parties.
11. Third Party
Beneficiaries. Fortress and its successors and assigns
are intended to be, and are, third party beneficiaries of Xxxxxx’ obligations
under this Agreement and no amendment or waiver of any provision of this
Agreement shall be effective unless in writing and signed by
Fortress.
12. Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas (without giving effect to
conflict of laws principles).
The
parties acknowledge that they have had an adequate opportunity to review each
and every provision contained in this Agreement and to submit this Agreement to
legal counsel for review and comment. Based on this acknowledgement,
the parties agree that the rule of construction that a contract be construed
against the drafter, if any, not be applied in the interpretation and
construction of this Agreement.
[Signatures
are on the following page.]
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The
parties have executed and delivered this Agreement as of the date first written
above.
Nevada
Gold & Casinos, Inc.
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By:
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/s/
Xxxxxx X. Xxxxxxx,
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Xxxxxx
X. Xxxxxxx, Chief Executive
Officer
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Guarantors:
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Gold
Mountain Development, L.L.C.
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CGC
Holdings, L.L.C.
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By:
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/s/
Xxxxxx X. Xxxxxxx
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By:
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/s/
Xxxxxx X. Xxxxxxx
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Xxxxxx
X. Xxxxxxx, Manager
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Xxxxxx
X. Xxxxxxx, Manager
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Colorado
Grande Enterprises, Inc.
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Nevada
Gold BVR, L.L.C.
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By:
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/s/
Xxxxxx X. Xxxxxxx
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By:
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/s/
Xxxxxx X. Xxxxxxx
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Xxxxxx
X. Xxxxxxx, President
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Xxxxxx
X. Xxxxxxx, Manager
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Secured
Party:
/s/
Xxxxxx X. Xxxxxx
Xxxxxx X.
Xxxxxx, as her Separate Property
0000 Xxxx
Xxxx
Xxxxx,
Xxxxx 00000-0000
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