SECOND AMENDMENT TO THE JULY 2009 AMENDED AND RESTATED SECURITY AGREEMENT AND SCHEDULE OF COLLATERAL
SECOND AMENDMENT TO THE JULY 2009 AMENDED AND RESTATED
SECURITY AGREEMENT AND SCHEDULE OF COLLATERAL
This Second Amendment to the July 2009 Amended and Restated Security Agreement (“Amendment”) is made to be effective as of October 7 2011, 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”), as the relevant parties to the ARSA (as defined in the Recitals below)
I. 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, as well as several other NGC wholly or partially-owned subsidiaries. Finally, Xxxxxx and NGC, as well as several other NGC wholly or partially-owned subsidiaries, entered into that certain Schedule of Collateral, Notes, Security Interests, and Ownership Interests dated July 7, 2009 (“Schedule”). The Note, ARSA, and Schedule are collectively referred to in this Amendment as the “Loan Documents.”
B. NGC desires that Xxxxxx agree to extend the maturity date of the Note from June 30, 2013, until June 30, 2015. NGC also desires that Xxxxxx subordinate her security interest in its ownership interest in NG Washington, LLC, a Washington state limited liability company, to Xxxxx Fargo Gaming Capital, LLC, acting in its capacity as administrative agent for certain lenders pursuant to that certain Credit Agreement dated October 7, 2011 (“WFGC”), reducing her first lien on this asset to a second lien, and that Xxxxxx clarify with certainty the assets on which she claims a lien.
C. In exchange for these concessions requested by NGC, Xxxxxx desires that NGC pay down the principal of the Xxxxxx’ Loan Proceeds by Two Million and No/100 Dollars ($2,000,000.00), leaving a principal amount due of Four Million and No/100 Dollars ($4,000,000.00), on or before the date of this Amendment. Xxxxxx also desires that NGC agree to increase the interest rate on the principal amount remaining due from 11% per annum to 11.5% per annum.
D. Both NGC and Xxxxxx agree to these amendments described above and agree to execute all documents necessary to effect the agreed amendments. This Amendment shall document Xxxxxx’ subordination of her security interest in and to NGC’s ownership interest in NG Washington, LLC, to WFGC, contingent upon NGC’s compliance with all of the terms and conditions set forth below. All capitalized terms not defined in this Amendment have the meanings attributed to them in the ARSA.
II. Agreements
In exchange for the good and valuable consideration described above, the receipt and sufficiency of which is mutually acknowledged, the parties to this Amendment agree as follows:
A. Amendments to the ARSA and Schedule.
1. By this Amendment, Xxxxxx agrees to and does amend Section II(A)(2)(k) of the ARSA, which gives Xxxxxx a security interest in NGC’s ownership interest in NG Washington, LLC, to state as follows:
NGC’s 100% interest in NG Washington, L.L.C., a Washington State limited liability company, although this interest shall be wholly subordinated to WFGC and WFGC only, with Xxxxxx’ in second lienholder status as to this asset behind WFGC.
2. Xxxxxx also agrees and does amend the Schedule to note her agreed subordination of her security interest in NG Washington, LLC, to WFGC, and her agreement to stand in second lienholder status to WFGC as to this asset.
3. By this Amendment, Xxxxxx agrees to and does amend Section II(B) by removing in its entirety the second paragraph in that section, which is as follows:
Notwithstanding the provisions of this Section or Section III(C), if NGC invests in a new subsidiary or acquires assets and the investment or acquisition is financed in whole or in part by a third party lender (and no proceeds of the Loan Documents are used by NGC to finance the investment or acquisition), then the “Collateral” as defined above shall not include NGC’s ownership interest in the new subsidiary or the acquired assets. Xxxxxx agrees to file a UCC-3 terminating any security interest Xxxxxx would otherwise have in NGC’s ownership interest in the new subsidiary or the acquired assets and shall provide, upon the reasonable request of NGC or its third party lender, written confirmation that the Collateral for the Loan Documents does not include NGC’s ownership interest in the new subsidiary or the acquired assets.
4. By this Amendment, Xxxxxx agrees to and does amend Section II(A)(2) by adding the following provision to the end of that Section:
Xxxxxx acknowledges and agrees that her security interest in the assets and properties of NGC extends only to the items listed and described in this Section and the Schedule dated October 7, 2011, and Xxxxxx releases and terminates any security interest in any other assets and properties of NGC not included or described in this Section or in the Schedule (including, without limitation, NGC’s membership interests in XX Xxxxxxxxxx XX Holdings, LLC, NG Washington III, LLC, NG South Dakota, LLC, and Nevada Gold Speedway, LLC).
B. No Other Provisions Amended. All other provisions in the ARSA not amended by this Amendment shall remain the same and unchanged, and in full force and effect.
C. UCC Filings. To the extent Xxxxxx has a security interest in NGC’s ownership interest in NG Washington, LLC, Xxxxxx agrees to file a UCC-3 financing statement(s) noting the amendments to that security interest set forth in this Amendment upon request by NGC.
D. Notice of Additional Lending. NGC agrees that it shall provide Xxxxxx with prompt notice of any additional funds loaned to it by WFGC, and of its receipt of any notice of default received from WFGC.
E. Confirmations.
1. Xxxxxx confirms to NGC that, as of October 7, 2011, and provided that all of the conditions set forth in Section II(F) below are met, Xxxxxx will subordinate her security interest in NGC’s ownership interest in NG Washington, LLC, in favor of WFGC, and she will then stand in second lienholder status as to this asset behind WFGC.
2. NGC ratifies and confirms that the ARSA and Schedule are and remain in full force and effect in accordance with their respective terms, as amended by this Amendment. Except as expressly provided in this Amendment, this Amendment does not constitute a waiver or modification of any of the other terms or provisions set forth in the ARSA or Schedule and shall not impair any other rights that Xxxxxx may now or subsequently have under or in connection with the ARSA and Schedule that are not expressly included in this Amendment.
F. Conditions Precedent to Effectiveness of this Amendment. NGC MUST execute this Amendment and all other amended loan documents provided by Xxxxxx to reflect all of the changes set forth in the recitals above as required by Xxxxxx and pay down the Note by $2,000,000.00, both as conditions precedent to the enforceability and effectiveness of this Amendment. If any single one of these conditions precedent is not met on or before October 14, 2011, then this Amendment is null, void, and of no force or effect.
G. Waiver. For the benefit of NGC, 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 ARSA arising on or before the date of this Amendment caused by NGC’s and any New NGC Entity’s acts or omissions in connection with any loans NGC may obtain from Xxxxx Fargo Gaming Capital, L.L.C.
H. No Impairment. Except as expressly provided in this Amendment, the amendments and waivers granted in this Amendment by Xxxxxx do not impair Xxxxxx’ right to insist upon strict compliance with the ARSA. The ARSA, as waived and amended by this Amendment, continues to bind and inure to the benefit of Xxxxxx, NGC, the NGC Guarantors, and their respective successors and permitted assigns.
I. Notices. Any and all notices or communications related in any way to this Amendment 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.
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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 Xxxxxxxxx, Assoc. 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: XXxxxxxxxx@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 |
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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0000 Xxxx Xxxxxxx, Xxxxx 000
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Xxxxxxx, Xxxxx 00000-0000
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The Xxxxxxxxx, 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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Notice may be delivered by facsimile
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E-mail address: XXxxxxx@XXxxxxxXxx.xxx
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with proof of receipt.
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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 Amendment 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.
J. Severability. If any provision of this Amendment 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 Amendment, but all other provisions shall remain in full force and effect.
K. Counterparts; Execution. This Amendment 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 Amendment 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 Amendment intends to be bound by the terms set forth in it.
L. Entire Agreement. This Amendment 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 regarding the specific matters contained in this Amendment, and all of the Loan Documents remain in full force and effect as amended by this Amendment.
M. Governing Law. This Amendment 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 Amendment and to submit this Amendment 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 Amendment.
The parties have executed and delivered this Amendment as of the date set forth in the introductory paragraph on the first page of this Amendment.
[Signatures follow on next page.]
Debtor:
Nevada Gold & Casinos, Inc.
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By:
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/s/ Xxxxxx X. Xxxxxxx
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October 10, 2011
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Xxxxxx X. Xxxxxxx, Chief Executive Officer
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Date of Signature
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Secured Party:
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/s/ Xxxxxx X. Xxxxxx
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October 3, 2011
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Xxxxxx X. Xxxxxx, as her Separate Property
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Date of Signature
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0000 Xxxx Xxxx
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Xxxxx, Xxxxx 00000-0000
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