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EXHIBIT 10.27
THIS DOCUMENT WAS DRAFTED BY
AND WHEN RECORDED RETURN TO:
Xxxxxx X. Norwich, Esq.
XXXXXXXXXXX XXXXX & XXXXXXXX
3400 Plaza VII Building
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
THIS DOCUMENT IS ALSO TO BE FILED AS A FIXTURE FILING IN THE REAL ESTATE
RECORDS OF TELLER COUNTY, COLORADO AND CONSTITUTES A FIXTURE FILING.
INFORMATION CONCERNING THE GRANTOR AND THE PROPERTY COVERED BY THIS FILING ARE
CONTAINED HEREIN.
DEED OF TRUST
and
SECURITY AGREEMENT
and
FIXTURE FILING
and
FINANCING STATEMENT
THIS INSTRUMENT (hereinafter referred to as "Deed of Trust"), is made and
given this 22nd day of October, 1996, by NATIONAL GAMING COMPANIES, INC., a
Minnesota corporation ("Borrower") and 000 XXXXX XXXXXX LIMITED PARTNERSHIP, a
Minnesota limited partnership ("Partnership") (both Borrower and Partnership
being herein sometimes collectively referred to as "Grantor"), each of whose
post office address is 0000 Xxxx 00xx Xxxxxx, Xxxxx 000, Xxxx Xxxxxxx,
Xxxxxxxxx 00000 to PUBLIC TRUSTEE OF THE COUNTY OF TELLER, COLORADO
("Trustee"), for the benefit of XXXXXX & XXXXXXXXX INVESTMENTS CORPORATION, a
Minnesota corporation ("Beneficiary"), whose post office address is 300
Pillsbury Center, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000.
PRELIMINARY STATEMENT OF FACTS:
A. The Borrower is the owner of those parcels of real estate situate
in City of Cripple Creek, County of Teller, State of Colorado as described in
Exhibit "A" attached hereto with the exception of Parcel No. 2.
B. The Partnership is the owner of Parcel No. 2 as described in
Exhibit "A" on which land there is located improvements which are operated as a
gaming casino commonly known as the "Jubilee Casino" ("Casino"). The other
parcels owned by the Borrower provide parking and other facilities for use by
the Casino. As used in this Deed of Trust the term
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"Premises" includes all of real property and improvements thereon described in
Exhibit "A" attached ("Premises").
C. The Borrower is a limited partner of the Partnership holding a
97.165647% interest in the Partnership. Cripple Creek Corporation, a Minnesota
corporation, is also a partner of the Partnership and holds a 2% interest as
general partner and holds the remaining percentage interest of the Partnership
as a limited partner.
D. The Beneficiary is making a loan to the Borrower in the amount of up to
Three Million Five Hundred Sixty-Four Thousand and no/100 Dollars
($3,564,000.00) ("Loan") the proceeds of which are being used to among other
things reimburse the Borrower for costs of acquiring its interest in the
Partnership, the stock of Cripple Creek Corporation, the Premises, to retire
existing indebtedness of the Partnership, to pay off short term debt of the
Partnership, to cover future development costs and to fund various reserves
required by the Beneficiary.
E. The Loan is evidenced by a Promissory Note dated of even date herewith
executed and delivered by the Borrower to the Beneficiary in the principal sum
of Three Million Five Hundred Sixty-Four Thousand and no/100 Dollars
($3,564,000.00) ("Note").
F. The Note bears interest at a variable per annum rate of interest equal
to 225 Basis Points plus the "Base Rate" of Norwest Bank Minnesota, National
Association, Main Office, Minneapolis, Minnesota, as such Base Rate changes from
time to time all as more fully set forth in the Note ("Interest Rate") except
that during the period of and continuance of a default under the Note or Event
of Default under this Deed of Trust the Note shall bear interest at a per annum
rate of interest of Four percent (4%) percent in excess of the interest rate
then in effect on the Note whether or not the Beneficiary has exercised its
option to accelerate the maturity of the Note and declare the entire unpaid
Indebtedness Secured Hereby due and payable as more fully set forth in the Note
("Default Rate").
G. The Partnership is executing and delivering to the Beneficiary its
Guaranty of the Note to be dated of even date herewith ("Guaranty") and which
Guaranty is also executed by Xxxxxx Xxxxxxx, Xxxxxxx Xxxxx, Xxxxx Xxxxxxx,
Xxxxxxxx XxXxxxx, Xxxx Xxxxxxxxxxx and National Lodging Companies, Inc., a
Minnesota corporation. All of such parties including the Partnership are herein
referred to as the "Guarantors".
H. As security for the repayment of the Loan as evidenced by the Note and
to secure the obligations of the Partnership under the Guaranty, and in order to
induce the Beneficiary to extend the Loan to the Borrower and in recognition
that the Borrower, as majority partner in the Partnership will be using the
funds to retire the existing indebtedness on the Casino, the Partnership is
executing this Deed of Trust.
I. The Note is payable in installments with a final installment payment of
principal and interest due on May 1, 1998 ("Maturity Date").
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J. As used herein the term "Note Rate" shall mean the rate of interest
then in effect on the Note whether the Interest Rate or Default Rate, as the
case may be.
K. As used herein the term "Grantor" shall include both the Borrower and
the Partnership in their capacities as co-grantors under this Deed of Trust.
NOW, THEREFORE, in consideration of the Loan evidenced by the Note and of
the sum of One and 00/100 Dollar ($1.00) paid by the Beneficiary to the
Grantor, the receipt whereof is hereby acknowledged, and for the purposes
aforesaid the Grantor hereby GRANTS, BARGAINS, SELLS, TRANSFERS AND CONVEYS
unto the Trustee, its successors and assigns, forever, AND GRANTS TO THE
BENEFICIARY A SECURITY INTEREST IN all of the following properties hereinafter
set forth (all the following being hereinafter collectively referred to as the
"Premises"):
A. REAL PROPERTY
All the tracts or parcels of real property lying and being in the County of
Teller, State of Colorado, all as more fully described in Exhibit "A" attached
hereto and made a part hereof, together with all the estates and rights in and
to the real property and in and to lands lying in streets, alleys and roads
adjoining the real property and all buildings, structures, improvements,
fixtures and annexations, access rights, easements, rights of way or use,
servitudes, licenses, tenements, hereditaments and appurtenances now or
hereafter belonging or pertaining to the real property; together with all water
rights (whether riparian, appropriative or otherwise whether or not appurtenant)
now or hereafter relating to or used in connection with the real property, and
all shares of stock, if any, evidencing such rights ("Real Property"), and
B. PERSONAL PROPERTY
All buildings, improvements, personal property, fixtures, fittings and
furnishings, now owned, licensed or leased or hereafter acquired by the Grantor
and now or hereafter attached to, located at, or placed in the improvements on
the real property described herein including, without limitation all machinery,
fittings, fixtures, apparatus, equipment or articles used to supply heating,
gas, electricity, air conditioning, water, light, waste disposal, power,
refrigeration, ventilation, and fire and sprinkler protection; all maintenance
supplies and repair equipment; all draperies, carpeting, floor coverings,
screens, storm windows and window coverings, blinds, awnings, shrubbery and
plants; all elevators, escalators and shafts, motors, machinery, fittings and
supplies necessary for their use; all building materials and supplies now or
hereafter delivered to the Premises, and
C. ACCOUNTS
All Accounts now owned or hereafter acquired by the Grantor and, which in
any event, includes, without limitation, (i) all accounts receivable, book debts
and other forms of obligations now owned or hereafter received or acquired by or
belonging or owing to the
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Grantor (including, without limitation, under any trade name, style or division
thereof) whether arising out of goods sold or services rendered by the Grantor,
or from any other transaction, whether or not the same involves the sale of
goods or services by the Grantor (including, without limitation, any such
obligation which might be characterized as an account or contract right under
the UCC), (ii) all of the Grantor's rights in, to and under all purchase orders
or receipts now owned or hereafter acquired by it for goods or services, and all
of the Grantor's rights to any goods represented by any of the foregoing
(including, without limitation, unpaid seller's rights of rescission, repletion,
reclamation and stoppage in transmit and rights to returned, reclaimed or
repossessed goods), (iii) all moneys due or to become due to the Grantor under
all contracts for the sale of goods or the performance of services or both by
the Grantor (whether or not yet earned by performance on the part of the Grantor
or in connection with any other transaction), now in existence or hereafter
occurring, including, without limitation, the right to receive the proceeds of
said purchase orders and contracts, and (iv) all collateral security and
guarantees of any kind given by any person with respect to any of the foregoing,
and
D. INCOME
All income derived from the operations conducted in the Casino including
all cash, all bank accounts and all payments from any consumer credit/charge
card organization, whether or not now existing or owed or hereinafter credited
or owed, and all proceeds of the foregoing, whether cash or non-cash, and
E. COMPUTER HARDWARE AND SOFTWARE
All computer hardware and software and which in any event includes (i) all
computer and other electronic data processing hardware, whether now owned,
licensed or leased or hereafter acquired by the Grantor, including, without
limitation, all integrated computer systems, central processing units, memory
units, display terminals, printers, features, computer elements, card readers,
tape drives, hard and soft disk drives, cables, electrical supply hardware,
generators, power equalizers, accessories and all peripheral devices and other
related computer hardware; (ii) all software programs, whether now owned,
licensed or leased or hereafter acquired by the Grantor, designed for use on the
computers and electronic data processing hardware described in clause (i) above,
including, without limitation, all operating system software, utilities and
application programs in whatsoever form (source code and object code in magnetic
tape, disk or hard copy format or any other listings whatsoever); (iii) all
firmware associated therewith, whether now owned, licensed or leased or
hereafter acquired by the Grantor including, without limitation, flow charts,
logic diagrams, manuals, specifications, training materials, charts and pseudo
codes; (iv) all documentation for such hardware, software and firmware described
in the preceding clauses (i), (ii) and (iii) above, and (v) all rights with
respect thereto, including, without limitation, any and all licenses, options,
warranties, service contracts, program services, test rights, maintenance
rights, support rights, improvement rights, renewal rights and indemnifications,
and any substitutions, replacements, additions or modern conversions of any of
the foregoing; whether now owned, licensed or leased or hereafter acquired by
the Grantor.
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F. CONTRACTS
All Contracts, undertakings or other agreements in or under which the
Grantor may now or hereafter have any right, title or interest, including,
without limitation, with respect to an Account, any agreement relating to the
terms of payment or the terms of performance thereof, and
G. EQUIPMENT
All Equipment whether now owned, licensed or leased or hereafter acquired
by the Grantor and, which in any event, includes, without limitation, (i) all
equipment and fixtures of every kind and nature owned by Grantor used in
connection with the gaming operations in the Casino included but not limited to
all gaming tables, slot machines, computerized games and other electronic
equipment, (ii) tables, chairs, booths, bar equipment, utensils, food service
equipment, all equipment used in preparing food for use in the Casino,
freezers, refrigerators, dishwashers, ice machines and entertainment equipment;
(iii) all televisions, radios, cabling, phone and communications systems, and
wiring, cash registers, office equipment, coin wrappers, and the like used in
operating the Casino (iv) all ground keeping lawn sprinklers and lawn
maintenance systems owned by Grantor; (v) all vehicles used in the Casino
operations including courtesy vans and courtesy cars; (vi) all food stock,
liquor and inventory on hand or on order for the food and beverage service
provided in the Casino; (vii) all cleaning supplies and equipment; (viii) all
convenience items furnished to guests of the Casino; and all stationery,
brochures, booklets, written materials and writing supplies furnished or made
available to the guests of the Casino, (ix) all of the furniture, fixtures and
equipment owned by Grantor used in the operation of the Premises as a gaming
casino including but not limited to all carpeting, floor coverings, draperies,
curtains, lamps, beds, mattresses, box springs, towels, linens, chests, chairs,
lobby furniture and other furniture used in the operation of the Casino, (x)
all security systems, cameras, monitors, security devices and wiring, and (xi)
all other machinery, equipment, furnishings, fixtures, vehicles, computers and
other electronic data-processing and office equipment and any and all
additions, substitutions and replacements of any of the foregoing, wherever
located, together with all attachments, components, parts, equipment and
accessories installed thereon or affixed thereto, and
H. GENERAL INTANGIBLES
All General Intangibles now owned, licensed or leased, or hereafter
acquired by the Grantor and, which in any event, includes, without limitation,
customer lists, trademarks, patents, rights in intellectual property, licenses,
permits, copyrights, trade secrets, proprietary or confidential information,
inventions (whether patented or patentable or not) and technical information,
procedures, designs, knowledge, know-how, software data bases, data, skill,
expertise, experience, processes, models, drawings, materials and records,
goodwill, rights of indemnification, all right, title and interest which the
Grantor may now or hereafter have in or under any Contract, and now owned or
hereafter acquired by the Grantor, all licenses and permits used, useful or
necessary in the operation of the Casino, all liquor licenses, gaming
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licenses, elevator permits, beverage and food licenses, all right and interest
and into the use of the name and logo "Jubilee Casino" and "Jubilee Casino and
Old Homestead" and all derivatives thereof, all books, records, writings, data
bases, information and other property relating to, used or useful in connection
with, evidencing, embodying, incorporating, or referring to any of the
foregoing, and
I. INSURANCE PROCEEDS AND AWARDS
All awards, payments, proceeds now or hereafter obtainable by Grantor under
any policy of insurance insuring the Premises including but not limited to the
proceeds of casualty insurance, title insurance, business interruption/rents
insurance or other insurance maintained with respect to the Premises whether by
Grantor or otherwise, and
J. RENTS, INCOME, LEASES AND PROFITS
All rents, income, contract rights, leases and profits now due or which may
hereafter become due under or by virtue of any lease, license or agreement,
whether written or verbal, for the use or occupancy of the Premises or any part
thereof together with all tenant security deposits, and
K. CONDEMNATION AWARDS
All awards, compensation and settlements in lieu thereof made as a result
of the taking by power of eminent domain of the whole or any part of the
Premises, including any awards for damages sustained to the Premises, for a
temporary taking, change of grade of streets or taking of access; and
L. INVENTORY
All inventory of Grantor, whether now owned or hereafter acquired and
wherever located.
Together with improvements, accessions, appurtenances, substitutions and
replacements thereof, insurance proceeds and condemnation awards payable
therefrom together with all proceeds and products thereof and all rights
thereto now or hereafter existing.
It is specifically understood that the enumeration of any specific articles
of property shall in nowise exclude or be held to exclude any items of property
not specifically mentioned. All of the Premises hereinabove described, real,
personal and mixed, whether affixed or annexed or not, and all rights hereby
conveyed and Deed of Trust are intended to be as a unit and are hereby
understood and agreed and declared to be appropriated to the use of the
Premises, and shall for the purposes of this Deed of Trust be deemed to be real
estate and conveyed and Deed of Trust hereby.
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THIS CONVEYANCE IS MADE IN TRUST, HOWEVER, to secure
(i) payment by the Borrower, its successors and assigns, to the
Beneficiary, its successors and assigns, the sum of Three Million Five
Hundred Sixty-Four Thousand and no/100 Dollars ($3,564,000.00),
according to the terms of the Note, or so much as is from time to time
disbursed thereon, the terms and conditions of which are incorporated
herein by reference and made a part hereof, together with any
extensions or renewals thereof, due and payable with interest thereon
at the Note thereon being due and payable in any event on the Maturity
Date; and
(ii) payment to the Beneficiary, its successors and assigns, at the
times demanded and with interest thereon at the Note Rate, all sums
advanced (a) in protecting the lien of this Deed of Trust, (b) in
payment of taxes on the Premises, (c) in payment of insurance premiums
covering improvements thereon, (d) in payment of principal and
interest on prior liens, (e) in payment of expenses and attorneys fees
herein provided for, and (f) all sums advanced for any other purpose
authorized herein; and
(iii) the keeping and performance of the obligations of the Partnership
under the Guaranty; and
(iv) the keeping of and performance of the covenants and agreements
herein contained; and
(v) the keeping of and performance of all of the terms and conditions of
any instrument given as collateral for the Loan.
The Note and all such sums, together with interest thereon, being collectively
referred to as the "Indebtedness Secured Hereby".
AND IT IS FURTHER COVENANTED AND AGREED AS FOLLOWS:
I. GENERAL COVENANTS, AGREEMENTS, WARRANTIES
1.1 Payment of Indebtedness: Observance of Covenants. Borrower shall
duly and punctually pay each and every installment of principal and interest on
the Note and all other Indebtedness Secured Hereby, as and when the same shall
become due, and shall duly and punctually perform and observe all of the
covenants, agreements and provisions contained herein, in the Note and any other
instrument given as security for the payment of the Note.
1.2 Performance of Guaranty. The Partnership shall duly and punctually
keep and perform all of its obligations under the Guaranty.
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1.3 Maintenance: Repairs. Grantor shall not abandon the Premises, shall
keep and maintain the Premises in good condition, repair and operating
condition, normal wear and tear excluded, free from any waste or misuse, and
shall promptly repair or restore any buildings, improvements or structures now
or hereafter on the Premises which may become damaged or destroyed to their
condition prior to any such damage or destruction. Grantor further agrees that
it will not expand any improvements on the Premises, erect any new improvements
or make any material alterations in any improvements which shall alter the basic
structure, adversely affect the market value or change the existing
architectural character of the Premises, nor remove or demolish any improvements
without suitable replacement thereof, and shall complete within a reasonable
time any buildings now or at any time in the process of remodeling on the
Premises; provided nothing herein shall preclude Grantor from constructing
improvements necessary or desirable to the use of the Premises for Grantor's
business purposes which are non-structural in nature and which do not constitute
material alterations to the Premises or affect the nature of use, structure or
utility of the Premises or decrease the market value of the Premises.
1.4 Compliance with Laws. Grantor shall comply with all requirements of
law, municipal ordinances and regulations affecting the Premises, shall comply
with all private restrictions and covenants affecting the Premises and shall not
acquiesce in or seek any rezoning classification affecting the Premises.
1.5 Payment of Operating Costs: Prior Deed of Trusts and Liens. Grantor
shall pay all operating costs and expenses of the Premises, shall keep the
Premises free from levy, attachment, mechanics', materialmen's and other liens
("Liens") and shall pay when due all indebtedness which may be secured by Deed
of Trust, lien or charge on the Premises.
1.6 Payment of Impositions. Grantor shall pay when due and in any event
before any penalty attaches all taxes, assessments, governmental charges, water
charges, sewer charges, and other fees, taxes, charges and assessments of every
kind and nature whatsoever assessed or charged against or constituting a lien on
the Premises or any interest therein ("Impositions") and will upon demand
furnish to the Beneficiary proof of the payment of any such Impositions. In the
event of a court decree or an enactment after the date hereof by any legislative
authority of any law imposing upon a Beneficiary the payment of the whole or any
part of the Impositions herein required to be paid by the Grantor, or changing
in any way the laws relating to the taxation of Deed of Trusts or debts secured
by Deed of Trusts or a Beneficiary's interest in mortgaged premises, so as to
impose such Imposition on the Beneficiary or on the interest of the Beneficiary
in the Premises, then, in any such event, Grantor shall bear and pay the full
amount of such Imposition, provided that if for any reason payment by Grantor of
any such Imposition would be unlawful, or if the payment thereof would
constitute usury or render the Indebtedness Secured Hereby wholly or partially
usurious, Beneficiary, at its option, may declare the whole sum secured by this
Deed of Trust with interest thereon to be immediately due and payable, without
prepayment premium, or Beneficiary, at its option, may pay that amount or
portion of such Imposition as renders the Indebtedness Secured Hereby unlawful
or usurious, in which event Grantor
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shall concurrently therewith pay the remaining lawful and non-usurious portion
or balance of said Imposition.
1.7 Contest of Impositions, Liens and Levies. Grantor shall not be
required to pay, discharge or remove any Imposition or any Lien so long as the
Grantor shall in good faith contest the same or the validity thereof by
appropriate legal proceedings which shall operate to prevent the collection of
the Lien or Imposition so contested and the sale of the Premises, or any part
thereof, to satisfy the same, provided that the Grantor shall, prior to the date
such Lien or Imposition is due and payable, have given such reasonable security
as may be demanded by the Beneficiary to insure such payments plus interest or
penalties thereon, and prevent any sale or forfeiture of the Premises by reason
of such nonpayment. Any such contest shall be prosecuted with due diligence and
the Grantor shall promptly after final determination thereof pay the amount of
any such Lien or Imposition so determined, together with all interest and
penalties which may be payable in connection therewith. Notwithstanding these
provisions Grantor shall (and if Grantor shall fail so to do, Beneficiary, may
but shall not be required to) pay any such Lien or Imposition notwithstanding
such contest if in the reasonable opinion of the Beneficiary, the Premises shall
be in jeopardy or in danger of being forfeited or foreclosed.
1.8 Protection of Security. Grantor shall promptly notify Beneficiary of
and appear in and defend any suit, action or proceeding that affects the
Premises or the rights or interest of Beneficiary hereunder and the Beneficiary
may elect to appear in or defend any such action or proceeding. Grantor agrees
to indemnify and reimburse Beneficiary from any and all loss, damage, expense or
cost arising out of or incurred in connection with any such suit, action or
proceeding, including costs of evidence of title and reasonable attorney's fees
and such amounts together with interest thereon at the Note Rate shall become
additional "Indebtedness Secured Hereby" and shall become immediately due and
payable.
1.9 Annual Statements. Grantor shall furnish to the Beneficiary the
following information at the following times:
(a) as soon as available, and in any event within one hundred
twenty (120) days after the end of each fiscal year of Borrower, its annual
financial statement for such year, which annual report shall include its
balance sheet and related statements of income and expenses, shareholders'
equity and cash flow for the fiscal year then ended, all in reasonable
detail and all prepared in accordance with GAAP by a reputable accounting
firm.
(b) as soon as available, and in any event within one hundred twenty
(120) days after the end of each calendar year, a copy of the annual
financial statements of Partnership, which shall include the balance sheet
of Partnership as at the end of such year and related statements of income
and expenses, statements of changes in financial position, a statement of
changes in capital accounts and a statement of allocation of distribution
of profits and losses of the Partnership all in reasonable
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detail, prepared in accordance with GAAP (or tax accounting reconciled to
GAAP) by a reputable accounting firm.
(c) as soon as available, and within one hundred twenty (120) days
after the end of each calendar year, a current financial statement of each
of the Guarantors who are natural persons which statement shall include an
itemization of all assets and liabilities of the Guarantor scheduled by
item and type, all investments and contingent liabilities and adequate to
disclose the net worth of Guarantor at such point in time. Such financial
statement shall be personally certified by the Guarantor and shall be
accompanied by the annual federal income tax return of Guarantor, including
all schedules, for the preceding taxable year as filed with the Internal
Revenue Service.
(d) as soon as available, and in any event within one hundred twenty
(120) days after the end of each fiscal year of the corporate Guarantor,
its annual financial statement for such year, which annual report shall
include its balance sheet and related statements of income and expenses,
shareholders' equity and cash flow for the fiscal year then ended, all in
reasonable detail and all prepared in accordance with GAAP by a reputable
accounting firm.
In the event Grantor fails to furnish any such statements after written request
to Grantor, the same shall be an Event of Default and in addition to any other
remedies available to Beneficiary, the Beneficiary may cause an audit to be
made of the respective books and records at the sole cost and expense of the
Grantor. Beneficiary also shall have the right to examine at their place of
safekeeping at reasonable times all books, accounts and records relating to the
operation of the Premises.
1.10 Additional Assurances. Grantor agrees upon reasonable request by the
Beneficiary to execute and deliver such further instruments, deeds and
assurances including financing statements under the Uniform Commercial Code and
will do such further acts as may be necessary or proper to carry out more
effectively the purposes of this Deed of Trust and without limiting the
foregoing, to make subject to the lien hereof any property agreed to be
subjected hereto or covered by the granting clause hereof, or intended so to be.
Grantor agrees to pay any recording fees, filing fees, note taxes, Deed of Trust
registry taxes or other charges arising out of or incident to the filing or
recording of this Deed of Trust, such further assurances and instruments and the
issuance and delivery of the Note.
1.11 Current Compliance With Laws. The Premises as improved on the date
hereof, comply with all material requirements of laws, including requirements of
any Federal, State, County, City or other governmental authority having
jurisdiction over the Grantor or the Premises and including, but not limited to,
any applicable zoning, occupational safety and health, the Americans with
Disability Act, energy and environmental laws, ordinances and regulations; and
the Grantor has obtained all necessary consents, permits and licenses to
construct, occupy and operate the Premises for its intended purposes.
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1.12 Title. Grantor is the lawful owner of and has good and marketable fee
simple absolute title to the Premises and will warrant and defend title to the
same free of all liens and encumbrances, other than the Encumbrances permitted
under the Lender's Policy of title insurance issued to Beneficiary in connection
with this Deed of Trust and has good right and lawful authority to grant,
bargain, sell, convey, Deed of Trust and grant a security interest in the
Premises as provided herein.
1.13 Management Agreement. Grantor will punctually keep and perform all of
the terms and conditions of the Management Agreement, will keep the same free of
default.
1.14 Equipment Replacement. Grantor will keep all equipment, including
gaming equipment, in the Casino in good order and repair and condition and will
maintain adequate reserves for replacement of the same. As and when any item of
equipment becomes one or obsolete the Grantor shall replace the same with a
replacement item of equipment of same utility and value.
1.15 Licenses and Permits. Grantor shall obtain and keep in full force and
effect all licenses and permits required to operate the Casino and all their
components, shall pay all required license and permit fees thereunder and shall
not surrender or permit such licenses and permits to lapse or terminate without
the prior written consent of the Beneficiary.
1.16 Federal Wetlands. Parcel No. 5 of the Premises is currently subject
to Cease and Desist Order issued by the U.S. Army Corps of Engineers, Action No.
1992 30103 (the "Order"). The Grantor covenants and agrees to bring the parcel
into compliance with the requirements of the Nationwide Permit authorization for
work in Cripple Creek in the Town of Cripple Creek, Colorado and the
requirements of the Corps of Engineers and to cause the Order to be rescinded.
II. INSURANCE AND ESCROWS
2.1 Insurance. Grantor shall obtain, pay for and keep in full force and
effect during the term of this Deed of Trust at its sole cost and expense the
following policies of insurance:
(a) All risk/open perils special form property insurance with extended
coverages including any building contents, sprinkler coverage, Ordinance of
Law coverage (including demolition cost, loss to undamaged portions of any
buildings and increased cost of construction) with limits of 100%
replacement cost and with no co-insurance provision or if the insurance
carrier requires, co-insurance provisions with an agreed amount endorsement
in amount acceptable to Beneficiary;
(b) insurance against loss or damage from (i) leakage of sprinkler
systems and (ii) explosion of steam boilers, air conditioning equipment,
high pressure piping, machinery and equipment, pressure vessels or similar
apparatus now or hereafter
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installed in any improvements on the Premises and including broad form
boiler and machinery insurance (without exclusion for explosion) covering
all boilers or other pressure vessels, machinery and equipment (including
electrical equipment, sprinkler systems, heating and air conditioning
equipment, refrigeration equipment and piping) located in, on or about the
Premises and any improvements thereon in an amount at least equal to the
full replacement cost of such equipment and the building or buildings
housing the same;
(c) flood insurance if any part of the Premises now (or
subsequently determined to be) is located in an area identified by the
Federal Emergency Management Agency as an area having special flood hazards
and in which flood insurance has been made available under the National
Flood Insurance Act of 1968 (and amendment or successor act thereto) in an
amount at least equal to the lesser of the full replacement cost of all
buildings and equipment on the Premises, the outstanding principal amount
of the Note or the maximum limits of coverage available with respect to the
buildings and equipment under said Act;
(d) earthquake or sinkhole insurance, if available in the area where
the Premises are located, in an amount at least equal to principal balance
of the Note or the maximum limited of coverage available, whichever is
less;
(e) Business Interruption insurance covering risk of loss due to the
occurrence of any hazards insured against under the required fire and
extended coverage insurance in an amount equal to one (1) year's loss of
income as such income may change from time to time due to changes in income
from the Premises;
(f) commercial general liability insurance (including broad form
property damage, blanket contractual and personal injuries, including death
resulting therefrom) and with minimum policy limits per single occurrence
of $1,000,000.00 and $2,000,000.00 in the aggregate and with excess
umbrella coverage of at least $10,000,000.00;
(g) Workmen's Compensation - Statutory workmen's compensation
coverage in the required amounts.
(h) Liquor Liability Coverage ("Dram Shop" coverage) in the minimum
amount of (i) $3,000,000 or (ii) amounts as may be statutorily required,
unless included in Grantors' General Liability Insurance.
(i) If any safety deposit box is maintained for guests, Safe Deposit
Box Liability in minimal amounts of $1,000,000.
(j) Such other coverages appropriate to the Premises, its location
and use as Beneficiary may from time to time require such as earthquake,
mine subsidence,
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sinkhole, personal property supplemental liability, or coverages of other
property - specific risks.
Such insurance policies shall be written on forms and with insurance
companies satisfactory to Beneficiary, shall be in amounts sufficient to prevent
the Grantor from becoming a co-insurer of any loss thereunder, and shall bear a
satisfactory mortgagee clause in favor of the Beneficiary with loss proceeds
under any such policies to be made payable to the Beneficiary. Blanket policies
must include limits by property location. All required policies of insurance or
acceptable certificates thereof together with evidence of the payment of current
premiums therefor shall be delivered to and be held by the Beneficiary. The
Grantor shall, within thirty (30) days prior to the expiration of any such
policy, deliver other original policies or certificates of the insurer
evidencing the renewal of such insurance together with evidence of the payment
of current premiums therefor. In the event of a foreclosure of this Deed of
Trust or any acquisition of the Premises by the Beneficiary all such policies
and any proceeds payable therefrom, whether payable before or after a
foreclosure sale, or during the period of redemption, if any, shall become the
absolute property of the Beneficiary to be utilized at its discretion. In the
event of foreclosure or the failure to obtain and keep any required insurance
the Grantor empowers the Beneficiary to effect the above insurance upon the
Premises at Grantor's expense and for the benefit of the Beneficiary in the
amounts and types aforesaid for a period of time covering the time of redemption
from foreclosure sale, and if necessary therefor, to cancel any or all existing
insurance policies. Grantor agrees to pay Beneficiary such fees as may be
permitted under applicable law for the costs incurred by Beneficiary in
determining, from time to time, whether the Premises are located within an area
having special flood hazards. Such fees shall include the fees charged by any
organization providing for such services.
2.2 Escrows. Grantor shall deposit with the Beneficiary, or at
Beneficiary's request, with its servicing agent, on the first day of each and
every month hereafter as a deposit to pay the costs of taxes, assessments and
insurance premiums next due ("Charges"):
(a) Initially a sum such that the amounts to be deposited pursuant to
(b) next and such initial sum shall equal the estimated Charges for the
next due payment; and
(b) Thereafter an amount equal to one-twelfth (1/12th) of the
estimated annual Charges due on the Premises.
Beneficiary will, upon the presentation to the Beneficiary by the Grantor of the
bills therefor, pay the Charges from such deposits or will upon presentation of
receipted bills therefor, reimburse the Grantor for such payments made by the
Grantor. In the event the deposits on hand shall not be sufficient to pay all
of the estimated Charges when the same shall become due from time to time, or
the prior deposits shall be less than the currently estimated monthly amounts,
then the Grantor shall pay to the Beneficiary on demand any amount necessary to
make up the deficiency. The excess of any such deposits shall be credited to
subsequent payments to be made for such items. If a default or an event of
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default shall occur under the terms of this Deed of Trust the Beneficiary may,
at its option, without being required so to do, apply any deposits on hand to
the Indebtedness Secured Hereby, in such order and manner as the Beneficiary may
elect. When the Indebtedness Secured Hereby has been fully paid any remaining
deposits shall be returned to the Grantor as its interest may appear. All
deposits are hereby pledged as additional security for the Indebtedness Secured
Hereby, shall be held for the purposes for which made as herein provided, may be
held by Beneficiary or its servicing agent and may be commingled with other
funds of the Beneficiary, or its servicing agent, shall be held without any
allowance of interest thereon and shall not be subject to the decision or
control of the Grantor. Neither Beneficiary nor its servicing agent shall be
liable for any act or omission made or taken in good faith. In making any
payments, Beneficiary or its servicing agent may rely on any statement, xxxx or
estimate procured from or issued by the payee without inquiry into the validity
or accuracy of the same. If the taxes shown in the tax statement shall be levied
on property more extensive than the Premises, then the amounts escrowed shall be
based on the entire tax xxxx and Grantor shall have no right to require an
apportionment and Beneficiary or its servicing agent may pay the entire tax xxxx
notwithstanding that such taxes pertain in part to other property and the
Beneficiary shall be under no duty to seek a tax division or apportionment of
the tax xxxx.
III. UNIFORM COMMERCIAL CODE SECURITY AGREEMENT
3.1 Security Agreement. This Deed of Trust shall constitute a security
agreement as defined in the Uniform Commercial Code of the State of Colorado
("Code") in the items described in the Granting Clauses of this Deed of Trust
("Collateral"). Any Collateral installed in or used in the Premises are to be
used by the Grantor solely for Grantor's business purposes or as the equipment
and fixtures leased or furnished by the Grantor, as landlord, to tenants of the
Premises and such Collateral will be kept at the buildings on the Premises and
will not be removed therefrom without the consent of the Beneficiary and may be
affixed to such buildings but will not be affixed to any other real estate. The
remedies of the Beneficiary hereunder are cumulative and separate, and the
exercise of any one or more of the remedies provided for herein or under the
Uniform Commercial Code shall not be construed as a waiver of any of the other
rights of the Beneficiary including having any Collateral deemed part of the
realty upon any foreclosure thereof. If notice to any party of the intended
disposition of the Collateral is required by law in a particular instance, such
notice shall be deemed commercially reasonable if given at least ten (10) days
prior to such intended disposition and may be given by advertisement in a
newspaper accepted for legal publications either separately or as part of a
notice given to foreclose the real property or may be given by private notice if
such parties are known to Beneficiary. Neither the grant of a security interest
pursuant to this Deed of Trust nor the filing of a financing statement pursuant
to the Code shall ever impair the stated intention of this Deed of Trust that
all Collateral comprising the Premises and at all times and for all purposes and
in all proceedings both legal or equitable shall be regarded as part of the real
property conveyed hereunder irrespective of whether such item is physically
attached to the real property or any such item is referred to or reflected in a
financing statement. Grantor will on demand deliver all financing statements
that may from time to time be required by Beneficiary to
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establish, perfect and continue the priority of Beneficiary's security interest
in the Collateral and shall pay all expenses incurred by Beneficiary in
connection with the renewal or extensions of any financing statements executed
in connection with the Premises; and shall give advance written notice of any
proposed change in Grantor's name, identity or structure and will execute and
deliver to Beneficiary prior to or concurrently with such change all additional
financing statements that Beneficiary may require to establish and perfect the
priority of Beneficiary's security interest.
3.2 Maintenance Of Property. Subject to the provisions of this section,
in any instance where Grantor in its sound discretion determines that any
Collateral subject to a security interest under this Deed of Trust has become
inadequate, obsolete, worn out, unsuitable, undesirable or unnecessary for the
operation of the Premises, Grantor may, at its expense, remove and dispose of it
and substitute and install other items not necessarily having the same function,
provided, that such removal and substitution shall not impair the operating
utility and unity of the Premises. All substituted items shall become a part of
the Premises and subject to the lien of the Deed of Trust. Any amounts received
or allowed Grantor upon the sale or other disposition of the removed items of
Collateral shall be applied first against the cost of acquisition and
installation of the substituted items. Nothing herein contained shall be
construed to prevent any tenant from removing from the Premises trade fixtures,
furniture and equipment installed by the tenant and removable by the tenant
under its terms of the lease, on the condition, however, that the tenant shall
at its own cost and expense, repair any and all damages to the Premises
resulting from or caused by the removal thereof.
3.3 Fixture Filing. THIS DEED OF TRUST SHALL BE EFFECTIVE AS A FINANCING
STATEMENT FILED AS A FIXTURE FILING WITH RESPECT TO ALL GOODS CONSTITUTING A
PART OF THE COLLATERAL WHICH ARE OR ARE TO BECOME FIXTURES RELATED TO THE
PREMISES. FOR PURPOSES OF THE UNIFORM COMMERCIAL CODE THE FOLLOWING INFORMATION
IS FURNISHED:
(a) The name and address of the record owner of the real estate described
in this instrument is:
National Gaming Companies, Inc.
0000 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxx, Xxxxxxxxx 00000
000 Xxxxx Xxxxxx Limited Partnership
0000 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxx, Xxxxxxxxx 00000
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(b) The name and address of the Grantor is:
National Gaming Companies, Inc.
0000 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxx, Xxxxxxxxx 00000
000 Xxxxx Xxxxxx Limited Partnership
0000 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxx, Xxxxxxxxx 00000
(c) Grantor's Federal Tax ID No.:
National Gaming Companies, Inc.: 00-0000000
000 Xxxxx Xxxxxx Limited Partnership: 00-0000000
(d) the name and address of the Secured Party is:
Xxxxxx & Xxxxxxxxx Investments Corporation
000 Xxxxxxxxx Xxxxxx
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
(e) Information concerning the security interest evidenced
by this instrument may be obtained from the Secured Party at
its address above:
(f) This document covers goods which are or are to become
fixtures.
3.4 Grantor to Comply with Prior Security Instruments. Grantor shall
at its sole cost and expense perform, comply with and discharge all obligations
of Grantor under any prior secured financing arrangements (whether lease
purchase, conditional sales or pure lease arrangements) for any property subject
to this security interest. Grantor shall not permit a surrender, assignment or
transfer of its interest in any such property without the prior written consent
of Beneficiary nor permit or suffer a default to exist under such prior
financing arrangements.
IV. APPLICATION OF INSURANCE AND AWARDS
4.1 Damage or Destruction of the Premises. Grantor shall give the
Beneficiary prompt notice of any damage to or destruction of the Premises and in
case of loss covered by policies of insurance the Beneficiary is hereby
authorized at its option to settle and adjust any claim arising out of such
policies and collect and receipt for the proceeds payable therefrom, provided,
that the Grantor may itself adjust and collect for any losses arising out of a
single occurrence aggregating not in excess of Twenty-Five Thousand and 00/100
($25,000.00) Dollars. Any expense incurred by the Beneficiary in the adjustment
and collection of insurance proceeds (including the cost of any independent
appraisal of the loss
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or damage on behalf of Beneficiary) shall be reimbursed to the Beneficiary first
out of any proceeds. The proceeds or any part thereof shall be applied to
reduction of the Indebtedness Secured Hereby then most remotely to be paid,
whether due or not, without the application of any prepayment premium, or to the
restoration or repair of the Premises, the choice of application to be solely at
the discretion of Beneficiary.
4.2 Condemnation. Grantor shall give the Beneficiary prompt notice of
any actual or threatened condemnation or eminent domain proceedings affecting
the Premises and hereby assigns, transfers, and sets over to the Beneficiary the
entire proceeds of any award or claim for damages or settlement in lieu thereof
for all or any part of the Premises taken or damaged under such eminent domain
or condemnation proceedings, the Beneficiary being hereby authorized to
intervene in any such action and to collect and receive from the condemning
authorities and give proper receipts and acquittances for such proceeds. Grantor
will not enter into any agreements with the condemning authority permitting or
consenting to the taking of the Premises or agreeing to a settlement unless
prior written consent of Beneficiary is obtained. Any expenses incurred by the
Beneficiary in intervening in such action or collecting such proceeds, including
reasonable attorney's fees, shall be reimbursed to the Beneficiary first out of
the proceeds. The proceeds or any part thereof shall be applied upon or in
reduction of the Indebtedness Secured Hereby then most remotely to be paid,
whether due or not, without the application of any prepayment premium, or to the
restoration or repair of the Premises, the choice of application to be solely at
the discretion of Beneficiary.
4.3 Disbursement of Insurance and Condemnation Proceeds. Any
restoration or repair shall be done under the supervision of an architect
acceptable to Beneficiary and pursuant to plans and specifications approved by
the Beneficiary. In any case where Beneficiary may elect to apply the proceeds
to repair or restoration or permit the Grantor to so apply the proceeds they
shall be held by Beneficiary for such purposes and will from time to time be
disbursed by Beneficiary to defray the costs of such restoration or repair under
such safeguards and controls as Beneficiary may establish to assure completion
in accordance with the approved plans and specifications and free of liens or
claims. Grantor shall on demand deposit with Beneficiary any sums necessary to
make up any deficits between the actual cost of the work and the proceeds and
provide such lien waivers and completion bonds as Beneficiary may reasonably
require. Any surplus which may remain after payment of all costs of restoration
or repair may at the option of the Beneficiary be applied on account of the
Indebtedness Secured Hereby then most remotely to be paid, whether due or not,
without application of any prepayment premium or shall be returned to Grantor as
its interest may appear, the choice of application to be solely at the
discretion of Beneficiary.
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V. LEASES AND RENTS
5.1 Grantor to Comply with Leases. Grantor will, at its own cost and
expense:
(a) Faithfully abide by, perform and discharge each and every
obligation, covenant and agreement under any leases to be performed by the
landlord thereunder;
(b) Enforce or secure the performance of each and every material
obligation, covenant, condition and agreement of said leases by the tenants
thereunder to be performed;
(c) Not borrow against, pledge or further assign any rentals due
under said leases;
(d) Not permit the prepayment of any Rents for more than thirty
(30) days in advance nor for more than the next accruing installment of
Rents, nor anticipate, discount, compromise, forgive or waive any Rents;
(e) Not waive, excuse, condone or in any manner release or
discharge the tenants of or from the obligations, covenants, conditions and
agreements by any tenant to be performed under the leases;
(f) Not permit any tenant to assign or sublet its interest in its
lease unless required to do so by the terms of its lease;
(g) Not terminate any leases;
(h) Not consent to a subordination of any lease to any party other
than Beneficiary and then only if specifically consented to by the
Beneficiary; Not amend or modify any lease or alter the obligations of the
parties thereunder without the consent of the Beneficiary; and
(i) Not accept a surrender of any lease.
5.2 Beneficiary's Right to Perform Under Leases. Should the Grantor
fail to perform, comply with or discharge any obligations of Grantor under any
lease or should the Beneficiary become aware of or be notified by any tenant
under any lease of a failure on the part of Grantor to so perform, comply with
or discharge its obligations under said lease, Beneficiary may, but shall not be
obligated to, and without further demand upon the Grantor, and without waiving
or releasing Grantor from any obligation in this Deed of Trust contained, remedy
such failure, and the Grantor agrees to repay upon demand all sums incurred by
the Beneficiary in remedying any such failure together with interest at the then
rate in effect on the Note. All such sums, together with interest as aforesaid
shall become
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so much additional Indebtedness Secured Hereby, but no such advance shall be
deemed to relieve the Grantor from any default hereunder.
5.3 Assignment of Leases and Rents. To further secure the Indebtedness
Secured Hereby, Grantor does hereby sell, assign and transfer unto the
Beneficiary all rents, income and profits now due and which may hereafter become
due under or by virtue of any lease, whether written or verbal, or any agreement
for the use or occupancy of the Premises, it being the intention of this Deed of
Trust to establish an absolute transfer and assignment of all such leases and
agreements and all of the rents, income and profits from the Premises unto the
Beneficiary and the Grantor does hereby appoint irrevocably the Beneficiary its
true and lawful attorney in its name and stead, which appointment is coupled
with an interest, to collect all of said rents, income, and profits; provided,
Beneficiary grants the Grantor the privilege, revocable, to collect and retain
such rents, income, and profits unless and until an Event of Default exists
under this Deed of Trust. Upon an Event of Default and whether before or after
the institution of proceedings to sell the Premises or foreclose this Deed of
Trust or during any period of redemption the Beneficiary, and without regard to
waste, adequacy of the security or solvency of the Grantor, may revoke the
privilege granted Grantor hereunder to collect the rents, income and profits of
the Premises, and may, at its option, without notice in person or by agent, with
or without taking possession of or entering the Premises, with or without
bringing any action or proceeding or by a receiver duly appointed, give or
require Grantor to give notice to any or all tenants under any lease authorizing
and directing the tenant to pay such rents, income and profits to Beneficiary,
such agent, or receiver as the case may be; collect all of the rents, income and
profits; enforce the payment thereof and exercise all of the rights of the
landlord under any lease and all of the rights of Beneficiary hereunder; enter
upon, take possession of, manage and operate said Premises, or any part thereof;
cancel, enforce or modify any leases, and fix or modify rents, and do any acts
which the Beneficiary deems proper to protect the security hereof. Any rents,
income and profits collected shall be applied to the costs and expenses of
operation, management and collection, including reasonable attorneys fees, to
the payment of the fees and expenses of any agent or receiver so acting, to the
costs incurred by the Beneficiary, including attorneys fees, to the payment of
taxes, assessments, insurance premiums and expenditures for the management,
repair and upkeep of the Premises, to the performance of landlord's obligations
under any leases and to the Indebtedness Secured Hereby all in such order as the
Beneficiary may require. The entering upon and taking possession of the
Premises, the collection of such rents, income and profits and the application
thereof as aforesaid shall not cure or waive any defaults under this Deed of
Trust or affect any notice of default or invalidate any act done pursuant to
such notice nor in any way operate to prevent the Beneficiary from pursuing any
other remedy which it may now or hereafter have under the terms of this Deed of
Trust or any other security given for the Indebtedness Secured Hereby nor shall
it in any way be deemed to constitute the Beneficiary a mortgagee-in-possession.
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VI. RIGHTS OF BENEFICIARY
6.1 Right to Cure Default. If the Grantor shall fail to comply with
any of the covenants or obligations of this Deed of Trust, the Beneficiary may,
but shall not be obligated to, without further notice to Grantor, and without
waiving or releasing Grantor from any obligation in this Deed of Trust
contained, remedy such failure, and the Grantor agrees to repay upon demand all
sums incurred by the Beneficiary in remedying any such failure together with
interest at the then rate in effect on the Note. All such sums, together with
interest as aforesaid shall become so much additional Indebtedness Secured
Hereby, but no such advance shall be deemed to relieve the Grantor from any
failure hereunder.
6.2 No Claim Against the Beneficiary. Nothing contained in this Deed
of Trust shall constitute any consent or request by the Beneficiary, express or
implied, for the performance of any labor or services or for the furnishing of
any materials or other property in respect of the Premises or any part thereof,
nor as giving the Grantor or any party in interest with Grantor any right, power
or authority to contract for or permit the performance of any labor or services
or the furnishing of any materials or other property in such fashion as would
create any personal liability against the Beneficiary in respect thereof or
would permit the making of any claim that any lien based on the performance of
such labor or services or the furnishing of any such materials or other property
is prior to the lien of this Deed of Trust.
6.3 Inspection. Grantor will permit the Beneficiary's authorized
representatives to enter the Premises at reasonable times for the purpose of
inspecting the same; provided the Beneficiary shall have no duty to make such
inspections and shall not incur any liability or obligation for making or not
making any such inspections.
6.4 Waivers; Releases; Resort to Other Security, Etc. Without
affecting the liability of any party liable for payment of any Indebtedness
Secured Hereby or performance of any obligation contained herein, and without
affecting the rights of the Beneficiary with respect to any security not
expressly released in writing, the Beneficiary may, at any time, and without
notice to or the consent of the Grantor or any party in interest with the
Premises or the Note:
(a) release any person liable for payment of all or any part of
the Indebtedness Secured Hereby or for performance of any obligation
herein;
(b) make any agreement extending the time or otherwise altering
the terms of payment of all or any part of the Indebtedness Secured Hereby
or modifying or waiving any obligation, or subordinating, modifying or
otherwise dealing with the lien or charge hereof;
(c) accept any additional security;
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(d) release or otherwise deal with any property, real or personal,
including any or all of the Premises, including making partial releases of
the Premises; or
(e) resort to any security agreements, pledges, contracts of
guarantee, assignments of rents and leases or other securities, and exhaust
any one or more of said securities and the security hereunder, either
concurrently or independently and in such order as it may determine.
6.5 Waiver of Appraisement, Homestead, Marshaling. The Grantor waives
to the full extent lawfully allowed the benefit of any homestead, appraisement,
evaluation, stay and extension laws now or hereinafter in force. Grantor waives
any rights available with respect to marshaling of assets so as to require the
separate sales of any portion of the Premises, or as to require the Beneficiary
to exhaust its remedies against a specific portion of the Premises before
proceeding against the other and does hereby expressly consent to and authorize
the sale of the Premises or any part thereof as a single unit or parcel or as
separate parcels.
VII. EVENTS OF DEFAULT AND REMEDIES
7.1 Events of Default. It shall be an event of default ("Event of
Default") under this Deed of Trust upon the happening of any of the following:
(a) failure to make any payment on the Note whether principal,
interest, premium or late charge, when and as the same becomes due (whether
at the stated maturity or at a date fixed for any installment payment or
any accelerated payment date or otherwise); or
(b) a "Default" as defined therein shall occur under the Note and
shall not have been cured within the time permitted therein to cure; or
(c) failure to pay, perform or comply with when due any other
Indebtedness Secured Hereby; or
(d) failure to comply with or perform any of the other terms,
conditions or covenants of this Deed of Trust and such failure shall
continue for a period of ten (10) days after notice thereof to Grantor;
provided, if the same is not susceptible of cure within said time limits
and the same may be cured within a reasonable period of time thereafter the
time period shall be extended for such additional time as is reasonably
necessary to effectuate such cure provided such curative action is promptly
taken in good faith and diligently prosecuted to completion and the
security afforded hereby and the interest of the Beneficiary is not in
jeopardy or be subject to forfeiture; or
(e) either Grantor or any guarantor or surety of the Note shall
fail to pay its debts as they become due, make an assignment for the
benefit of its/his/her
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creditors, or shall admit in writing its inability to pay
its/his/her debts as they become due, or shall file a petition under any
chapter of the Federal Bankruptcy Code or any similar law, state or
federal, now or hereafter existing, or shall become "insolvent" as that
term is generally defined under the Federal Bankruptcy Code, or shall in
any involuntary bankruptcy case commenced against it/him/her file an
answer admitting insolvency or inability to pay its/his/her debts as they
become due, or shall fail to obtain a dismissal of such case within sixty
(60) days after its commencement or convert the case from one chapter of
the Federal Bankruptcy Code to another chapter, or be the subject of an
order for relief in such bankruptcy case, or be adjudged a bankrupt or
insolvent, or shall have a custodian, trustee or receiver appointed for,
or have any court take jurisdiction of its/his/her property, or any part
thereof, in any proceeding for the purpose of reorganization,
arrangement, dissolution or liquidation, and such custodian, trustee or
receiver shall not be discharged, or such jurisdiction shall not be
relinquished, vacated or stayed within sixty (60) days of the
appointment; or
(f) an event of default shall occur under any other instrument
securing the Note and shall not have been cured within the time permitted
therein to cure; or
(g) a judgment, writ or warrant of attachment or execution, or
similar process shall be entered and become a lien or be issued or levied
against the Premises and shall not be released or fully bonded within
forty-five (45) days after its entry, issue or levy; or
(h) any representation or warranty made by Grantor herein, in the
Note or in any other instrument given as security for the Note shall be
false, materially breached or dishonored; or
(i) any individual guarantor or surety for the Note shall be
adjudged incompetent or a conservator, custodian or guardian be appointed
to handle his/her affairs or the guarantor or surety shall die and a
replacement surety acceptable to Beneficiary is not substituted or
satisfactory provisions are not made for the substitution of the liability
of guarantor's or such surety's estate for the repayment of the
Indebtedness Secured Hereby; or
(j) either Grantor or any corporate guarantor or surety for the
Note shall be dissolved, liquidated or wound up or shall fail to maintain
its existence as a going concern in good standing; or
(k) if any guarantor or surety for the Note shall fail to keep or
perform any covenant, undertaking or agreement on its part under any
separate guaranty, indemnity or other surety arrangement given in
connection with the Note; or
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(l) any operating license for the Casino is terminated and a
substitute license acceptable to the Beneficiary is not issued to the
Partnership within thirty (30) days thereof; or
(m) any management agreement providing for the management of the
Casino is terminated and a substitute management agreement acceptable
to the Beneficiary with a management company acceptable to Beneficiary
is not entered into within thirty (30) days thereof.
7.2 Beneficiary's Right to Accelerate. If an Event of Default
shall occur the Beneficiary may declare the entire unpaid principal balance of
the Note together with all other Indebtedness Secured Hereby to be immediately
due and payable and thereupon all such unpaid principal balance of the Note
together with all accrued interest thereon at the Note Rate and all other
Indebtedness Secured Hereby shall be and become immediately due and payable.
7.3 Remedies. If an Event of Default shall occur, the Beneficiary
may elect to advertise the Premises and demand the sale thereof by filing notice
of such election and demand for sale with the Trustee, who shall upon receipt of
such notice of election and demand for sale, cause a copy of the same to be
recorded in the recorder's office of the county in which the Premises are
situated. It shall be lawful for the Trustee to sell and dispose of the same
(en masse or in separate parcels, as the Trustee may think best), and all the
right, title and interest of the Grantor, its successors or assigns therein, at
public auction at any place authorized by law as specified in the notice of such
sale, for the highest and best price the same will bring in cash, public notice
having been previously given pursuant to statute of the time and place of such
sale, by advertisement, weekly, in some newspaper of general circulation at that
time published in said county, a copy of which notice shall be mailed within ten
(10) days from the date of the first publication thereof to the Grantor at the
addresses herein given and to such person or persons appearing to have acquired
a subsequent record interest in the Premises at the address given in the
recorded instrument. The Trustee shall make and give to the purchaser or
purchasers of the Premises at such sale a certificate or certificates in writing
describing the Premises purchased, and the sum or sums paid therefor, and the
time when the purchaser or purchasers (or other person entitled thereto) shall
be entitled to a deed or deeds therefor, unless the same shall be redeemed as is
provided by law; and the Trustee shall, upon demand by the person or persons
holding the said certificate or certificates of purchase, when said demand is
made, or upon demand by the person entitled to a deed to and for the Premises
purchased at the time such demand is made, the time for redemption having
expired, make and execute to such person or persons a deed or deeds to the
Premises purchased, which said deed or deeds shall be in the ordinary form of a
conveyance, and shall be signed, acknowledged and delivered by the Trustee as
grantor, and shall convey and quitclaim to such person or persons entitled to
such deed as grantee, the Premises purchased as aforesaid, and all the right,
title, interest, benefit and equity of redemption of the Grantor, its successors
and assigns therein and shall recite the sum or sums for which the Premises was
sold and shall refer to the power of sale herein contained, and to the sale or
sales made by virtue thereof;
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and in case of an assignment of such certificate or certificates of purchase, or
in case of the redemption of the Premises by a subsequent encumbrancer, such
assignment or redemption shall also be referred to in such deed or deeds; but
the notice of sale need not be set out in such deed or deeds and the said
Trustee shall, out of the proceeds or avails of such sale, after said sale, pay
to the Beneficiary hereunder or the legal holders of said Note, the principal
and interest due on said Note according to the tenor and effect thereof, and all
moneys advanced by such Beneficiary or legal holder of said Note for insurance,
taxes and assessments, or other money advanced pursuant to the terms hereof,
with interest thereon at the rate provided for in the Note, the overplus, if
any, to be applied pursuant to statute; which sale or sales and said deed or
deeds so made shall be a perpetual bar, both in law and equity, against the
Grantor, its successors or assigns, and all other person claiming the property,
or any part thereof, by, from, through or under the Grantor. The holder or
holders of the Note may purchase the Premises or any part thereof; and it shall
not be obligatory upon the purchaser or purchasers at any such sale to see to
the application of the purchase money. If a release deed is required, it is
agreed that the Grantor, its successor or assigns, will pay the expense thereof.
Reasonable attorneys' fees for services in the supervision of said foreclosure
proceedings shall be allowed by the Trustee as a part of the cost. Separate
sales may be conducted in each county in which the Premises are situate and no
sale in a particular county shall act as a bar to or waiver of any right to
conduct a separate sale in another county. When the Indebtedness Hereby
Secured, or any part thereof, shall become due, whether by acceleration or
otherwise, Beneficiary shall have the right to foreclose the lien hereof for
such indebtedness or part thereof. If foreclosure be made through the Court,
reasonable attorneys' fees, in no event to exceed the maximum amount allowed by
law, shall be allowed as part of the foreclosure costs. In the event of
foreclosure of the lien hereof, whether through the Trustee or through the
Court, there shall be allowed and included as additional indebtedness all
reasonable expenditures and expense which may be paid or incurred by or on
behalf of Beneficiary for attorneys' fees, appraisers' fees, outlays for
documentary and expert evidence, stenographers' charges, publication costs and
costs (which may be estimated as to items to be expended after foreclosure sale
or entry of the decree) or procuring all such abstracts of title, title searches
and examinations, title insurance policies, and similar data and assurances with
respect to title as beneficiary may deem reasonably necessary either to
prosecute such suit or to evidence to bidders at any sale which may be had
pursuant to such decree the true condition of the title to or the value of the
Premises. All expenditures and expenses of the nature in this Section
mentioned, and such expense and fees as may be incurred in the protection of
said Premises and the maintenance of the lien of this Deed of Trust, including
the reasonable fees of any attorney employed by Beneficiary in any litigation or
proceeding affecting this Deed of Trust, the Note or said Premises, including
probate and bankruptcy proceedings, or in preparation for the commencement or
defense of any proceedings, or in preparation for the commencement or defense of
any proceeding or threatened suit or proceeding shall be immediately due and
payable by Grantor with interest thereon at the rate provided for in the Note.
In the alternative, the Beneficiary may commence a judicial proceeding for
foreclosure of this Deed of Trust or exercise any other remedies permitted by
Colorado law. Nothing herein dealing with foreclosure procedures or specifying
particular actions to be taken by Beneficiary or by the trustee shall be deemed
to contradict or add to their requirements and procedures of
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Colorado law now or hereafter existing; any such conflict or inconsistency shall
be resolved in favor of Colorado law applicable at the time of foreclosure.
The proceeds of any sale shall be applied as follows and in the following
order:
FIRST: Payment of the costs and expenses of the sale, including without
limitation Trustee's fees, legal fees and disbursements, title charges and
transfer taxes, and payment of all expenses, liabilities and advances of
Trustee, together with interest on all advances made by Trustee from date of
disbursement at the default interest rate under the Note from time to time or at
the maximum rate permitted to be charged by Trustee under the applicable law if
that is less.
SECOND: Payment of all sums expended by Beneficiary under the terms of
this Deed of Trust and not yet repaid, together with interest on such sums from
date of disbursement at the Note Rate or the maximum rate permitted by
applicable law if that is less.
THIRD: Payment of the Indebtedness Secured Hereby in any order that the
Beneficiary chooses.
FOURTH: The remainder, if any, to the person or persons legally entitled
to it.
The Power of Sale conferred by this Deed of Trust and the laws of the State of
Colorado is not an exclusive remedy and when not exercised, Beneficiary may
foreclose this Deed of Trust as a mortgage.
7.4 Receiver. If an Event of Default shall occur, the Beneficiary
shall be entitled as a matter of right without notice and without regard to the
solvency or insolvency of the Grantor, or waste of the Premises or adequacy of
the security of the Premises, or any other party or parties liable for the
payment of the amount due to exparte apply for the appointment of a Receiver of
rents and profits of any part or the whole of the Premises with power to lease
the Premises, or such part thereof as may not then be under lease, and with such
powers as may be deemed necessary who after deducting all proper charges and
expense attending the execution of its trust as received shall apply the residue
of the rents, issues and profits to the payment and satisfaction of the
Indebtedness Secured Hereby or to any deficiency which may exist after applying
the proceeds of the sale of the Premise to the payment of the amount due,
including interest and such costs of any reasonable attorneys' fees for the
foreclosure and sale in such order of priority as Beneficiary shall elect.
7.5 Rights Under Uniform Commercial Code. In addition to the rights
available to a Beneficiary of real property Beneficiary shall also have all the
rights, remedies and recourse available to a secured party under the Uniform
Commercial Code including the right to proceed under the provisions of the
Uniform Commercial Code governing default as to any property which is subject to
the security interest created by the Deed of Trust or
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to proceed as to such personal property in accordance with the procedures and
remedies available pursuant to a foreclosure of real estate.
7.6 Due on Sale or Mortgaging, Etc. In the event of a Transfer without
the written consent of the Beneficiary being first obtained, whether
voluntarily, involuntarily, or by operation of law, then at the sole option of
the Beneficiary, the Beneficiary may declare the entire unpaid principal balance
together with accrued interest, due and payable in full and call for payment of
the same in full at once. Any such payment shall be subject to the
requirements, if any, in the Note providing for the payment of a prepayment
premium in the event of a non-permitted Transfer. A consent by the Beneficiary
as to any one Transfer shall not be deemed to be a waiver of the right to
require consent to a future Transfer. As used herein, the term "Transfer" shall
include any sale, pledge, assignment, Deed of Trust, encumbrance, security
interest, consensual lien, hypothecation, transfer or divesture, or otherwise,
of or in (i) the Premises, (ii) either Grantor, or (iii) any underlying
ownership in either Grantor or (iv) any entity controlling, managing or in
control of either Grantor. Any change in the legal or equitable title of the
Premises or in the beneficial ownership of the Premises or either Grantor
whether or not of record and whether or not for consideration shall be deemed a
Transfer. This paragraph shall not be construed as to prevent the Borrower from
issuing additional shares of stock in the Borrower as long as National Lodgings,
Inc., and the Guarantors shall in the aggregate remain the majority shareholders
in the Borrower nor the sale of Parcel No. 2 of the Premises to the Borrower.
7.7 Rights Cumulative. Each right, power or remedy herein conferred upon
the Beneficiary is cumulative and in addition to every other right, power or
remedy, express or implied, now or hereafter arising, available to Beneficiary,
at law or in equity, or under any other agreement, and each and every right,
power and remedy herein set forth or otherwise so existing may be exercised from
time to time as often and in such order as may be deemed expedient by the
Beneficiary and shall not be a waiver of the right to exercise at any time
thereafter any other right, power or remedy. No delay or omission by the
Beneficiary in the exercise of any right, power or remedy arising hereunder or
arising otherwise shall impair any such right, power or remedy or the right of
the Beneficiary to resort thereto at a later date or be construed to be a waiver
of any default or event of default under this Deed of Trust or the Note.
7.8 Right to Discontinue Proceedings. In the event Beneficiary shall
have proceeded to invoke any right, remedy or recourse permitted under this Deed
of Trust and shall thereafter elect to discontinue or abandon the same for any
reason, Beneficiary shall have the unqualified right to do so and in such event
Grantor and Beneficiary shall be restored to their former positions with respect
to the Indebtedness Secured Hereby. This Deed of Trust, the Premises and all
rights, remedies and recourse of the Beneficiary shall continue as if the same
had not been invoked.
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VIII. HAZARDOUS SUBSTANCE
8.1 Definitions. As used herein, the following definitions shall apply:
(a) "Hazardous Substance" shall mean any hazardous or toxic
material, substance or waste, pollutant or contaminant which is regulated
under any statute, law, ordinance, rule or regulation of any local, state,
regional or Federal authority having jurisdiction over the property of the
Grantor, or its use, including but not limited to any material, substance
or waste which is (a) defined as a hazardous substance under any
Environmental Laws; (b) a petroleum hydrocarbon, including crude oil or any
fraction thereof and all petroleum products; (c) polychlorinated biphenyls
(d) lead; (e) urea formaldehyde (f) asbestos; (g) flammable explosives; (h)
infectious materials; (i) radioactive materials; or (j) defined or
regulated as a hazardous substance or hazardous waste under any rules or
regulations promulgated under any of the foregoing Environmental Laws.
(b) "Environmental Laws" shall mean any international, federal,
state or local statute, law, regulation, order, consent, decree, judgment,
permit, license, code, covenant, deed restriction, common law, treaty,
convention, ordinance or other requirement relating to public health,
safety or the environment, including, without limitation, those relating to
releases, discharges or emissions to air, water, land or groundwater, to
the withdrawal or use of groundwater, to the use and handling of
polychlorinated biphenyls or asbestos, to the disposal, treatment, storage
or management of hazardous or solid waste, or Hazardous Substances or crude
oil, or any fraction thereof, or to exposure to toxic or hazardous
materials to the handling, transportation, discharge or release of gaseous
or liquid Hazardous Substances and any regulation, order, notice or demand
issued pursuant to such law, statute or ordinance, in each case applicable
to the property of the Grantor or its affiliates, if any, including without
limitation the following: the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986, the Solid Waste Disposal Act,
as amended by the Resource Conservation and Recovery Act of 1976 and the
Hazardous and Solid Waste Amendments of 1984, the Hazardous Materials
Transportation Act, as amended, the Federal Water Pollution Control Act, as
amended by the Clean Water Act of 1976, the Safe Drinking Water Act, the
Clean Air Act, as amended, the Toxic Substances Control Act of 1976, the
Occupational Safety and Health Act of 1977, as amended, the Emergency
Planning and Community Right-to-Know Act of 1986, the National
Environmental Policy Act of 1975, the Oil Pollution Act of 1990 and any
similar or implementing state law, and any state statute and any further
amendments to these laws providing for financial responsibility for cleanup
or other actions with respect to the release or threatened release of
Hazardous Substances or crude oil, or any fraction thereof and all rules
and regulations promulgated thereunder.
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8.2 Representations of Grantor. Grantor hereby represents to
Beneficiary that, except as heretofore disclosed to Beneficiary: (a) the
Premises has never been used by Grantor, or, to the best of Grantor's knowledge,
by any previous owners or occupants or current occupants other than Grantor to
generate, manufacture, refine, transport, treat, store, handle or dispose of any
Hazardous Substances and no such Hazardous Substances exist on the Premises or
in its soil or groundwater; (b) to the best of Grantor's knowledge after due
inquiry, no portion of the improvements on the Premises has been constructed
with asbestos, asbestos-containing materials, urea formaldehyde insulation or
any other chemical or substance which has been determined to be a hazard to
health and/or the environment; (c) to the best of Grantor's knowledge after due
inquiry, there are no nor have there been electrical transformers or other
equipment which have dielectric fluid-containing polychlorinated biphenyls
(PCBs) located in, on or under the Premises; (d) to the best of Grantor's
knowledge after due inquiry, the Premises has never contained any underground
storage tanks; (e) Grantor has not received nor does it have any knowledge of
any summons, citation, directive, letter or other communication, written or
oral, from any local, state or federal governmental agency concerning (f) the
existence of Hazardous Substances on the Premises or in the immediate vicinity
and (g) the releasing, spilling, leaking, pumping, pouring, emitting, emptying,
or dumping of Hazardous Substances onto the Premises or into waters or other
lands.
8.3 Covenants of Grantor. Grantor hereby covenants to Beneficiary that
Grantor shall (a) comply and shall cause all occupants of the Premises to comply
with all federal, state and local laws, rules, regulations and orders with
respect to the discharge, generation, removal, transportation, storage and
handling of Hazardous Substances, (b) remove any Hazardous Substances
immediately upon discovery of same, in accordance with applicable laws,
ordinances and orders of governmental authorities having jurisdiction thereof,
(c) pay or cause to be paid all costs associated with such removal; and (d)
prevent the migration of Hazardous Substances from or through the Premises onto
or under other properties; (e) keep the Premises free of any lien imposed
pursuant to any state or federal law, rule, regulation or order in connection
with the existence of Hazardous Substances on the Premises; (f) not install or
permit to be incorporated into any improvements in the Premises or to exist in
or on the Premises any asbestos, asbestos-containing materials, urea
formaldehyde insulation or any other chemical or substance which has been
determined to be a hazard to health and environment; (g) not cause or permit to
exist, as a result of an intentional or unintentional act or omission on the
part of Grantor or any occupant of the Premises, a releasing, spilling, leaking,
pumping, emitting, pouring, emptying or dumping of any Hazardous Substances onto
the Premises or into waters or other lands; and (h) give all notifications and
prepare all reports required by Environmental Laws or any other law with respect
to Hazardous Substances existing on, released from or emitted from the Premises.
8.4 Indemnification. Grantor hereby agrees to defend, indemnify and hold
harmless Beneficiary, its directors, officers, employees, agents, contractors,
subcontractors, licensees, invitees, successors and assigns ("Indemnified
Parties") from and against any and all claims, losses, damages, liabilities,
judgments, costs and expenses (including, without limitation, attorneys' fees
and costs incurred in the investigation, defense and settlement of
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claims or remediation of contamination) incurred by the Indemnified Parties as a
result of (i) the failure of the Grantor to keep and perform the covenants of
the Grantor as contained in this Article, (ii) the misrepresentation or
incorrectness of any of the representations of Grantor as contained in this
Article, (iii) the presence on, in or under the Premises of a Hazardous
Substance and (iv) the removal of Hazardous Substances or as a result of or in
connection with activities regulated under this Article. Grantor shall bear,
pay and discharge, as and when the same become due and payable, any and all such
judgments or claims for damages, penalties or otherwise, against the Indemnified
Parties, shall hold the Indemnified Parties harmless against all claims, losses,
damages, liabilities, costs and expenses, administrative proceedings, and
negotiations of any description with any and all persons, political subdivisions
or government agencies arising out of any of the occurrences set forth in this
Article.
8.5 Run with Land. These covenants, representations, warranties and
indemnities shall be deemed continuing covenants, representations, warranties
and indemnities running with the Real Property for the benefit of the
Beneficiary, and any successors and assigns of the Beneficiary, including any
purchaser at a Deed of Trust foreclosure sale, any transferee of the title of
the Beneficiary or any subsequent purchaser at a foreclosure sale, and any
subsequent owner of the Premises claiming through or under the title of
Beneficiary and shall survive any foreclosure of this Deed of Trust and any
acquisition of title of Beneficiary. The amount of all such indemnified loss,
damage, expense or cost, shall bear interest thereon at the rate of interest in
effect on the Note and shall become so much additional Indebtedness Secured
Hereby and shall become immediately due and payable in full on demand of the
Beneficiary, its successors and assigns. The indemnification contained herein
shall be a personal monetary obligation of the Grantor notwithstanding any
provisions of this Deed of Trust to the contrary that limit or exculp the
personal liability of the Grantor and/or require the Beneficiary to look solely
to the security of the Premises.
8.6 Limitations. Notwithstanding anything in this Article to the
contrary, this Article shall not apply to the introduction and initial release
of a Hazardous Substance on the Premises from and after the date that the
Beneficiary acquires title to the Premises through foreclosure or a deed in lieu
of foreclosure (the "Transfer Date"); provided, however, the Grantor shall bear
the burden of proof that the introduction and initial release of such Hazardous
Substance (i) occurred subsequent to the Transfer Date, (ii) did not occur as a
result of any action of the Grantor, and (iii) did not occur as a result of a
continuing migration or release of any Hazardous Substance introduced prior to
the Transfer Date in, on, under or near the Premises.
IX. PRIOR INDEBTEDNESS
9.1 Prior Indebtedness. As to Parcel No. 2 such parcel is subject to an
existing Deed of Trust to the Public Trustee of the County of Teller, Colorado
dated November 15, 1991, and recorded November 22, 1991 in Book 582, page 1,
Teller County Records, given to secure a Promissory Note executed by Xxxxxx X.
Xxxx, nominee for Blackjack Holding Company, a Colorado corporation, to the
order of Xxxxx Xxxxxx and Xxxxxxx Xxxxxx in
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the principal sum of $593,648.33 the aforesaid Deed of Trust, the Note secured
thereby, and any and all additional security given in connection therewith being
hereinafter collectively referred to as the "Prior Indebtedness". Grantor
covenants and agrees to pay the principal, interest and other sums on the Prior
Indebtedness on or before their due date and to comply with all of the other
terms, covenants and conditions thereof. If requested hereafter by the
Beneficiary, the Grantor shall produce to the Beneficiary from time to time and
no less than three days prior to their due dates the installments of principal,
interest and other sums payable on the Prior Indebtedness or receipts or other
evidence of payment thereof satisfactory to the Deed of Trust. Grantor further
agrees:
(a) The Grantor will not without the prior written consent of the
Beneficiary enter into any modification, amendment, agreement or
arrangement with respect to the Prior Indebtedness expressly including, but
not in limitation of the foregoing, any such modification, amendment,
agreement or arrangement pursuant to which the Grantor is granted any
forbearance or indulgence (as to time or amount) in payment of any
principal, interest or other sums due in accordance with the terms and
provisions of the Prior Indebtedness nor obtain any additional advances
thereunder.
(b) In case of any default under the Prior Indebtedness or if any
holder of the Prior Indebtedness shall take any action to accelerate or
otherwise declare its Prior Indebtedness due or exercise any rights or
remedies available to it under its Prior Indebtedness, then in addition to
the rights and remedies available to the Beneficiary hereunder, or at law,
the Beneficiary may, but need not, make any payment or perform any act
required of the Grantor under the Prior Indebtedness in any form and manner
deemed expedient and may, but need not, make full or partial payments of
principal or interest on the Prior Indebtedness, perform in the name of
Grantor or in its own name, any and all covenants, conditions and
agreements on the part of the Grantor to be performed under the Prior
Indebtedness, pay, compromise or settle the Prior Indebtedness and redeem
from any foreclosure sale or forfeiture of the Prior Indebtedness affecting
the Premises or contest any foreclosure sale or forfeiture under the Prior
Indebtedness. For this purpose Grantor hereby appoints the Beneficiary as
its attorney in fact, irrevocable, which appointment is coupled with an
interest. All monies paid for any purposes herein authorized and all
expenses paid or incurred in connection therewith, including attorney's
fees, and all other sums advanced by the Beneficiary to protect the
Premises and the lien hereof, shall be so much additional Indebtedness
Secured Hereby and shall become immediately due and payable with interest
thereon at the rate then in effect in the Note. Inaction of the
Beneficiary shall never be considered as a waiver of any right accruing to
it on account of any default on the part of Grantor under the Prior
Indebtedness.
(c) Grantor will furnish to Beneficiary copies of all notices
forwarded to Grantor by the Holder of the Prior Indebtedness.
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(d) On request the Grantor from time to time agrees to use its best
efforts to obtain from the Holder of the Prior Indebtedness written
statements setting forth the unpaid principal of and interest on the Prior
Indebtedness and any unpaid sums thereunder and the date to which payment
has been made and whether any payment is in arrears.
(e) Beneficiary shall be subrogated to the rights of the Holder of
such Prior Indebtedness to the extent of any advances made by Beneficiary
hereunder as fully as if said liens had been created in favor of
Beneficiary.
(f) In order to protect the security of the Beneficiary's interest
therein the Grantor shall pay monthly, to the Beneficiary, not later than
ten (10) days before its due date under the Prior Indebtedness the amount
of the next due installment of Principal, Interest and other amounts due
under the Prior Indebtedness. Upon receipt of the same, the Beneficiary
shall make payment directly to the holder of the Prior Indebtedness out of
such deposit. The failure to make timely payment of such amounts to the
Beneficiary shall be an Event of Default under this Deed of Trust and
Beneficiary shall be entitled to exercise any and all of the remedies
available to it by reason of an Event of Default. TIME IS OF THE ESSENCE
IN THE PAYMENT OF THESE SUMS.
X. MISCELLANEOUS
10.1 Choice of Law. Notwithstanding the situs of the Premises, the parties
to this instrument have contracted for the law of the State of Minnesota to
govern the loan, including matters of construction, validity and performance and
the obligations arising hereunder, provided, however, that with respect to the
creation, perfection, priority and enforceability of this instrument, and any
warranties of title contained in this instrument with respect to the Premises,
and the provisions hereof which relate to realizing upon the security covered by
this instrument, the applicable provisions of this instrument shall be governed
by, and interpreted in accordance with, the laws of the State of Colorado,
applicable to contracts made and performed in such state, without regard to the
principles thereof regarding conflict of laws, and any applicable laws of the
United States of America.
10.2 Successors and Assigns. This Deed of Trust and each and every
covenant, agreement and other provision hereof shall be binding upon Grantor and
its successors and assigns including without limitation each and every from time
to time record owner of the Premises or any other person having an interest
therein, shall run with the land and shall inure to the benefit of the
Beneficiary and its successors and assigns. As used herein the words
"successors and assigns" shall also be deemed to include the heirs,
representatives, administrators and executors of any natural person who is or
becomes a party to this Deed of Trust. In the event that the ownership of the
Premises becomes vested in a person or persons other than the Grantor, the
Beneficiary shall not have any obligation to deal with such successor or
successors in interest unless such transfer is permitted by this Deed of Trust
and then only upon being notified in writing of such change of ownership. Upon
such
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notification, the Beneficiary may thereafter deal with such successor in place
of Grantor without any obligation to thereafter deal with Grantor and without
waiving any liability of Grantor hereunder or under the Note. No change of
ownership shall in any way operate to release or discharge the liability of the
Grantor hereunder unless such release or discharge is expressly agreed to in
writing by the Beneficiary.
10.3 Unenforceability of Certain Clauses. The unenforceability or
invalidity of any provisions hereof shall not render any other provision or
provisions herein contained unenforceable or invalid.
10.4 Captions and Headings. The captions and headings of the various
sections of this Deed of Trust are for convenience only and are not to be
construed as confining or limiting in any way the scope or intent of the
provisions hereof. Whenever the context requires or permits the singular shall
include the plural, the plural shall include the singular and the masculine,
feminine and neuter shall be freely interchangeable.
10.5 Amendment/Modification. Any amendment to or modification of this Deed
of Trust may be made in writing by and between Grantor and Beneficiary without
necessity of joinder therein by the Trustee. No oral waiver, amendment, or
modification may be implied and the same must be executed by the party against
whom enforcement is sought.
10.6 Acceptance of Trust. Trustee accepts this trust when this Deed of
Trust, duly executed and acknowledged, is made a public record as provided by
law. Trustee is not obligated to notify any party hereto of a pending sale under
any other Trust Indenture or of any action or proceeding in which Grantor,
Beneficiary or Trustee shall be a party unless brought by Trustee.
10.7 Reconveyance Upon Surrender of Deed of Trust. Upon payment in full of
the Indebtedness Secured Hereby the Beneficiary shall deliver to the Trustee
this Deed of Trust and all notes secured hereby to Trustee for cancellation and
release and upon payment by Beneficiary of its fees, Trustee shall reconvey to
Grantor, without warranty, the Premises then held hereunder. The grantee in
such reconveyance may be described as "the person or persons legally entitled
thereto."
10.8 Notices. Any notices and other communications permitted or required
by the provisions of this Deed of Trust (except for telephonic notices expressly
permitted) shall be in writing and shall be deemed to have been properly given
or served by depositing the same with the United States Postal Service, or any
official successor thereto, designated as Certified Mail, Return Receipt
Requested, bearing adequate postage, or deposited with reputable private courier
or overnight delivery service, and addressed as hereinafter provided. Each such
notice shall be effective upon being deposited as aforesaid. The time period
within which a response to any such notice must be given, however, shall
commence to run from the date of receipt of the notice by the addressee thereof.
Rejection or other refusal to accept or the inability to deliver because of
changed address of which no notice was given shall be deemed to be receipt of
the notice sent. By giving to the other party
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hereto at least ten (10) days' notice thereof, either party hereto shall have
the right from time to time to change its address and shall have the right to
specify as its address any other address within the United States of America.
Each notice to Beneficiary shall be addressed as follows:
Xxxxxx & Xxxxxxxxx Investments Corporation
000 Xxxxxxxxx Xxxxxx
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: Vice President - Mortgage Loans
Each notice to Grantor shall be addressed as follows:
National Gaming Companies, Inc.
0000 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxx, Xxxxxxxxx 00000
Attn: President
000 Xxxxx Xxxxxx Limited Partnership
0000 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxx, Xxxxxxxxx 00000
Attn: Managing General Partner
10.9 Savings Clause. It is expressly stipulated and agreed to be the
intent of Grantor, and Beneficiary at all times to comply with applicable state
law or applicable United States federal law (to the extent that it permits the
Beneficiary to contract for, charge, take, reserve, or receive a greater amount
of interest than under state law) and that this section shall control every
other covenant and agreement in the Note, this Deed of Trust and any other loan
documents delivered in connection with this instrument ("Loan Documents"). If
the applicable law is ever judicially interpreted so as to render usurious any
amount called for under the Note, this Deed of Trust or under any of the other
Loan Documents, or contract for, charged, taken, reserved, or received with
respect to the indebtedness by the Note ("Indebtedness"), or if the
Beneficiary's exercise of the option to accelerate the maturity of the Note, or
if any prepayment by Grantor results in Grantor having paid any interest in
excess of that permitted by applicable law, then it is Grantor's and
Beneficiary's express intent that all excess amounts theretofore collected by
Beneficiary shall be credited on the principal balance of the Note and all other
Indebtedness (or, if the Note and all other Indebtedness have been or would
thereby be paid in full, refunded to Grantor), and the provisions of the Note
and this Deed of Trust and the other Loan Documents immediately be deemed
reformed and the amounts thereafter collectible hereunder and thereunder
reduced, without the necessity of the execution of any new documents, so as to
comply with the applicable law, but so as to permit the recovery of the fullest
amount otherwise called for hereunder or thereunder. All sums paid or agreed to
be paid to Beneficiary for the use, forbearance, or detention of the
Indebtedness shall, to the
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extent permitted by applicable law, be amortized, prorated, allocated,
and spread throughout the full stated term of the Indebtedness until payment in
full so that the rate or amount of interest on account of the Indebtedness does
not exceed the maximum lawful rate from time to time in effect and applicable
to the Indebtedness for so long as the Indebtedness is outstanding.
Notwithstanding anything to the contrary contained herein or in any of the
other Loan Documents, it is not the intention of the Beneficiary to accelerate
the maturity of any interest that has not accrued at the time of such
acceleration or to collect unearned interest at the time of such acceleration.
10.10 Adjustable Rate Note. The Note secured by this Deed of Trust
provides for adjustments in its interest rate from time to time in accordance
with its terms. Reference is made to the Note for the time, terms and
conditions of the adjustments in the interest rate. Such times, terms and
conditions are incorporated herein by reference.
10.11 Consent to Jurisdiction. The Grantor submit(s) and consent(s) to
personal jurisdiction of the Courts of the State of Minnesota and Courts of the
United States of America sitting in such State for the enforcement of this
instrument and waive(s) any and all personal rights under the laws of any state
or the United States of America to object to jurisdiction in the State of
Minnesota. Litigation may be commenced in any state court of general
jurisdiction for the State of Minnesota or the United States District Court
located in that state, at the election of the Beneficiary. Nothing contained
herein shall prevent Beneficiary from bringing any action against any other
party or exercising any rights against any security given to Beneficiary or
against the Grantor personally, or against any property of the Grantor, within
any other state. Commencement of any such action or proceeding in any other
state shall not constitute a waiver of consent to jurisdiction or of the
submission made by the Grantor to personal jurisdiction within the State of
Minnesota.
34
35
IN WITNESS WHEREOF, the Grantor has caused these presents to be executed as
of the date first above written.
NATIONAL GAMING COMPANIES, INC., a
Minnesota corporation
By: /s/ Xxxxxx Xxxxxxx
----------------------------
Its: President
----------------------------
000 XXXXX XXXXXX LIMITED PARTNERSHIP, a
Minnesota limited partnership
By: CRIPPLE CREEK CORPORATION, a
Minnesota corporation, its General Partner
By: /s/ Xxxxxx Xxxxxxx
------------------------
Its: President
------------------------
35
36
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing was instrument was acknowledged before me this 22nd day of
October, 1996, by Xxxxxx Xxxxxxx, the President of National Gaming Companies,
Inc., a Minnesota corporation on behalf of the corporation.
/s/ Xxxxxxxx X. Xxxxxx
---------------------------
Notary Public
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing was instrument was acknowledged before me this 22nd day of
October, 1996, by Xxxxxx Xxxxxxx, the President of Cripple Creek Corporation, a
Minnesota corporation, the General Partner of 000 Xxxxx Xxxxxx Limited
Partnership, a Minnesota limited partnership, on behalf of the limited
partnership.
/s/ Xxxxxxxx X. Xxxxxx
---------------------------
Notary Public
36
37
EXHIBIT "A"
Legal Description
PARCEL 1A:
Lots 34 through 00,
Xxxxx 00,
XXXXXXX (xxx Xxxxxxx Xxxxx);
PARCEL 1B:
Lots 37 through 00,
Xxxxx 00,
XXXXXXX (xxx Xxxxxxx Xxxxx);
PARCEL 2:
Xxxx 00 xxx 00X,
(Xxx 00X being formerly known as Xxxx 00, 00 xxx 00),
Xxxxx 22,
FREMONT (now Cripple Creek),
according to the original plat as modified by the Subdivision Exemption
Plat recorded September 12, 1991 in Plat Book L Page 13;PARCEL 3:
Xxxx 00, 00, xxx 00,
Xxxxx 00,
XXXXXXX (now Cripple Creek);
PARCEL 4:
The Surface only of
Lots 1 through 15,
Block 26,
FREMONT (now Cripple Creek);
X-0
00
XXXXXX 5:
Xxxx 0 xxxxxxx 00,
Xxxxx 0,
XXXXXXX XXXXXXX ADDITION TO THE CITY OF CRIPPLE CREEK;
NOTE: The North 1/2 of Xxxxxx Avenue lying Easterly of Fourth Street and
Westerly of the Midland Terminal Railway Right of Way appears to have
been vacated and probably should be included in any legal documents.
All in Teller County, Colorado.
A-2
