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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(AMENDMENT NO. 1)
BLACK HAWK GAMING & DEVELOPMENT COMPANY, INC.
(Name of Issuer)
COMMON STOCK, $0.001 PAR VALUE PER SHARE
(Title of Class of Securities)
092067 10 7
(CUSIP Number of Class of Securities)
Jeffrey P. Jacobs, Individually and as President of Jacobs Entertainment Ltd.,
the manager of
Diversified Opportunities Group Ltd.
425 Lakeside Avenue
Cleveland, OH 44114
(216) 861-4390
(Name, address and telephone number of persons
authorized to receive notices and communications
on behalf of person(s) filing statement)
JANUARY 13, 1997
(Date of Event which Requires Filing of this Statement)
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If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ].
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class.) (See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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CUSIP No. 096612 10 6
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF REPORTING PERSON
DIVERSIFIED OPPORTUNITIES GROUP LTD. -- FEIN: 34-1828344
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
OO
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
[ ]
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
OHIO
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7. SOLE VOTING POWER
NUMBER OF SHARES
BENEFICIALLY 1,333,333
OWNED BY EACH -----------------------------------------------------------
REPORTING PERSON 8. SHARED VOTING POWER
WITH
-0-
-----------------------------------------------------------
9. SOLE DISPOSITIVE POWER
1,333,333
-----------------------------------------------------------
10. SHARED DISPOSITIVE POWER
-0-
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,333,333
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.8%
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
OO
- --------------------------------------------------------------------------------
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CUSIP No. 096612 10 6
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF REPORTING PERSON
JEFFREY P. JACOBS -- SSN: ###-##-####
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
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3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS
OO
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
[ ]
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
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7. SOLE VOTING POWER
NUMBER OF SHARES
BENEFICIALLY 20,000
OWNED BY EACH ----------------------------------------------------------
REPORTING PERSON 8. SHARED VOTING POWER
WITH
-0-
---------------------------------------------------------
9. SOLE DISPOSITIVE POWER
20,000
----------------------------------------------------------
10. SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
20,000
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.5%
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14. TYPE OF REPORTING PERSON
IN
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This Amendment No. 1 to Schedule 13D is being filed on
behalf of Diversified Opportunities Group Ltd., an Ohio limited liability
company ("Diversified"), for the purpose of reporting the completion of the next
phase of its transaction (the "Transaction") with Black Hawk Gaming &
Development Company, Inc. ("Black Hawk"). It is also being filed on behalf of
Jeffrey P. Jacobs ("Jacobs"), the manager of Jacobs Entertainment Ltd., which is
the manager of Diversified, to report his beneficial ownership of shares of
Black Hawk.
On January 13, 1997, Black Hawk held a special meeting (the
"Special Meeting") of its shareholders and obtained the approval (the "NASD
Approval") required of its shareholders pursuant to the rules and regulations of
the National Association of Securities Dealers, Inc. Following the Special
Meeting, Black Hawk issued and delivered to Diversified a convertible note in
the principal amount of $6,000,000 (the "$6,000,000 Note") and the original
convertible note in the principal amount of $1,500,000 (the "Original Note") was
cancelled. A copy of the $6,000,000 Note is attached hereto as Exhibit A.
On November 12, 1996, Jacobs was granted options to acquire
60,000 Shares. The options become exercisable 1/3 upon conversion of the entire
unpaid principal balance of the $6,000,000 Note and 1/3 each upon the first and
second anniversary dates of such conversion. Jacobs is deemed to beneficially
own 20,000 Shares because the $6,000,000 Note may be converted at any time by
Diversified.
Terms used but not otherwise defined in this Amendment No. 1
shall have the meanings given to such terms in the original Schedule 13D filed
for Diversified dated November 12, 1996.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 3 is amended and supplemented as follows:
To date only $1,500,000 of the $6,000,000 Note has been
funded by Diversified. The remaining $4,500,000 will be paid by Diversified at
such time as is required in connection with the financing being negotiated by
Black Hawk/Jacobs Entertainment, LLC, a Colorado limited liability company (the
"LLC"), or at such time as otherwise agreed to by Black Hawk and Diversified. It
is contemplated that the $4,500,000 will be paid by Diversified on or before
March 15, 1997.
It is anticipated that the remaining $4,500,000 of the
$6,000,000 Note will be financed with the proceeds of a loan from Richard E.
Jacobs, father of Jacobs and grantor and a potential beneficiary of the
Opportunities Trust, one of the members of Diversified. Any such loan would be
made pursuant to the terms of the Credit Agreement and Revolving Note dated as
of July 31, 1996, attached to Diversified's original Schedule 13D dated November
12, 1996 as Exhibits A and B, respectively.
Jacobs was not required to pay any consideration for the
options.
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ITEM 4. PURPOSE OF TRANSACTION.
On January 13, 1997, at the Special Meeting, Black Hawk
obtained the NASD Approval. Following the Special Meeting, Black Hawk issued and
delivered to Diversified the $6,000,000 Note and the Original Note was
cancelled.
Since Black Hawk obtained the NASD Approval, all or any
portion of the unpaid principal due under the $6,000,000 Note is convertible
into Shares at a conversion price of $5.25 per Share at any time upon the
election of Diversified and, if not yet fully converted, will be automatically
converted into Shares at such time as (i) Diversified has acquired or received
all necessary and appropriate regulatory, licensing and other approvals from the
Colorado Division of Gaming, the Commission and the Colorado state and local
liquor licensing authorities and (ii) the Commission approves the issuance to
the LLC of a retail gaming license. The foregoing automatic conversion must
occur unless certain purchase or redemption provisions contained in the
Operating Agreement apply.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Items 5(a) and 5(b) are amended and supplemented as
follows:
(a) As of January 13, 1997, Black Hawk indicated to
Diversified that the number of Shares it had outstanding was 2,659,534 not
taking into account any Shares reserved for issuance upon conversion of the Note
or exercise of any options. As of January 13, 1997, Diversified had beneficial
ownership of 1,333,333 Shares, and Jacobs had beneficial ownership of 20,000
Shares. The 20,000 Shares relate to 60,000 options which were granted to Jacobs
on November 12, 1996 and become exercisable 1/3 upon conversion of the entire
unpaid principal balance of the $6,000,000 Note and 1/3 each upon the first and
second anniversary dates of such conversion. Therefore, Diversified and Jacobs
together have acquired 35.3% of the outstanding common stock of Black Hawk.
(b) Diversified has the sole power to vote and dispose of
all 1,333,333 Shares it beneficially owns and Jacobs has the sole power to vote
and dispose of all 20,000 Shares he beneficially owns. Because Jacobs is the
sole Manager of Entertainment, the Manager of Diversified, Jacobs may be deemed
to have sole power to vote or to direct the voting of the Shares and have shared
power with the Trust to dispose or to direct the disposition of Shares. Jacobs
disclaims beneficial ownership of the Shares beneficially owned by Diversified.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
A. Amended and Restated Convertible Note dated January 13,
1997, executed by Black Hawk in favor of Diversified.
B. Joint Filing Agreement of Diversified and Jacobs dated
January 13, 1997.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
January 13, 1997
---------------------------------------
DIVERSIFIED OPPORTUNITIES
GROUP LTD.
By: Jacobs Entertainment Ltd., its
Manager
By: /s/ Jeffrey P. Jacobs
----------------------------------
Jeffrey P. Jacobs, President
/s/ Jeffrey P. Jacobs
--------------------------------------
Jeffrey P. Jacobs, individually
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EXHIBIT INDEX
Exhibit Description Page No.
- ------- ----------- --------
A Amended and Restated Convertible Note
dated January 13, 1997, executed by
Black Hawk in favor of Diversified.
B Joint Filing Agreement of Diversified
and Jacobs dated January 13, 1997.
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EXHIBIT A
AMENDED AND RESTATED
CONVERTIBLE NOTE
$6,000,000 Boulder, Colorado
Originally dated
November 12, 1996
Amended and Restated as of
January 13, 1997
FOR VALUE RECEIVED, the adequacy of which is hereby acknowledged, Black
Hawk Gaming & Development Company, Inc., a Colorado corporation with its
principal office located at 2060 Broadway, Suite 400, Boulder, Colorado 80302
(the "Maker"), hereby promises to pay to the order of Diversified Opportunities
Group Ltd. (the "Holder") with its principal office located at 1231 Main Avenue,
Cleveland, Ohio 44113, the principal sum of Six Million Dollars ($6,000,000.00),
or so much thereof as shall have been advanced by the Holder at any time and not
hereafter repaid, together with interest thereon from the date hereof until
payment in full at the Charged Rate (as defined below). This Convertible Note
(the "Note") is issued pursuant to that certain Amended and Restated Purchase
Agreement dated November 12, 1996 (the "Purchase Agreement") between the Maker
and the Holder.
1. PAYMENT OF PRINCIPAL
All principal outstanding hereunder shall be due in one payment, in
full, on November 12, 1998. Principal of and interest on this Note are payable
in lawful money of the United States of America at the Holder's address stated
above, or at such other place as the Holder shall designate to the Maker in
writing.
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2. INTEREST
a. For purposes of this Note, the following terms shall have the
meanings given them in this subsection a.:
i. "Adjusted Eurodollar Rate": For each calendar month until
this Note is paid in full, the rate (rounded upward, if
necessary, to the next one hundredth of one percent)
determined by dividing the Eurodollar Rate for such Interest
Period by 1.00 minus the Eurodollar Reserve Percentage;
ii. "Eurodollar Business Day": A day (other than a Saturday,
Sunday or legal holiday) on which banks are open for
business in New York City and on which there is trading by
and between banks in United States dollar deposits in the
interbank Eurodollar market.
iii. "Eurodollar Rate": For each calendar month, the interest
rate per annum (rounded upward, if necessary, to the next
one-sixteenth of one percent) at which United States dollar
deposits are offered to First Bank National Association (the
"Bank") in the interbank Eurodollar market two Eurodollar
Business Days prior to the first day of such calendar month
for delivery in immediately available funds on the first day
of such month and in an amount approximately equal to the
outstanding principal amount of the Note and for a thirty
(30) day maturity; provided, that in lieu of determining the
rate in the foregoing manner, the Holder may substitute the
per annum Eurodollar rate
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(LIBOR) for United States dollars displayed on the Telerate
Systems, Inc. screen, page 3750 (or other applicable page),
on the first day of such calendar month.
iv. "Eurodollar Reserve Percentage": As of any day, that
percentage (expressed as a decimal) which is in effect on
such day, as prescribed by the Federal Reserve Board for
determining the maximum reserve requirement (including any
basic, supplemental or emergency reserves) for a member bank
of the Federal Reserve System, with deposits comparable in
amount to those held by the Bank, in respect of
"Eurocurrency Liabilities" as such term is defined in
Regulation D of the Federal Reserve Board. The rate of
interest applicable to the outstanding principal balance of
the Note shall be adjusted automatically on and as of the
effective date of any change in the Eurodollar Reserve
Percentage.
b. This Note shall bear interest on the unpaid principal amount at a
variable rate per annum equal to the sum of (1) the Adjusted
Eurodollar Rate, plus (2) two percent (2.00%) (the "Charged
Rate"). The Charged Rate shall be adjusted monthly on the first
day of each calendar month and each change in the Charged Rate
shall result immediately, without notice or demand of any kind,
in a corresponding change in the interest rate under the Note.
Interest shall be payable on the last day of each calendar
quarter, and, in the event of a permitted prepayment, on the date
of such prepayment. The Holder shall
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provide the Maker with notice of the Charged Rate periodically in
order to permit the Maker to make timely payments hereunder.
c. Any amount not paid when due under this Note, whether at the date
scheduled for payment or earlier upon acceleration, shall bear
interest until paid in full at a rate per annum equal to the
Charged Rate plus four percent (4.00%) (the "Default Rate").
3. FACILITY FEE
Maker shall pay to Holder an annual facility fee (the "Facility Fee")
equal to 1/4 of 1% of the amount of principal outstanding hereunder. The
Facility Fee shall be due and payable to Holder on the date hereof and on the
same day of each subsequent year until this Note is paid in full.
4. SECURITY
This Note is be secured by a first priority lien on the Maker's interest
in the LLC (as defined in the Purchase Agreement) equal to 100% of the Maker's
Membership Interest and the products and proceeds thereof, including but not
limited to, its Capital Interest, interest in the Net Profits and Net Losses and
Net Cash Flow of the LLC (each as defined in the Operating Agreement for the LLC
(the "Operating Agreement")), and all other rights and privileges associated
with Maker's membership in the LLC; provided, however, that the Holder's
remedies upon an Event of Default hereunder shall be limited as set forth in
Section 11 b., below. The Holder and BH Entertainment Ltd. ("Entertainment") are
the other members of the LLC.
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5. PROFIT PARTICIPATION. In addition to the interest payable pursuant to
Section 2, until conversion of the entire unpaid principal balance of the Note
in accordance with Section 8, below, Maker shall pay to the Holder, as and when
received by the Maker, 40% of the Net Cash Flow distributed by the LLC to the
Maker.
6. PREPAYMENT Except as may be required by the Commission, the Division
or other Governmental Authority (all as defined in the Purchase Agreement), the
Maker may not prepay this Note without the prior written consent of the Holder.
7. COVENANTS. So long as any indebtedness under this Note remains
outstanding, Maker shall not, without the prior written consent of the Holder:
a. directly or indirectly declare or pay any dividends or make any
distributions upon any of its common stock or other equity securities;
b. except with respect to the Maker's obligation to acquire 12,500
shares of its common stock pursuant to a put option incurred by the Maker when
it acquired certain property, directly or indirectly redeem, purchase or
otherwise acquire any of the Maker's common stock or other equity securities
(including, without limitation, options and other rights to acquire such common
stock or other equity securities), or directly or indirectly redeem, purchase or
make any payments with respect to any stock appreciation rights, phantom stock
plans or similar rights or plans;
c. except with respect to the exercise of warrants and options currently
outstanding as shown on Schedule 5(c) to the Purchase Agreement, authorize,
issue or enter into any agreement providing for the issuance (contingent or
otherwise) of (i) any notes or debt securities containing equity features
(including, without limitation, any notes or debt
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securities convertible into or exchangeable for capital stock or other equity
securities, issued in connection with the issuance of capital stock or other
equity securities or containing profit participation features) or (ii) any
capital stock or other equity securities (or any securities convertible into or
exchangeable for any capital stock or other equity securities); PROVIDED, that
the Maker may, without the Holder's consent, issue up to an aggregate of 100,000
shares of its common stock;
d. merge or consolidate with any person or permit any subsidiary to
merge or consolidate with any person (other than a wholly-owned subsidiary);
provided, that a subsidiary may merge with another person so long as after such
merger the Maker owns at least 80% of the (i) capital stock of the surviving
corporation possessing the right to vote for the election of directors and (ii)
number of shares of the common stock of the surviving corporation then
outstanding;
e. sell, lease or otherwise dispose or, or permit any subsidiary to
sell, lease or otherwise dispose of, more than 50% of the consolidated assets of
the Maker and its subsidiaries (computed on the basis of book value, determined
in accordance with generally accepted accounting principles consistently
applied, or fair market value);
f. except with respect to the sale of the Maker's subsidiary formed for
the purpose of obtaining a gaming license in downtown Oklahoma City, Oklahoma
with the Sac and Fox Indian Nation, issue or sell any shares of the capital
stock, or rights to acquire shares of the capital stock, of any subsidiary to
any person (other than the Holder or a permitted assignee of the Holder) if
immediately after such issuance or sale the Maker owns
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less than 80% of the (i) capital stock possessing the right to vote for the
election of directors and (ii) the number of shares of the common stock of any
subsidiary then outstanding;
g. liquidate, dissolve or effect a recapitalization or reorganization in
any form of transaction (including, without limitation, any reorganization into
a limited liability company or into partnership or other non-corporate form);
h. make any amendment to the Articles of Incorporation or the Maker's
bylaws or file a resolution of the Board of Directors with the Colorado
Secretary of State containing any provisions, which would increase the number of
authorized shares of common stock of the Maker or adversely affect or otherwise
impair the rights of the Holder under the Agreement; or
i. create, incur or assume, or permit any subsidiary to create, incur or
assume additional indebtedness in excess of $1,000,000.
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8. CONVERSION
a. All or any portion of the unpaid principal balance shall be
convertible into shares of common stock of the Maker, $.001 par value per Share
(the "Common Stock") at any time upon the election of the Holder and, if not yet
fully converted, shall, provided the provisions of Article XI of the Operating
Agreement do not apply, automatically be converted, at such time as (i) the
Holder has acquired or received all necessary and appropriate regulatory,
licensing and other approvals (to permit the Holder to convert the Note and hold
the resulting Conversion Shares) from the Colorado Division of Gaming (the
"Division"), the Colorado Limited Gaming Control Commission (the "Commission")
and the state and local liquor licensing authorities and (ii) the Commission
approves the issuance to the LLC of a retail gaming license for the proposed
casino of the LLC. The number of shares of Common Stock into which this Note may
be converted ("Conversion Shares") shall be determined by dividing the amount of
the then unpaid principal balance of this Note specified in the notice described
in Section 8.c. below for conversion by $5.25 (the "Conversion Price").
b. Any Conversion Shares shall have the registration rights set forth in
the Registration Agreement among the Maker, the Holder and certain shareholders
of the Maker dated of even date herewith.
c. Before the Holder shall be entitled to convert this Note into
Conversion Shares in the event of an optional conversion by the Holder, it shall
give written notice by mail, postage prepaid, to the Maker at its principal
corporate office, of the election to convert the same. Such notice shall state
therein the date on which such conversion will
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occur. The Maker at its own expense shall, as soon as practicable thereafter or
as soon as practicable after the issuance of the retail gaming license for the
LLC's casino in the event of an automatic conversion, issue and deliver at such
office to the Holder of this Note a certificate or certificates for the number
of Conversion Shares to which the Holder of this Note shall be entitled. At the
time such certificates are issued, accrued interest on the amount of principal
so converted shall be paid by the Maker to the Holder. Such conversion shall be
deemed to have been made immediately prior to the close of business on the date
of conversion specified in such written notice, or, on the date of issuance of
the retail gaming license to the LLC in the event of an automatic conversion,
and the Holder of this Note shall be treated for all purposes as the record
holder of such Conversion Shares. To the extent that the entire unpaid principal
balance of this Note is not being converted in Conversion Shares, the Maker of
this Note shall credit the Note on its books to the extent of the principal
being converted by the Holder into Conversion Shares.
d. No fractional share of Common Stock shall be issued upon conversion
of this Note. In lieu of the Maker issuing any fractional share to the Holder
upon the conversion of this Note, the Maker shall pay, in cash, to the Holder
the amount of outstanding principal that is applicable to such fractional share.
e. At its expense, the Maker shall, as soon as practicable thereafter,
issue and deliver to such Holder at such principal office a certificate or
certificates for the number of Conversion Shares to which the Holder shall be
entitled upon such conversion (bearing such legends as are required by
applicable state and federal securities and other laws in the opinion of counsel
to the Maker), together with any other securities and property to which
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the Holder is entitled upon such conversion under the terms of this Note,
including a check payable to the Holder for any cash amounts payable as
described above and for all amounts of interest accrued as of the date of
conversion. Such conversion shall be deemed to have been made immediately prior
to the close of business on the date specified in such notice and on and after
such date the Holder of this Note entitled to receive the Conversion Shares
shall be treated for all purposes as the record holder of such Conversion
Shares. Upon conversion of this Note and delivery of the check described above,
the Maker shall be forever released from all its obligations and liabilities
under this Note to the extent of the amount of unpaid principal which the Holder
has elected to convert into Conversion Shares.
9. CONVERSION PRICE ADJUSTMENTS.
a. In the event the Maker should at any time or from time to time after
the date of issuance hereof fix a record date for the effectuation of a split or
subdivision of the outstanding shares of Common Stock or the determination of
holders of Common Stock entitled to receive a dividend or other distribution
payable in additional shares of Common Stock or other securities or rights
convertible into, or entitling the holder thereof to receive directly or
indirectly, additional shares of Common Stock (hereinafter referred to as
"Common Stock Equivalents") without payment of any consideration by such holder
for the additional shares of Common Stock or the Common Stock Equivalents
(including the additional shares of Common Stock issuable upon conversion or
exercise thereof), then, as of such record date (or the date of such dividend
distribution, split or subdivision if no record date is fixed), the Conversion
Price of this Note shall be appropriately decreased so
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that the number of Conversion Shares issuable upon conversion of this Note shall
be increased in proportion to such increase of outstanding shares.
b. If the number of shares of Common Stock outstanding at any time after
the date hereof is decreased by a combination of the outstanding shares of
Common Stock, then, following the record date of such combination, the
Conversion Price for this Note shall be appropriately increased so that the
number of Conversion Shares issuable on conversion hereof shall be decreased in
proportion to such decrease in outstanding shares.
c. In the event of (i) any taking by the Maker of a record of the
holders of any class of securities of the Maker for the purpose of determining
the holders thereof who are entitled to receive any dividend (other than a cash
dividend) or other distribution, or any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities or
property, or to receive any other right, or (ii) any capital reorganization of
the Maker, any reclassification or recapitalization of the capital stock of the
Maker or any transfer of all or substantially all of the assets of the Maker to
any other person or any consolidation or merger involving the Maker, or (iii)
any voluntary or involuntary dissolution, liquidation or winding up of the
Maker, the Maker will mail to the Holder of this Note a notice specifying (A)
the date on which any such record is to be taken for the purpose of such
dividend, distribution or right, and the amount and character of such dividend,
distribution or right, (B) the date on which any such reorganization,
reclassification, transfer, consolidation, merger, dissolution, liquidation or
winding up is expected to become effective and the record date for determining
stockholders entitled to vote thereon and (C) the new Conversion Price after
giving effect to the adjustment event,
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which new Conversion Price shall represent an appropriate increase or decrease
in the Conversion Price to preserve the proportionate amount of Conversion
Shares. Such notice shall be mailed at least twenty (20) days prior to the date
described in clause (A) or (B) above.
d. The Maker shall at all times reserve and keep available out of its
authorized but unissued shares of Common Stock solely for the purpose of
effecting the conversion of the Note into such number of Conversion Shares as
shall from time to time be sufficient to effect the conversion of the Note; and
if at any time the number of authorized but unissued shares of Common Stock
shall not be sufficient to effect the conversion of the entire outstanding
principal amount of this Note, in addition to such other remedies as shall be
available to the Holder of this Note, the Maker will use its best efforts to
take such corporate action as may, in the opinion of its counsel, be necessary
to increase its authorized but unissued shares of Common Stock to such number of
shares as shall be sufficient for such purposes.
10. EVENTS OF DEFAULT
"Event of Default," whenever used herein, means any one or more of the
following defaults shall have occurred and be continuing (whatever the reason
for such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
i. Default in the payment of any installment of interest, the
Facility Fee,
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the principal of this Note or any other amount payable hereunder when
such payment becomes due and payable, whether at maturity, by
acceleration or otherwise, and such default shall continue unremedied
for a period of fifteen (15) days;
ii. Default in the performance or breach of any other agreement,
covenant or warranty of the Maker contained in this Note, and such
default or breach shall continue unremedied for a period of thirty (30)
days after the date on which written notice of such default or breach,
requiring the Maker to remedy the same, shall have been given to the
Maker by the Holder, or such longer period provided that the default is
of a nature that cannot be remedied within 30 days and the Maker has
within the thirty (30) day period instituted curative action and
diligently and continuously pursues such action to completion;
iii. The entry of a decree or order by a court having
jurisdiction adjudging the Maker a bankrupt or insolvent, or approving
as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Maker under federal
bankruptcy law or any similar federal or state law for the relief of
debtors ("Bankruptcy Law"), or appointing a receiver, liquidator,
assignee, trustee, conservator, sequestrator or assignee in bankruptcy
or insolvency of the Maker or of any substantial part of its property,
or ordering the winding up or liquidation of its affairs, and such
decree or order shall have continued undischarged and unstayed for a
period of thirty (30) days;
iv. The Maker shall commence a voluntary case or shall consent to
the entry of an order for relief in any involuntary case under
Bankruptcy Law, or shall
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consent to the appointment of or taking possession by a receiver,
liquidator, custodian, sequestrator, trustee or assignee of any
substantial part of its property, or shall make an assignment for the
benefit of creditors, or shall fail generally to pay its debts as they
become due;
v. There shall have occurred any circumstance or event which,
upon the lapse of time, the giving of notice, or both, would constitute
an event of default under any other indebtedness of the Maker, except if
the same is cured or waived within any applicable grace period;
vi. The Maker shall have failed to give written notice within
five (5) days after the occurrence of the event or circumstances
described in clause (v), above;
vii. Entertainment delivers a notice to the Maker that pursuant
to the terms of the Operating Agreement, it is electing its Purchase
Right of the Maker's Membership Interest in the LLC, or an event occurs
that pursuant to the terms of the Operating Agreement would subject all
of the Maker's Membership Interest in the LLC to automatic and immediate
termination; or
viii. Breach or default by the Maker of any representation,
warranty, agreement or covenant pursuant to the Purchase Agreement or
any other agreement between the Holder and the Maker.
11. REMEDIES
a. Subject to subsection b., below, if an Event of Default occurs and is
continuing (unless waived in writing by the Holder), then, and in each and every
case, unless the entire principal of this Note already shall have become due and
payable, the Holder may, by a
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notice in writing to the Maker, declare the principal and the accrued interest
on this Note to be immediately due and payable. The principal and accrued
interest on this Note shall become and shall be immediately due and payable upon
such declaration.
b. The following provisions shall apply if an Event of Default shall
occur. The principal and accrued interest on this Note shall be immediately due
and payable without any notice or other action being required on the part of
Holder. If the Event of Default consists of Entertainment's election of a
Purchase Right, then the Holder's remedies for this Event of Default shall be
limited to the extent and in the circumstances provided in the Operating
Agreement. If the Event of Default is one that causes the automatic termination
of the Maker's Membership Interest, and the Membership Interest of the Holder as
a result increases in accordance with the provisions of the Operating Agreement,
then the Holder shall transfer the Note to the LLC as provided by the Operating
Agreement and shall exercise no remedies thereunder inconsistent with its
obligations as set out under the Operating Agreement. In the event of any other
Event of Default hereunder, then Holder's remedies shall be limited in the same
manner as if the Event of Default consists of Entertainment's election of the
Purchase Right under the Operating Agreement. In any event, provided all of the
applicable provisions of Section 11.2(b) of the Operating Agreement occur,
Holder shall take no further action against the Maker to enforce payment under
the Note, except for the payment of accrued but unpaid interest.
12. MISCELLANEOUS
a. The Maker hereby waives presentment, notice of dishonor, protest and
diligence in bringing suit against the Maker. Acceptance by the Holder of any
payment
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<PAGE> 16
which is less than the full amount then due and owing hereunder shall not
constitute a waiver of the Holder's right to receive payment in full at such
time or at any prior or subsequent time. The Maker consents that the time of
payment may be extended an unlimited number of times before or after maturity
without notice to the Maker, and that the Maker shall not be discharged by
reason of any such extension or extensions of time. No delay or omission on the
part of the Holder in exercising any right hereunder shall operate as a waiver
of such right or any other right under this Note. A waiver on any one occasion
shall not be construed as a bar to or waiver of any such right or remedy on any
future occasion.
b. Notwithstanding the foregoing, if at any time implementation of any
provision hereof shall cause the interest contracted for or charged herein and
collectible hereunder to exceed the applicable lawful maximum rate, then the
interest shall be limited to such lawful maximum.
c. The Maker shall be liable for any and all costs and expenses of
collection of the interest required to be paid hereunder, including, without
limitation, reasonable attorneys' fees, arising by virtue of an Event of
Default.
d. This Note shall be subject to and construed in accordance with the
laws of the State of Colorado. If any provision herein shall be unenforceable,
such unenforceable provision shall not render the remaining provisions hereof
unenforceable or invalid.
e. This Note shall be binding upon the Maker and the Maker may not
assign its obligations hereunder without the prior written consent of the
Holder. The Holder may assign its rights hereunder, in whole or in part, to one
or more corporations, limited liability
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companies, partnerships, trusts or other entities which are under common control
with or controlled through equity ownership and/or voting control by, the Holder
or Jeffrey P. Jacobs; it being acknowledged that (i) any entity managed by
Jacobs Entertainment Ltd. ("JEL") or Jeffrey P. Jacobs, (ii) any entity in which
either JEL or Jeffrey P. Jacobs is one of the trustees and/or one of the
beneficiaries or (iii) any entity in which either JEL or Jeffrey P. Jacobs
beneficially owns 15% or more of the outstanding equity securities constitutes
common control.
BLACK HAWK GAMING & DEVELOPMENT
COMPANY, INC.
By: /s/ Stephen R. Roark
-------------------------------------
Title: President
---------------------------------
<PAGE> 1
EXHIBIT B
JOINT FILING AGREEMENT
THIS JOINT FILING AGREEMENT (the "Agreement") made as of the 13th day of
January, 1997, between Jeffrey P. Jacobs and Diversified Opportunities Group
Ltd.
W I T N E S S E T H:
For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the undersigned hereby agree pursuant to Rule
13d-1(f) promulgated under the Securities Exchange Act of 1934, as amended, (i)
that Amendment No. 1 to Schedule 13D dated January 13, 1997, and pertaining to
the common stock, $0.01 par value per share, of Black Hawk Gaming & Development
Company, Inc. (the "Statement") was filed on behalf of each of the undersigned
and (ii) that until further notice, all subsequent amendments to the Statement
are filed on behalf of each of the undersigned.
IN WITNESS WHEREOF, this Agreement has been executed by each of the
undersigned as of the 13th day of January, 1997.
/s/ Jeffrey P. Jacobs
-------------------------------------------
Jeffrey P. Jacobs
DIVERSIFIED OPPORTUNITIES GROUP LTD.
By: Jacobs Entertainment Ltd., its manager
By: /s/ Jeffrey P. Jacobs
---------------------------------------
Jeffrey P. Jacobs, President
