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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) April 24, 1998
BLACK HAWK GAMING & DEVELOPMENT COMPANY, INC.
----------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Colorado 0-21736 84-1158484
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(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
17301 West Colfax Avenue, Suite 170
Golden, Colorado 80401
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 216-0908
None
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Former name or former address if changed since date of last filing
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Item 2. Acquisition or Disposition of Assets.
As reported on Form 8-K dated January 6, 1998, Black Hawk Gaming &
Development Company, Inc. ("Black Hawk") had entered into agreements to acquire:
(i) all of the outstanding common stock of Gilpin Ventures, Inc. ("GVI") and its
affiliates' interests in the Gilpin Hotel Venture ("GHV"); and (ii) the real
property leased by the Gilpin Hotel Venture from Black Hawk and the co-owner of
the land, Gilpin Gold, Inc. ("GGI"). Black Hawk and GVI each owned a 50%
interest in GHV which operates a gaming facility in Black Hawk, Colorado and
Black Hawk and GGI each owned an undivided 50% interest in the land underlying
the GHV Casino and in certain parcels across Main Street from the Casino. Black
Hawk now owns 100% of the Gilpin Hotel Casino as a result of its acquisition of
all of GVI's outstanding common stock.
The two transactions were closed on April 24, 1998. To recapitulate the
financial terms as earlier reported in the referenced Form 8-K:
(a) With respect to the acquisition of the outstanding common
stock of GVI:
o $50,000 had been paid to GVI stockholders by Black Hawk
upon signing of the agreement;
o $4,950,000 was paid by Black Hawk to GVI stockholders at
the closing;
o $250,000 was paid by Black Hawk to an affiliate of GVI at
closing, for termination of a consulting agreement.
(b) With respect to the purchase of the land from GGI,
Black Hawk paid to GGI the sum of $4,750,000 at
closing.
(c) Certain allocations of profits from the Gilpin Hotel
Casino, rents on the land purchased, taxes and other
items were made through April 24, 1998 the date of
closing and were paid or will be paid to the GVI
shareholders and to GGI.
Reference is made to Items 1 and 2 of Black Hawk's Annual Report on
Form 10-K for the year ended December 31, 1997 for previously reported
information concerning these transactions.
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Item 5. Other Events.
In connection with the acquisitions referred to in Item 2 above, Black
Hawk entered into a Credit Agreement with Wells Fargo Bank, National Association
("Wells Fargo"). Some of the more important terms of the Credit Agreement are as
follows:
(i) the facility under the Credit Agreement is a five
year reducing revolving line of credit in the amount
of $20 million. Approximately $13.5 million was drawn
down at closing to fund the acquisitions described in
Item 2 above and to pay existing mortgage debt
against the property purchased.
(ii) the undrawn balance of the facility will be used to
pay certain equipment debt, to pay for the third
story of a parking garage under construction across
Main Street from the Gilpin Hotel Casino, and for
working capital;
(iii) the facility bears interest at the rate of 75 basis
points over prime (approximately 9.5% currently);
(iv) beginning January 1, 1999, the maximum credit line
available will be reduced by $500,000 per quarter
until April 24, 2001 when the outstanding balance of
the facility will be due;
(v) the Credit Agreement contains a number of affirmative
and negative covenants which, among other things,
requires Black Hawk to maintain certain financial
ratios and refrain from certain actions without Wells
Fargo's concurrence; and
(vi) substantially all of the assets of the Gilpin Hotel
Venture, GVI and Black Hawk (except Black Hawk's 75%
interest in The Lodge Casino) are pledged as security
for repayment of the credit facility. The Credit
Agreement also contains customary events of default
provisions.
Reference is made to Item 7 hereof under which the Credit Agreement is
filed. The foregoing summary is qualified in its entirety to such Credit
Agreement.
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Item 7. Financial Statements and Exhibits.
(a)(b) The financial statements for the business acquired and the pro
forma financial statements required under this Item 7 will be
filed within 60 days after the date of this report or, if
appropriate, such will be included in Black Hawk's Report on
Form 10-Q for the quarter ended March 31, 1998.
(c) The following are filed as exhibits hereto:
Exhibit No. Description
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10.A(98) Stock Purchase Agreement
10.B(98) Credit Agreement
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BLACK HAWK GAMING & DEVELOPMENT
COMPANY, INC.
By: /s/ Stephen R. Roark
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Stephen R. Roark, President
Date: April 28, 1998
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
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<S> <C>
10.A(98) Stock Purchase Agreement
10.B(98) Credit Agreement
</TABLE>
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered
into this 10th day of March 1998, by and among Claudette K. Lee, Candace K.
Thoke, Jeffrey L. Lee, Steven R. Lee, Janice L. Atkins, Jeanette M. Cox, Douglas
K. Lee, and Robert W. and Kathy L. Dunlap as joint tenants, (hereafter
collectively referred to as the "Sellers"); and BLACK HAWK GAMING & DEVELOPMENT
COMPANY, INC., a Colorado corporation (the "Purchaser"). GILPIN VENTURES, INC.,
a Colorado corporation ("GVI"), is a party hereto for certain purposes.
EXPLANATORY STATEMENT
A. The Sellers constitute all of the stockholders and all of the
directors of GVI which is a co-venturer with the Purchaser and which owns a 50%
interest in the Gilpin Hotel Venture ("GHV"), a limited gaming casino in Black
Hawk, Colorado.
B. The Sellers own of record and beneficially and in the aggregate
50,000 shares of the common stock (the "Common Stock") of GVI (such 50,000
shares of Common Stock shall be hereinafter collectively referred to as the
"Sellers' Shares"). The Sellers' Shares constitute all of the issued and
outstanding capital stock of GVI.
C. The Sellers desire to sell, assign, transfer and deliver to the
Purchaser, and the Purchaser desires to purchase, all, but not less than all, of
the Sellers' Shares on the terms and subject to the conditions hereinafter
contained.
NOW THEREFORE, in consideration of the mutual covenants, promises,
agreements, representations and warranties contained in this Agreement, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto do hereby covenant, promise, agree,
represent and warrant as follows:
1. Purchase and Sale of the Sellers' Shares.
1.1 Purchase and Sale. On the terms and subject to the
conditions set forth in this Agreement, at the Closing on the Closing Date, the
Sellers shall each sell, assign, transfer and deliver to the Purchaser and the
Purchaser shall purchase from each of the Sellers, that number of the Sellers'
Shares as is set forth opposite the name of each of the Sellers as follows:
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<TABLE>
<CAPTION>
NUMBER OF SELLERS'
SHARES THAT SHALL BE ALLOCATION OF
SELLERS SOLD TO PURCHASER PURCHASE PRICE
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<S> <C> <C>
Robert W. & Kathy L. Dunlap
(Joint Tenants) 25,000 $2,500,000
Janice L.Atkins 3,572 $ 357,200
Candace K. Thoke 3,572 $ 357,200
Douglas K. Lee 3,572 $ 357,200
Jeanette M. Cox 3,571 $ 357,100
Jeffrey L. Lee 3,571 $ 357,100
Steven R. Lee 3,571 $ 357,100
Claudette K. Lee 3,571 $ 357,100
TOTAL $5,000,000
</TABLE>
1.2 Purchase Price; Transfer of Securities. (a) The full, entire
and aggregate purchase price that has been and shall be paid at the Closing on
the Closing Date by the Purchaser to the Sellers for the Sellers' Shares shall
be Five Million Dollars ($5,000,000) (the "Purchase Price"). The Purchase Price
shall be allocated among the Sellers as set forth in 1.1 above and has been and
shall be paid as follows:
(b) Fifty Thousand Dollars ($50,000) has been
paid and by check of the Purchaser (# 5160) dated December 22, 1997 payable to
the order of GVI and shall be allocated to the Sellers at Closing in accordance
with 1.1 above.
(c) Four Million Nine Hundred and Fifty Thousand
Dollars ($4,950,000) shall be paid and allocated to each of the Sellers, by
checks of the Purchaser payable to the order of each Seller in accordance with
allocation ratio in 1.1 above.
(d) The Sellers shall deliver to the Purchaser
at the Closing on the Closing Date, concurrently with the payment of the
Purchase Price, free and clear of any and all liens and encumbrances, stock
certificates of GVI, representing the Sellers' Shares owned of record and
beneficially by each of the Sellers, duly endorsed in blank, or accompanied by
assignments separate from certificates duly endorsed in blank.
1.3 Distributions; Reserves. In addition to the payments in
1.2 but not as a part of the Purchase Price: (a) As soon as possible after
receiving GHV's results of operations for the year ended December 31, 1997 as
audited by Deloitte & Touche LLP, a distribution will be made to GVI in
accordance with Paragraph 14A of the Joint Venture Agreement in the amount, when
added to previous distributions to GVI of net income made during 1997, will
equal 50% of audited net income for the year 1997. Moreover, during the period
from January 1, 1998 and until the Closing Date, GHV shall make distributions in
a manner consistent with past practices, the determination of which may be
reviewed by Deloitte & Touche LLP, to insure
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consistency of accounting principles with prior periods. If the Closing occurs,
all such distributions shall be made without adjustment for reserves (except
those authorized under 7.3 below) and without repayment by GVI to the Advance
Account. If Closing does not occur, such distributions and activities for
calendar year 1998 will be subject to the provisions of the Advance Account; and
(b) In addition to the payments above, at the
Closing, GHV shall retain no more than a $1,500,000 operational reserve
(described on the GHV Balance Sheet as the operating account, credit card
account, OTB-petty cash, change banks, poker podium, black jack table fills,
slot hopper fills, house bank poker table fills, currency/coin/checks, and
miscellaneous), and at the GVI Closing, all other reserve amounts shall be
distributed one-half to GVI and one-half to Purchaser, which distribution may be
reviewed by GVI and/or Deloitte & Touche LLP, all of which reserves shall be
maintained in the ordinary course of business. GVI shall have no obligation to
make an additional contribution to the operational reserve.
(c) All such distributions under (a) and (b)
above shall be allocated to the Sellers and paid to them by GVI at or prior to
Closing; provided, as to distributions not capable of calculation as of the
Closing Date, BHWK shall gather the necessary information and perform the
necessary calculations to make all distributions within 30 days of the Closing
Date.
2. Extension of Closing Date. The closing of the purchase and sale of
the Sellers' Shares provided for by this Agreement (referred to throughout this
Agreement as the "Closing") shall take place at the law offices of Jones &
Keller, P.C. on or before June 30, 1998, at 10:00 a.m., provided that the
Closing Date (defined below) may be extended ("Extension") for not more than
three one-month periods upon written notice by Purchaser delivered to Sellers in
accordance with 13.9 not less than 5 days prior to the Closing Date, together
with payment by Purchaser of $50,000 ("Extension Fee") with each delivery of a
notice of Extension; provided further Black Hawk shall provide 30 days advance
written notice to GVI for a Closing prior to June 30, 1998. Any such amounts
paid for Extensions shall be nonrefundable deposits, provided however that each
Extension Fee shall be credited against the amount to be paid pursuant to 1.2(c)
at Closing if such fee was paid within 30 days prior to the date of the Closing
occurs. The time, place and date of the Closing are referred to throughout this
Agreement as the "Closing Date".
3. Representations and Warranties.
3.1 Representations and Warranties of Sellers. Each of the Sellers
represents and warrants to the Purchaser with respect to himself/herself and to
his/her Sellers' Shares only that:
(a) Ownership of Sellers' Shares. Such Seller
is the sole and exclusive record and beneficial owner of that number of the
Seller's Shares as is set forth
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opposite his or her name in 1.1 of this Agreement. Such Seller possesses good
and merchantable title to his or her respective Seller's Shares, and except as
stated in 3.2(c) owns his or her respective Sellers' Shares free and clear of
any and all security interests, agreements, restrictions, claims, liens, pledges
and encumbrances of any nature or kind. Such Seller has the absolute and
unconditional right to sell, assign, transfer and deliver his or her respective
Seller's Shares to the Purchaser in accordance with the terms of this Agreement.
(b) Validity of Agreement. Such Seller has the
legal capacity and authority to enter into this Agreement. This Agreement is a
valid and legally binding obligation of such Seller and is fully enforceable
against such Seller in accordance with its terms, except as such enforceability
may be limited by general principles of equity, bankruptcy, insolvency,
moratorium and similar laws relating to creditors' rights generally.
(c) No Brokerage. No Seller has not incurred
any obligation or liability, contingent or otherwise, for brokerage fees,
finder's fees, agent's commissions, or the like in connection with this
Agreement or the transactions contemplated hereby.
3.2. Representations and Warranties of Officers & Directors.
Robert W. Dunlap, Douglas K. Lee, and Kathy L. Dunlap are officers and directors
of GVI (the "Representing Shareholders"). Notwithstanding any statement in this
Article 3 or otherwise in this Agreement to the contrary, the representations
and warranties of the Representing Shareholders shall not be deemed to cover the
limited gaming casino, restaurant, bar, real property and retail businesses
operated and conducted by GHV in the State of Colorado (the "Business") except
as otherwise expressly provided herein, or any matter affecting the casino
industry generally. Subject to the foregoing qualification, Representing
Shareholders for a period of one year from the date of this Agreement represent,
covenant, and warrant to Purchaser as follows:
(a) Due Organization; Good Standing; Authority
of GVI. As of Closing, GVI is a corporation duly organized, validly existing as
a corporation, and in good standing under the laws of the State of Colorado. As
of Closing, GVI has full right, power, and authority to own its properties and
assets, and to carry on its business as a venturer in GHV. A complete and
correct copy of each of GVI's Articles of Incorporation, as amended to the date
of this Agreement, (the "Charter") certified by the Secretary of State of the
State of Colorado (the "Department") and bylaws, as amended to the date of this
Agreement, (the "Bylaws"), are attached to this Agreement as Exhibits 1 and 2,
respectively, and are incorporated by reference herein. As of Closing, the
Charter and the Bylaws are in full force and effect, and GVI is not in breach or
violation of any of the provisions thereof. The minute books of GVI containing
the minutes of the meetings of the stockholders of GVI and the board of
directors of GVI, which were heretofore made available to the Purchaser for
examination, are, except as provided below, complete and correct and accurately
reflect all proceedings of the stockholders of GVI and the board of directors of
GVI. The Purchaser and GVI have agreed not to institute arbitration for certain
issues that may be arbitrable between them, as provided for in 7.4.
Consequently, Purchaser and GVI acknowledge that such privileged matters,
currently deleted
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from GVI minute books and from other GVI records subject to inspection by
Purchaser, will be delivered to Purchaser at Closing.
(b) Capitalization; the GVI Stock; Related
Matters. As of Closing, GVI's authorized capital stock consists of 50,000 shares
of common stock, of which 50,000 shares, namely, the Sellers' Shares, are issued
and outstanding and owned of record and beneficially by each Seller as is set
forth opposite the name of each Seller in 1.1 of this Agreement. The Sellers'
Shares have been duly, legally and validly issued, and are fully-paid and
non-assessable. Delivery of the Sellers' Shares by the Sellers to the Purchaser
at the Closing on the Closing Date pursuant to this Agreement will transfer to
the Purchaser full and entire legal and equitable title to 100% of the issued
and outstanding capital stock of GVI.
(c) Options, Warrants and Other Rights and
Agreements Affecting GVI Capital Stock. As of Closing, GVI has no authorized or
outstanding options, warrants, calls, subscriptions, rights, convertible
securities or other securities (as defined in the federal Securities Act of 1933
(hereinafter "Securities")) or, except as identified on Exhibit 2.1, any
commitments, agreements, arrangements or understandings of any kind or nature
obligating GVI, in any such case, to issue shares of GVI capital stock or other
Securities or securities convertible into or evidencing the right to purchase
shares of GVI capital stock or other Securities. As of Closing, GVI is not a
party to any agreement, understanding, arrangement or commitment, or bound by
any Articles of Incorporation or Bylaw provision which creates any rights in any
person with respect to the authorization, issuance, voting, sale or transfer of
any shares of GVI's capital stock or other Securities. All agreements identified
on Exhibit 2.1 shall be terminated at Closing.
(d) No Subsidiaries. GVI does not have any
subsidiaries and does not, directly or indirectly, own any interest in or
control any corporation, partnership, joint venture, or other business entity
except for GHV.
(e) Agreement Not in Conflict with Other
Instruments; Required Approvals Obtained. The execution, acknowledgment,
sealing, delivery, and performance of this Agreement and the consummation of the
transactions contemplated by this Agreement will not (a) violate or require any
registration, qualification, consent, approval, or filing under, (i) any law,
statute, ordinance, rule or regulation (hereinafter collectively referred to as
"Laws") of any federal, state or local government (hereinafter collectively
referred to as "Governments") or any agency, bureau, commission or
instrumentality of any Governments (hereinafter collectively referred to as
"Governmental Agencies" except as set forth on Exhibit 3 hereto), or (ii) any
judgment, injunction, order, writ or decree of any court, arbitrator, Government
or Governmental Agency by which GVI or any of its assets or properties is bound;
(b) conflict with result in the breach or termination of any provision of,
constitute a default under, result in the acceleration of the performance of
GVI's obligations under, or result in the creation of any claim, security
interest, lien, charge, or encumbrance upon any of GVI's properties, assets, or
businesses pursuant to, (i) GVI's Charter or Bylaws, (ii) any indenture,
mortgage, deed of trust, license, permit, approval, consent, franchise, lease,
contract, or other instrument or agreement to which GVI is a party or by which
GVI or any of GVI's assets or properties is bound, or (iii) any
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judgment, injunction, order, writ or decree of any court, arbitrator, Government
or Governmental Agency by which GVI or any of its assets or properties is bound.
(f) Conduct of Business in Compliance with
Regulatory and Contractual Requirements. GVI has conducted and is conducting
GVI's business in compliance with all applicable Laws of all Governments and
Governmental Agencies. Neither the real or personal properties owned, leased,
operated or occupied by GVI, nor the use, operation or maintenance thereof, (i)
violates any Laws of any Government or Governmental Agency, or (ii) violates any
restrictive or similar covenant, agreement, commitment, understanding or
arrangement.
(g) Licenses; Permits; Related Approvals. GVI
possesses all licenses, permits, consents, approvals, authorizations,
qualifications, and orders (hereinafter collectively referred to as "Permits")
of all Governments and Governmental Agencies lawfully required to enable GVI to
conduct GVI's business as a venturer in GHV. All of the Permits are in full
force and effect, and to the knowledge of GVI no suspension, modification or
cancellation of any of the Permits is pending or threatened. A list of the
Permits is attached hereto as Exhibit 3.
(h) Legal Proceedings. Except as expressly set
forth on Exhibit 3(H) or otherwise of which the Purchaser has knowledge there is
no action, suit, proceeding, claim, arbitration, or investigation by any
Government, Governmental Agency or any other person (i) pending to which GVI is
a party, (ii) threatened against or relating to GVI or any of GVI's assets or
businesses, (iii) challenging GVI's right to execute, acknowledge, seal,
deliver, perform under or consummate the transactions contemplated by this
Agreement, or (iv) asserting or notifying of any right with respect to any of
the Sellers' Shares, and to the knowledge of GVI there is no basis for any such
action, suit, proceeding, claim, arbitration or investigation.
(i) Financial Statements; Undisclosed
Liabilities. Attached hereto as Exhibit 4 and incorporated by reference herein
are copies of GVI's unaudited balance sheets as of December 31, 1995 through
1996, GVI's unaudited Statement of Operations and Retained Earnings for the
years ended as of December 31, 1995 through 1996 (hereinafter collectively
referred to as the "Financial Statements"). Attached hereto as Exhibit 5 and
incorporated by reference herein are copies of GVI's preliminary unaudited
balance sheets as of December 31, 1997, GVI's preliminary unaudited Statement
of Operations and Retained Earnings for the period ended as of December 31,
1997, and GVI's (hereinafter collectively referred to as the "Year End
Statements"). The Financial Statements and Year End Statements are or were
prepared in the ordinary course of business of GVI based on financial
information provided by Purchaser, as GHV manager. To the Representing
Shareholders' knowledge the Financial Statements and the Year End Statements
are in accordance with the books and records of GVI, are true, correct and
complete and accurately present GVI's financial position as of the dates set
forth therein and the results of GVI's operations and changes in GVI's
financial position for the periods then ended, all in conformity with generally
accepted accounting principles applied on a consistent basis during each period
and on a basis consistent with that of prior periods. Except (i) as disclosed
in the Financial Statements and the Year End Statements, and (ii) as disclosed
in this Agreement, to the Representing
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Shareholders' knowledge GVI has no liabilities or obligations of any nature or
kind, known or unknown, whether accrued, absolute, contingent, or otherwise, or
appropriate cash reserves have been established therefor. To the Representing
Shareholders' knowledge there is no basis for assertion against GVI of any
claim, liability or obligation not fully disclosed in the Financial Statements
and the Year End Statements. To the Representing Shareholders' knowledge all
accounts payable set forth in GVI's Financial Statements and Year End Statements
have been paid or appropriate cash reserves have been established.
(j) Tax Matters. Subject to 7.5, GVI has duly
and timely filed with all appropriate Governmental Agencies, to the Representing
Shareholders' knowledge all tax returns, information returns, and reports
required to be filed by GVI. Except for accruals for payroll taxes payable,
income taxes payable, and deferred taxes as set forth in GVI's Balance Sheet as
of December 31, 1997 and for the "Short Year" 1998 (January 1, 1998 to Closing)
(collectively, the "Accrued Taxes"), if any, and for which GVI specifically
represents that appropriate cash reserves have been established, and subject to
7.5, to the Representing Shareholders' knowledge GVI has paid in full all taxes
(including sales, use, property and income taxes and taxes withheld from
employees' salaries and other withholding taxes and obligations), interest,
penalties, assessments and deficiencies owed by GVI to all taxing authorities.
Complete and correct copies of (a) the income tax returns of GVI for GVI's
fiscal years 1992, 1993,1994, 1995, 1996 as filed by GVI with the Internal
Revenue Service (the "IRS") and all state taxing authorities (collectively, the
"Returns"), (b) all audit reports received by GVI during the last five years and
issued by the IRS or any state taxing authorities, and (c) all consents and
agreements entered into by GVI during the last five years with the IRS or any
state taxing authorities (collectively, the "Tax Agreements") are collectively
attached hereto as Exhibit 6 and incorporated by reference herein. To the
Representing Shareholders' knowledge all information reported on the Returns is
true, accurate, and complete. To the Representing Shareholders' knowledge all
claims by the IRS or any state taxing authorities for taxes due and payable by
GVI have been paid by GVI. The provisions and revenues for the Accrued Taxes are
adequate for the payment of all of GVI's liabilities for unpaid taxes (whether
or not disputed). To the Representing Shareholders' knowledge GVI is not a party
to, and is not aware of, any pending or threatened action, suit, proceeding, or
assessment against it for the collection of taxes by any Governmental Agency.
(k) Accounts Receivable; Accounts Payable; Assets;
Liabilities. It is the express intent and understanding of the Purchaser, GVI
and the Sellers that at Closing, to the Representing Shareholders' knowledge GVI
will have: (a) no assets except for its unencumbered right, title and interest
to its ownership of a 50% interest in GHV, and its various contractual rights
related thereto, including without limitation its rights, privileges, benefits
and interests under certain agreements dated on or about February 28, 1992 and
others as follows:
(i) Gilpin Hotel Venture Agreement (the
"Joint Venture Agreement") between
Purchaser and GVI;
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(ii) Development, Management and
Consulting Agreement (the
"Management Agreement") among GHV,
Purchaser and Golden Gamble, Inc.;
and
(iii) in connection with the business of
GHV, all contracts, agreements,
consents, or licenses, permits or
cetificates, including computer
software licenses; agreements,
permits, leases and arrangements
with respect to intangible or
personal property or interests
therein, including passenger vehicle
services; equipment leases and motor
vehicle leases; employment
agreements whether oral or written;
consents; claims; chooses in
actions; agreements with suppliers
and customers; business licenses;
prepaid expenses; and any sales
agent or sales affiliate agreements
used or owned in connection with the
business of GHV.
(b) no liabilities, accounts payable, accrued expenses, contingent liabilities
of any kind or nature, or any other obligation or duty to pay any amount to any
person or Governmental Agency.
(l) No Real Property. Except as set forth on
Exhibit 7 attached hereto and incorporated by reference herein, GVI does not own
or have any interest in any real estate.
(m) Certain Contracts. Excepting contracts
relating to the GHV business, attached hereto as Exhibit 8 and incorporated by
reference herein is a true, correct and complete list and copy of all contracts
to which GVI is a party (collectively, the "Contracts"). Each of the Contracts
is in full force and effect, is valid and binding upon each of the parties
thereto and is fully enforceable by GVI against the other party thereto in
accordance with its terms. GVI has no notice of, or any reason to believe that
there is or has been any actual, threatened or contemplated termination or
modification of any of the Contracts. No party to any of the Contracts is in
breach of or in default thereunder, nor has any event occurred which, with the
lapse of time, notice or election, may become a breach or default by GVI or any
other party to or under any of the Contracts. The execution, acknowledgment,
sealing, delivery and performance of this Agreement by the Sellers and the
consummation of the transactions contemplated by this Agreement (i) will not
result in the breach or termination of or constitute a default under any
Contract, (ii) does not require the consent of any party to a Contract, or any
other person for whose benefit a Contract was executed, and (iii) all payments
required to be made pursuant to the Contracts by GVI or the parties to the
Contracts, and other persons for whose benefit Contracts were executed, have
been paid in full through December 31, 1997. The Contracts will be terminated
with no liability to GVI at Closing and evidence thereof will be provided to the
Purchaser at Closing.
(n) Insurance. Attached hereto as Exhibit 9 and
incorporated by reference herein is a list of all insurance policies of GVI,
setting forth with respect to each policy
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the name of the insurer, a description of the policy, the dollar amount of
coverages, the amount of the premium, the date through which all premiums have
been paid, and the expiration date. Each insurance policy relating to the
insurance referred to in Exhibit 9 is in full force and effect, is valid and
enforceable, and GVI is not in breach of or in default under any such policy.
Attached hereto as Exhibit 10 and incorporated by reference herein is a true,
correct and complete list and summary of all claims which have been made under
each insurance policy relating to the insurance referred to in Exhibit 9. GVI
has not failed to give any notice or to present any claim under any insurance
policy in a due and timely fashion.
(o) ERISA. Since December 31, 1992: (i) GVI has
not maintained, contributed to, or been obligated to contribute to any "employee
pension benefit plan" (as that term is defined in the Employee Retirement Income
Security Act of 1974 ("ERISA")); and (ii) GVI has never contributed to or been
obligated to contribute to any pension plan and it is not subject to any claims
with respect thereto.
(p) Plans. There are no present or future
obligations to any person who is or has been employed by GVI under any
retirement plan or deferred compensation program or arrangement.
(q) Employment Matters. GVI is not in violation
of applicable equal employment opportunity laws, wage and hour laws,
occupational safety and health laws, federal labor laws, or any other Laws of
any Government or Governmental Agency relating to employment. GVI has disclosed
to the Purchaser the status of all investigations, claims, charges, and
employment-related suits or controversies which have occurred with respect to
GVI within the last 5 years or which are presently pending or threatened with
respect to GVI under any employment-related Law of any Government or
Governmental Agency (including common law). GVI has satisfied and performed
fully all judgments, decrees, conciliation agreements, or settlement agreements
by which it is bound or to which it is subject concerning employment-related
matters.
(r) Employment Contracts. GVI has not entered
into any employment agreement and all employees can be terminated at will. GVI
has no contractual obligation or special termination or severance arrangement in
respect of any employee.
(s) Benefits. GVI has or will have paid all
wages due (including all required taxes, insurance, and withholding thereon)
through the Closing Date. GVI has no obligation to pay or honor any accrued
vacation, accrued sick leave, or accrued bonuses (including pro rata accruals
for a period of a year) due to employees of GVI as of the Closing Date.
(t) Books and Records; Fiscal Year; Method of
Accounting. GVI has made available to the Purchaser all of its tax, accounting,
corporate and financial books and records. The books and records pertaining to
GVI's business made available to the Purchaser are true, correct and complete,
have been maintained on a current basis, and fairly reflect the basis for GVI's
financial condition and results of operations as set forth in the Financial
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Statements and the Year End Statements. GVI has consistently used the fiscal
year ended December 31 as its taxable year, and has consistently used the cash
method as its method of accounting for tax purposes.
(u) Absence of Certain Changes or Events. Since
December 31, 1997, except as set forth in Exhibit 11 attached hereto and
incorporated by reference herein, GVI has not: (i) incurred any indebtedness,
obligation or liability (contingent or otherwise), except normal trade or
business obligations incurred in the ordinary course of its business, none of
which was entered into for inadequate consideration and none of which will not
have been paid at Closing; (ii) mortgaged, pledged, or subjected to lien,
charge, security interest, or other encumbrance any of its assets or properties;
(iii) sold, assigned, transferred, leased, disposed of, or agreed to sell,
assign, transfer, lease, or dispose of, any of its assets or properties; (iv)
acquired or leased any assets or property of any other person; (v) waived or
released any rights; (vi) granted or made any contract, agreement, promise or
commitment to grant any wage, salary or employee benefit increase to, or entered
into any employment contract, bonus, stock option, profit sharing, pension,
incentive, retirement or other similar arrangement or plan with, any officer,
employee or other person; (vii) suffered any casualty loss or damage, whether or
not such loss or damage is or was covered by insurance; and (viii) changed the
nature of its business or its method of accounting.
(v) Adverse Conditions. The Representing
Shareholders have no knowledge of any present or future condition, state of
facts or circumstances which has affected or may affect adversely the assets or
business of GVI or prevent GVI from carrying on its business.
(w) Full Disclosure. This Agreement (including
the Exhibits hereto) does not contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements contained
herein not misleading. There is no fact known to the Representing Shareholders
which is not disclosed in this Agreement which materially adversely affects the
accuracy of the representations and warranties contained in this Agreement.
3.3. Representations and Warranties of the Purchaser. The
Purchaser represents and warrants to Sellers that:
(a) Organization, Good Standing and
Qualification. The Purchaser is a Colorado corporation duly organized, validly
existing and in good-standing under the laws of the State of Colorado. The
Purchaser possess all requisite power and authority to own, operate and lease
its properties and carry on its business as presently conducted, to acquire and
own the Sellers' Shares and conduct its business, and to enter into this
Agreement and complete the transactions contemplated herein subject to obtaining
applicable consents and approvals.
(b) Authorization of Agreement. All actions
required by the Purchaser's organizational documents or the laws of its
formation, necessary to authorize the
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execution, delivery and performance of this Agreement by Purchaser and the
consummation of the transactions contemplated herein, including approval of its
Board of Directors, have been duly and validly taken on or prior to the date
thereof, and certified copies of such approval resolutions or minutes shall be
delivered to Sellers upon execution of this Agreement.
(c) Litigation. There is no action, suit or
proceeding pending or, to the knowledge of the Purchaser, threatened against the
Purchaser which might interfere with its ability to consummate the transactions
contemplated herein. The Purchaser is not in default with respect to any
judgment, order, writ, injunction, decree, demand or assessment issued by any
court or of any federal, state, municipal or other governmental agency, board,
commission, bureau, instrumentality or department. The Purchaser is not charged
or, to the knowledge of the Purchaser, threatened with or under investigation
with respect to, any violation of any provision of any federal, state, municipal
or other law or administrative rule or regulation.
(d) Financing. The Purchaser intends to use
diligent efforts to obtain all monies or requisite financing necessary to fund
and deliver the required portion of the Purchase Price for the Sellers' Shares
at the Closing and believes such efforts have a reasonable probability of
success. More specifically, the Purchaser will use its best efforts to: (a) file
a registration statement with the United States Securities and Exchange
Commission as soon as reasonably practicable to consummate an offering of its
securities thereunder; and/or (b) obtain private debt or equity financing
necessary to fund the required portion of the Purchase Price at Closing.
(e) Qualification. Subject to the conditions
precedent in Article 8, Purchaser is, or at the Closing will be, qualified to be
a transferee of the Sellers' Shares under all applicable federal, state and
local laws.
(f) No Approvals Required. No authorization or
approval of, or filing with, any governmental agency, authority or other body or
any other third persons will be required in connection with the Purchaser's
execution and delivery of this Agreement or its consummation of the transactions
contemplated hereby and thereby, except Gaming Approval and Liquor Consent as
expressly referred to in Exhibit 3 to this Agreement. The execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
and thereby are not events which of themselves or with the giving of notice or
the passage of time or both would constitute, on the part of the Purchaser, a
violation of or conflict with or result in any breach of, or default under the
terms, conditions or provisions of, any order, writ, injunction, decree,
judgment, law or regulation, relating to the Purchaser or of the Purchaser's
organizational documents or any agreement or instrument to which the Purchaser
is a party or by or to which it or any of its assets or properties are bound or
subject.
(g) Taxes. To the Purchaser's knowledge, all
federal, state and local income, excise or franchise tax returns and real estate
and sales and use tax returns or other filings or returns for taxes required to
be filed by the Purchaser or GHV in connection with the operation of GHV's
business have been filed and all taxes owed in connection with its operations
have been paid, except taxes which have not yet accrued or otherwise become due
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or which are being protested in good faith and by appropriate proceedings. To
the Purchaser's knowledge, there are no audits pending or any outstanding
agreements or waivers extending the statutory period of limitations applicable
to any taxes or tax return or document for any period.
(h) Compliance with Laws. To the Purchaser's
knowledge, to the date of this Agreement the Purchaser has complied and through
the Closing will continue to comply in all material respects with federal, state
and local laws, rules and regulations affecting its assets or the operation of
GHV's business.
(i) Accurate Information. No representation and
warranty made by Purchaser in this Agreement nor any statement or certificate
furnished or to be furnished by it pursuant to this Agreement contains or will
contain any untrue statement of a material fact or omits or will omit any
material fact the omission of which would be misleading.
(j) Financial Statements. Purchaser has
delivered to GVI balance sheets of GHV as of December 31, 1996, and the related
statements of operations, stockholders' equity and changes in financial position
for these years then ending, certified by Deloitte & Touche LLP, independent
certified public accountants. To Purchaser's knowledge, these financial
statements have been prepared in accordance with generally accepted accounting
principles consistently applied followed and fairly present the financial
position of GHV and the results of operations of GHV for the periods indicated,
and since December 31, 1996, there has been no material change in the financial
condition of GHV.
(k) Purchase for Investment. The Purchaser's
purchase hereunder is made for its own account for investment, with no present
intention of resale. All Common Stock certificates representing the shares
purchased under this Agreement shall be endorsed with a restrictive legend that
the shares represented by the certificates have not been registered under the
Securities Act of 1933, and the shares may not be offered or sold and no
transfer will be made by the Company or its transferee except in compliance with
the Securities Act of 1933 and the rules and regulations promulgated thereunder.
4. Covenants and Obligations of GVI and Sellers.
GVI and Sellers covenant and agree that between the date of this
Agreement and Closing:
4.1 Access to Information and Facilities. Subject to the
provisions of 3.2(a) and reasonable advance notice, GVI will afford the
Purchaser and its representatives full access during normal business hours to
all facilities, properties, books, accounts, records, contracts and documents of
or relating to GVI and in GVI's possession and control. Sellers shall furnish or
cause to be furnished to the Purchaser and its representatives all data and
information concerning the Sellers' Shares as shall reasonably be requested by
the Purchaser.
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<PAGE> 13
4.2 Cooperation. GVI and Sellers agree to cooperate with the
Purchaser in connection with the Purchaser's obligation to obtain and secure the
approvals set forth on Exhibit 3 hereto and will cooperate in obtaining any
other consents or approvals required to consummate the transactions contemplated
herein.
4.3 Continued Efforts. GVI and Sellers will use their
continual reasonable efforts to (a) cause to be fulfilled and satisfied all of
the conditions to the Closing; (b) cause to be performed all of the matters
required upon the Closing; and (c) take such steps and do such acts as may be
necessary to make all of their warranties and representations true and correct
as of the Closing Date with the same effect as if the same has been made, and
this Agreement had been dated, as of the Closing Date.
5. Covenants and Obligations of the Purchaser.
The Purchaser covenants and agrees that between the date of this
Agreement and the Closing:
5.1 Continued Efforts. The Purchaser will use its continual
reasonable efforts to (a) cause to be fulfilled all of the conditions to the
Closing to be satisfied by it; (b) cause to be performed all of the matters
required of it upon Closing; and (c) take such steps and do such acts as may be
necessary to make all of its warranties and representations true and correct as
of the Closing with the same effect as if the same had been made, and this
Agreement had been dated, as of the Closing Date.
5.2 Gaming Approval, Liquor and Other Consents. The Purchaser
shall promptly file any necessary applications and provide all information
necessary in connection with obtaining the approvals set forth on Exhibit 3
hereto and any other necessary approvals or consents.
5.3 Financing. The Purchaser reaffirms as a covenant the
representation and warranty set forth in 3.3(d).
5.4 Conduct of Business. The Purchaser will use its reasonable
efforts to: (a) maintain the services of GHV's present employees; and (b)
maintain and preserve GHV's business relationships with suppliers, customers,
and others having business relationships with GHV.
5.5 Negative Covenants. The Purchaser will not (a) modify,
amend, cancel or terminate any material interest in GHV's property or business;
(b) enter into, make or cancel any material contracts regarding GHV's property
or business; (c) sell, assign, lease, hypothecate or otherwise transfer or
dispose of, any of GHV's property or business except as permitted by this
Agreement; or (d) materially disrupt existing customer, vendor or service
relationships.
6. Parking Obligations. The Purchaser further covenants and
agrees as follows:
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6.1 The Purchaser shall design and construct parking
facilities (the "Parking Facility") currently contemplated by the Purchaser and
GVI (estimated at approximately $2,500,000), with appropriate access on the
northwest portion of Millsite 30 and will pay for all costs related to
construction of the Parking Facility, which costs shall not be subject to the
recoupment provisions of paragraph 10B of the Joint Venture Agreement or
otherwise, and shall not be deemed a contribution by the Purchaser to the
Advance Account or a capital contribution to GHV.
6.2 The Parking Facility, together with parking on Millsite
29, the unused portion of Millsite 30 not covered by the Parking Facility, and
between the Gilpin and Canyon Casinos, shall provide for use by the Gilpin Hotel
Casino approximately 179 parking spaces, of which 162 shall be striped, or such
greater number as is sufficient to avoid the City of Black Hawk's Parking
Improvement Fee.
6.3 The Parking Facility (or such portion thereof sufficient
to provide the parking spaces described in 6.2 above) shall be completed no
later than June 30, 1998, and approximately 100 of such required parking spaces
located in the Parking Facility shall be subject to a lease in favor of the
Gilpin Hotel Casino providing for (i) an initial term of 10 years at a monthly
rental cost of $80,000, (ii) a CPI adjustment to rent every 5th year, and (iii)
two 5- year extension options which extensions shall also be subject to a CPI
adjustment to rent every 5th year.
7. Mutual Covenants and Obligations. Each of the parties
covenants and agrees as follows:
7.1 Confidentiality. GVI, Sellers and the Purchaser will use
their best efforts to keep confidential any and all information furnished to
either of them or their representatives, accountants, counsel, advisors or
bankers in the course of negotiations relating to this Agreement and the
business and financial reviews and investigations referred to in this Agreement,
except to the extent that any such information may be generally available to the
public. Sellers and the Purchaser have instructed their respective officers,
employees and other representatives having access to such information of such
obligation of confidentiality; provided, however, that any disclosure of such
information may be made to the extent required by applicable law or regulation,
judicial or regulatory process, reviews by financial institutions for the
purpose of lending to either party, and such information may be used as evidence
in or in connection with any pending or threatened litigation relating to this
Agreement or the transactions contemplated therein. In the event the transaction
is not consummated for any reason, each party agrees to return to the other
party all such materials immediately on request. The obligations arising under
this 7.1 shall survive any termination or abandonment of this Agreement.
7.2 Additional Actions, Etc. Each party covenants, commencing
promptly upon the execution and delivery of this Agreement, to use all
reasonable efforts in good faith to take, or cause to be taken, all actions and
to do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations, expeditiously and practicably to
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consummate and make effective the transactions contemplated herein, including
using its reasonable efforts to obtain all necessary actions, waivers, consents
and approvals from third parties or governmental or regulatory bodies and to
effect all necessary filings (including, without limitation, any filings under
the Colorado Limited Gaming Act and other necessary filings with governmental
regulatory authorities).
7.3 Capital Expenditures/Policy Board. (a) Until the Closing
Date, the Purchaser, as manager under the Management Agreement, shall have the
right to incur capital expenditures upon prior written approval of the Policy
Board, consistent with past practices and the terms of the Management Agreement,
including expenditures incurred in accordance with the following: (i) all
reasonable and necessary capital expenditures not exceeding $100,000 in the
aggregate; (ii) capital expenditures financed through leases or other long-term
arrangements; or (iii) otherwise, as approved in writing by GVI.
(b) GVI and the Purchaser shall each designate
two representatives with authority to act on all things pertaining to GHV and
shall endeavor to agree upon the selection of an independent and impartial
person to serve as the fifth member of the Policy Board on any deadlocked
matter; provided either GVI or the Purchaser may, at any time, apply to the
American Arbitration Association for the appointment of the fifth Policy Board
member. The Purchaser shall continue management of the Gilpin Hotel Casino in
the normal course of business and without deviation from Policy Board directives
until Closing, and shall take no actions not previously approved by the Policy
Board in writing which would materially damage the business of GHV.
7.4 Stay of Arbitration. The Purchaser and GVI acknowledge
that there may be issues between them which are arbitrable under provisions of
the Joint Venture Agreement and the Management Agreement. The Purchaser and GVI
agree that neither will institute proceedings in arbitration during the period
commencing with the date hereof and ending if the Purchaser fails to pay the
Purchase Price for the Sellers' Shares in accordance with 1.2; provided, however
and notwithstanding the foregoing, the Purchaser or GVI may initiate
arbitration: (i) for appointment of a fifth Policy Board member as provided for
in 7.3; (ii) for departure from the material intent of this Agreement; or (iii)
for breach of this Agreement.
7.5 Tax Treatment. The parties acknowledge that GVI has filed
an election to be taxed under Subchapter S of the Internal Revenue Code of 1986,
as amended ("Code"), and that such election will terminate upon Closing since a
corporate entity cannot be a shareholder of a Subchapter S corporation. As soon
as possible after the Closing Date, therefore, a "short period" information
return on Form 1065 will be prepared by Deloitte & Touche LLP and a Form K-1
will be delivered to each Seller reporting his or her share of income, loss,
deduction or credit for the "short period" (i.e., the period from January 1,
1998 to the Closing Date). The parties acknowledge that the Sellers are
responsible for payment of all federal and state income taxes attributable to
them as a result of GVI's Subchapter S election through the Closing Date. Also,
at Closing the parties will execute and file an election under Section
338(h)(10) of the Code for purposes of allocation of tax basis. The parties
shall agree to the content of IRS Form 338(h)(10) and Form 8023-A at Closing.
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8. Conditions Precedent to Obligation of the Purchaser to Close.
The obligation of the Purchaser to purchase the Sellers' Shares
hereunder is, unless waived in writing by the Purchaser, subject to the
satisfaction, on the Closing Date, of the following conditions:
8.1 Accuracy of Representations and Performance of Conditions.
The representations and warranties of GVI, Sellers and the Representing
Shareholders contained in this Agreement shall be true and correct in all
material respects at and as of the Closing Date with the same force and effect
as though made on and as of such Date, except to the extent as permitted by this
Agreement; each and all of the conditions and covenants to be performed or
satisfied by GVI and Sellers hereunder at or prior to the Closing Date shall
have been duly performed or satisfied in all material respects; and GVI, Sellers
and the Representing Shareholders shall have furnished the Purchaser with their
respective certificates to that effect.
8.2 No Proceeding or Litigation. No order restraining,
preventing or challenging this Agreement or the transactions contemplated herein
shall be in effect.
8.3 Regulatory Approvals. Evidence reasonably satisfactory to
the Purchaser of the approval by the Colorado Division of Gaming ("Division")
and the Colorado Liquor License Division ("Liquor"), of the operation of limited
gaming, restaurant and retail business, under the Purchaser's and GHV's existing
licenses.
8.4 FIRPTA Compliance. Sellers shall have delivered either an
affidavit that Sellers are not foreign persons within the meaning of 1445(b)(2)
of the Internal Revenue Code of 1986, as amended, or an affidavit of Sellers
that complies with 1445(b)(3) thereof.
8.5 No Opposition. All requirements and waiting periods under
the Hart-Scott- Rodino Improvement Act of 1976 amending 7 of the Clayton Act, 15
U.S.C. ss.18a (Supp. 1979), if applicable, shall have been fulfilled and no
suit, action or proceeding shall be pending on the Closing Date before or by any
court or governmental body seeking to restrain or prohibit, or damages or other
relief in connection with, the execution and delivery of this Agreement or the
consummation of the transactions contemplated herein.
8.6 Deliveries Precedent to Black Hawk's Obligations to
Consummate the Purchase. GVI and Sellers shall deliver to the Purchaser each of
the following items:
(i) Certificates representing the Sellers' Shares,
duly endorsed with signatures.
(ii) The resignation of each of GVI's officers and
directors effective at the Closing on the
Closing Date.
(iii) The certificates of appropriate officers of
GVI and of the individual Sellers stating
material compliance with the requirements of
8.1,
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respectively, and that GVI and Sellers have no
knowledge of any breach or of any event which
of itself or with the giving of notice or the
passage of time or both would constitute any
breach by GVI or Sellers of any of the
representations, warranties, agreements or
covenants of GVI or Sellers under the
Agreement.
(iv) Certified copies of the resolutions of the
shareholders and Board of Directors of GVI,
pertaining to the authorization and execution
of this Agreement and the consummation of the
transactions contemplated herein and a
certificate executed by the secretary or
assistant secretary of GVI, as to the due
election, qualification and incumbency and
valid signature of its officers authorized to
sign this Agreement or any document,
instrument or certificate to be delivered
under it.
(v) The consents listed in Exhibit 3 ("Material
Consents") shall have been obtained by the
parties.
8.7 New or Modified Agreements. The Purchaser and Gilpin Gold,
Inc. ("Gold") shall have executed either (a)(i) the Amended and Restated Ground
Lease, and (ii) a new or amended Tenancy in Common Agreement, both relating to
the real estate owned by the Purchaser and Gold, or (b) a Memorandum of Lease
which sets forth the primary terms of such agreements in form substantially
similar to Exhibit 12 attached hereto, providing: (i) in the Amended and
Restated Ground Lease, a term for a minimum monthly rent of $60,000 payable to
Gold (in consideration for which the Purchaser shall have an option to extend
the closing of Gold's interest in the real estate through July 2, 1999);
provided however that such minimum rent term shall not in any way limit the
payment of additional amounts which may be due under the existing rent
calculations based on the gross income of Gilpin Hotel Casino; and (ii) in the
new or amended Tenancy in Common Agreement, certain other arm's length
provisions regarding management of the real estate and consents for actions to
be taken on the Premises (as defined therein).
8.8 General Release and Waiver. The Purchaser, the Sellers,
GVI and Gamble shall have executed a mutual release and waiver in form
substantially similar to Exhibit 13 attached hereto, releasing each other from
all claims, damages, duties, responsibilities, and obligations whatever kind and
nature except as may arise under this Agreement.
8.9 Purchase of Realty. Simultaneously with, or prior to, the
execution of this Agreement, the Purchaser and Gold shall have entered into the
Agreement to Purchase and Sell Real Estate.
8.10 Cancellation of Agreements. The Agreement set forth in
3.2(k)(ii), except as to the interest of Gamble arising from Paragraph 9(g) of
the Development Management and Consulting Agreement shall be terminated and
canceled in their entireties, effective as of the
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completion and consummation of the Closing, in form substantially similar to
Exhibit 14 attached hereto.
9. Conditions Precedent to Obligation of Sellers to Close.
The obligation of Sellers to sell, assign, transfer and deliver the
Sellers' Shares to the Purchaser hereunder are, unless waived in writing by
Sellers, subject to the satisfaction at or prior to the Closing Date of the
following conditions:
9.1 Accuracy of Representations and Performance of Conditions.
The representations and warranties of the Purchaser contained in this Agreement
shall be true and correct in all material respects at and as of the Closing Date
with the same force and effect as though made on and as of such Date, except to
the extent that such representations and warranties shall be incorrect as of the
Closing Date because of events or changes occurring or arising after the date
hereof in the ordinary course of business of the Purchaser or as otherwise
permitted by this Agreement; each and all of the conditions and covenants to be
performed or satisfied by the Purchaser hereunder at or prior to the Closing
Date shall have been duly performed or satisfied in all material respects; and
the Purchaser shall have furnished Sellers with the Purchaser's certificate to
that effect.
9.2 No Proceeding or Litigation. No order restraining,
preventing or challenging this Agreement or the transactions contemplated herein
shall be in effect.
9.3 Regulatory Approval. Approval of the Division and of
Liquor shall have been obtained.
9.4 No Opposition. All requirements and waiting periods under
the Hart-Scott-Rodino Improvement Act of 1976 amending 7 of the Clayton Act, if
applicable, shall have been fulfilled and no suit, action or proceeding shall be
pending on the Closing Date before or by any court or governmental body seeking
to restrain or prohibit the execution and delivery of this Agreement or the
consummation of the transactions contemplated herein.
9.5 Payment. The Purchaser shall have delivered the Purchase
Price for the Sellers' Shares as provided in 1.2.
9.6 Approval. Certified copies of all the Purchaser's
resolutions pertaining to the authorization of this Agreement and the
consummation of the transactions contemplated herein, and a certificate executed
by the secretary or assistant secretary of the Purchaser as to the due election,
qualification and incumbency and valid signatures of its officers authorized to
sign this Agreement or any document or certificates to be delivered under it
shall have been delivered to the Sellers.
9.7 Certificate of Purchaser. The Purchaser shall have
delivered and the Sellers a certificate of the Purchaser in form reasonably
satisfactory to Sellers that, as of the Closing Date, the Purchaser has no
knowledge of any breach or of any event which of itself or
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<PAGE> 19
with the giving of notice or the passage of time or both would constitute any
breach by the Purchaser of any of the representations, warranties, agreements or
covenants of the Purchaser under this Agreement.
9.8 Consents. All Material Consents shall have been obtained
by the parties.
9.9 New or Modified Agreements. The Purchaser and Gold shall
have executed (a) the Amended and Restated Ground Lease, and (b) a new or
amended Tenancy in Common Agreement, both relating to the real estate, with the
primary terms as set forth in 8.7.
9.10 General Release and Waiver. The Purchaser, the Sellers,
GVI and Gamble shall have executed a mutual release and waiver in form
substantially similar to Exhibit 13 attached hereto, releasing each other from
all claims, damages, duties, responsibilities, and obligations under the
agreements of whatever kind and nature except as may arise under this Agreement.
9.11 Purchase of Realty. Prior to or contemporaneous with the
Closing, the Purchaser and Gold shall have entered into the Agreement to
Purchase and Sell Real Estate of even date herewith.
9.12 Distributions. The amounts due under 1.3(a) and (b) shall
be delivered to GVI (for the benefit of Sellers) by the Purchaser or GHV by
certified check or wire transfer.
9.13 Parking. The Purchaser's agreement under 6 hereof to
provide approximately 179 parking spaces, of which 162 shall be striped, or such
greater number as is sufficient to avoid the City of Black Hawk's Parking
Improvement Fee will be available to the Gilpin Hotel Casino shall be assigned
to Gold.
10. The Closing.
10.1 Closing and Closing Provisions. The Closing Date shall be
the earlier of (a) 30 days after closing of the Purchaser's financing described
in 3.3(d), or (b) June 30, 1998 unless extended for up to three months (i.e.,
until September 30, 1998) as provided in 2, or (c) such other date as may be
agreed to by Sellers and the Purchaser; provided further Black Hawk shall
provide 30 days advance written notice to GVI for a Closing prior to June 30,
1998. The Closing shall take place on the Closing Date commencing at 10:00 a.m.
at the offices of Jones & Keller, P.C., 1625 Broadway, Suite 1600, Denver,
Colorado 80202, or at such other place as the parties may agree in writing. The
Purchaser may give Sellers written notice of an earlier Closing Date at any time
after the execution hereof and Closing shall occur on such designated Closing
Date.
10.2 Deliveries by Seller. At or prior to the Closing, GVI and
the Sellers shall deliver to the Purchaser all of the matters designated as
conditions precedent and deliveries precedent to the Purchaser's obligation to
close under this Agreement.
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<PAGE> 20
10.3 Deliveries by the Purchaser. At the Closing, the
Purchaser shall deliver to GVI and Sellers the Purchase Price for the Sellers'
Shares and the distributions set forth in 1.3(a) and (b) (for the benefit of the
Sellers) in the manner and form provided for in this Agreement, and all the
certificates and other documents designated as deliveries and conditions
precedent to Seller's obligation to close under this Agreement.
11. Termination.
11.1 Non-Performance. The Sellers or the Purchaser each shall
have the right to terminate this Agreement at or prior to Closing in the event
that the other party is in default in the performance of any of its material
obligations to be performed hereunder, or should any covenant, warranty or
representation made by the other party in this Agreement prove to be materially
incorrect; provided, however, that the party against whom such termination is to
be exercised shall have the right, for a period of twenty (20) days following
receipt of written notice from the other specifying the alleged default and the
basis therefor, to correct or satisfy any such condition or covenant necessary
to the consummation of this Agreement. Nothing in this paragraph shall be
construed as relieving a party from liability for damages, including, without
limitation, expenses reasonably incurred in the negotiation and preparation of
this Agreement, to the other party for breach of its obligations under or by
reason of this Agreement whether or not this Agreement is terminated by the
non-defaulting party under the provisions of this paragraph, or as limiting the
Sellers' right to retain the $50,000 deposit heretofore made under 1.2(b).
However, if a default both results from a third party's refusal to grant one or
more of the Material Consents and a good faith effort was made to obtain the
same, the parties shall not be liable for damages hereunder.
Provided however, that the Purchaser has the right
but not the obligation to make the payments required in 1.2(c). In the event the
Purchaser fails to obtain the financing described in 3.3(d) hereof, the Sellers'
remedies at law or in equity pertaining to the matters contemplated in this
Agreement shall be specifically limited as follows:
(i) The Purchaser shall forfeit the
deposit heretofore made under 1.2(b)
and any further deposits made under
2.
(ii) The Purchaser shall design and
construct the Parking Facility
described in 6 and currently
contemplated by the parties
(estimated at approximately
$2,500,000), with appropriate access
on the northwest portion of Millsite
30 and will pay for all costs
related to construction of the
Parking Facility, which costs shall
not be subject to the recoupment
provisions of paragraph 10B of the
Joint Venture Agreement or otherwise
and shall not be deemed a
contribution by the Purchaser to the
Advance Account or a capital
contribution to GHV.
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<PAGE> 21
(iii) The Parking Facility, together with
parking on Millsite 29, the unused
portion of Millsite 30 not covered
by the Parking Facility, and between
the Gilpin and Canyon Casinos, shall
provide for use by GHV of parking
spaces described in 6.2.
(iv) The Parking Facility (or such
portion thereof sufficient to
provide the parking spaces described
in 6.2) shall be completed no later
than June 30, 1998, and the parking
spaces therein shall be subject to a
lease in favor of GHV providing for
(i) an initial term of 10 years at a
monthly rental cost of $80,000, (ii)
a CPI adjustment to rent every 5th
year, and (iii) two 5-year extension
options which extensions shall also
be subject to a CPI adjustment to
rent every 5th year.
(v) The Advance Account shall be reduced
by $250,000 (for accounting matters
currently at issue under the
proposed arbitration) and the
Advance Account shall be deemed
current as of December 31, 1997.
(vi) The Purchaser shall forfeit its
right to purchase Gold's interest
under the Real Estate Agreement.
12. Indemnification.
12.1 Indemnification. After closing, the Purchaser will
indemnify, defend and hold harmless the Sellers and the officers and directors
of GVI and each of their agents and employees from and against any and all
claims, actions, suits, costs, expenses, fees (including reasonable attorney
fees), liabilities and losses and damages of any nature whatsoever in connection
with GHV; provided however, such indemnification shall not extend to any such
claims, actions, suits, costs expenses, fees, liabilities, losses or damages
resulting from or caused by the gross negligence or willful misconduct of the
Sellers, GVI, or GVI's employees, officers or directors.
12.2 Claims for Indemnification. Whenever any claim shall
arise for indemnification hereunder, the party entitled to indemnification (the
"indemnified party") shall promptly notify the Purchaser (the "indemnifying
party") of the claim and, when known, the facts constituting the basis for such
claim. In the event of any claim for indemnification hereunder resulting from or
in connection with any claim or legal proceedings by a third party, the notice
to the Purchaser shall specify, if known, the amount or an estimate of the
amount of the liability arising therefrom. The indemnified party shall not
settle or compromise any claim by a third party for which it is entitled to
indemnification hereunder, without the prior written consent of the Purchaser
unless suit shall have been instituted against it and the Purchaser shall not
have taken control of such suit after notification thereof as provided in 12.3
of this Agreement.
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<PAGE> 22
12.3 Defense by the Purchaser. In connection with any claim
giving rise to indemnity hereunder resulting from or arising out of any claim or
legal proceeding by a person who is not a party to this Agreement, the Purchaser
at its sole cost and expense may, upon written notice to the indemnified party,
assume the defense of any such claim or legal proceeding if it acknowledges to
the indemnified party in writing its obligations to indemnify the indemnified
party with respect to all elements of such claim and provides adequate assurance
of its ability to do so. The indemnified party shall be entitled to participate
in (but not control) the defense of any such action, with its counsel and at its
own expense. If the Purchaser does not assume the defense of any such claim or
litigation resulting therefrom, (a) the indemnified party may defend against
such claim or litigation, in such manner as it may deem appropriate, including,
but not limited to, settling such claim or litigation, after giving notice of
the same to the Purchaser, on such terms as the indemnified party may deem
appropriate, and (b) the Purchaser shall be entitled to participate in (but not
control) the defense of such action, with its counsel and at its own expense. If
the Purchaser thereafter seeks to question the manner in which the indemnified
party defended such third party claim or the amount of nature of any such
settlement, the Purchaser shall have the burden to provide by a preponderance of
the evidence that the indemnified party did not defend or settle such third
party claim in a reasonably prudent manner.
12.4 Limitations on Claims. Any Notice of Claim must be made
as provided herein on or before the first anniversary date of this Agreement;
provided, however, that any Claim by Sellers pertaining to the business of GHV
that is attributable to ownership, operations or events after Closing or
obligations assumed by the Purchaser under this Agreement, may be made within
the applicable period of limitation of the statutes providing for limitations on
claims and causes of action.
13. Miscellaneous Provisions.
13.1 Investigation. The Purchaser may, through its
accountants, attorneys, engineers, agents, employees and others, make, and
hereby acknowledges and agrees that it has made or will make prior to Closing,
such investigations of the business, properties and assets and of the financial
and legal and other condition and location of the GHV business and GVI as it may
deem necessary or advisable with respect to those matters.
13.2 Commissions. Each party represents and warrants that it
has dealt with no broker or finder in connection with this Agreement and,
insofar as it knows, no broker or other person is entitled to any commission or
finder's fee in connection with the consummation of the transactions
contemplated hereunder. If either of the parties shall breach the foregoing
warranty and representation, it shall indemnify the other party and hold the
other party harmless from and against any damage, liability, loss, claim, or
expense suffered by the other party as a result of such breach.
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<PAGE> 23
13.3 Expenses. Except as otherwise provided herein, each of
the parties shall pay all costs and expenses incurred or to be incurred by it or
them in the negotiation and preparation of this Agreement and in closing and
carrying out the transactions contemplated herein.
13.4 Headings. The subject headings of the sections and
subsections of this Agreement are included only for the purposes of convenience,
and shall not affect the construction or interpretation of any of its
provisions.
13.5 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
13.6 Rights of Parties. Nothing in this Agreement, whether
express or implied, is intended to confer any rights or remedies under or by
reason of this Agreement on any persons other than the parties to it and their
respective successors and assigns, nor is anything in this Agreement intended to
relieve or discharge the obligation or liability of any third person to any
party to this Agreement, nor shall any provision give any third persons any
right to subrogation or action against any party to this Agreement.
13.7 Assignment. The rights, duties and obligations under this
Agreement, may not be assigned by any party hereto unless such assignment is to
an affiliate defined as a person controlling, controlled by or under common
control with the assignor or unless such assignment is made with the prior
written consent of the other parties hereto; provided however that the indemnity
obligations set forth in 12 shall not be assignable without the express written
consent of the parties indemnifiable.
13.8 Binding Agreement. This Agreement constitutes, and all
other documents to be executed by each party shall, when executed and delivered,
constitute the legal, valid and binding obligation of each party enforceable in
accordance with their respective terms and shall be binding upon and inure to
the benefit of its respective successors and assigns, except as may be limited
by bankruptcy, insolvency, reorganization or similar laws affecting the rights
and remedies of creditors generally and the availability of equitable remedies.
No provisions of this Agreement may be waived or relinquished except by written
instrument signed by the party to be charged with such waiver. Failure by any
party to this Agreement to enforce any provision of this Agreement shall not
constitute a waiver of such provision, and no waiver by any party to this
Agreement of any provision of this Agreement on one occasion shall constitute a
waiver of any other provision or of the same provision on another occasion.
13.9 Notices. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given on the date of service if served personally on the party to
whom notice is to be given, or on the third day after mailing if mailed to the
party to whom notice is to be given, by first class mail, registered or
certified, return receipt requested, postage prepaid, and properly addressed as
follows:
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<PAGE> 24
To GVI and Sellers:
Robert W. Dunlap, President
of GVI and as agent for Kathy L. Dunlap
32391 Horseshoe Drive
Evergreen, Colorado 80439
(303) 670-3885
Claudette K. Lee
106 Sumac Court
St. Charles, Illinois 60174
Jeanette M. Cox
PO BOX 2541
Corona, California 91718
Janice L. Atkins
4890 E. Creek Ridge Trail
Reno, NV 89509
Douglas K. Lee
33 Sparrow Court
Bailey, Colorado 80421
Candace K. Thoke
4 N. 235 Wildrose Road
St. Charles, Illinois 60174
Jeffrey L. Lee
1708 Essex Court
St. Charles, Illinois 60174
Steven R. Lee
1357 Larsen Street
Sycamore, Illinois 60178
With a copy (which shall not constitute notice) to:
Philip A. Rouse, Jr., Esq.
303 E. Seventeenth Ave, Suite 800
Denver, Colorado 80203
(303) 813-9333
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<PAGE> 25
To the Purchaser:
Black Hawk Gaming & Development Company, Inc.
17301 West Colfax Avenue, Suite 170
Golden, Colorado 80401
Attention: Mr. Stephen R. Roark, President
(303) 216-0908
With a copy (which shall not constitute notice) to:
Jones & Keller, P.C.
Attention: Samuel E. Wing, Esq.
1625 Broadway, Suite 1600
Denver, Colorado 80202
(303) 573-1600
Any party may change its address for purposes of this paragraph by giving the
other parties written notice of the new address in the manner set forth above.
13.10 Applicable Law and Remedies. The terms, conditions and
other provisions of this Agreement and any documents or instruments delivered in
connection with it shall be governed and construed according to the internal
laws of the State of Colorado. All remedies at law, in equity, by statute or
otherwise shall be cumulative and may be enforced concurrently or from time to
time and, subject to the express terms of this Agreement, the election of any
remedy or remedies shall not constitute a waiver of the right to pursue any
other available remedies.
13.11 Expense of Enforcement. If any party believes in good
faith that it is required to initiate an action to enforce a provision of this
Agreement or any agreement, instrument or document made or delivered in
connection herewith, or for damages by reason of an alleged breach of any
provision, and such action is commenced or initiated, the prevailing party shall
be entitled an award of all costs and expenses, including without limitation,
reasonable attorneys' fees and costs, incurred in connection with such action.
13.12 Additional Instruments and Assistance. Each party
thereto shall promptly from time to time execute and deliver such further
instruments and render such further assistance as the other party or its counsel
may reasonably request in order to complete and perfect the transactions
contemplated herein.
13.13 Severability. If any provision of this Agreement is held
or deemed to be invalid or unenforceable to any extent when applied to any
person or circumstance, the remaining provisions hereof and the enforcement of
such provision to other persons or circumstances, or to another extent, shall
not be affected thereby and each provision hereof shall be enforced to the
fullest extent allowed by law, unless the invalid or unenforceable provision
defeats the basis of the bargain herein.
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<PAGE> 26
13.14 Pronouns and Terms. In this Agreement, the singular
shall include the plural, the plural the singular, and the use of any gender
shall include all genders.
13.15 Time of Essence. Time is of the essence for each
provision of this Agreement for which time is a factor.
13.16 Disclosure. No representation or warranty made by a
party in this Agreement contains any untrue statement of a material fact or
omits to state a material fact necessary to make the statement of facts
contained within it not misleading.
13.17 Entire Agreement, Modification and Waiver. This
Agreement merges all previous negotiations between the parties hereto,
supersedes all prior discussions and correspondence between the parties,
including, without limitation, that certain Nonbinding Letter of Intent dated
November 20, 1997 and that certain Agreement For the Purchase and Sale of Assets
and Joint Venture Interest dated on or about December 15, 1997 (and executed on
or about December 31,1997) and attached hereto without exhibits as Exhibit 15
between and among the Purchaser, GVI and Gamble and this Agreement constitutes
the entire agreement and understanding between the parties with respect to the
subject matter of this Agreement. No alteration, modification, or change of this
Agreement shall be valid except by a written instrument executed by the parties
hereto.
13.18 Arbitration. Any controversy or claim arising out of, or
relating to this Agreement, or the breach thereof, shall be settled by
arbitration in Denver, Colorado in accordance with the Commercial Arbitration
Rules of the American Arbitration Association, and judgment upon the award
rendered by the arbitrators may be entered in any court having jurisdiction
thereof.
13.19 Submission to Jurisdiction. Each of the parties hereto
irrevocably consents that legal action or proceeding against it or any of its
property with respect to this Agreement or any other agreement executed in
connection herewith not inconsistent with 13.18 may be brought in any court of
the State of Colorado and the County of Jefferson or any Federal Court of the
United States of America located in the State of Colorado, or both, and by the
execution and delivery of this Agreement, each party hereto hereby accepts with
regard to any such action or proceeding for itself and in respect of its
property, generally and unconditionally, the jurisdiction of the aforesaid
courts. Each party hereto further irrevocably consents to the service of process
out of any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
such party at the address referred to in 13.9 hereof, such service to become
effective upon receipt thereof by such party. Nothing herein shall affect the
right of any party to serve process in any other manner permitted by law.
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<PAGE> 27
IN WITNESS WHEREOF, the parties to this Agreement have duly executed it
on the date first above written.
PURCHASER:
BLACK HAWK GAMING & DEVELOPMENT
COMPANY, INC.
By:
------------------------------------
Stephen R. Roark, President
SELLERS:
---------------------------------------
Robert W. Dunlap & Kathy L. Dunlap,
joint tenants, also as Representing
Shareholders
---------------------------------------
Janice L. Atkins
---------------------------------------
Candace K. Thoke
---------------------------------------
Douglas K. Lee, also as a Representing
Shareholder
---------------------------------------
Jeanette M. Cox
---------------------------------------
Jeffrey L. Lee
---------------------------------------
Steven R. Lee
---------------------------------------
Claudette K. Lee
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<PAGE> 28
JOINED IN BY: JOINED IN BY:
GILPIN HOTEL VENTURE GILPIN VENTURES, INC.
By: Black Hawk Gaming & Development By:
Company, Inc., venturer ------------------------------
Robert W. Dunlap, President
By:
-------------------------------------
Stephen R. Roark, President
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<PAGE> 29
EXHIBITS TO
STOCK PURCHASE AGREEMENT
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
1 GVI Articles of Incorporation
2 GVI Bylaws
2.1 Terminable GVI/Sellers' Shareholder Agreement
3 Governmental and Other Consents
3(H) Legal Proceedings
4 GVI Financial Statements (1995-1996)
5 GVI Financial Statements (1997) preliminary
6 Tax Returns and Tax Agreements
7 Real Property--Ground Lease
8 Contracts
9 Insurance
10 Claims Under Insurance
11 Absence of Changes
12 Memorandum of Lease
13 Mutual Release and Waiver
14 Termination of Agreements
15 Agreement for the Purchase and Sale of Assets and Joint
Venture Interest
</TABLE>
<PAGE> 1
CREDIT AGREEMENT
THIS CREDIT AGREEMENT ("Credit Agreement") is made and entered into as
of the 24th day of April, 1998, by and among BLACK HAWK GAMING & DEVELOPMENT
COMPANY, INC., a Colorado corporation ("BHGD"), GILPIN VENTURES, INC., a
Colorado corporation ("GVI") and GILPIN HOTEL VENTURE, a Colorado joint venture
partnership ("GHV" and together with BHGD and GVI, collectively the
"Borrowers"), each of the Lenders, as hereinafter defined, and WELLS FARGO
BANK, National Association, as administrative and collateral agent for the
Lenders (herein in such capacity, called the "Agent Bank" and, together with
the Lenders, collectively referred to as the "Banks").
RECITALS:
WHEREAS:
A. In this Credit Agreement all capitalized words and terms shall
have the respective meanings and be construed herein as hereinafter provided in
Section 1.01 of this Credit Agreement and shall be deemed to incorporate such
words and terms as a part hereof in the same manner and with the same effect as
if the same were fully set forth.
B. Prior to the Closing Date: (i) BHGD and GGI are the owners of
the H/C Real Property and Millsite 29 Parcel, each as to an undivided fifty
percent (50%) interest, (ii) the H/C Real Property and Millsite 29 Parcel are
leased by BHGD and GGI to GHV pursuant to the Existing Land Lease, and (iii)
GHV is a Colorado joint venture between BHGD and GVI, each as to an undivided
one half interest.
C. On or about December 31, 1997, BHGD, as buyer, and GGI, as
seller, entered into an Agreement for Purchase and Sale of Real Estate (the
"Land Purchase Agreement") under the terms of which BHGD agreed to purchase and
GGI agreed to sell to BHGD all of GGI's right title and interest in and to the
H/C Real Property and Millsite 29 Parcel for a purchase price of Four Million
Seven Hundred Fifty Thousand Dollars ($4,750,000.00), plus or minus certain
adjustments as therein specified (the "Land Purchase Price").
D. On or about March 10, 1998, Claudette K. Lee, Candace K.
Thoke, Jeffrey L. Lee, Steven R. Lee, Janice L. Atkins, Geanette M. Cox,
Douglas K. Lee and Robert W. and
<PAGE> 2
Kathy L. Dunlap, as joint tenants, as sellers (collectively the "Stock Sellers")
and BHGD, as purchaser, together with GVI, a party thereto for certain
purposes, entered into the Stock Purchase Agreement ("Stock Purchase
Agreement") under the terms of which BHGD agrees to purchase and Stock Sellers
agree to sell to BHGD all of the issued and outstanding capital stock of GVI
(the "GVI Shares") for a purchase price of Five Million Dollars ($5,000,000.00)
(the "Stock Purchase Price").
E. On or about April 24, 1998, BHGD and Gamble entered into the
Agreement to Assign Management Contract Interests (the "Gamble Assignment
Agreement") under the terms of which Gamble agreed to transfer and assign to
BHGD all of its rights to certain consultancy fees under the Management
Agreement (the "Gamble Contract Rights") in and for consideration of Two
Hundred Fifty Thousand Dollars ($250,000.00) (the "Gamble Purchase Price") to
be paid by BHGD to Gamble on the Closing Date.
F. BHGD is the owner of the BHG Parcel. The easterly boundary of
the BHG Parcel is situated adjacent to the westerly boundary of the Lodge
Property. The westerly boundary of the BHG Parcel is situated adjacent to the
easterly boundary of the Millsite 29 Parcel.
G. BHJE is the owner of the Lodge Property. BHJE is planning to
construct a two (2) story parking garage on the Lodge Property. BHJE and GHV
are negotiating a lease under the terms of which a third (3rd) story would be
added to the planned parking garage with an access ramp from the BHG Parcel and
such third (3rd) story leased by BHJE to GHV, all of such third (3rd) story to
be constructed at GHV's expense (the "Parking Garage Project") for the
exclusive use of GHV in connection with the Hotel/Casino Facility.
H. BHGD, GVI and GHV desire to establish a reducing revolving
line of credit for the purposes of: (i) refinancing the Existing Real Estate
Debt and the Existing Equipment Debt, (ii) financing the costs of acquisition
by BHGD of GGI's interest in the H/C Real Property and the Millsite 29 Parcel
in accordance with the terms of the Land Purchase Agreement, (iii) financing
the cost of acquisition of the GVI Shares by BHGD pursuant to the terms of the
Stock Purchase Agreement, (iv) financing the costs of acquisition of the Gamble
Contract Rights, (v) financing the cost of construction of the Parking Garage
Project, and (vi) providing working capital to BHGD, GVI and GHV.
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<PAGE> 3
I. Banks are willing to establish the Credit Facility in the
principal amount of Twenty Million Dollars ($20,000,000.00), for the uses and
purposes hereinafter set forth in Section 2.02 and on the terms and subject to
the conditions, covenants and understandings hereinafter set forth and
contained in each of the Loan Documents.
NOW, THEREFORE, in consideration of the foregoing, and other valuable
considerations as hereinafter described, the parties hereto do promise,
covenant and agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. For the purposes of this Credit
Agreement, each of the following terms shall have the meaning specified with
respect thereto, unless a different meaning clearly appears from the context:
"Access Laws" shall have the meaning ascribed to such term in Section
5.22(a).
"Adjusted TFCC Ratio" shall be defined as follows:
Annualized EBITDA, less Distributions paid, less Non-Financed Capital
Expenditures incurred during the period under review,
Divided by (/)
The sum of, without duplication for the period under review: (i)
Annualized Interest Expense, plus (ii) the aggregate of Scheduled
Reductions, plus (iii) the aggregate of scheduled principal
amortization, plus (iv) payments required to be made on Capitalized
Lease Liabilities.
"Affiliate(s)" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person. A Person shall be deemed to be "controlled by" any other Person if
such other Person possesses, directly or indirectly, power to:
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<PAGE> 4
(a) vote ten percent (10%) or more of the equity
securities (on a fully diluted basis) having ordinary voting power for
the election of directors or managing general partners; or
(b) direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.
"Agent Bank" shall mean WFB in its capacity as administrative and
collateral agent for Lenders.
"Aggregate Commitment" shall mean reference to the aggregate amount
committed by Lenders for advance to or on behalf of Borrowers as Borrowings
under the Credit Facility in the initial principal amount of Twenty Million
Dollars ($20,000,000.00), as reduced on each Reduction Date by the Scheduled
Reductions to the Maximum Scheduled Balance, and further subject to the
additional reductions and/or limitations for advances as set forth or
incorporated in the definition of Maximum Permitted Balance.
"Aggregate Commitment Reduction Schedule" shall mean the Aggregate
Commitment Reduction Schedule marked Schedule 2.01(c) affixed hereto and by
this reference incorporated herein and made a part hereof, setting forth the
Scheduled Reductions and Maximum Scheduled Balance as of each Reduction Date
under the Credit Facility.
"Annualized EBITDA" shall mean with reference to GHV: (a) for the
Fiscal Quarter ending September 30, 1998, EBITDA for such Fiscal Quarter
multiplied by four (4), (b) for the Fiscal Quarter ending December 31, 1998,
EBITDA for such Fiscal Quarter together with the immediately preceding Fiscal
Quarter multiplied by two (2), (c) for the Fiscal Quarter ending March 31,
1999, EBITDA for such Fiscal Quarter, together with the immediately preceding
two (2) Fiscal Quarters multiplied by four-thirds (4/3), and (d) for the Fiscal
Quarter ending June 30, 1999 and for each subsequently occurring Fiscal Quarter
until Credit Facility Termination, EBITDA for such Fiscal Quarter, together
with the three (3) immediately preceding Fiscal Quarters on a rolling four (4)
Fiscal Quarter basis.
"Annualized Interest Expense" shall mean with reference to GHV: (a)
for the Fiscal Quarter ending September 30, 1998, Interest Expense for such
Fiscal Quarter multiplied by four (4), (b) for the Fiscal Quarter ending
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<PAGE> 5
December 31, 1998, Interest Expense for such Fiscal Quarter together with the
immediately preceding Fiscal Quarter multiplied by two (2), (c) for the Fiscal
Quarter ending March 31, 1999, Interest Expense for such Fiscal Quarter,
together with the immediately preceding two (2) Fiscal Quarters multiplied by
four-thirds (4/3), and (d) for the Fiscal Quarter ending June 30, 1999 and for
each subsequently occurring Fiscal Quarter until Credit Facility Termination,
Interest Expense for such Fiscal Quarter, together with the three (3)
immediately preceding Fiscal Quarters on a rolling four (4) Fiscal Quarter
basis.
"Assignment and Assumption Agreement" shall mean the document
evidencing an assignment of a Syndication Interest by any Lender to an Eligible
Assignee in the form of the Assignment, Assumption and Consent Agreement marked
"Exhibit H", affixed hereto and by this reference incorporated herein and made
a part hereof.
"Assignment of Permits, Licenses and Contracts" shall mean the
assignment duly executed by Borrowers as of the Closing Date, pursuant to which
Borrowers assign to Agent Bank on behalf of Lenders, as additional security for
the Credit Facility, all of their right, title and interest in and to all
permits, licenses and contracts relating to the Hotel/Casino Facility and the
Fee Properties, except those gaming permits and licenses and other permits,
licenses and contracts which are unassignable, as the same may be amended,
modified, supplemented, replaced, renewed or restated from time to time.
"Assignment of Spaceleases, Contracts, Rents and Revenues" shall mean
the assignment duly executed by Borrowers as of the Closing Date, whereby
Borrowers assign to Agent Bank on behalf of Lenders, as additional security for
the Credit Facility all Spaceleases and Equipment Leases and Contracts relating
to the Hotel/Casino Facility and the Fee Properties, including, without
limitation, all rents, issues, profits, revenues and income from the
Hotel/Casino Facility and the Fee Properties and any other business activity
conducted on the Hotel/Casino Facility and the Fee Properties, together with
any and all future expansions thereof, related thereto or used in connection
therewith, as the same may be amended, modified, supplemented, replaced,
renewed or restated from time to time.
"Assignments" shall mean collective reference to the Assignment of
Spaceleases, Contracts, Rents and Revenues and Assignment of Permits, Licenses
and Contracts.
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<PAGE> 6
"Authorized Representative Certificate" shall have the meaning set
forth in Section 3.05(iv).
"Authorized Representative(s)" shall mean, relative to the Borrowers,
those of the respective officers whose signatures and incumbency shall have
been certified to Agent Bank and the Banks as required in Section 3.05(iv) of
the Credit Agreement with the authority and responsibility to deliver Notices
of Borrowing, Compliance Certificates and all other requests, notices, reports,
consents, certifications and authorizations on behalf of Borrowers.
"Available Borrowings" shall mean, at any time, and from time to time,
the aggregate amount available to Borrowers for a Borrowing not exceeding the
amount of the Maximum Availability, as of each date of determination.
"BHG Parcel" shall mean that certain real property described as parcel
5 on the Title Report, including that portion of the Lode 99 Property located
within the exterior boundaries of such parcel 5, as described in parcel 4 of
the Title Report.
"BHGD" shall mean Black Hawk Gaming & Development Company, Inc., a
Colorado corporation, formerly known as Mountain Casino Properties, Inc.
"BHJE" shall mean Black Hawk/Jacobs Entertainment, LLC, a Colorado
limited liability company.
"BHJE Credit Agreement" shall mean that certain Construction and
Reducing Revolving Credit Agreement dated as of March 7, 1997, entered into by
and among BHJE, as borrower, each of the lenders therein named and WFB, as
administrative and collateral agent for such lenders.
"Banking Business Day" means any day excluding Saturday, Sunday and
any day which is a legal holiday under the laws of the States of California
and/or Nevada, or is a day on which banking institutions located in California
and/or Nevada are required or authorized by law or other governmental action to
close.
"Bankruptcy Code" shall mean the United States Bankruptcy Code, as
amended, 11 U.S.C. Section 101, et seq.
"Banks" shall have the meaning set forth in the Preamble to this
Credit Agreement.
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<PAGE> 7
"Borrower Consolidation" means reference to the Borrowers on a
consolidated basis, without regard to any other Subsidiary or Affiliate of
BHGD.
"Borrowers" shall have the meaning ascribed to such term in the
Preamble to this Credit Agreement.
"Borrowing(s)" shall mean such amounts as Borrowers may request from
Agent Bank from time to time to be advanced under the Credit Facility as
Closing Disbursements or by Notice of Borrowing during the Revolving Credit
Period in the manner provided in Section 2.03.
"Capital Expenditures" shall mean, for any period, without
duplication, the aggregate of all expenditures (whether paid in cash or accrued
as liabilities during that period and including Capitalized Lease Liabilities)
by the Borrowers during such period that, in conformity with GAAP, are required
to be included in or reflected by the property, plant or equipment or similar
fixed or capital asset accounts reflected in the balance sheet of the Borrowers
(including equipment which is purchased simultaneously with the trade-in of
existing equipment owned by Borrowers to the extent of (a) the gross amount of
such purchase price less (b) the cash proceeds of trade-in credit of the
equipment being traded in at such time), but excluding capital expenditures
made in connection with the replacement or restoration of assets, to the extent
reimbursed or refinanced from insurance proceeds paid on account of the loss of
or damage to the assets being replaced or restored, or from awards of
compensation arising from the taking by condemnation of or the exercise of the
power of eminent domain with respect to such assets being replaced or restored.
"Capital Proceeds" shall mean the net proceeds (after deducting all
reasonable expenses incurred in connection therewith) available to Borrowers
from: (i) partial or total condemnation or destruction of any part of the
Collateral, (ii) sales of easements, rights of way or similar interests in any
portion of the Real Property, (iii) insurance proceeds (other than rent
insurance and business interruption insurance) received in connection with
damage to or destruction of any part of the Collateral, (iv) the sale or other
disposition of any portion of the Collateral in accordance with the provisions
of this Credit Agreement (not including, however, any proceeds received by
Borrowers from a sale of FF&E if such FF&E is replaced by items of equivalent
value and utility, in each case such exclusion to apply only during any period
in which no Event of Default has occurred
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and is continuing), and (v) any other extraordinary receipt of proceeds not in
the ordinary course of business and treated, for accounting purposes, as
capital in nature.
"Capitalized Lease Liabilities" means all monetary obligations of
Borrowers under any leasing or similar arrangement which, in accordance with
GAAP, would be classified as capitalized leases, and, for purposes of this
Credit Agreement, the amount of such obligations shall be the capitalized
amount thereof, determined in accordance with GAAP, and the stated maturity
thereof shall be the date of the last payment of rent or any other amount due
under such lease prior to the first date upon which such lease may be
terminated by the lessee without payment of a penalty.
"Cash" shall mean, when used in connection with any Person, all
monetary and non-monetary items owned by that Person that are treated as cash
in accordance with GAAP.
"Closing Certificate" shall have the meaning ascribed to such term in
Section 3.05(v).
"Closing Date" shall mean the date upon which: (i) each condition
precedent required under Article IIIA of this Credit Agreement has been
satisfied or waived and (ii) the Security Documentation has been filed and/or
recorded in accordance with and in the manner required by the Depository
Closing Instructions, or such other date as to which Agent Bank and Borrowers
agree in writing.
"Closing Disbursements" shall have the meaning set forth in Section
2.02(a).
"Collateral" shall mean collective reference to all of Borrowers'
right, title and interest in and to: (i) all of the Hotel/Casino Facility and
the Fee Properties and the personal property, FF&E, contract rights, leases,
stock, intangibles and other interests of the Borrowers which are subject to
the liens, pledges and security interests created by the Security
Documentation; (ii) all rights of the Borrowers assigned and/or pledged as
additional security pursuant to the terms of the Loan Documents and Security
Documentation, including, without limitation, following the satisfaction of the
conditions set forth in Article III C, the Parking Garage Security Documents;
and (iii) any and all other property and/or intangible rights, interest or
benefits inuring to or in favor of the Borrowers which are in any manner
assigned, pledged, encumbered or otherwise hypothecated
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in favor of Banks or Agent Bank on behalf of Lenders to secure payment of the
Credit Facility.
"Commitment Letter" shall mean the letter dated February 4, 1998, from
WFB to BHGD and accepted by BHGD on February 5, 1998, together with all
attachments and exhibits thereto, setting forth the terms and conditions upon
which WFB committed to establish the Credit Facility in favor of Borrowers, as
may be amended from time to time by written instrument executed by WFB and
Borrowers.
"Compliance Certificate" shall mean the compliance certificates
referred to in Section 5.08, a form for which is set forth on "Exhibit F",
affixed hereto and by this reference incorporated herein and made a part
hereof.
"Contingent Liability(ies)" shall mean, as to any Person, any
obligation of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness, leases or dividends ("primary obligations") of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to advance or
supply funds (i) for the purchase or payment of any such primary obligation or
(ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (c) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation, (d) to make payment in respect of
any net liability arising in connection with any Interest Rate Hedges, foreign
currency exchange agreement, commodity hedging agreement or any similar
agreement or arrangement in any such case if the purpose or intent of such
agreement is to provide assurance that such primary obligation will be paid or
discharged, or that any agreements relating thereto will be complied with, or
that the holders of such primary obligation will be protected (in whole or in
part) against loss in respect thereof or (e) otherwise to assure or hold
harmless the holder of such primary obligation against loss in respect thereof;
provided, however, that the term Contingent Liability shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Contingent Liability shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of
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which such Contingent Liability is made or, if not stated or determinable, the
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"Contractual Obligation" means, as to any Person, any provision of any
outstanding securities issued by that Person or of any material agreement,
instrument or undertaking to which that Person is a party or by which it or any
of its assets is bound.
"Credit Agreement" shall mean this Credit Agreement executed by and
among Borrowers and Banks setting forth the terms and conditions of the Credit
Facility as it may be amended, modified, extended, renewed or restated from
time to time.
"Credit Facility" shall mean the agreement of Lenders to fund the
Closing Disbursements on the Closing Date and other Borrowings during the
Revolving Credit Period, subject to the terms and conditions set forth in this
Credit Agreement and the Note, up to the Maximum Permitted Balance as reduced
from time to time in accordance with the terms of this Credit Agreement and the
Note.
"Credit Facility Termination" shall mean indefeasible payment in full
of all sums owing under the Note and each of the other Loan Documents and the
irrevocable termination of the obligation of Banks to advance Borrowings.
"Deed of Trust" shall mean the Deed of Trust, Fixture Filing and
Security Agreement with Assignment of Rents to be executed, as of the Closing
Date, by Borrowers, as trustor and debtor, to the Public Trustee of Gilpin
County, Colorado, as trustee, in favor of Agent Bank on behalf of Lenders, as
beneficiary, for the purposes of providing a security for the Credit Facility
encumbering the Real Property and other Collateral more particularly therein
described as a first mortgage lien, as the same may be amended, modified,
supplemented, replaced, renewed or restated from time to time.
"Default" shall mean the occurrence or non-occurrence, as the case may
be, of any event that with the giving of notice or passage of time, or both,
would become an Event of Default, pursuant to Article VII.
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"Default Notice Recording" shall mean either:
(i) the filing with the Public Trustee of Gilpin County,
Colorado, of a Notice of Election and Demand for Sale pursuant to
Colorado Revised Statutes, Section 38-38-101, or any applicable
successor statute, by Agent Bank as beneficiary under the Deed of
Trust, or
(ii) the commencement of a judicial foreclosure action in an
appropriate court in and for the County of Gilpin, Colorado, pursuant
to which Lenders or Agent Bank on behalf of Lenders seek judicial
foreclosure of the Deed of Trust.
"Default Rate" shall have the meaning set forth in Section 2.08(b).
"Defaulting Lender" means any Lender which fails or refuses to perform
its obligations under this Credit Agreement within the time period specified
for performance of such obligation or, if no time frame is specified, if such
failure or refusal continues for a period of five (5) Banking Business Days
after notice from Agent Bank.
"Depository Closing Instructions" shall mean the Depository Closing
Instructions to be given by Agent Bank to Title Insurance Company at or prior
to the Closing Date setting forth the requirements for the issuance of the
Title Insurance Policy and other conditions for the closing of the Credit
Facility, as it may be amended or modified prior to the Closing Date to the
reasonable satisfaction of Agent Bank, Requisite Lenders and the Borrowers.
"Designated Deposit Account" shall mean a deposit account to be
maintained by Borrowers, as from time to time designated in writing to Agent
Bank by an Authorized Representative.
"Dispute" shall have the meaning set forth in Section 10.14(a).
"Distributions" shall mean and collectively refer to any and all cash
dividends, loans, payments (including principal payments made on Subordinated
Debt, but excluding Distributions to the Stock Sellers of net income and
reserves made pursuant to Section 1.3 entitled "Distributions; Reserves" of the
Stock Purchase Agreement), advances or other
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<PAGE> 12
distributions, fees or compensation of any kind or character whatsoever made by
GHV to any Person, including, without limitation, any member of the Borrower
Consolidation, but shall not include consideration paid for tangible and
intangible assets in an arms length exchange for fair market value, trade
payments made and other payments for liabilities incurred in the ordinary
course of business or compensation and fees to officers, directors, members,
managers and employees of Borrowers, all in the ordinary course of business.
"Documents" shall have the meaning set forth in Section 10.14(a).
"Dollars" and "$" means the lawful money of the United States of
America.
"EBITDA" shall mean with reference to any Person, for any Fiscal
Period under review, the sum of (i) Net Income for that period, plus (ii)
Interest Expense (expensed and capitalized) for that period, plus (iii) the
aggregate amount of federal and state taxes on or measured by income for that
period (whether or not payable during that period), plus (iv) depreciation,
amortization and all other non-cash expenses for that period, in each case
determined in accordance with GAAP and, in the case of items (ii), (iii) and
(iv), only to the extent deducted in the determination of Net Income for that
period.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
"Eligible Assignee" means (a) another Lender, (b) with respect to any
Lender, any Affiliate of that Lender, (c) any commercial bank, savings and loan
association or savings bank that is organized under the Laws of the United
States of America, any State thereof or the District of Columbia, or (d) any
commercial bank that is organized under the Laws of any other country which is
a member of the Organization for Economic Cooperation and Development, or a
political subdivision of such a country, provided that (A) such bank is acting
through a branch or agency located in the United States of America and (B) such
bank is otherwise exempt from withholding of tax on interest and delivers Form
1001 or Form 4224 at the time of any assignment, and (e) with respect to such
commercial bank or financial institution as described in (a) through (d) above,
no finding of unsuitability has been made or determined by any Gaming
Authority.
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"Eligible Subparticipant" shall mean any Person which is a bank,
savings and loan association or other financial or lending institution which
has not been found unsuitable as a lender by the Gaming Authorities.
"Environmental Certificate" shall mean the Certificate and
Indemnification Regarding Hazardous Substances to be executed by Borrowers on
or before the Closing Date and delivered to Agent Bank as a further inducement
to the Banks to establish the Credit Facility, as may be amended, modified,
extended, renewed or restated from time to time.
"Equipment Leases and Contracts" shall mean the executed leases and
purchase contracts pertaining to FF&E wherein any Borrower is the lessee or
vendee, as the case may be, as set forth on that certain Schedule of Equipment
Leases and Contracts designated as Schedule 4.17, affixed hereto and by this
reference incorporated herein and made a part hereof.
"Event of Default" shall mean any event of default as defined in
Section 7.01 hereof.
"Existing Equipment Debt" shall mean the indebtedness owing by
Borrowers for various items of equipment as shown on the Schedule of Existing
Equipment Debt marked "Schedule 3.16(b)", affixed hereto and by this reference
incorporated herein and made a part hereof.
"Existing Equipment Security Documents" shall mean collective
reference to all security agreements, deeds of trust, mortgages, financing
statements, assignments and other instruments securing repayment of all or any
portion of the Existing Equipment Debt.
"Existing Land Lease" shall mean that certain Lease dated February 28,
1992, between GGI and BHGD, as lessors, and GHV, as lessee, under the terms of
which the H/C Real Property and the Millsite 29 Parcel are leased by GGI and
BHGD to GHV.
"Existing Real Estate Debt" shall mean the indebtedness listed on the
Schedule of Existing Real Estate Debt, a copy of which is marked "Schedule
3.16(a)", affixed hereto and by this reference incorporated herein and made a
part hereof.
"Existing Real Estate Security Documents" shall mean collective
reference to all deeds of trust, mortgages,
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assignments and other security instruments securing repayment of all or any
portion of the Existing Real Estate Debt.
"FF&E" shall mean collective reference to any and all furnishings,
fixtures and equipment, including, without limitation, all Gaming Devices and
associated equipment, which have been installed or are to be installed and used
in connection with the operation of the Hotel/Casino Facility and in connection
with any other business operation conducted on the Real Property and those
items of furniture, fixtures and equipment which have been purchased or leased
or are hereafter purchased or leased by Borrowers in connection with the
Hotel/Casino Facility and in connection with any other business operation
conducted on the Real Property.
"FIRREA" shall mean the Financial Institutions Reform, Recovery and
Enforcement Act of 1989.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to:
a. the weighted average of the rates on overnight
federal funds transactions with members of the Federal Reserve System arranged
by federal funds brokers, as published for such day (or, if such day is not a
Banking Business Day, for the next preceding Banking Business Day) by the
Federal Reserve Bank of New York; or
b. if such rate is not so published for any day which is
a Banking Business Day, the average of the quotations for such day on such
transactions received by the Agent Bank from three (3) federal funds brokers of
recognized standing selected by it.
"Fee Properties" shall mean collective reference to the H/C Real
Property, the Millsite 29 Parcel and the BHG Parcel.
"Financial Covenant" shall mean individual reference and "Financial
Covenants" shall mean collective reference to the Financial Covenants set forth
in Article VI of the Credit Agreement.
"Financing Statements" shall mean the Uniform Commercial Code
Financing Statements required to be filed in the central indexing system of the
Office of the Secretary of State of Colorado and the real property records in
the Office
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of the Clerk and Recorder of Gilpin County, Colorado, in order to perfect the
security interest granted to Agent Bank under the Deed of Trust and other
Security Documentation in accordance with the requirements of the Uniform
Commercial Code.
"Fiscal Quarter" shall mean the consecutive three (3) month periods
during each Fiscal Year beginning on January 1, April 1, July 1 and October 1,
and ending on December 31, March 31, June 30 and September 30, respectively.
"Fiscal Year" shall mean the fiscal year period beginning January 1 of
each calendar year and ending on the following December 31.
"Fiscal Year End" shall mean December 31 of each calendar year.
"Force Majeure" shall mean an event or occurrence directly caused by
fire, flood, earthquake or other acts of God.
"Funded Debt" shall mean for any period the daily average of the
Funded Outstandings during the last month of such period, plus the total as of
the last day of such period of: (i) both the long-term and current portions
(without duplication) of all other Indebtedness, (ii) Capitalized Lease
Liabilities, (iii) the stated amount of all outstanding letters of credit, and
(iv) all other Contingent Liabilities.
"Funded Debt to EBITDA Ratio" as of the end of each Fiscal Quarter,
beginning with the Fiscal Quarter ending September 30, 1998, shall mean with
respect to GHV the ratio resulting by dividing Funded Debt for the Fiscal
Quarter under review by Annualized EBITDA.
"Funded Outstandings" shall mean the unpaid principal amount
outstanding on the Credit Facility as of any given date of determination.
"Funding Date" shall mean each date upon which Lenders fund Borrowings
requested by Borrowers in accordance with the provisions of Section 2.03.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements
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of the Financial Accounting Standards Board, or in such other statements by
such other entity as may be in general use by significant segments of the
accounting profession, which are applicable to the circumstances as of the date
of determination.
"GGI" shall mean Gilpin Gold, Inc., a Colorado corporation.
"GHV" shall mean Gilpin Hotel Venture, a Colorado joint venture.
"GVI" shall mean Gilpin Ventures, Inc., a Colorado corporation.
"GVI Shares" shall have the meaning set forth in Recital Paragraph D.
"Gamble" shall mean Golden Gamble, Inc., a Colorado corporation.
"Gamble Assignment Agreement" shall have the meaning set forth in
Recital Paragraph E.
"Gamble Contract Rights" shall have the meaning set forth in Recital
Paragraph E.
"Gamble Purchase Price" shall have the meaning set forth in Recital
Paragraph E.
"Gaming Authorities" means collective reference to the Division of
Gaming of the Colorado Department of Revenue, the Colorado Limited Gaming
Control Commission and each other agency or other political subdivision which
has jurisdiction over the gaming activities of Borrowers at the Hotel/Casino
Facility.
"Gaming Devices" shall mean slot machines and other devices and items
which constitute gaming devices and related equipment as defined by the Gaming
Authorities and Gaming Laws.
"Gaming Laws" shall mean the Colorado Limited Gaming Act and the
regulations relating thereto and all other rules, regulations, statutes and
ordinances having authority or with which compliance is required for the
conduct of gambling, gaming and casino activities at the Hotel/Casino Facility.
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"Gaming Permits" shall mean collective reference to every license,
permit or other authorization required to own, operate and otherwise conduct
gambling, gaming and casino activities at the Hotel/Casino Facility, including,
without limitation, all licenses granted by the Gaming Authorities and all
other applicable Governmental Authorities.
"Government Securities" means readily marketable (a) direct full faith
and credit obligations of the United States of America or obligations
guaranteed by the full faith and credit of the United States of America and (b)
obligations of an agency or instrumentality of, or corporation owned,
controlled or sponsored by, the United States of America that are generally
considered in the securities industry to be implicit obligations of the United
States of America.
"Governmental Authority" or "Governmental Authorities" shall mean any
federal, state, regional, county or municipal governmental agency, board,
commission, officer or official whose consent or approval is required or whose
regulations must be followed as a prerequisite to (i) the continued operation
and occupancy of the Real Property and the Hotel/Casino Facility or (ii) the
performance of any act or obligation or the observance of any agreement,
provision or condition of whatever nature herein contained.
"H/C Real Property" shall mean that certain real property described as
parcels 1 and 3 on the Title Report, including that portion of the Lode 99
Property located within the exterior boundaries of such parcels 1 and 3, as
described in parcel 4 on the Title Report.
"Hazardous Materials Claims" shall have the meaning set forth in
Section 5.20.
"Hazardous Materials Laws" shall have the meaning set forth in Section
5.20.
"Hotel/Casino Facility" shall mean collective reference to the Fee
Properties, the casino businesses and related activities conducted by Borrowers
in and on the Fee Properties under the name and style of Gilpin Hotel Casino
and all improvements now or hereafter situate thereon, including, without
limitation, following the Parking Garage Completion Date, the Parking Garage
Project, together with any other real property, personal property or interests
therein which are used by Borrowers as a part of the operation of the casino
businesses conducted by Borrowers on the Real Property.
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"Indebtedness" shall mean, as to any Person, with-out duplication, (a)
all indebtedness (including principal, interest, fees and charges) of such
Person for borrowed money, (b) the deferred purchase price of property or
services (other than accrued expenses, tax liability, deferred taxes, and trade
accounts payable less than ninety (90) days past due and other accrued or
deferred liabilities incurred in the ordinary course of business) which in
accordance with GAAP would be shown on the liability side of the balance sheet
of such Person, (c) the face amount of all letters of credit issued for the
account of such Person and all drafts drawn thereunder, (d) all obligations
under conditional sale or other title retention agreements relating to property
purchased by such Person, (e) all liabilities of the type described in clauses
(a) through (d) or (f) of this definition secured by (or for which the holder
of any such liability has an existing right, contingent or otherwise, to be
secured by) any lien or encumbrance on any property owned by such Person,
whether or not such liabilities have been assumed by such Person, (f) all
Capitalized Lease Liabilities of such Person, and (g) all Contingent
Liabilities of such Person in respect of any indebtedness, obligations or
liabilities of any other Person of the type referred to in clauses (a)-(f) of
this definition.
"Indemnified Party" and "Indemnified Parties" shall have the meaning
ascribed to such terms in Section 5.14.
"Interest Expense" shall mean with respect to any Person, as of the
last day of any fiscal period under review, the sum of (i) all interest, fees,
charges and related expenses paid or payable (without duplication) for that
fiscal period by such Person to a lender in connection with borrowed money
(including any obligations for fees, charges and related expenses payable to
the issuer of any letter of credit) or the deferred purchase price of assets
that are considered "interest expense" under GAAP, plus (ii) the portion of the
up front costs and expenses for Interest Rate Hedges (to the extent not
included in (i)) fairly allocated to such interest rate hedges as expenses for
such period, plus (iii) the portions of Capital Lease Liabilities that should
be treated as interest in accordance with GAAP.
"Interest Rate Hedge" shall mean collective reference to any one or
more interest rate swap agreements, interest rate cap agreements, basis swaps,
forward rate agreements and interest collar or floor agreements and all other
interest rate protection products or arrangements
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designed to protect against fluctuations in interest rates or currency exchange
rates for the purpose of hedging the interest rates on the Credit Facility.
"Investment" shall mean, when used in connection with any Person, any
investment by or of that Person, whether by means of purchase or other
acquisition of stock or other securities of any other Person or by means of a
loan, advance creating a debt, capital contribution, guaranty or other debt or
equity participation or interest in any other Person, including any partnership
and joint venture interests of such Person. The amount of any Investment shall
be the amount actually invested without adjustment for subsequent increases or
decreases in the value of such Investment.
"Land Purchase Agreement" shall have the meaning set forth in Recital
Paragraph C.
"Land Purchase Price" shall have the meaning set forth in Recital
Paragraph C.
"Laws" means, collectively, all international, foreign, federal, state
and local statutes, maritime laws, treaties, rules, regulations, ordinances,
codes and administrative or judicial precedents.
"Lender Reply Period" shall have the meaning set forth in Section
9.10(d).
"Lenders" means WFB and any other bank, finance company, insurance or
other financial institution which is or becomes a party to this Credit
Agreement by execution of a counterpart signature page hereto or by execution
of an Assignment and Assumption Agreement, as assignee. At all times that
there are no Lenders other than WFB, the terms "Lender" and "Lenders" means WFB
in its individual capacity. With respect to matters requiring the consent to
or approval of all Lenders at any given time, all then existing Defaulting
Lenders will be disregarded and excluded, and, for voting purposes only, "all
Lenders" shall be deemed to mean "all Lenders other than Defaulting Lenders".
"Liabilities and Costs" means all claims, judgments, liabilities,
obligations, responsibilities, losses, damages (including lost profits),
punitive or treble damages, costs, disbursements and expenses (including,
without limitation, reasonable attorneys', experts' and consulting fees and
costs of investigation and feasibility studies), fines, penalties
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and monetary sanctions, interest, direct or indirect, known or unknown,
absolute or contingent, past, present or future.
"Loan Documents" shall mean the collective reference to this Credit
Agreement, the Note, the Security Documentation, the Upfront Fee Side Letter,
Environmental Certificate and all other instruments and agreements required to
be executed by or on behalf of Borrowers, or any other Person in connection
with the Credit Facility for the benefit of Banks or Agent Bank on behalf of
the Lenders, as the same may be amended, modified, supplemented, replaced,
renewed or restated from time to time.
"Lode 99 Property" shall mean that certain real property described in
the Quitclaim Deed recorded on December 13, 1899, in Book 150 at Page 317, in
the City of Blackhawk.
"Lodge Property" shall mean that certain real property situate in the
City of Black Hawk, County of Gilpin, State of Colorado, owned by BHJE, more
particularly described in that certain exhibit marked "Exhibit B", affixed
hereto and by this reference incorporated herein and made a part hereof.
"Management Agreement" shall mean that certain Development, Management
and Consulting Agreement dated February 28, 1992, executed by and among GHV,
BHGD and Gamble with respect to certain management obligations and fees to be
paid by GHV to BHGD and certain consulting obligations and fees to be paid by
GHV to Gamble.
"Margin Stock" shall have the meaning provided in Regulation U of the
Board of Governors of the Federal Reserve System.
"Material Adverse Change" shall mean any change which is material and
adverse to the Collateral or the condition (financial or otherwise) or business
operations of the Borrowers taken as a whole or the ability of Borrowers taken
as a whole to perform their obligations under the Loan Documents or the ability
of any of the Lenders to enforce any of their rights or remedies under any of
the Loan Documents.
"Material Adverse Effect" means any set of circumstances or events
which (a) has or would reasonably be expected to have any material adverse
effect whatsoever upon the validity or enforceability of any Loan Document, (b)
is or would reasonably be expected to result in a Material Adverse
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Change, (c) materially impairs or would reasonably be expected to materially
impair the ability of the Borrowers to perform their obligations under the
Credit Agreement or any other Loan Document, or (d) materially impairs or would
reasonably be expected to materially impair the ability of the Agent Bank,
Banks, or any of them, to enforce their legal remedies pursuant to the Loan
Documents.
"Maturity Date" shall mean April 24, 2001.
"Maximum Availability" shall mean the Maximum Permitted Balance less
the Funded Outstandings.
"Maximum Permitted Balance" shall mean the maximum amount of principal
which may be outstanding on the Credit Facility from time to time which shall
be the lesser of: (a) the Maximum Scheduled Balance, or (b) the amount to which
the Maximum Scheduled Balance is voluntarily reduced by Borrower pursuant to
Section 2.01(c) or is otherwise reduced or limited pursuant to Sections 5.01,
5.12 or 8.02 or by Scheduled Reductions.
"Maximum Scheduled Balance" shall mean the maximum amount of scheduled
principal which may be outstanding on the Credit Facility from time to time in
the amount of the Aggregate Commitment as of the Closing Date, as reduced from
time to time by the Scheduled Reductions as set forth on the Aggregate
Commitment Reduction Schedule.
"Millsite 29 Parcel" shall mean that certain real property described
as parcel 2 on the Title Report, including that portion of the Lode 99 Property
located within the exterior boundaries of such parcel 2, as described in parcel
4 on the Title Report.
"Net Income" shall mean with respect to any Person for any fiscal
period, the net income of such Person during such fiscal period determined in
accordance with GAAP, consistently applied.
"New Land Lease" shall mean the Lease to be executed on or before the
Closing Date wherein BHGD leases the H/C Real Property, the Millsite 29 Parcel
and the BHG Parcel to GHV and GHV leases the H/C Real Property, the Millsite 29
Parcel and the BHG Parcel from BHGD, for a term no less than 10 years and for
rental considerations no more than One Thousand Dollars ($1,000.00) per year in
the aggregate, subject to terms and conditions reasonably satisfactory to Agent
Bank.
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"New Lease Subordination" shall mean the Subordination Agreement under
the terms of which the New Land Lease will be subordinated to the lien of the
Deed of Trust and other Security Documentation, which New Lease Subordination
shall be in a form and content acceptable to Agent Bank.
"Non-Financed Capital Expenditures" shall mean Capital Expenditures
for the Hotel/Casino Facility which are paid by GHV from assets of GHV and not
from the Credit Facility or through any other loan, credit agreement, lease or
financing from any source.
"Non-Pro Rata Borrowing" means a Borrowing with respect to which fewer
than all Lenders have funded their respective Pro Rata Shares of such Borrowing
and the failure of the non-funding Lender or Lenders to fund its or their
respective Pro Rata Shares of such Borrowing constitutes a breach of this
Credit Agreement.
"Nonusage Fee" shall have the meaning ascribed to such term in Section
2.07(b) of this Credit Agreement.
"Note" shall mean the Revolving Credit Note, a copy of which is marked
"Exhibit A", affixed hereto and by this reference incorporated herein and made
a part hereof, to be executed by Borrowers on the Closing Date, payable to the
order of Agent Bank on behalf of the Lenders, evidencing the Credit Facility,
as the same may be amended, modified, supplemented, replaced, renewed or
restated from time to time.
"Notice of Borrowing" shall have the meaning set forth in Section
2.03.
"Obligations" means, from time to time, all Indebtedness of Borrowers
owing to Agent Bank, any Lender or any Person entitled to indemnification
pursuant to Section 5.14, or any of their respective successors, transferees or
assigns, of every type and description, whether or not evidenced by any note,
guaranty or other instrument, arising under or in connection with this Credit
Agreement or any other Loan Document, whether or not for the payment of money,
whether direct or indirect (including those acquired by assignment), absolute
or contingent, due or to become due, now existing or hereafter arising and
however acquired. The term includes, without limitation, all interest,
charges, expenses, fees, reasonable attorneys' fees and disbursements,
reasonable fees and disbursements of expert witnesses and other
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consultants, and any other sum now or hereinafter chargeable to Borrowers under
or in connection with Credit Agreement or any other Loan Document.
Notwithstanding the foregoing definition of "Obligations", Borrowers'
obligations under any environmental indemnity agreement constituting a Loan
Document, or any environmental representation, warranty, covenant, indemnity or
similar provision in this Credit Agreement or any other Loan Document, shall be
secured by the Collateral only to the extent, if any, specifically provided in
the Security Documentation.
"Parking Garage Completion Date" shall mean the date upon which: (a)
the Parking Garage Project has been completed to the reasonable satisfaction of
Agent Bank and in substantial accordance and compliance with the Parking Garage
plans and specifications and in accordance and compliance with the terms and
conditions of all Governmental Authorities, and (b) GHV has obtained all
licenses, permits and other authorizations from all necessary Governmental
Authorities for the use and operation of the Parking Garage Project in
connection with the Hotel/Casino Facility.
"Parking Garage Construction Funds" shall mean a portion of the Credit
Facility in the amount of Two Million Five Hundred Thousand Dollars
($2,500,000.00) which shall be held for disbursement subject to satisfaction of
the conditions set forth in Article III C until the occurrence of the Parking
Garage Completion Date.
"Parking Garage Documents" shall have the meaning set forth in Section
3.28.
"Parking Garage Lease" shall mean the Parking Garage Lease Agreement
dated April 24, 1998, executed by and between BHJE, as landlord, and GHV, as
tenant, under the terms of which the Parking Garage Project is leased by BHJE
to GHV together with other provisions therein contained relating to the
construction, operation and maintenance of the Parking Garage Project, all as
more particularly therein described.
"Parking Garage Project" shall have the meaning set forth in Recital
Paragraph G.
"Parking Garage Security Documents" shall have the meaning set forth
in Section 3.29.
"Payment Subordination Agreement" shall mean the Payment Subordination
Agreement to be executed by each
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Subordinated Debt Holder intending to loan or advance all or any portion of the
Subordinated Debt to GHV, which shall be executed in favor of Agent Bank prior
to any such loan or advance of funds under the Subordinated Debt in the form of
the Payment Subordination Agreement marked "Exhibit I", affixed hereto and by
this reference incorporated herein and made a part hereof.
"Pension Plan" means any "employee pension benefit plan" that is
subject to Title IV of ERISA and which is maintained for employees of Borrower
or any of its ERISA Affiliates.
"Permitted Encumbrances" shall mean, at any particular time, (i) liens
for taxes, assessments or governmental charges not then due, payable and
delinquent or being contested in good faith, (ii) liens for taxes, assessments
or governmental charges not then required to be paid pursuant to Section 5.10
or being contested in good faith, (iii) liens in favor of Agent Bank or any
Lender created or contemplated by the Security Documentation, or securing
Secured Interest Rate Hedges, (iv) the liens, encumbrances and restrictions on
the Real Property and existing improvements which are allowed by Banks to
appear in Schedule B, Part I and II of the Title Insurance Policy relating to
such Real Property at the Closing Date, (v) liens consented to in writing by
Agent Bank, (vi) purchase money security interests or Capital Lease Liabilities
for acquired FF&E up to the maximum cumulative aggregate amount permitted under
Section 6.05(c) and only to the extent of the lesser of the purchase money loan
or the fair market value of the acquired FF&E as of the applicable acquisition
date, as the case may be, (vii) easements, licenses or rights-of-way, hereafter
granted to any Governmental Authority or public utility providing services to
the Hotel/Casino Facility, which are first approved in writing by the Agent
Bank, (viii) judgment liens on property other than the Collateral which do not
constitute an Event of Default, (ix) statutory liens of landlords, revenue
authorities and materialmen and other similar liens imposed by law incurred in
the ordinary course of business which could not reasonably be expected to cause
a Material Adverse Effect and which are discharged in accordance with Section
5.04, (x) liens incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types
of social security, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts, trade
contracts, performance and return-
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of-money bonds and other similar obligations; (xi) leases, concessions or
subleases granted to others not interfering in any material respect with the
ordinary conduct of the business of Borrower; and (xii) minor defects,
encroachments or irregularities in title that do not have a Material Adverse
Effect.
"Person" means an individual, firm, corporation, trust, association,
partnership, joint venture, tribunal or other entity.
"Policies of Insurance" shall mean the insurance to be obtained and
maintained by Borrower throughout the term of this Credit Agreement as provided
by Section 5.09 herein.
"Post Foreclosure Plan" shall have the meaning set forth in Section
9.11(e).
"Prime Rate" shall mean the rate of interest per annum which WFB from
time to time identifies and publicly announces at its principal office in San
Francisco, California, as its "prime rate" or "reference rate" and is not
necessarily, for example, the lowest rate of interest which WFB collects from
any borrower or group of borrowers.
"Principal Prepayments" shall have the meaning set forth in Section
2.06(a) of this Credit Agreement.
"Pro Rata Share" means, with respect to any Lender, a percentage equal
to such Lender's Syndication Interest in the Credit Facility as set forth on
Schedule of Lenders' Proportions in Credit Facility.
"Protective Advance" means all sums expended as determined by Agent
Bank to be necessary to: (a) protect the priority, validity and enforceability
of the Security Documentation on, and security interests in, any Collateral and
the instruments evidencing or securing the Obligations, or (b) prevent the
value of any Collateral from being materially diminished (assuming the lack of
such a payment within the necessary time frame could potentially cause such
Collateral to lose value), or (c) protect any of the Collateral from being
materially damaged, impaired, mismanaged or taken, including, without
limitation, any amounts expended in accordance with Section 10.20 or
post-foreclosure ownership, maintenance, operation or marketing of any
Collateral.
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"Real Property" shall mean collective reference to: (i) the land which
is the subject of and particularly described in the Title Report, together with
all improvements now or hereafter situate thereon, and shall constitute a
collective reference to the Fee Properties, and (ii) all right, title and
interest of GHV in and to the Parking Garage Project and related interests as
set forth in the Parking Garage Documents.
"Reduction Date(s)" shall mean reference to each Reduction Date, as
the context may require as set forth on the Aggregate Commitment Reduction
Schedule.
"Reportable Event" shall mean a reportable event as defined in Title
IV of ERISA, except actions of general applicability by the Secretary of Labor
under Section 110 of ERISA.
"Requisite Lenders" mean, collectively, Lenders whose Pro Rata Shares,
in the aggregate, are at least sixty-six and two-thirds percent (66-2/3%),
provided that, (i) in determining such percentage at any given time, all then
existing Defaulting Lenders will be disregarded and excluded and the Pro Rata
Shares of Lenders shall be redetermined, for voting purposes only, to exclude
the Pro Rata Shares of such Defaulting Lenders, and (ii) notwithstanding the
foregoing, at all times when two or more Lenders are party to this Credit
Agreement, the term Requisite Lenders shall in no event mean less than two (2)
Lenders.
"Revolving Credit Period" shall mean the period commencing on the
Closing Date and terminating on the Maturity Date.
"Schedule of Lenders' Proportions in Credit Facility" shall mean the
Schedule of Lenders' Proportions in Credit Facility, a copy of which is set
forth as Schedule 2.01(a), affixed hereto and by this reference incorporated
herein and made a part hereof, setting forth the respective Syndication
Interest and maximum amount to be funded under the Credit Facility by each
Lender, as the same may be amended or restated from time to time in connection
with an Assignment and Assumption Agreement.
"Schedule of Significant Litigation" shall mean the Schedule of
Significant Litigation, a copy of which is set forth as Schedule 3.17, affixed
hereto and by this reference incorporated herein and made a part hereof,
setting forth the
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information described in Section 3.17 with respect to each Significant
Litigation.
"Scheduled Reductions" shall mean the amount by which the Aggregate
Commitment is reduced on each Reduction Date as set forth on the Aggregate
Commitment Reduction Schedule.
"Secured Interest Rate Hedge(s)" shall mean any Interest Rate Hedge
entered into between Borrowers and any Lender, or Affiliate of any Lender,
which is secured by the Deed of Trust.
"Security Documentation" shall mean collective reference to the Deed
of Trust, New Lease Subordination, Financing Statements, Assignments and all
other instruments and agreements to be executed by or on behalf of Borrowers or
other applicable Persons, in favor of Agent Bank on behalf of the Lenders
securing repayment of the Credit Facility, including, without limitation, the
Parking Garage Security Documents when executed and delivered by Borrowers in
favor of Agent Bank.
"Significant Litigation" shall mean each action, suit, proceeding,
litigation and controversy involving any Borrower involving claims in excess of
One Million Dollars ($1,000,000.00) or which if determined adversely to the
interests of such Borrower, could have a Material Adverse Effect.
"Spaceleases" shall mean the executed leases and concession agreements
pertaining to the Hotel/Casino Facility, or any portion thereof, wherein
Borrower is the lessor, as set forth on that certain Schedule of Spaceleases
designated as Schedule 4.16, affixed hereto and by this reference incorporated
herein and made a part hereof.
"Stock Purchase Agreement" shall have the meaning set forth in Recital
Paragraph D.
"Stock Purchase Price" shall have the meaning set forth in Recital
Paragraph D.
"Stock Sellers" shall have the meaning set forth in Recital Paragraph
D.
"Subordinated Debt" shall mean unsecured Indebtedness, owing by GHV to
Subordinated Debt Holders which:
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(a) has been first approved in writing by Agent Bank, (b) bears interest at an
annual rate no greater than twelve percent (12%), (c) has been structurally and
contractually subordinated to the Credit Facility prior to the incurrence of
such Subordinated Debt by execution of a Payment Subordination Agreement by GHV
and the Subordinated Debt Holders in favor of Agent Bank, and (d) may only be
used for providing working capital for the Hotel/Casino Facility.
"Subordinated Debt Holders" shall mean collective reference to BHGD,
GVI or any Affiliate or Subsidiary of BHGD or GVI who loans or advances funds
to GHV as Subordinated Debt.
"Subsidiary" shall mean, on the date in question, any Person of which
an aggregate of 50% or more of the stock of any class or classes (or equivalent
interests) is owned of record or beneficially, directly or indirectly, by
another Person and/or any of its Subsidiaries, if the holders of the stock of
such class or classes (or equivalent interests) (a) are ordinarily, in the
absence of contingencies, entitled to vote for the election of a majority of
the directors (or individuals performing similar functions) of such Person,
even though the right so to vote has been suspended by the happening of such a
contingency, or (b) are entitled, as such holders, to vote for the election of
a majority of the directors (or individuals performing similar functions) of
such Person, whether or not the right so to vote exists by reason of the
happening of a contingency.
"Syndication Interest" shall mean the proportionate interest of each
Lender in the Credit Facility as set forth on the Schedule of Lenders'
Proportions in Credit Facility, as the same may be amended or restated from
time to time.
"Taxes" shall have the meaning set forth in Section 2.10.
"Title Insurance Company" shall mean First American Title Insurance
Company and its issuing agent, Clear Creek- Gilpin Abstract & Title Corp., with
offices located at 619 Fifth Street, P.O. Box 545, Georgetown, Colorado 80444,
together with such reinsurers with direct access as are requested by Agent Bank
or other title insurance company or companies as may be acceptable to Agent
Bank.
"Title Insurance Policy" shall mean the ALTA Extended Coverage Lenders
Policy of Title Insurance, and the
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endorsements thereto, which are to be issued by Title Insurance Company, as of
the Closing Date, in the amount of Twenty Million Dollars ($20,000,000.00), in
favor of Agent Bank, insuring the Deed of Trust as a first priority mortgage
lien encumbering the Real Property therein described subject only to the
exceptions shown therein in Schedule B, Part I, all in accordance with the
Depository Closing Instructions.
"Title Report" shall refer to the Commitment for Title Insurance
Commitment issued by Title Insurance Company, as its Commitment No.
FG11778.C-6, a copy of which is marked "Exhibit J", affixed hereto and by this
reference incorporated herein and made a part hereof.
"Upfront Fee" shall have the meaning ascribed to such term in Section
2.07(a).
"Upfront Fee Side Letter" shall mean the confidential letter dated
February 4, 1998, executed by and between Borrowers and Agent Bank concerning
payment of the Upfront Fee.
"Voluntary Permanent Reduction" shall have the meaning set forth in
Section 2.01(c).
"WFB" shall mean Wells Fargo Bank, National Association.
Section 1.02. Interpretation and Construction. In this Credit
Agreement, unless the context otherwise requires:
(i) Articles and Sections mentioned by number only are the
respective Articles and Sections of this Credit Agreement as so numbered;
(ii) Words importing a particular gender mean and include
every other gender, and words importing the singular number mean and include
the plural number and vice versa;
(iii) All times specified herein, unless otherwise
specifically referred, shall be the time in San Francisco, California;
(iv) Any headings preceding the texts of the several
Articles and Sections of this Credit Agreement, and any table of contents or
marginal notes appended to copies hereof, shall be solely for convenience of
reference and shall
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not constitute a part of this Credit Agreement, nor shall they affect its
meaning, construction or effect;
(v) If any clause, definition, provision or Section of this
Credit Agreement shall be determined to be apparently contrary to or
conflicting with any other clause, definition, provision or Section of this
Credit Agreement then the clause, definition, provision or Section containing
the more specific provisions shall control and govern with respect to such
apparent conflict. The parties hereto do agree that each has contributed to
the drafting of this Credit Agreement and all Loan Documents and that the
provisions herein contained shall not be construed against either Borrower or
Lenders as having been the person or persons responsible for the preparation
thereof;
(vi) The terms "herein", "hereunder", "hereby", "hereto",
"hereof" and any similar terms as used in the Credit Agreement refer to this
Credit Agreement; the term "heretofore" means before the date of execution of
this Credit Agreement; and the term "hereafter" means after the date of the
execution of this Credit Agreement;
(vii) All accounting terms used herein which are not otherwise
specifically defined shall be used in accordance with GAAP consistently
applied;
(viii) If any clause, provision or Section of this Credit
Agreement shall be ruled invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any of
the remaining provisions hereof; and
(ix) Each reference to this Credit Agreement or any other Loan
Document or any of them, as used in this Credit Agreement or in any other Loan
Document, shall be deemed a reference to this Credit Agreement or such Loan
Document, as applicable, as the same may be amended, modified, supplemented,
replaced, renewed or restated from time to time.
Section 1.03. Use of Defined Terms. Unless otherwise defined or
the context otherwise requires, terms for which meanings are provided in this
Credit Agreement shall have such meanings when used in the Note and in each
Loan Document and other communication delivered from time to time in connection
with this Credit Agreement or any other Loan Document.
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Section 1.04. Cross-References. Unless otherwise specified,
references in this Credit Agreement and in each other Loan Document to any
Article or Section are references to such Article or Section of this Credit
Agreement or such other Loan Document, as the case may be, and, unless
otherwise specified, references in any Article, Section or definition to any
clause are references to such clause of such Article, Section or definition.
Section 1.05. Exhibits and Schedules. All Exhibits and Schedules
to this Credit Agreement, either as originally existing or as the same may from
time to time be supplemented, modified, amended or restated are incorporated
herein by this reference.
ARTICLE II
AMOUNT, TERMS AND SECURITY OF THE CREDIT FACILITY
Section 2.01. The Credit Facility.
a. Subject to the conditions and upon the terms
hereinafter set forth and in accordance with the terms and provisions of the
Note, Lenders severally agree in the proportions set forth on the Schedule of
Lenders' Proportions in Credit Facility, marked Schedule 2.01(a) attached
hereto and by this reference incorporated herein and made a part hereof, to
lend and advance Borrowings to Borrowers, up to the Maximum Permitted Balance,
in such amounts as Borrowers may request by: (i) Notice of Borrowing duly
executed by an Authorized Representative and delivered to Agent Bank on or
before three (3) Banking Business Days prior to the Closing Date for the
purpose of requesting funding of the Closing Disbursements, and (ii) Notice of
Borrowing duly executed by an Authorized Representative and delivered to Agent
Bank from time to time during the Revolving Credit Period when and as provided
in Section 2.03, provided, however, notwithstanding anything herein contained
to the contrary, until Borrowers have complied with each of the requirements
set forth in Article III C, a portion of the Credit Facility equal to the
Parking Garage Construction Funds shall not be available for Borrowing
hereunder for any purpose other than financing costs of construction of the
Parking Garage Project until the occurrence of the Parking Garage Completion
Date, after which the entire Maximum Permitted Balance shall be available for
Borrowing for the uses and purposes set forth in Section 2.02(b)(ii) and (iii).
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b. During the Revolving Credit Period, Borrowers may
borrow, repay and reborrow the Available Borrowings up to the Maximum Permitted
Balance from time to time, provided that at all times the Maximum Availability
shall be no less than zero (0). The Credit Facility shall be for a term
commencing on the Closing Date and terminating on the Maturity Date, on which
date the entire outstanding balance of the Credit Facility shall be fully paid
and Credit Facility Termination shall occur. In no event shall any Lender be
liable to fund any amounts under the Credit Facility in excess of its
respective Syndication Interest in any Borrowing.
c. Notwithstanding the Scheduled Reductions to the
Maximum Scheduled Balance as set forth on the Aggregate Commitment Reduction
Schedule, Schedule 2.01(c) attached hereto and by this reference incorporated
herein and made a part hereof, Borrowers may voluntarily further reduce the
Maximum Permitted Balance from time to time (a "Voluntary Permanent Reduction")
on the following conditions:
(i) that each such Voluntary Permanent
Reduction be in the minimum amount of Two Million Dollars
($2,000,000.00) and made in writing by an Authorized
Representative, effective on the fifth (5th) Banking Business
Day following receipt by Agent Bank; and
(ii) that each such Voluntary Permanent
Reduction shall be irrevocable and a permanent reduction to
the Maximum Permitted Balance.
d. In the event any Scheduled Reduction or
Voluntary Permanent Reduction reduces the Maximum Permitted Balance to less
than the sum of the Funded Outstandings, the Borrowers shall immediately cause
the Funded Outstandings to be reduced by such amount as may be necessary to
cause the Funded Outstandings to be equal to or less than the Maximum Permitted
Balance.
Section 2.02. Use of Proceeds of the Credit Facility.
Available Borrowings shall be used for the purposes of:
a. On the Closing Date (collectively the
"Closing Disbursements"):
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(i) paying in full all loans and advances
outstanding under the Existing Real Estate Debt and the
Existing Equipment Debt as of the Closing Date in the
approximate aggregate amount of Five Million One Hundred
Twenty-Five Thousand Dollars ($5,125,000.00);
(ii) financing the costs of acquisition by BHGD
of the GVI Shares from the Stock Sellers pursuant to the terms
of the Stock Purchase Agreement in the aggregate amount of the
Stock Purchase Price;
(iii) financing the costs of acquisition by BHGD
of the Gamble Contract Rights from Gamble pursuant to the
terms of the Gamble Assignment Agreement in the aggregate
amount of the Gamble Purchase Price;
(iv) financing the costs of acquisition by BHGD
of GGI's undivided one-half interest in the H/C Real Property
and the Millsite 29 Parcel in the aggregate amount of the Land
Purchase Price; and
(v) paying in full the Upfront Fee, the costs,
fees and expenses of Title Company incurred in connection with
the issuance of the Title Policy, the costs, fees and expenses
of Henderson & Morgan, LLC, attorneys for Agent Bank, and
associate counsel and insurance consultants retained by them
incurred to the Closing Date.
b. During the Revolving Credit Period:
(i) financing the costs of construction of the
Parking Garage Project, subject to compliance with the
requirements of Article III C, up to the maximum aggregate
amount of Two Million Five Hundred Thousand Dollars
($2,500,000.00);
(ii) funding working capital needs of Borrowers;
and
(iii) funding ongoing Capital Expenditure
requirements of Borrowers.
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Section 2.03. Notice of Borrowings.
a. Borrowings shall be made through Agent
Bank's credit sweep product. Provided, however, for each Borrowing in excess
of Five Hundred Thousand Dollars ($500,000.00), an Authorized Representative
shall give Agent Bank, no later than 11:00 a.m. on a Banking Business Day at
Agent Bank's office specified in Section 2.06(b), two (2) full Banking Business
Days prior written notice in the form of the Notice of Borrowing ("Notice of
Borrowing"), a copy of which is marked "Exhibit C", affixed hereto and by this
reference incorporated herein and made a part hereof, for each proposed
Borrowing to be made during the Revolving Credit Period. Agent Bank shall give
prompt, and in any event within one (1) Banking Business Day, notice of each
Notice of Borrowing to Lenders of the amount to be funded and specifying the
Funding Date. Not later than 11:00 o'clock a.m. on the Funding Date specified,
each Lender shall disburse to Agent Bank the Pro Rata Share to be advanced by
each such Lender in lawful money of the United States of America and in
immediately available funds. Agent Bank shall make the proceeds of such
fundings received by it on or before 11:00 o'clock a.m. from the Lenders
available to Borrowers by depositing in or wiring to, prior to 1:00 o'clock
p.m. on the day so received (but not prior to the Funding Date), the Designated
Deposit Account the amounts received from the Lenders. No Borrowing may exceed
the Available Borrowings.
b. The failure of any Lender to fund its Pro
Rata Share of any Borrowing on any Funding Date shall not relieve any other
Lender of any obligation hereunder to fund its Pro Rata Share of such Borrowing
on such Funding Date nor relieve the Lender which has failed to fund of its
obligations to Borrowers hereunder. No Lender shall be responsible for the
failure of any other Lender to fund its Pro Rata Share of such Borrowing on any
Funding Date nor shall any Lender be responsible for the failure of any other
Lender to perform its respective obligations hereunder.
Section 2.04. Conditions of Borrowings. During the
Revolving Credit Period, Borrowings will only be made so long as Borrowers are
in full compliance with each of the requirements and conditions precedent set
forth in Article III B of this Credit Agreement. Provided, however, upon the
consent of the Requisite Lenders, Lenders shall advance Borrowings
notwithstanding the existence of less than full compliance with the
requirements of Article III B and
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Borrowings so made shall be deemed to have been made pursuant to this Credit
Agreement.
Section 2.05. The Note, Interest Accrual and Repayment.
The Credit Facility shall be evidenced by the Note which shall be executed by
the Borrowers and shall be jointly and severally payable to the order of Agent
Bank on behalf of the Lenders. Borrowers waive any rights which they might
otherwise have under Colorado Revised Statutes Sections 13-50-102 or 13-50-103
(or under any corresponding future statute or rule of law in any jurisdiction)
by reason of any release of fewer than all of the Borrowers. The amount of
each Borrowing shall be recorded on Agent Bank's internal data control systems
and each payment of principal and/or interest with respect to the Credit
Facility or any portion thereon, when applied, shall be evidenced by entries
made by Agent Bank in Agent Bank's internal data control system showing the
date and amount of each payment of principal and interest with respect thereto.
Agent Bank shall provide Borrowers with a copy of such entries upon the written
request of Borrowers. The aggregate unpaid balance of principal and interest
of the Note as set forth on the most recent data control system printout of
Agent Bank shall be rebuttably presumptive evidence of the sums owing and
unpaid on the Note. The Note shall bear interest and be due and payable in the
manner and at the times set forth therein, the terms whereof are by this
reference incorporated herein and made a part hereof as though fully set forth.
Section 2.06. Place and Manner of Payment.
a. All amounts payable by Borrowers to the
Lenders shall be made to Agent Bank on behalf of Lenders pursuant to the terms
of this Credit Agreement and the Note and shall be made on a Banking Business
Day in lawful money of the United States of America and in immediately
available funds.
b. All such amounts payable by Borrowers shall
be made to Agent Bank at its office located at Wells Fargo Agency Department,
201 Third Street, 8th Floor, San Francisco, California 94103. If such payment
is received by Agent Bank prior to 11:00 o'clock a.m., Agent Bank shall credit
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Borrowers with such payment on the day so received and shall disburse to the
appropriate Lenders on the same day such Lenders' Pro Rata Shares of payments
relating to the Credit Facility based on the respective Syndication Interests,
in immediately available funds. If such payment is received by Agent Bank
after 11:00 o'clock a.m., Agent Bank shall credit Borrowers with such payment
as of the next Banking Business Day and disburse to the appropriate Lenders on
the next Banking Business Day such Lenders' Pro Rata Shares of such payment
relating to the Credit Facility based on their respective Syndication
Interests, in immediately available funds. Any payment on the Credit Facility
made by Borrowers to Agent Bank pursuant to the terms of this Credit Agreement
or the Note for the account of Lenders shall constitute payment to the
appropriate Lenders. If the Note or any payment required to be made thereon or
hereunder, is or becomes due and payable on a day other than a Banking Business
Day, the due date thereof shall be extended to the next succeeding Banking
Business Day and interest thereon shall be payable at the then applicable rate
during such extension.
c. Unless the Agent Bank receives notice from
an Authorized Representative prior to the date on which any payment is due to
the Lenders that the Borrowers will not make such payment in full as and when
required, the Agent Bank may assume that the Borrowers have made such payment
in full to the Agent Bank on such date in immediately available funds and the
Agent Bank may (but shall not be so required), in reliance upon such
assumption, distribute to each Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent the Borrowers have not made
such payment in full to the Agent Bank, each Lender shall repay to the Agent
Bank on demand such amount distributed to such Lender, together with interest
thereon at the Federal Funds Rate for each day from the date such amount is
distributed to such Lender until the date repaid.
Section 2.07. Fees.
a. On the Closing Date, Borrowers shall pay
the unpaid balance of the non-refundable upfront fee (the "Upfront Fee"), in
such amount as has been agreed upon by Agent Bank and Borrowers in the Upfront
Fee Side Letter, which Upfront Fee shall be retained by Agent Bank or
distributed in whole or in part to Lenders as may be agreed between Agent Bank
and Lenders.
b. Commencing with the commencement of the
Revolving Credit Period, Borrowers shall pay to Agent Bank for disbursement to
Lenders in proportion to their respective Syndication Interests in the Credit
Facility and in consideration for their commitment to advance Borrowings under
the Credit Facility during the Revolving Credit Period a non-refundable fee
(the "Nonusage Fee") in the amount of one-half
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of one percent (.50%) per annum of the daily average of the Maximum
Availability, computed on the basis of a three hundred sixty (360) day year
based on the actual number of days elapsed, to be calculated during the
Revolving Credit Period and continuing until the Maturity Date. The Nonusage
Fee will be payable on the first Banking Business Day following the end of each
Fiscal Quarter commencing with the Fiscal Quarter in which the Closing Date
occurs, and on the Maturity Date. Each Nonusage Fee shall be distributed by
Agent Bank to Lenders in proportion to their respective Syndication Interests
in the Credit Facility.
Section 2.08. Late Charges and Default Rate.
a. If any principal reduction required to be
made to the Credit Facility is not paid within three (3) days of the date upon
which such principal reduction is due or if any other payment, fee or other
Obligation due under the Note or under the Credit Agreement is not paid within
fifteen (15) days of the date upon which such payment is due, Borrowers promise
to pay a late charge in the amount of three percent (3%) of the amount of such
delinquent payment and Agent Bank need not accept any late payment made unless
it is accompanied by such three percent (3%) late payment charge. Any late
charge shall be paid to Lenders in proportion to their respective Syndication
Interests.
b. In the event of the existence of an Event
of Default, commencing on the first (1st) Banking Business Day following the
receipt by Borrowers of written notice of the occurrence of such Event of
Default from Agent Bank, the total of the unpaid balance of the principal and
the then accrued and unpaid interest owing under the Credit Facility shall
collectively commence accruing interest at a rate equal to five percent (5%)
over the Prime Rate (the "Default Rate") until such time as all payments and
additional interest are paid, together with the curing of any Events of Default
which may exist, at which time the interest rate shall revert to that rate of
interest otherwise accruing pursuant to the terms of the Note.
c. In the event of the occurrence of an Event
of Default, Borrowers agree to pay all reasonable costs of collection,
including a reasonable attorneys' fee, in addition to and at the time of the
payment of such sum of money and/or the performance of such acts as may be
required to cure such default. In the event legal action is commenced for the
collection of any sums owing hereunder or under the
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terms of the Note, the Borrowers agree that any judgment issued as a
consequence of such action against any Borrower shall bear interest at a rate
equal to the Default Rate until fully paid.
Section 2.09. Security for the Credit Facility. As
security for the due and punctual payment and performance of the terms and
provisions of this Credit Agreement, the Note and each of the other Loan
Documents, the Security Documentation shall be executed and delivered to Agent
Bank, as of the Closing Date, by the respective parties to each of the Security
Documentation, other than the Parking Garage Security Documentation which shall
be delivered to Agent Bank in accordance with Article III C.
Section 2.10. Net Payments. All payments under this
Credit Agreement, the Note and/or any other Loan Document shall be made without
set-off or counterclaim and in such amounts as may be necessary in order that
all such payments, after deduction or withholding for or on account of any
future taxes, levies, imposts, duties or other charges of whatsoever nature
imposed by the United States or any Governmental Authority, other than
franchise taxes or any tax on or measured by the gross receipts or overall net
income of any Lender pursuant to the income tax laws of the United States or
any State, or the jurisdiction where each Lender's principal office is located
(collectively "Taxes"), shall not be less than the amounts otherwise specified
to be paid under this Credit Agreement and the Note. A certificate as to any
additional amounts payable to the Lenders under this Section 2.10 submitted to
the Borrowers by the Lenders shall show in reasonable detail an accounting of
the amount payable and the calculations used to determine in good faith such
amount and shall be conclusive absent manifest or demonstrable error. Any
amounts payable by the Borrowers under this Section 2.10 with respect to past
payments shall be due within ten (10) days following receipt by the Borrowers
of such certificate from the Lenders; any such amounts payable with respect to
future payments shall be due within ten (10) days after demand with such future
payments. With respect to each deduction or withholding for or on account of
any Taxes, the Borrowers shall promptly furnish to the Lenders such
certificates, receipts and other documents as may be required (in the
reasonable judgment of the Lenders) to establish any tax credit to which the
Lenders may be entitled.
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ARTICLE III
CONDITIONS PRECEDENT TO THE CLOSING DATE
A. Closing Conditions. The obligation of each of the Banks
hereunder is subject to the following conditions precedent, each of which shall
be satisfied prior to April 30, 1998 (unless each of the Banks, in their sole
and absolute discretion, shall agree otherwise). The occurrence of the Closing
Date is subject to and contingent upon Agent Bank having received, in each case
in form and substance reasonably satisfactory to Banks, or in the case of an
occurrence, action or event, the occurrence of each of the following:
Section 3.01. Credit Agreement. Executed counterparts of
this Credit Agreement in sufficient duplicate originals for each of the Banks.
Section 3.02. The Note. The Note duly executed by the
Borrowers in favor of Agent Bank.
Section 3.03. Security Documentation. The Security
Documentation set forth below, duly executed by Borrowers or other party
thereto, consisting of the following:
a. Deed of Trust;
b. Financing Statements;
c. Assignment of Spaceleases, Contracts, Rents
and Revenues;
d. Assignment of Permits, Licenses and
Contracts; and
e. New Lease Subordination.
Section 3.04. Other Loan Documents. The following Loan
Documents duly executed by Borrowers and each other applicable party thereto
consisting of the following:
a. Environmental Certificate; and
b. Payment Subordination Agreement (for each
Subordinated Debt incurred as of the Closing Date).
Section 3.05. Articles of Incorporation, Bylaws,
Corporate Resolution, Certificate of Good Standing and Closing
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Certificate. Agent Bank shall have received from each of BHGD and GVI: (i) a
Certificate of Good Standing issued by the Secretary of State of the State of
Colorado and each dated within thirty (30) calendar days of the Closing Date
and telephonically confirmed as of the Closing Date, (ii) a copy of the
respective articles of incorporation and by-laws of each of BHGC and GVI and a
copy of the joint venture agreement of GHV, together with all amendments and
addendum thereto, including, without limitation, written addendum or other
documentation specifying that GHV is intended to be governed by the Colorado
Uniform Partnership Act, in each case certified as of the Closing Date to be
true, correct and complete by a duly Authorized Representative of each of BHGD
and GVI, respectively, (iii) an original Certificate of Corporate Resolution
and Certificate of Incumbency executed by the Secretary of each of BHGD and GVI
and attested to by its respective President, Vice President, or Treasurer
authorizing each on behalf of itself and on behalf of GHV to enter into all
documents and agreements to be executed by it pursuant to this Credit Agreement
and further authorizing and empowering the officer or officers who will execute
such documents and agreements with the authority and power to execute such
documents and agreements on behalf of each respective corporation and on behalf
of GHV, (iv) designation by corporate resolution of each of BHGD and GVI and
partnership resolution of GHV, an original certificate ("Authorized
Representative Certificate"), substantially in the form of the Authorized
Representative Certificate marked "Exhibit D", affixed hereto and by this
reference incorporated herein and made a part hereof, of the officers of BHGD
and GVI who are authorized to give Notices of Borrowing, Compliance
Certificates and all other notices, requests, reports, consents, certifications
and authorizations on behalf of the Borrowers (each individually an "Authorized
Representative" and collectively the "Authorized Representatives") and (v) an
original closing certificate ("Closing Certificate"), substantially in the form
of the Closing Certificate marked "Exhibit E", affixed hereto and by this
reference incorporated herein and made a part hereof, duly executed by an
Authorized Representative of Borrowers.
Section 3.06. Opinion of Counsel. The opinion of counsel
to the Borrowers, dated as of the Closing Date and addressed to the Agent Bank
and each of the Banks, together with their respective successors and assigns,
substantially in the form of the legal opinion marked "Exhibit G", affixed
hereto and by this reference incorporated herein and made a part hereof.
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Section 3.07. Title Insurance Policy. The Title
Insurance Policy (or proforma commitment for the issuance thereof) together
with such endorsements and re-insurance requirements as set forth in the
Depository Closing Instructions.
Section 3.08. Survey. If required by the Title Company
as a condition for the issuance of the Title Policy, current ALTA survey for
the Real Property subject to exceptions approved by Agent Bank prior to the
Closing Date, which must (i) be certified to Agent Bank and the Title Company,
(ii) show the Real Property to be free of encroachments, overlaps, and other
survey defects, (iii) show the courses and distances of the boundary lines for
the Real Property, (iv) show that all existing or to be constructed
improvements are located within said boundary lines, and (v) show the location
of all above and below ground easements, improvements, appurtenances,
utilities, rights-of-way, water rights, if any, and ingress and egress, by
reference to book and page numbers and/or filed map reference. On or before
the Closing Date, Borrowers shall comply with all other survey requirements of
Title Company for the issuance of the Title Insurance Policy.
Section 3.09. Payment of Taxes. Evidence satisfactory to
Agent Bank that all past and current real and personal property taxes and
assessments which are presently due and payable applicable to the Real Property
have been paid in full.
Section 3.10. Insurance. Copies of the declaration pages
of each of the insurance policies certified to be true and correct by an
Authorized Representative of the Borrowers, together with original binders
evidencing Borrowers as named insured, and original certificates of insurance,
loss payable and mortgagee endorsements naming Agent Bank as mortgagee, loss
payee and additional insured, as required by the applicable insurance
provisions set forth in Section 5.09 of this Credit Agreement.
Section 3.11. Payment of Upfront Fees. Payment by
Borrowers of the balance of the Upfront Fee as provided in Section 2.07(a)
hereinabove.
Section 3.12. Reimbursement for Expenses and Fees.
Reimbursement by Borrowers for all reasonable fees and out-of-pocket expenses
incurred by Agent Bank in connection with the Credit Facility, including, but
not limited to, escrow
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charges, title insurance premiums, environmental examinations, recording fees,
appraisal fees, reasonable attorney's fees of Henderson & Morgan, LLC and
Colorado counsel retained by them, insurance consultant fees, and all other
like fees and expenses remaining unpaid as of the Closing Date to the extent
then due and payable on the Closing Date, provided that the amount then
invoiced shall not thereafter preclude Borrowers' obligation to pay such costs
and expenses relating to the closing of the Credit Facility following the
Closing Date or to reimburse Agent Bank for the payment thereof.
Section 3.13. Schedule of Spaceleases and Equipment
Leases and Contracts. A Schedule of Spaceleases (Schedule 4.16) and Equipment
Leases and Contracts (Schedule 4.17) in each instance setting forth the name of
the other party thereto, a brief description of each spacelease, equipment
lease and contract and the commencement and ending date thereof, to the extent
known to Borrowers as of the Closing Date.
Section 3.14. Phase I Environmental Site Assessments. A
Phase I Environmental Site Assessment or Assessments of the Fee Properties
prepared in conformance with the scope and limitations of ASTM Standard
Designation E1527-93 and approved by Agent Bank. Any recommended action shall
have been completed by Borrowers.
Section 3.15 New Land Lease. A true and correct copy of
the New Land Lease and of all amendments and modifications thereto.
Section 3.16. Payment in Full of Existing Real Estate
Debt and Existing Equipment Debt.
a. Payment in full of all Existing Real Estate
Debt and the full and complete release and reconveyance of all Existing Real
Estate Security Documents.
b. Payment in full of all Existing Equipment
Debt and the full and complete release and termination of all Existing
Equipment Security Documents.
Section 3.17. Schedule of all Significant Litigation. A
Schedule of Significant Litigation (Schedule 3.17), in each instance setting
forth the names of the other parties thereto, a brief description of such
litigation, whether or not such litigation is covered by insurance and, if so,
whether the defense thereof and
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liability therefor has been accepted by the applicable insurance company
indicating whether such acceptance of such defenses with or without a
reservation of rights, the commencement date of such litigation and the amount
sought to be recovered by the adverse parties thereto or the amount which is
otherwise in controversy.
Section 3.18. Acquisition of GVI Shares. As of the
Closing Date, BHGD shall have acquired all of the GVI Shares from the Stock
Sellers and GVI shall be a wholly owned subsidiary of BHGD.
Section 3.19. Acquisition of Title. As of the Closing
Date, BHGD shall have acquired all right, title and interest of GGI in and to
the H/C Real Property and the Millsite 29 Parcel, subject only to Permitted
Encumbrances.
Section 3.20. Acquisition of Gamble Contract Rights,
Termination of Existing Land Lease and Management Agreement. As of the Closing
Date: (i) Gamble shall have assigned to BHGD all of the Gamble Contract Rights
and interest in the Management Agreement, including, without limitation, any
consulting fees and fees for services, under or relating to the Management
Agreement, (ii) BHGD and GHV shall have terminated the Management Agreement in
its entirety, and (iii) BHGD and GVI, as lessors, and GHV, as lessee, shall
have terminated the Existing Land Lease in its entirety.
Section 3.21. Financial Statements. For Fiscal Year
1997: (i) audited financial statements of GHV, including schedules which
present the balance sheet and statement of operations of GHV, and (ii) audited
consolidated financial statements of BHGD including consolidating schedules
which present the balance sheet and statement of operations of BHGD.
Section 3.22. No Injunction or Other Litigation. No law or
regulation shall prohibit, and no order, judgment or decree of any Governmental
Authority shall, and no litigation shall be pending or threatened which in the
reasonable judgment of the Agent Bank would or would reasonably be expected to,
enjoin, prohibit, limit or restrain the execution and delivery of this Credit
Agreement or the performance by the Borrowers of any other obligations in
respect thereof.
Section 3.23. Additional Documents and Statements. Such
additional documents, affidavits, certificates and opinions as Lenders may
reasonably require to insure
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compliance with this Credit Agreement. The statements set forth in Section
3.25 shall be true and correct.
B. Conditions Precedent to all Borrowings. The
obligation of each Lender and Agent Bank to make any Borrowing requested to be
made on any Funding Date is subject to the occurrence of each of the following
conditions precedent as of such Funding Date:
Section 3.24. Notice of Borrowing. With respect to any
Borrowing, the Agent Bank shall have received in accordance with Section 2.03
on or before such Funding Date an original and duly executed Notice of
Borrowing or facsimile copy thereof, to be promptly followed by an original.
Section 3.25. Certain Statements. On the Closing Date
and as of the Funding Date the following statements shall be true and correct:
a. The representations and warranties with
respect to the Borrowers contained in Article IV hereof (other than
representations and warranties which expressly speak only as of a different
date which shall be true and correct as of such date) are true and correct on
and as of the Funding Date and as of the Closing Date in all material respects
as though made on and as of that date, except to the extent that such
representations and warranties are not true and correct as a result of a change
which is permitted by this Credit Agreement or by any other oan Document, or
which is otherwise consented to by Requisite Lenders;
b. The representations and certifications
contained in the Environmental Certificate are true and correct in all material
respects (other than representations and warranties which expressly speak only
as of a different date which shall be true and correct as of such date);
c. Since the date of the most recent financial
statements referred to in Section 5.08, no Material Adverse Change shall have
occurred; and
d. No event has occurred or as a result of any
Borrowings contemplated hereby would occur and is continuing, or would result
from the making thereof, which constitutes a Default or Event of Default
hereunder.
Section 3.26. Gaming Permits. The Borrowers shall have
all Gaming Permits material to or required for the
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conduct of its gaming businesses and the conduct of games of chance at the
Hotel/Casino Facility and such Gaming Permits shall not then be suspended,
enjoined or prohibited (for any length of time) by any Gaming Authority or any
other Governmental Authority.
C. Conditions Precedent to Initial Construction
Disbursement of Parking Garage Construction Funds. The obligation of each
Lender and Agent Bank to advance the initial Borrowing of Parking Garage
Construction Funds is subject to Agent Bank having received, in each case in
form and substance reasonably satisfactory to Agent Bank, each of the
following:
Section 3.27. Construction Schedule, Plans and Specifications
and Construction Budget. The construction schedule, the plans and
specifications and the project development budget with respect to the Parking
Garage Project, each to the reasonable satisfaction of Agent Bank.
Section 3.28. Parking Garage Documents. GHV and BHJE
shall have executed the Parking Garage Lease (together with all exhibits and
attachments thereto, collectively the "Parking Garage Documents"). Each of the
Parking Garage Documents shall be first approved by Agent Bank, which approval
shall not be unreasonably withheld.
Section 3.29. Parking Garage Security Documents.
Borrowers shall execute and deliver to Agent Bank, such assignments, deeds of
trust, pledges and other security instruments (collectively, the "Parking
Garage Security Documents") as may be required or deemed necessary by Agent
Bank for the purpose of perfecting a first position security interest in GHV's
rights to the Parking Garage Project and Parking Garage Documents as additional
Collateral for the Credit Facility.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce Banks to enter into this Credit Agreement, Borrowers
make the following representations and warranties:
Section 4.01. Organization; Power and Authorization.
BHGD and GVI are each a corporation duly organized and validly existing under
the laws of the State of Colorado. As of the Closing Date, GVI is a wholly
owned Subsidiary of
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BHGD and GHV is a joint venture partnership organized and validly existing
under the laws of the State of Colorado and is governed by the Colorado Uniform
Partnership Act, whose joint venture partners are BHGD and GVI. Each Borrower
(i) has all requisite corporate or partnership, as applicable, power, authority
and legal right to execute and deliver each document, agreement or certificate
to which it is a party or by which it is bound in connection with the Credit
Facility, to consummate the transactions and perform its obligations hereunder
and thereunder, and to own its properties and assets and to carry on and
conduct its business as presently conducted or proposed to be conducted, and
(ii) has taken all necessary corporate or partnership, as applicable, action to
authorize the execution, delivery and performance of this Credit Agreement and
the other Loan Documents to which it is a party or by which it is bound and to
consummate the transactions contemplated hereunder and thereunder.
Section 4.02. Authority; Compliance with other Agreements
and Instruments and Government Regulations. The execution, delivery and
performance by Borrowers of the Loan Documents and the execution of the Loan
Documents have been duly authorized by all necessary corporate or partnership,
as applicable, action and do not:
a. require any consent or approval not
heretofore obtained of any member, partner, co- venturer, director,
stockholder, security holder or creditor of such Party;
b. violate or conflict with any provision of
such Party's articles of incorporation or bylaws, or joint venture agreement,
as applicable;
c. violate any requirement of Law, including
any Gaming Law, applicable to such Party;
d. constitute a "transfer of an interest" or
an "obligation incurred" that is avoidable by a trustee under Section 548 of
the Bankruptcy Code of 1978, as amended, or constitute a "fraudulent
conveyance," "fraudulent obligation" or "fraudulent transfer" within the
meanings of the Uniform Fraudulent Conveyances Act or Uniform Fraudulent
Transfer Act, as enacted in any applicable jurisdiction; or
e. result in a breach of, or would, with the
giving of notice or the lapse of time or both, constitute a breach of or
default under, or cause or permit the
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acceleration of any obligation owed under, any indenture or loan or credit
agreement or any other Contractual Obligation to which such Party is a party or
by which such Party or any of its assets are bound or affected.
Section 4.03. Litigation. Except as disclosed on the
Schedule of Significant Litigation delivered in connection with Section 3.17,
to the best knowledge of Borrowers, after due inquiry and investigation, there
is no action, suit, proceeding, inquiry, hearing or investigation pending or
threatened, in any court of law or in equity, or before any Governmental
Authority, which could reasonably be expected to (a) result in any Material
Adverse Change in the Hotel/Casino Facility or in its business, financial
condition, properties or operations, or (b) result in any Material Adverse
Effect. To the best knowledge of Borrowers, after due inquiry and
investigation, no Borrower is in violation of or default with respect to any
order, writ, injunction, decree or demand of any such court or Governmental
Authority.
Section 4.04. Agreements Legal, Binding, Valid and
Enforceable. This Credit Agreement, the Note, the Security Documentation and
all other Loan Documents, when executed and delivered by Borrowers in
connection with the Credit Facility will constitute legal, valid and binding
obligations of Borrowers enforceable against Borrowers in accordance with their
respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium and other laws of general application relating to or
affecting the enforcement of creditors' rights and the exercise of judicial
discretion in accordance with general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law).
Section 4.05. Information and Financial Data Accurate;
Financial Statements; No Adverse Change. All information and financial and
other data previously furnished in writing by Borrowers in connection with the
Credit Facility was true, correct and complete in all material respects as of
the date furnished (unless subsequently corrected prior to the date hereof),
and there has been no Material Adverse Change with respect thereto to the date
of this Credit Agreement since the dates thereof. No information has been
omitted which would make the information previously furnished in such financial
statements to Banks misleading or incorrect in any material respect to the date
of this Credit Agreement. Any and all financial statements heretofore
furnished to Banks by Borrowers: (i) present fairly the financial position of
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Borrowers as at their respective dates and the results of operations and
changes in cash flows for the periods to which they apply, and (ii) have been
prepared, except as noted therein, in conformity with GAAP applied on a
consistent basis throughout the periods involved. Since the date of the
financial statements referred to in this Section 4.05, there has been no
Material Adverse Change in the financial condition, business or operations of
the Borrowers.
Section 4.06. Governmental Approvals. All consents,
approvals, orders or authorizations of, or registrations, declarations, notices
or filings with any Governmental Authority and any other Person, which may be
required in connection with the valid execution and delivery of this Credit
Agreement and the other Loan Documents by Borrowers and the carrying-out or
performance of any of the transactions required or contemplated hereunder, or
thereunder, by Borrowers, have been obtained or accomplished and are in full
force and effect. All consents, approvals, orders or authorizations of, or
registrations, declarations, notices or filings with any Governmental Authority
and any other Person, the failure of which could reasonably be expected to have
a Material Adverse Effect, which may be required by Borrowers in connection
with the use and operation of the Hotel/Casino Facility have been obtained or
accomplished and are in full force and effect.
Section 4.07. Payment of Taxes. Borrowers have duly
filed or caused to be filed all federal, state and local tax reports and
returns which are required to be filed by them and have paid or made provisions
for the payment of, all material taxes, assessments, fees and other
governmental charges which have or may have become due pursuant to said returns
or otherwise pursuant to any assessment received by Borrowers except such
taxes, assessments, fees or other governmental charges, if any, as are being
contested in good faith by any Borrower by appropriate proceedings and for
which such Borrower has maintained adequate reserves for the payment thereof in
accordance with GAAP.
Section 4.08. Title to Properties. As of the Closing
Date and at all times during the term of the Credit Facility: (i) BHGD shall
have good and marketable title to the H/C Real Property, Millsite 29 Parcel and
BHG Parcel, (ii) BHGD shall be the owner and holder of all outstanding shares
of the common voting stock of GVI, (iii) GHV shall have a leasehold interest in
and to the H/C Real Property, Millsite 29 Parcel and BHG Parcel pursuant to the
New Land
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Lease, and (iv) GHV shall have a lease of airspace and other necessary rights
under the Parking Garage Documents to construct, own and operate the Parking
Garage Project. Borrowers have good and marketable title to: (a) all of their
respective properties and assets reflected in the most recent financial
statements referred to in Section 4.05 hereof as owned by them (except those
properties and assets disposed of since the date of said financial statements
in the ordinary course of business or those properties and assets which are no
longer used or useful in the conduct of its businesses), including, but not
limited to, Borrowers' interest in patents, trademarks, tradenames,
servicemarks, and licenses relating to or pertaining to the Hotel/Casino
Facility, and (b) all properties and assets acquired by them subsequent to the
date of the most recent financial statements referred to in Section 4.05
hereof. All such properties and assets are not subject to any liens,
encumbrances or restrictions except Permitted Encumbrances. All roads,
easements and rights of way necessary for the full utilization of the Real
Property have been completed and/or obtained.
Section 4.09. No Untrue Statements. All statements,
representations and warranties made by Borrowers in this Credit Agreement, any
other Loan Document and any other agreement, document, certificate or
instrument previously furnished or to be furnished by Borrowers to Banks
pursuant to the provisions of this Credit Agreement, (i) are and shall be true,
correct and complete in all material respects, at the time they were made, (ii)
do not and shall not contain (at the time they were made) any untrue statement
of a material fact, and (iii) do not and shall not omit to state (at the time
they were made) a material fact necessary in order to make the information
contained herein or therein not misleading or incomplete. Borrowers understand
that all such statements, representations and warranties shall be deemed to
have been relied upon by Banks as a material inducement to establish the Credit
Facility.
Section 4.10. Brokerage Commissions. No person is
entitled to receive any brokerage commission, finder's fee or similar fee or
payment in connection with the extensions of credit contemplated by this Credit
Agreement as a result of any agreement entered into by Borrowers. No brokerage
or other fee, commission or compensation is to be paid by Banks with respect to
the extensions of credit contemplated hereby as a result of any agreement
entered into by Borrowers, and Borrowers agree to indemnify Banks against any
such claims for brokerage fees or commissions and to pay all expenses
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including, without limitation, reasonable attorney's fees incurred by Banks in
connection with the defense of any action or proceeding brought to collect any
such brokerage fees or commissions.
Section 4.11. No Defaults. Borrowers are not in
violation of or in default with respect to any applicable Laws which materially
and adversely affect the business or financial condition of the Hotel/Casino
Facility. Without limiting the generality of the foregoing, Borrowers are not
in violation or default (nor is there any waiver in effect which, if not in
effect, would result in a violation or default) in any material and adverse
respect under any indenture, evidence of indebtedness, loan or financing
agreement or other agreement or instrument of whatever nature to which they, or
any of them, are a party or by which they, or any of them, are bound, which in
any case could reasonably be expected to have a Material Adverse Effect.
Section 4.12. Employee Retirement Income Security Act of
1974. No Reportable Event has occurred and is continuing with respect to any
Pension Plan under ERISA, that gives rise to liabilities that materially
adversely affect the financial condition or operations of Borrowers.
Section 4.13. Subsidiaries. As of the Closing Date,
neither GVI nor GHV have any Subsidiaries.
Section 4.14. Utility Services. All utility services
necessary for the Hotel/Casino Facility including, without limitation,
electrical, water, gas and sewage services and facilities are presently in
service and fully operational at the Hotel/Casino Facility.
Section 4.15. Policies of Insurance. Each of the copies
of the policies, declaration pages, original binders and certificates of
insurance evidencing the Policies of Insurance as required under Section 5.09
with respect to the Hotel/Casino Facility and each component of the Real
Property delivered to Agent Bank by Borrowers (i) is a true, correct and
complete copy of the respective original thereof as in effect on the date
hereof or thereof, without amendments or modifications of any of said documents
or instruments not included in such copies, and (ii) has not been terminated
and is in full force and effect. Borrowers are not in default in the
observance or performance of its obligations under said documents and
instruments, and Borrowers have all things
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required to be done as of the date of this Credit Agreement to keep unimpaired
their rights thereunder.
Section 4.16. Spaceleases. A schedule of all executed
Spaceleases pertaining to the Hotel/Casino Facility, or any portion thereof, in
existence as of the Closing Date hereof, is set forth on Schedule 4.16 attached
hereto.
Section 4.17. Equipment Leases and Contracts. A schedule
of all executed Equipment Leases and Contracts pertaining to the Hotel/Casino
Facility or any portion thereof, in existence on the date hereof, is set forth
on Schedule 4.17 attached hereto.
Section 4.18. Gaming Permits and Approvals. As of the
Closing Date, all Gaming Permits required to be held by Borrowers necessary for
the operation of gaming activities at the Hotel/Casino Facility will be current
and in good standing.
Section 4.19. Environmental Certificate. The
representations and certifications contained in the Environmental Certificate
are true and correct in all material respects.
Section 4.20. Compliance with Statutes, etc. To the best
of their knowledge, Borrowers are in compliance in all material respects with
all applicable statutes, regulations and orders of, and all applicable
restrictions imposed by, all Governmental Authorities, domestic or foreign, in
respect of the conduct of their business and the ownership of their property.
Section 4.21. Investment Company Act. No Borrower is an
"investment company" nor a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended.
Section 4.22. Public Utility Holding Company Act. No
Borrower is a "holding company," nor a "subsidiary company" of a "holding
company," nor an "affiliate" of a "holding company" nor of a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
Section 4.23. Labor Relations. There is no strike or
work stoppage in existence, or to the best knowledge of
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Borrowers threatened, involving any Borrower or the Hotel/Casino Facility.
Section 4.24. Trademarks, Patents, Licenses, Franchises,
Formulas and Copyrights. Borrowers own all the patents, trademarks, permits,
service marks, trade names, copyrights, licenses, franchises and formulas, or
has a valid license or sublicense of rights with respect to the foregoing, and
has obtained assignments of all leases and other rights of whatever nature,
necessary for the present conduct of their business at the Hotel/Casino
Facility, without any known conflict with the rights of others which, or the
failure to obtain which, as the case may be, could reasonably be expected to
result in a Material Adverse Effect on the business, operations, property,
assets or condition (financial or otherwise) of the Borrower Consolidation
taken as a whole.
Section 4.25. Contingent Liabilities. As of the Closing
Date, Borrowers have incurred no material Contingent Liabilities (any
Contingent Liability in excess of Five Hundred Thousand Dollars ($500,000.00)
being deemed material) other than those described on Schedule 4.25.
Section 4.26. Termination of Existing Land Lease and
Management Agreement. As of the Closing Date, the Existing Land Lease and the
Management Agreement shall have been terminated in all respects.
ARTICLE V
GENERAL COVENANTS OF BORROWERS
To induce the Banks to enter into this Credit Agreement and
establish the Credit Facility, Borrowers covenant to Banks as follows:
Section 5.01. FF&E. Borrowers shall furnish, fixture and
equip the Hotel/Casino Facility with FF&E they reasonably deem appropriate for
the operation of the Hotel/Casino Facility. All FF&E that is purchased and
installed in the Hotel/Casino Facility shall be purchased free and clear of any
liens, encumbrances or claims, other than Permitted Encumbrances and shall be
owned by GHV. If Borrowers should sell, transfer, convey or otherwise dispose
of any FF&E and not replace such FF&E with purchased items of equivalent value
and utility or replace said FF&E with leased FF&E of equivalent value and
utility, within the permissible leasing and purchase agreement limitation set
forth herein, to
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the extent such non-replaced FF&E exceeds a cumulative aggregate value of One
Hundred Fifty Thousand Dollars ($150,000.00) during the term of the Credit
Facility, Borrowers shall be required to immediately, permanently reduce the
Maximum Permitted Balance of the Credit Facility by the amount of the Capital
Proceeds of the FF&E so disposed of in excess of such One Hundred Fifty
Thousand Dollars ($150,000.00), subject, however, to the right of Agent Bank to
verify to its reasonable satisfaction the amount of said Capital Proceeds; in
the event Agent Bank and Borrowers do not agree as to the value of the FF&E
disposed of and the amount of the Capital Proceeds, then Borrowers, at their
sole cost and expense, shall obtain a written appraisal of the FF&E disposed
of, in excess of One Hundred Fifty Thousand Dollars ($150,000.00) as provided
hereinabove, from an appraiser reasonably satisfactory to Agent Bank, setting
forth said values and amounts, and Lenders agree to accept the results of said
appraisal. The Maximum Permitted Balance shall immediately be reduced without
duplication by the amount of such appraisal.
Section 5.02. Permits; Licenses and Legal Requirements.
Borrowers shall comply in all material respects with and keep in full force and
effect, as and when required, all Gaming Permits and all material permits,
licenses and approvals obtained from any Governmental Authorities which are
required for the operation and use of the Hotel/Casino Facility. Borrowers
shall comply in all material respects with all applicable material existing and
future laws, rules, regulations, orders, ordinances and requirements of all
Governmental Authorities, and with all recorded restrictions affecting the
Hotel/Casino Facility. All material contracts and agreements relating to the
operation of the Hotel/Casino Facility shall be held in the name of a Borrower.
Section 5.03. Compliance with Payment Subordination
Agreement. Until Credit Facility Termination, Borrowers shall fully perform
and comply with all covenants, terms and conditions imposed or assumed by
Borrowers under the Payment Subordination Agreement executed in connection with
the Subordinated Debt.
Section 5.04. Protection Against Lien Claims. Borrowers
shall give written notice to Agent Bank on or before ten (10) days of any
Borrower's actual knowledge thereof, of any lien claim filed against any
Borrower or any portion of the Real Property. Borrowers shall promptly pay and
discharge or cause to be paid and discharged all claims and liens for
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labor done and materials and services supplied and furnished in connection with
the Real Property in accordance with this Section 5.04. If any mechanic's lien
or materialman's lien shall be recorded, filed or suffered to exist against any
portion of the Real Property or any interest therein by reason of work, labor,
services or materials supplied, furnished or claimed to have been supplied and
furnished to the Hotel/Casino Facility or any portion of the Real Property upon
Borrowers' receipt of written notice from Agent Bank demanding the release and
discharge of such lien, said lien or claim shall be paid, released and
discharged of record within sixty (60) days following its receipt of such
notice.
Section 5.05. No Change in Character of Business. Until
Credit Facility Termination Borrowers shall not effect a material change in the
nature and character of their business at the Hotel/Casino Facility and the
Real Property as presently contemplated and disclosed to Banks.
Section 5.06. Preservation and Maintenance of Properties
and Assets. Until Credit Facility Termination, (a) Borrowers shall operate,
maintain and preserve all rights, privileges, franchises, licenses, Gaming
Permits and other properties and assets necessary to conduct their businesses
and the Hotel/Casino Facility, the absence of which would have a Material
Adverse Effect, in accordance in all material respects with all applicable
governmental laws, ordinances, approvals, rules and regulations and
requirements, including, but not limited to, zoning, sanitary, pollution,
building, environmental and safety laws and ordinances, rules and regulations
promulgated thereunder, and (b) Borrowers shall not consolidate with, remove,
demolish, materially alter, discontinue the use of, sell, transfer, assign,
hypothecate or otherwise dispose of to any Person (other than to another member
of the Borrower Consolidation), any part of their properties and assets
necessary for the continuance of their business, as presently conducted and as
presently contemplated, other than in the normal course of business or as
otherwise permitted pursuant to this Credit Agreement. Furthermore, in the
event any Borrower, or any Affiliate and/or Subsidiary thereof, shall acquire
any other real property or rights to the use of real property which is used in
a material manner in connection with the Hotel/Casino Facility or any other
portion of the Real Property, Borrowers shall concurrently with the acquisition
of such real property or the rights to the use of such real property, execute
or cause the execution of such documents as may be necessary to add such real
property or rights to the use of real property
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as Collateral under the Credit Facility. Borrowers shall not remove, demolish,
materially alter, discontinue the use of, sell, transfer, assign, hypothecate
or otherwise dispose of to any Person, any part of their properties and assets
necessary for the continuance of their businesses, as presently conducted,
other than in the normal course of Borrowers' business and as provided in
Sections 5.01 and 5.07.
Section 5.07. Repair of Properties and Assets. Until
Credit Facility Termination, Borrowers shall, at their own cost and expense,
(a) maintain, preserve and keep in a manner consistent with gaming casino
operating practices generally applicable to casino operations operating in the
Gilpin County, Colorado area, their assets and properties, including, but not
limited to, the Collateral and all FF&E owned or leased by Borrowers in good
and substantial repair, working order and condition, ordinary wear and tear
excepted, (b) from time to time, make or cause to be made, all repairs,
replacements, renewals, improvements and betterments to the Hotel/Casino
Facility that Borrowers deem reasonably necessary, and (c) from time to time,
make such substitutions, additions, modifications and improvements that
Borrowers deem reasonably necessary. All alterations, replacements, renewals,
or additions made pursuant to this Section 5.07 shall become and constitute a
part of said assets and property and subject, inter alia, to the provisions of
Section 5.01 and subject to the lien of the Security Documentation.
Section 5.08. Financial Statements; Reports; Certificates
and Books and Records. Until Credit Facility Termination, the Borrowers, as
indicated below shall, unless the Agent Bank (with the written approval of the
Requisite Lenders) otherwise consents, at Borrowers' sole expense, deliver to
the Agent Bank and each of the Lenders a full and complete copy of each of the
following:
a. As soon as practicable, and in any event
within forty-five (45) days after the end of each Fiscal Quarter following the
Closing Date, the balance sheet of GHV as at the end of such Fiscal Quarter and
an income statement, statement of operations and a statement of cash flows for
the Fiscal Quarter under review and reflecting year-to-date performance of GHV
and, a comparison of the financial performance of GHV to the prior Fiscal
Year's operations. Such financial statements shall be certified by an
Authorized Representative of GHV as fairly presenting the financial condition,
results of operations and cash flows of GHV in accordance with GAAP, except as
noted therein, as at such date
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and for such periods, subject only to normal year-end accruals and audit
adjustments;
b. As soon as practicable, and in any event
within one hundred twenty (120) days after the end of each Fiscal Year, the
balance sheet of GHV as at the end of such Fiscal year and an income statement,
statement of operations and statement of cash flows for such Fiscal Year, all
in reasonable detail. Such financial statements shall be prepared in
accordance with GAAP, except as noted therein, and such balance sheet and
statements shall be accompanied by a report of independent public accountants
of recognized standing selected by GHV and reasonably satisfactory to the
Requisite Lenders (it being understood that any "Big 6" accounting firm shall
be automatically deemed satisfactory to the Requisite Lenders), which report
shall be prepared in accordance with generally accepted auditing standards as
at such date, and shall not be subject to any qualifications or exceptions as
to the scope of the audit nor to any other qualification or exception
determined by the Requisite Lenders in their good faith business judgment to be
adverse to the interests of the Banks. Concurrently with the submission of
such annual audited financial statements, such independent certified public
accountants shall additionally furnish to Agent Bank a Compliance Certificate,
certifying that such independent certified public accountant has no actual
knowledge of any Default or Event of Default.
c. On or before forty-five (45) days after the
end of each Fiscal Quarter following the Closing Date, and continuing until
Credit Facility Termination, GHV shall, at GHV's sole expense, deliver to the
Agent Bank for distribution by it to the Banks, a Compliance Certificate in
each instance duly and accurately prepared and signed by an Authorized
Representative;
d. As soon as practicable, and in any event
within forty-five (45) days after the commencement of each Fiscal Year, a
budget for each of the Borrowers, including for such Fiscal Year, projected
statement of operations and projected statement of cash flow, all in reasonable
detail;
e. Until Bank Facility Termination, each of
the Borrowers shall keep and maintain complete and accurate books and records.
Borrowers shall permit Banks and any authorized representatives of Banks to
have reasonable access to and to inspect, examine and make copies of the books
and records, any and all accounts, data and other documents of
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Borrowers at all reasonable times upon the giving of reasonable notice of such
intent. In addition: (i) in the event of the occurrence of any Default or
Event of Default, or (ii) in the event any Material Adverse Change occurs,
Borrowers shall promptly, and in any event within three (3) days after actual
knowledge thereof, notify Agent Bank in writing of such occurrence; and
f. Promptly after the same are available,
copies of each annual report, quarterly report, proxy or financial statement or
other report or communication sent to the stockholders of BHGD, and copies of
all annual, regular, periodic and special reports and registration statements
which BHGD may file or be required to file with the Securities and Exchange
Commission under Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, and not otherwise required to be delivered to the Banks pursuant to
other provisions of this Section 5.08;
g. Until Credit Facility Termination,
Borrowers shall furnish to Agent Bank, with sufficient copies for distribution
to each of the Banks any financial information or other information bearing on
the financial status of the Borrowers which is reasonably requested by Agent
Bank or Requisite Lenders.
Section 5.09. Insurance. Borrowers shall obtain, or
cause to be obtained, and shall maintain or cause to be maintained with respect
to the Hotel/Casino Facility and the Real Property, at all times throughout the
period commencing on the Closing Date and continuing until Credit Facility
Termination at their own cost and expense, and shall deposit with Agent Bank on
or before the Closing Date:
a. Property Insurance. The Borrowers shall
maintain a Special Causes of Loss ("All Risk" ISO or Equivalent Form), covering
the building and improvements, and any other permanent structures for one
hundred percent (100%) of the replacement cost. The policy shall also provide
coverage for the perils of flood and earthquake subject to a sub-limit of no
less than Two Million Five Hundred Thousand Dollars ($2,500,000.00) per
occurrence. Upon the request of Agent Bank, replacement cost for insurance
purposes will be established by an independent appraiser mutually selected by
Borrowers and Agent Bank. The policy will include Agreed Amount (waiving co-
insurance), replacement cost valuation and building ordinance endorsements.
The policy will include a standard mortgagee clause (ISO form or equivalent)
and provide
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that all losses in excess of Two Hundred Fifty Thousand Dollars ($250,000.00)
be adjusted with the Agent Bank. The Borrowers waive any and all rights of
subrogation against Banks.
b. Personal Property (including machinery,
equipment, furniture, fixtures, stock). The Borrowers shall maintain a Special
Causes of Loss ("All Risk") perils property coverage for all personal property
owned, leased or for which any Borrower is legally liable. Such policy shall
include a Lenders Loss Payable endorsement in favor of Agent Bank.
The policy providing real property and personal
property coverages, as specified in 5.09(a) and (b) hereinabove, may include a
deductible of no more than Twenty-Five Thousand Dollars ($25,000.00) for any
single occurrence. Flood and earthquake deductibles can be no more than Fifty
Thousand Dollars ($50,000.00), if a separate deductible applies.
c. Business Interruption/Extra Expense. The
Borrowers shall maintain combined Business Interruption/Extra Expense coverage
with a limit representing no less than one hundred percent (100%) of the
projected annual net profit plus continuing expenses (including debt service)
for the Hotel/Casino Facility. Such coverage shall also include extensions for
off premises power losses and an extended period of indemnity of ninety (90)
days endorsement. These coverages may have a deductible of no greater than
twenty-four (24) hours, or Twenty-Five Thousand Dollars ($25,000.00), if a
separate deductible applies.
d. Boiler and Machinery. The Borrowers shall
maintain a Boiler and Machinery policy for the Hotel/Casino Facility written on
a Comprehensive Form with a combined direct and indirect limit of no less than
Two Million Five Hundred Thousand Dollars ($2,500,000.00). The policy shall
include extensions for Agreed Amount (waiving co-insurance) and Replacement
Cost Valuation. The policy may contain deductibles of no greater than Ten
Thousand Dollars ($10,000.00) direct and twenty-four (24) hours indirect.
e. Crime Insurance. The Borrowers shall
obtain a comprehensive crime policy, including the following coverages:
(i) employee dishonesty - Two Hundred Fifty
Thousand Dollars ($250,000.00);
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(ii) money and securities (inside) - One Hundred
Thousand Dollars ($100,000.00);
(iii) money and securities (outside) - One
Hundred Thousand Dollars ($100,000.00);
(iv) depositor's forgery - Two Hundred Fifty
Thousand Dollars ($250,000.00);
(v) computer fraud - Two Hundred Fifty Thousand
Dollars ($250,000.00).
The policy must be amended so that money is defined
to include "tokens and chips" (as defined by the Gaming Laws). The policy may
contain deductibles of no greater than Twenty-Five Thousand Dollars
($25,000.00) for employee dishonesty and Ten Thousand Dollars ($10,000.00) for
all other agreements listed above.
f. Commercial General Liability (1996 form or
equivalent). The Borrowers shall maintain a Commercial General Liability
policy with a One Million Dollar ($1,000,000.00) combined single limit for
bodily injury and property damage, including Products Liability, Contractual
Liability, and all standard policy form extensions. The policy must provide a
Two Million Dollar ($2,000,000.00) general aggregate (per location, if multi-
location risk) and be written on an "occurrence form". The policy will include
extensions for Liquor legal and Employee Benefits legal. If the general
liability policy contains a self-insured retention, it shall be no greater than
Ten Thousand Dollars ($10,000.00) per occurrence, with an aggregate retention
of no more than Two Hundred Fifty Thousand Dollars ($250,000.00), including
expenses.
The policy shall be endorsed to include Agent Bank as
an additional insured on behalf of the Banks. Definition of additional insured
shall include all officers, directors, employees, agents and representatives of
the additional insured. The coverage for additional insured shall apply on a
primary basis irrespective of any other insurance whether collectible or not.
g. Automobile. Borrowers shall maintain a
comprehensive Automobile Liability Insurance Policy written under coverage
"symbol 1", providing a One Million Dollar ($1,000,000.00) combined single
limit for bodily injury and property damage covering all owned, non-owned and
hired
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vehicles of the Borrowers. If the policy contains a self insured retention it
shall be no greater than Ten Thousand Dollars ($10,000.00) per occurrence, with
an aggregate retention of no more than Two Hundred Fifty Thousand Dollars
($250,000.00), including expenses. The following additional coverages shall be
purchased and maintained by Borrowers:
(i) Garage Liability. A One Million Dollar
($1,000,000.00) combined single limit for bodily injury and
property damage for the garage operation.
(ii) Garagekeepers Legal Liability. Five
Hundred Thousand Dollar ($500,000.00) limit for comprehensive
and collision coverages for physical damage to vehicles in any
Borrower's care, custody and control. The policy can be
subject to a deductible of no greater than Two Thousand Five
Hundred Dollars ($2,500.00) for each auto and Ten Thousand
Dollars ($10,000.00) for each loss.
h. Workers Compensation and Employers
Liability Insurance. The Borrowers shall maintain a standard workers
compensation policy in compliance with all applicable laws of the State of
Colorado, including employers liability coverage subject to a limit of no less
than One Million Dollars ($1,000,000.00) each employee, One Million Dollars
($1,000,000.00) each accident, One Million Dollars ($1,000,000.00) policy
limit. The policy shall include endorsements for Voluntary Compensation
Coverage. If the Borrowers have elected to self-insure Workers Compensation
coverage in the State of Colorado, the Agent Bank must be furnished with a copy
of the certificate from the state permitting self-insurance and evidence of a
Stop Loss Excess Workers Compensation policy with a specific retention of no
greater than One Hundred Fifty Thousand Dollars ($150,000.00).
i. If the Borrower's general liability and
automobile policies include a self-insured retention, it is agreed and fully
understood that the Borrowers are solely responsible for payment of all amounts
due within said self-insured retentions. Any Indemnification/Hold Harmless
provision is extended to cover all liabilities associated with said
self-insured retentions.
j. Umbrella Liability. An Umbrella Liability
policy shall be purchased with a limit of not less than Fifteen Million Dollars
($15,000,000.00) providing excess
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coverage over all limits and coverages indicated in paragraphs (f), (g) and (h)
above. The limits can be obtained by a combination of Primary and Excess
Umbrella policies, provided that all layers follow form with the underlying
policies indicated in (f), (g) and (h) and are written on an "occurrence" form.
This policy shall be endorsed to include the Agent Bank as an additional
insured on behalf of the Banks, in the same manner set forth in Section 5.09(f)
hereinabove.
k. All policies indicated above shall be
written with insurance companies licensed and admitted to do business in the
State of Colorado and shall be rated no lower than "A XII" in the most recent
addition of A.M. Best and "AA" in the most recent edition of Standard & Poor's,
or such other carrier reasonably acceptable to Agent Bank. All policies
discussed above shall be endorsed to provide that in the event of a
cancellation, non-renewal or material modification, Agent Bank shall receive
thirty (30) days prior written notice thereof. The Borrowers shall furnish
Agent Bank with Certificates of Insurance executed by an authorized agent of
the applicable insurance company or companies evidencing compliance with all
insurance provisions set forth in Section 5.09 (a) through (j) on an annual
basis. Certificates of Insurance executed by an authorized agent of each
carrier providing insurance evidencing continuation of all coverages set forth
in Section 5.09 (a) through (j) will be provided on or before the Closing Date
and annually on or before ten (10) days prior to the expiration of each policy.
All certificates and other notices related to the insurance program shall be
delivered to Agent Bank concurrently with the delivery of such certificates or
notices to such carrier or to Borrowers.
l. Any other insurance reasonably requested by
Agent Bank in such amounts and covering such risks as may be reasonably
required and customary in the hotel/casino industry in the general location of
the Hotel/Casino Facility.
Section 5.10. Taxes. Throughout the term of the Credit
Facility, Borrowers shall prepare and timely file or cause to be prepared and
timely filed all federal, state and local tax returns required to be filed by
it, and Borrowers shall pay and discharge prior to delinquency all material
taxes, assessments and other governmental charges or levies imposed upon them,
or in respect of any of their respective properties and assets except such
taxes, assessments and other governmental charges or levies, if any, as are
being contested
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in good faith by Borrowers in the manner which is set forth for such contests
by Section 4.07 herein.
Section 5.11. Permitted Encumbrances Only. Until Credit
Facility Termination, Borrowers shall not create, incur, assume or suffer to
exist any mortgage, deed of trust, pledge, lien, security interest,
encumbrance, attachment, levy, distraint, or other judicial process or burdens
of any kind and nature except the Permitted Encumbrances on or with respect to
the Collateral, except (a) with respect to matters described in Section 5.04
and 5.10, such items as are being discharged, released and/or contested, as the
case may be, in the manner described therein, written notice of all tax lien
contests and all other items involving amounts in excess of $250,000.00 in the
aggregate having been given to Agent Bank, and (b) with respect to any other
items involving amounts in excess of $250,000.00 in the aggregate, if any, as
are being contested in good faith by appropriate proceedings and for which
Borrowers have given written notice thereof to Agent Bank and have maintained
adequate reserves for the payment thereof.
Section 5.12. Advances. Until Credit Facility
Termination, if Borrowers should fail (i) to perform or observe, or (ii) to
cause to be performed or observed, any covenant or obligation of such Borrowers
under this Credit Agreement or any of the other Loan Documents, the failure of
which could reasonably be expected to have a Material Adverse Effect, then
Agent Bank, upon the giving of reasonable notice, may (but shall be under no
obligation to) take such steps as are necessary to remedy any such
non-performance or non-observance and provide for payment thereof. All amounts
advanced by Agent Bank or Lenders pursuant to this Section 5.12 shall become an
additional obligation of Borrowers to Lenders secured by the Security
Documentation and other Loan Documents, shall reduce the amount of Available
Borrowings and shall become due and payable by Borrowers on the next interest
payment date, together with interest thereon at a rate per annum equal to the
Default Rate (such interest to be calculated from the date of such advancement
to the date of payment thereof by Borrowers).
Section 5.13. Further Assurances. Borrowers, Agent Bank
and each of the Banks will, at the expense of the Borrowers, do, execute,
acknowledge and deliver, or cause to be done, executed, acknowledged and
delivered, such amendments or supplements hereto or to any of the Loan
Documents and such further documents, instruments and transfers as any such
party
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may reasonably require for the curing of any defect in the execution or
acknowledgement hereof or in any of the Loan Documents, or in the description
of the Real Property or other Collateral or for the proper evidencing of giving
notice of each lien or security interest securing repayment of the Credit
Facility. Further, upon the execution and delivery of the Deed of Trust and
each of the Loan Documents and thereafter, from time to time, Borrowers shall
cause the Deed of Trust and each of the Loan Documents and each amendment and
supplement thereto to be filed, registered and recorded and to be refiled,
re-registered and re-recorded in such manner and in such places as may be
reasonably required by the Requisite Lenders or Agent Bank, in order to publish
notice of and fully protect the liens of the Security Documentation and to
protect or continue to perfect the security interests created by the Security
Documentation in the Collateral and to perform or cause to be performed from
time to time any other actions required by law and execute or cause to be
executed any and all instruments of further assurance that may be necessary for
such publication, perfection, continuation and protection.
Section 5.14. Indemnification. Borrowers agree to and do
hereby jointly and severally indemnify, protect, defend and save harmless Agent
Bank and each of the Banks and their respective directors, trustees, officers,
employees, agents, attorneys and shareholders (individually an "Indemnified
Party" and collectively the "Indemnified Parties") from and against any and all
losses, damages, expenses or liabilities of any kind or nature from any
investigations, suits, claims, demands or other proceedings, including
reasonable counsel fees incurred in investigating or defending such claim,
suffered by any of them and caused by, relating to, arising out of, resulting
from, or in any way connected with this Credit Agreement, with any other Loan
Document or with the transactions contemplated herein and thereby; provided,
however, Borrowers shall not be obligated to indemnify, protect, defend or save
harmless an Indemnified Party if, and to the extent, the loss, damage, expense
or liability was caused by (a) the gross negligence or willful or intentional
misconduct of such Indemnified Party, or (b) the breach of this Credit
Agreement or any other Loan Document by such Indemnified Party or the breach of
any laws, rules or regulations by an Indemnified Party (other than those
breaches of laws arising from any Borrower's default). In case any action
shall be brought against any Indemnified Party based upon any of the above and
in respect to which indemnity may be sought against Borrowers, Agent Bank shall
promptly notify Borrowers in writing, and Borrowers shall assume the defense
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thereof, including the employment of counsel selected by Borrowers and
reasonably satisfactory to Agent Bank, the payment of all costs and expenses
and the right to negotiate and consent to settlement. Upon reasonable
determination made by an Indemnified Party that such counsel would have a
conflict representing such Indemnified Party and Borrowers, the applicable
Indemnified Party shall have the right to employ, at the expense of Borrowers,
separate counsel in any such action and to participate in the defense thereof.
Borrowers shall not be liable for any settlement of any such action effected
without its consent, but if settled with Borrowers' consent, or if there be a
final judgment for the claimant in any such action, Borrowers agree to
indemnify, defend and save harmless such Indemnified Parties from and against
any loss or liability by reason of such settlement or judgment. In the event
that any Person is adjudged by a court of competent jurisdiction not to have
been entitled to indemnification under this Section 5.14, it shall repay all
amounts with respect to which it has been so adjudged. If and to the extent
that the indemnification provisions contained in this Section 5.14 are
unenforceable for any reason, the Borrowers hereby agree to make the maximum
contribution to the payment and satisfaction of such obligations that is
permissible under applicable law. The provisions of this Section 5.14 shall
survive the termination of this Credit Agreement, the repayment of the Credit
Facility and the assignment or subparticipation of all or any portion of the
Syndication Interest held by any Lender pursuant to Section 10.10.
Section 5.15. Compliance With Other Loan Documents.
Borrowers shall comply in all material respects with each and every term,
condition and agreement contained in the Loan Documents.
Section 5.16. Suits or Actions Affecting Borrowers.
Until Credit Facility Termination, Borrowers shall promptly advise Agent Bank
in writing within ten (10) days of any Borrower's knowledge of (a) any
Significant Litigation claims, litigation, proceedings or disputes (whether or
not purportedly on behalf of Borrowers) against, or to the actual knowledge of
Borrowers, threatened or affecting any Borrower which could reasonably be
expected to result in an award of monetary damages in excess of One Million
Dollars ($1,000,000.00), (b) any material labor controversy resulting in or
threatening to result in a strike against the Hotel/Casino Facility, or (c) any
proposal by any Governmental
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Authority to acquire any of the material assets or business of Borrowers.
Section 5.17. Maintenance of Designated Deposit Account.
Until Credit Facility Termination, Borrowers shall maintain the Designated
Deposit Account to facilitate the operational process of the Credit Facility.
Section 5.18. Notice to Gaming Authorities Board. Borrowers
shall make all required reports and disclosures to the Gaming Authorities on a
timely basis.
Section 5.19. Tradenames, Trademarks and Servicemarks.
No Borrower shall assign or in any other manner alienate its interest in any
material tradenames, trademarks or servicemarks relating or pertaining to the
Hotel/Casino Facility during the term of the Credit Facility, except pursuant
to the Security Documentation. No Borrower shall change its name without first
giving sixty (60) days prior written notice to Agent Bank, together with
evidence reasonably satisfactory to the Agent Bank that all notices and other
documents required to be delivered, recorded or filed in order to perfect and
protect the security interest granted by such Borrower to the Banks in such
trademarks, tradenames and servicemarks and the other Collateral have been so
delivered, recorded and/or filed.
Section 5.20. Notice of Hazardous Materials. Within ten
(10) days after any Borrower obtaining actual knowledge thereof, Borrowers
shall immediately advise Agent Bank and each of the Lenders in writing and
deliver a copy of (a) any and all enforcement, clean-up, removal or other
governmental or regulatory actions expected to cost in excess of Two Hundred
Fifty Thousand Dollars ($250,000.00) instituted, completed or threatened
pursuant to any applicable federal, state or local laws, ordinances or
regulations relating to any Hazardous Materials (as defined in the
Environmental Certificate) affecting the Collateral ("Hazardous Materials
Laws"); (b) all claims made or threatened by any third party against any
Borrower or the Hotel/Casino Facility or any portion of the Real Property in
excess of Two Hundred Fifty Thousand Dollars ($250,000.00) relating to damage,
contribution, cost recovery compensation, loss or injury resulting from any
Hazardous Materials (the matters set forth in clauses (a) and (b) above are
hereinafter referred to as "Hazardous Materials Claims"); and (c) the discovery
of any occurrence or condition on any real property adjoining or in the
vicinity of the Hotel/Casino Facility that
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could cause the Real Property or any part thereof to be classified as a
"border-zone property" under the provisions of, or to be otherwise subject to
any restrictions on the ownership, occupancy, transferability or use of the
Hotel/Casino Facility under, any Hazardous Materials Laws.
Section 5.21. Compliance with Statutes, etc. Borrowers
will comply with all applicable statutes, regulations and orders of, and all
applicable restrictions imposed by, all Governmental Authorities, domestic or
foreign, in respect of the conduct of their business and the ownership of the
property (including applicable statutes, regulations, orders and restrictions
relating to environmental standards and controls) the non-compliance with which
would have a Material Adverse Effect.
Section 5.22. Compliance with Access Laws.
a. Borrowers agree that Borrowers and the
Hotel/Casino Facility and the Real Property shall at all times comply in all
material respects with the applicable requirements of the Americans with
Disabilities Act of 1990; the Fair Housing Amendments Act of 1988; and other
federal, state or local laws or ordinances related to disabled access; or any
statute, rule, regulation, ordinance, order of Governmental Authorities, or
order or decree of any court adopted or enacted with respect thereto, as now
existing or hereafter amended or adopted (collectively, the "Access Laws"). At
any time, Agent Bank may require a certificate of compliance with the Access
Laws and indemnification agreement in a form reasonably acceptable to Agent
Bank. Agent Bank may also require a certificate of compliance with the Access
Laws from an architect, engineer, or other third party acceptable to Agent
Bank.
b. Notwithstanding any provisions set forth
herein or in any other document, Borrowers shall not alter or permit any tenant
or other person to alter the Hotel/Casino Facility or the Real Property in any
manner which would increase any Borrower's responsibilities for compliance with
the Access Laws without the prior written approval of Agent Bank. In
connection with such approval, Agent Bank may require a certificate of
compliance with the Access Laws from an architect, engineer or other person
acceptable to Agent Bank.
c. Borrowers agree to give prompt written
notice to Agent Bank of the receipt by any Borrower of any
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claims of violation of any of the Access Laws and of the commencement of any
proceedings or investigations which relate to compliance with any of the Access
Laws.
d. Borrowers shall and do hereby jointly and
severally indemnify, defend and hold harmless Indemnified Parties from and
against any and all claims, demands, damages, costs, expenses, losses,
liabilities, penalties, fines and other proceedings including, without
limitation, reasonable attorneys' fees and expenses arising directly or
indirectly from or out of or in any way connected with any failure of the
Hotel/Casino Facility to comply with any of the Access Laws. The obligations
and liabilities of Borrowers under this section shall survive Credit Facility
Termination, any satisfaction, assignment, judicial or nonjudicial foreclosure
proceeding, or delivery of a deed in lieu of foreclosure.
Section 5.23. Compliance with New Land Lease and Parking
Garage Documents. Until Credit Facility Termination: (i) BHGD, as lessor, and
GHV, as lessee, shall fully perform and comply with or cause to be performed
and complied with all of the respective material covenants, terms and
conditions imposed or assumed by them under the New Land Lease, and (ii) GHV
shall fully perform and comply with or cause to be performed and complied with
all material covenants, terms and conditions applicable to it under the Parking
Garage Documents. None of the Borrowers shall amend, modify or terminate, or
enter into any agreement to amend, modify or terminate the New Land Lease or
the Parking Garage Documents without the prior written consent of Agent Bank.
Section 5.24. Updated Appraisal. In the event of the
occurrence of a Default or Event of Default or if at any time an appraisal of
the Hotel/Casino Facility and the Real Property prepared in compliance with
FIRREA is determined to be necessary by Agent Bank or Requisite Lenders,
Borrowers agree to pay all reasonable fees, costs and expenses incurred by
Agent Bank in connection with the engagement and preparation of such appraisal.
Borrowers shall not be obligated to pay for more than one of such appraisals.
ARTICLE VI
FINANCIAL COVENANTS
Until Credit Facility Termination, Borrowers agree to comply
or cause compliance with the following Financial Covenants.
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Section 6.01. Funded Debt to EBITDA Ratio. Commencing
with the Fiscal Quarter ending September 30, 1998, GHV shall maintain a maximum
Funded Debt to EBITDA Ratio no greater than 3.15 to 1.00 to be calculated as of
the end of each Fiscal Quarter.
Section 6.02. Adjusted TFCC Ratio. Commencing with the
Fiscal Quarter ending September 30, 1998, GHV shall maintain a minimum Adjusted
TFCC Ratio no less than 1.00 to 1.00 to be calculated as of the end of each
Fiscal Quarter.
Section 6.03. Minimum Capital Expenditures. Commencing
with the Fiscal Year commencing January 1, 1999, the GHV shall make, or cause
to be made annual Capital Expenditures with respect to the Hotel/Casino
Facility during each Fiscal Year, in a minimum aggregate amount of Two Hundred
Fifty Thousand Dollars ($250,000.00).
Section 6.04. Restriction on Transfer of Ownership. Until
Credit Facility Termination: (i) all of the issued and outstanding capital
stock of GVI shall be owned by BHGD, and (ii) GHV shall be a joint venture
partnership consisting only of BHGD and GVI.
Section 6.05. Total Indebtedness. GHV shall not owe or
incur any Indebtedness, except as specifically permitted hereinbelow:
a. Funded Outstandings under the Credit
Facility;
b. Accrued expenses, tax liability, deferred
taxes, and trade accounts payable less than ninety (90) days past due and other
accrued or deferred liabilities incurred in the ordinary course of business;
c. Secured purchase money Indebtedness and
Capital Lease Liabilities relating to FF&E to be used in connection with the
Hotel/Casino Facility up to the maximum aggregate principal amount of Three
Hundred Thousand Dollars ($300,000.00) at any time outstanding;
d. Unsecured Subordinated Debt, the rate of
interest and repayment terms of which are first approved in writing by Agent
Bank and for which a Payment Subordination Agreement, in the form of Exhibit I
hereto, has been first executed in favor of Agent Bank on behalf of Lenders.
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Section 6.06. Contingent Liabilities. GHV shall not
incur any Contingent Liabilities.
Section 6.07. Other Liens. Borrowers shall not grant,
consent to or otherwise agree to liens, encumbrances or negative pledges with
respect to any of the Collateral, other than (a) liens existing as of the
Closing Date acceptable to the Agent Bank and disclosed in writing prior to the
Closing Date, (b) liens permitted under the terms of this Credit Agreement as
Permitted Encumbrances, and (c) liens created or evidenced by the Security
Documentation.
Section 6.08. Consolidation, Merger, Sale of Assets, etc.
No Borrower will wind up, liquidate or dissolve its affairs or enter into any
transaction of merger or consolidation, or convey, sell, lease or otherwise
dispose of (or agree to do any of the forgoing at any future time) all or any
material part of its property or assets, except that (i) the Borrowers may make
sales of inventory in the ordinary course of business and (ii) the Borrowers
may, in the ordinary course of business, sell or otherwise dispose of FF&E
which is uneconomic or obsolete subject to the provisions set forth in Section
5.01.
Section 6.09. Investment Restrictions. Other than
Investments held by GHV as of the date of this Credit Agreement or as otherwise
permitted herein or approved in writing by Agent Bank, GHV shall not make any
Investments (whether by way of loan, stock purchase, capital contribution, or
otherwise) other than the following:
a. Direct obligations of the United States
Government;
b. Prime commercial paper (AA rated or
better);
c. Certificates of Deposit or Repurchase
Agreement issued by a commercial bank having capital surplus in excess of One
Hundred Million Dollars ($100,000,000.00);
d. Money market or other funds of nationally
recognized institutions investing solely in obligations described in (a), (b)
and (c) above; and
e. Investments and Capital Expenditures in the
Hotel/Casino Facility.
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Section 6.10. ERISA. GHV shall not:
a. At any time, permit any Pension Plan which
is maintained by GHV or to which GHV is obligated to contribute on behalf of
its employees, in such case if to do so would constitute a Material Adverse
Effect, to:
(i) engage in any non-exempt "prohibited
transaction", as such term is defined in Section 4975 of the
Code;
(ii) incur any material "accumulated
funding deficiency", as that term is defined in Section 302 of
ERISA; or
(iii) suffer a termination event to occur
which may reasonably be expected to result in liability of any
Borrower to the Pension Plan or to the Pension Benefit
Guaranty Corporation or the imposition of a lien on the
Collateral pursuant to Section 4068 of ERISA.
b. Fail, upon any Borrower becoming aware
thereof, promptly to notify the Agent Bank of the occurrence of any "reportable
event" (as defined in Section 4043 of ERISA) or of any non-exempt "prohibited
transaction" (as defined in Section 4975 of the Code) with respect to any
Pension Plan which is maintained by any Borrower or to which any Borrower is
obligated to contribute on behalf of its employees or any trust created
thereunder.
c. At any time, permit any Pension Plan which
is maintained by any Borrower or to which any Borrower is obligated to
contribute on behalf of its employees to fail to comply with ERISA or other
applicable laws in any respect that would result in a Material Adverse Effect.
Section 6.11. Margin Regulations. No part of the proceeds of
the Credit Facility will be used by any Borrower to purchase or carry any
Margin Stock or to extend credit to others for the purpose of purchasing or
carrying any Margin Stock. Neither the making of such loans, nor the use of
the proceeds of such loans will violate or be inconsistent with the provisions
of Regulations G, T, U or X of the Board of Governors of the Federal Reserve
System.
Section 6.12. Transactions with Affiliates. Transactions
by any Borrower with Affiliates of any Borrower
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other than arms length transactions for fair market value shall be and are
hereby prohibited.
Section 6.13. Change in Accounting Principles. Except as
otherwise provided herein, if any changes in accounting principles from those
used in the preparation of the most recent financial statements delivered to
Agent Bank pursuant to the terms hereof are hereinafter required or permitted
by the rules, regulations, pronouncements and opinions of the Financial
Accounting Standards Board or the American Institute of Certified Public
Accountants (or successors thereto or agencies with similar functions) and are
adopted by the Borrowers with the agreement of their independent certified
public accountants and such changes result in a change in the method of
calculation of any of the financial covenants, standards or terms found herein,
the parties hereto agree to enter into negotiations in order to amend such
provisions so as to equitably reflect such changes with the desired result that
the criteria for evaluating the financial condition of Borrowers shall be the
same after such changes as if such changes had not been made; provided,
however, that no change in GAAP that would affect the method of calculation of
any of the financial covenants, standards or terms shall be given effect in
such calculations until such provisions are amended, in a manner satisfactory
to Agent Bank, Requisite Lenders and Borrowers, to so reflect such change in
accounting principles.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.01. Events of Default. Any of the following
events and the passage of any applicable notice and cure periods shall
constitute an Event of Default hereunder:
a. Any representation or warranty made by
Borrowers pursuant to or in connection with this Credit Agreement, the Note,
the Environmental Certificate, or any other Loan Document or in any report,
certificate, financial statement or other writing furnished by Borrowers in
connection herewith, shall prove to be false, incorrect or misleading in any
materially adverse aspect as of the date when made (unless cured within thirty
(30) days of the date when made if such representation or warranty is capable
of being cured);
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b. Borrowers shall have defaulted in the
payment of any interest on the Note for a period of five (5) days from the date
Agent Bank gives written notice that such payment is due or shall have
defaulted in the payment of any principal on the Note for two (2) days after
written notice thereof is delivered to Borrowers by Agent Bank;
c. Any of the Security Documentation or any
provision thereof shall cease to be in full force and effect in any material
respect or shall cease to give the Agent Bank in any material respect the
liens, rights, powers and privileges purported to be created thereby or the
Borrowers shall default in the due performance or observance of any term,
covenant or agreement on their part to be performed or observed pursuant to the
Security Documentation for a period of thirty (30) days after written notice
thereof is delivered to Borrowers by Agent Bank or any Lender of such failure
(or such shorter period following such notice as may be specifically required
in any Loan Document), provided that with respect to default of any term,
covenant or agreement (other than a Financial Covenant) which cannot be cured
within such thirty (30) day period in the reasonable judgment of Agent Bank,
Borrowers shall have a period of ninety (90) days to cure such default so long
as Borrowers commence such cure within the thirty (30) day period and
diligently continues to cure such default;
d. Borrowers shall have defaulted in the
payment of any late charge, Non-usage Fees, expenses, indemnities or any other
amount owing under any Loan Document for a period of five (5) days after notice
thereof to Borrowers from Agent Bank;
e. Borrowers shall fail duly and punctually to
perform or comply in all material respects with any other term, covenant,
condition or promise contained in this Credit Agreement, the Note or any other
Loan Document and such failure shall continue for thirty (30) days after
written notice thereof is delivered to Borrowers by Agent Bank or any Lender of
such failure (or such shorter period following such notice as may be required
in any Loan Document), provided that with respect to default of any term,
covenant or agreement (other than a Financial Covenant) which cannot be cured
within such thirty (30) day period in the reasonable judgment of Agent Bank,
Borrowers shall have a period of ninety (90) days to cure such default so long
as Borrowers commence such cure within the thirty (30) day period and
diligently continue to cure such default;
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f. Any Borrower shall commence a voluntary
case or other proceeding seeking liquidation, reorganization or other relief
with respect to it or its debts under the Bankruptcy Code or any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official, for all or substantially all of its property, or shall consent to any
such relief or to the appointment or taking possession by any such official in
any involuntary case or other proceeding against it;
g. An involuntary case or other proceeding
shall be commenced against any Borrower seeking liquidation, reorganization or
other relief with respect to itself or its debts under the Bankruptcy Code or
any bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official, for all or substantially all of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed for
a period of ninety (90) days;
h. Any Borrower makes an assignment of all or
substantially all of its assets for the benefit of its creditors or admits in
writing its inability to pay its debts generally as they become due;
i. Borrowers shall fail to pay when due in
accordance with its terms and provisions any other Indebtedness of such
Borrowers which failure would have a Material Adverse Effect and continues
beyond the period of grace, if any, therefor;
j. The occurrence of any event of default,
beyond any applicable grace period, or any termination event under the terms of
any agreement with any Lender in connection with a Secured Interest Rate Hedge
relating to the Credit Facility;
k. The occurrence of any Reportable Event as
defined under the ERISA, which Agent Bank determines reasonably and in good
faith constitutes proper grounds for the termination of any employee pension
benefit plan or pension plan of any Borrower covered by ERISA by the Pension
Benefit Guaranty Corporation or for the appointment by an appropriate United
States District Court of a trustee to administer any such plan, which occurs
and continues for
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thirty (30) days after written notice of such determination shall have been
given to Borrowers by Agent Bank;
l. Commencement against any Borrower, any time
after the execution of this Credit Agreement, of any litigation which is not
stayed, bonded, dismissed, terminated or disposed of to the satisfaction of
Requisite Lenders within ninety (90) days after its commencement, and which (i)
could materially adversely affect the priority of the encumbrances and security
interests granted Agent Bank by the Security Documentation in the Collateral,
or (ii) results in the issuance of a preliminary or permanent injunction which
is not dissolved or stayed pending appeal within sixty (60) days of its
issuance and which preliminary or permanent injunction materially adversely
affects Borrowers' right to occupy and use the Real Property or the
Hotel/Casino Facility;
m. The failure of any Borrower to hold all
necessary Gaming Permits as of the Closing Date. The loss or suspension, other
than on account of Force Majeure, of any Borrower's unrestricted Gaming Permits
or the failure of any Borrower to maintain gaming activities in the
Hotel/Casino Facility other than on account of Force Majeure for a period in
excess of ten (10) consecutive days;
n. Any order, judgment or decree shall be
entered against any Borrower decreeing its involuntary dissolution or split up
and such order shall remain undischarged and unstayed for a period in excess of
thirty (30) days, or any Borrower shall otherwise dissolve or cease to exist;
or
o. The occurrence of any "Event of Default" as
defined and set forth in Section 7.01 of the BHJE Credit Agreement.
Section 7.02. Default Remedies. Upon the occurrence of
any Event of Default, Agent Bank, upon the consent or direction of Requisite
Lenders, shall declare the unpaid balance of the Credit Facility, together with
the interest thereon, to be fully due and payable, and, Agent Bank shall, upon
the consent or direction of Requisite Lenders, exercise any or all of the
following remedies:
a. Terminate the obligation of Lenders to make
any advances for Borrowings and may declare all outstanding unpaid Indebtedness
hereunder and under the Note and other Loan Documents together with all accrued
interest
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thereon immediately due and payable without presentation, demand, protest or
notice of any kind. This remedy will be deemed to have been automatically
exercised on the occurrence of any event set out in Sections 7.01(f), (g) or
(h) with respect to any Borrower.
b. The Banks and/or Agent Bank may exercise
any and all remedies available to Banks or Agent Bank under the Loan Documents.
c. The Banks and/or Agent Bank may exercise
any other remedies available to Banks or Agent Bank at law or in equity,
including requesting the appointment of a receiver to perform any acts required
of Borrowers under this Credit Agreement, and Borrowers hereby specifically
consent to any such request by Banks.
For the purpose of carrying out this section and exercising
these rights, powers and privileges, Borrowers hereby irrevocably constitute
and appoint Agent Bank as their true and lawful attorney-in-fact to execute,
acknowledge and deliver any instruments and do and perform any acts such as are
referred to in this paragraph in the name and on behalf of Borrowers. Agent
Bank on behalf of Lenders may exercise one or more of Lenders' remedies
simultaneously and all its remedies are nonexclusive and cumulative. Lenders
shall not be required to pursue or exhaust any Collateral or remedy before
pursuing any other Collateral or remedy. Lenders' failure to exercise any
remedy for a particular default shall not be deemed a waiver of (i) such
remedy, nor their rights to exercise any other remedy for that default, nor
(ii) their right to exercise that remedy for any subsequent default.
Section 7.03. Application of Proceeds. All payments and
proceeds received and all amounts held or realized from the sale or other
disposition of the Hotel/Casino Facility and other Collateral, which are to be
applied hereunder towards satisfaction of Borrowers' obligations under this
Credit Agreement, shall be applied in the manner set forth in Colorado Revised
Statutes or otherwise in the following order of priority:
a. First, to the payment of all reasonable
fees, costs and expenses (including reasonable attorney's fees and expenses)
incurred by Agent Bank and Banks, their agents or representatives in connection
with the realization upon any of the Collateral;
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b. Next, to the payment in full of any other
amounts due under this Credit Agreement and any other Loan Documents (other
than the Note);
c. Next, to the balance of interest remaining
unpaid on the Note;
d. Next, to the balance of principal remaining
unpaid on the Note;
e. Next, the balance, if any, of such payments
or proceeds to whomever may be legally entitled thereto.
Section 7.04. Notices. In order to entitle Agent Bank
and/or Banks to exercise any remedy available hereunder, it shall not be
necessary for Agent Bank and/or Banks to give any notice, other than such
notice as may be required expressly herein.
Section 7.05. Agreement to Pay Attorney's Fees and
Expenses. Subject to the provisions of Section 10.14, upon the occurrence of
an Event of Default, as a result of which Agent Bank and/or Banks shall require
and employ attorneys or incur other expenses for the collection of payments due
or to become due or the enforcement or performance or observance of any
obligation or agreement on the part of Borrowers contained herein, Borrowers
shall, on demand, pay to Agent Bank and Banks the actual and reasonable fees of
such attorneys (including actual and reasonable allocated costs of in-house
legal counsel) and such other reasonable expenses so incurred by Agent Bank and
Banks.
Section 7.06. No Additional Waiver Implied by One Waiver.
In the event any agreement contained in this Credit Agreement should be
breached by either party and thereafter waived by the other party, such waiver
shall be limited to the particular breach so waived and shall not be deemed to
waive any other breach hereunder.
Section 7.07. Licensing of Agent Bank and Lenders. In
the event of the occurrence of an Event of Default hereunder or under any of
the Loan Documents and it shall become necessary, or in the opinion of
Requisite Lenders advisable, for an agent, supervisor, receiver or other
representative of Agent Bank and Banks to become licensed under the provisions
of the Gaming Laws of the State of Colorado, or rules and regulations adopted
pursuant thereto,
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as a condition to receiving the benefit of any Collateral encumbered by the
Security Documentation or other Loan Documents for the benefit of Lenders or
otherwise to enforce their rights hereunder or thereunder, Borrowers do hereby
give their consent to the granting of such license or licenses and agree to
execute such further documents as may be required in connection with the
evidencing of such consent.
Section 7.08. Exercise of Rights Subject to Applicable
Law. All rights, remedies and powers provided by this Article VII may be
exercised only to the extent that the exercise thereof does not violate any
applicable provision of the laws of any Governmental Authority and all of the
provisions of this Article VII are intended to be subject to all applicable
mandatory provisions of law that may be controlling and to be limited to the
extent necessary so that they will not render this Credit Agreement invalid,
unenforceable or not entitled to be recorded or filed under the provisions of
any applicable law.
Section 7.09. Discontinuance of Proceedings. In case
Agent Bank and/or Banks shall have proceeded to enforce any right, power or
remedy under this Credit Agreement, the Note, the Security Documentation or any
other Loan Document by foreclosure, entry or otherwise, and such proceedings
shall have been discontinued or abandoned for any reason or shall have been
determined adversely to Banks, then and in every such case Borrowers, Agent
Bank and/or Banks shall be restored to their former positions and rights
hereunder with respect to the Collateral, and all rights, remedies and powers
of Agent Bank and Banks shall continue as if such proceedings had not been
taken, subject to any binding rule by the applicable court or other tribunal in
any such proceeding.
ARTICLE VIII
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 8.01. No Abatement of Payments. If all or any part of
the Collateral shall be materially damaged or destroyed, or if title to or the
temporary use of the whole or any part of any of the Collateral shall be taken
or condemned by a competent authority for any public use or purpose, or by
exercise of the power of eminent domain, there shall be no abatement or
reduction in the amounts payable by Borrowers hereunder or under the Note, and
Borrowers shall continue to be obligated to make such payments.
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Section 8.02. Distribution of Capital Proceeds Upon
Occurrence of Fire, Other Perils or Condemnation. All monies received from
"All Risk" including flood and earthquake insurance policies covering any of
the Collateral or from condemnation or similar actions in regard to said
Collateral, shall be paid directly to Agent Bank. However, in the event the
amount paid to Agent Bank is equal to or less than Five Hundred Thousand
Dollars ($500,000.00), unless a Default or Event of Default shall have occurred
and then be continuing such amount shall be paid directly to Borrowers to be
used by Borrower for the repair or replacement of the property destroyed or
condemned. In the event the amount paid to Agent Bank is greater than Five
Hundred Thousand Dollars ($500,000.00), then, unless a Default or Event of
Default has occurred hereunder and is then continuing, the entire amount so
collected or so much thereof as may be required to repair or replace the
destroyed or condemned property, shall, subject to the condition set forth
below, be released to Borrowers for repair or replacement of the property
destroyed or condemned or to reimburse Borrowers for the costs of such repair
or replacement incurred prior to the date of such release. If a Default or
Event of Default has occurred hereunder and is then continuing such amount may,
at the option of Requisite Lenders, be applied to pay the outstanding balance
of the Credit Facility. In the event the amount so collected is applied to pay
or reduce the outstanding balance of the Credit Facility, the amount received
by Agent Bank shall be applied in the priority set forth in Section 7.03 and,
if such application is made when a Default or Event of Default has occurred and
remains continuing, then Borrowers shall not be entitled to any further
Borrowings. In the event Banks are required to release all or a portion of the
collected funds to Borrowers for such repair or replacement of the property
destroyed or condemned, such release of funds shall be made in accordance with
the following terms and conditions:
a. The repairs, replacements and rebuilding
shall be made in accordance with plans and specifications approved by Agent
Bank and in accordance with all applicable laws, ordinances, rules, regulations
and requirements of Governmental Authorities;
b. Borrowers shall provide Agent Bank with a
detailed estimate of the costs of such repairs or restorations;
c. Borrowers shall satisfy the Requisite
Lenders that after the reconstruction is completed, the value
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of the Hotel/Casino Facility, as determined by the Requisite Lenders in their
reasonable discretion, will not be less than Twenty-Five Million Dollars
($25,000,000.00);
d. In the Agent Bank's reasonable opinion, any
undisbursed portion of the Available Borrowings contemplated hereunder, after
deposit of such proceeds, is sufficient to pay all costs of reconstruction of
the Hotel/Casino Facility or other Collateral damaged, destroyed or condemned;
or if the undisbursed portion of such Credit Facility is not sufficient,
Borrowers shall provide evidence reasonably acceptable to Agent Bank of the
availability of additional funds sufficient to pay such additional costs of
reconstructing the Collateral;
e. Borrowers have delivered to the Agent Bank
a construction contract for the work of reconstruction in form and content,
including insurance requirements, acceptable to the Agent Bank with a
contractor acceptable to the Agent Bank;
f. The Requisite Lenders in their reasonable
discretion have determined that after the work of reconstruction is completed,
the Hotel/Casino Facility or Collateral damaged, destroyed or condemned will
produce income sufficient to pay all costs of operations and maintenance of the
applicable Collateral with a reasonable reserve for repairs, and service all
debts secured by the applicable Collateral;
g. No Default or Event of Default has occurred
and is continuing hereunder;
h. Borrowers have provided evidence reasonably
acceptable to Agent Bank of the availability of funds (taking into
consideration the amount of Borrowings available and the amount of proceeds, if
any, of insurance policies covering property damage and business interruption,
loss or rental income in connection with the Hotel/Casino Facility or
Collateral damaged, destroyed or condemned accruing and immediately forthcoming
to the Agent Bank) to be sufficient to service the Indebtedness secured hereby
during the period of reconstruction;
i. Before commencing any such work, Borrowers
shall, at its own cost and expense, furnish Agent Bank with appropriate
endorsements, if needed, to the "All Risk" insurance policy which Borrowers are
then presently
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maintaining, and course of construction insurance to cover all of the risks
during the course of such work;
j. Such work shall be commenced by Borrowers
within one hundred twenty (120) days after (i) settlement shall have been made
with the insurance companies or condemnation proceeds shall have been received,
and (ii) all the necessary governmental approvals shall have been obtained, and
such work shall be completed within a reasonable time (and in any event within
one (1) year from the commencement thereof), free and clear of all liens and
encumbrances, except Permitted Encumbrances; and
k. Disbursements of such insurance or
condemnation proceeds shall be made in the customary manner used by Agent Bank
for the disbursement of construction loans.
ARTICLE IX
AGENCY PROVISIONS
Section 9.01. Appointment.
a. Each Lender hereby (i) designates and
appoints WFB as the Agent Bank of such Lender under this Credit Agreement and
the Loan Documents, (ii) authorizes and directs Agent Bank to enter into the
Loan Documents other than this Credit Agreement for the benefit of Lenders, and
(iii) authorizes Agent Bank to take such action on its behalf under the
provisions of this Credit Agreement and the Loan Documents and to exercise such
powers as are set forth herein or therein, together with such other powers as
are reasonably incidental thereto, subject to the limitations referred to in
Sections 9.10(a) and 9.10(b). Agent Bank agrees to act as such on the express
conditions contained in this Article IX.
b. The provisions of this Article IX are
solely for the benefit of Agent Bank and Lenders, and Borrowers shall not have
any rights to rely on or enforce any of the provisions hereof (other than as
expressly set forth in Sections 9.03, 9.09 and 10.10), provided, however, that
the foregoing shall in no way limit Borrowers' obligations under this Article
IX. In performing its functions and duties under this Credit Agreement, Agent
Bank shall act solely as Agent Bank of Lenders and does not assume and shall
not be deemed to have assumed any obligation toward or relationship of agency
or trust with or for Borrowers or any other Person.
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Section 9.02. Nature of Duties. Agent Bank shall not
have any duties or responsibilities except those expressly set forth in this
Credit Agreement or in the Loan Documents. The duties of Agent Bank shall be
administrative in nature. Subject to the provisions of Sections 9.05 and 9.07,
Agent Bank shall administer the Credit Facility in the same manner as it
administers its own loans. Promptly following the effectiveness of this Credit
Agreement, Agent Bank shall send to each Lender a duplicate executed original,
to the extent the same are available in sufficient numbers, of the Credit
Agreement and a copy of each other Loan Document in favor of Lenders and a copy
of the filed or recorded Security Documentation, with the originals of the
latter to be held and retained by Agent Bank for the benefit of all Lenders.
Agent Bank shall not have by reason of this Credit Agreement a fiduciary
relationship in respect of any Lender. Nothing in this Credit Agreement or any
of the Loan Documents, expressed or implied, is intended or shall be construed
to impose upon Agent Bank any obligation in respect of this Credit Agreement or
any of the Loan Documents except as expressly set forth herein or therein.
Each Lender shall make its own independent investigation of the financial
condition and affairs of the Borrowers and the Collateral in connection with
the making and the continuance of the Credit Facility hereunder and shall make
its own appraisal of the creditworthiness of the Borrowers and the Collateral,
and, except as specifically provided herein, Agent Bank shall not have any duty
or responsibility, either initially or on a continuing basis, to provide any
Lender with any credit or other information with respect thereto, whether
coming into its possession before the Closing Date or at any time or times
thereafter.
Section 9.03. Disbursement of Borrowings.
a. Not later than the next Banking Business
Day following receipt of a Notice of Borrowing, Agent Bank shall send a copy
thereof by facsimile to each other Lender and shall otherwise notify each
Lender of the proposed Borrowing and the Funding Date. Each Lender shall make
available to Agent Bank (or the funding bank or entity designated by Agent
Bank), the amount of such Lender's Pro Rata Share of
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such Borrowing in immediately available funds not later than the times
designated in Section 9.03(b). Unless Agent Bank shall have been notified by
any Lender not later than the close of business (San Francisco time) on the
Banking Business Day immediately preceding the Funding Date in respect of any
Borrowing that such Lender does not intend to make available to Agent Bank such
Lender's Pro Rata Share of such Borrowing, Agent Bank may assume that such
Lender shall make such amount available to Agent Bank. If any Lender does not
notify Agent Bank of its intention not to make available its Pro Rata Share of
such Borrowing as described above, but does not for any reason make available
to Agent Bank such Lender's Pro Rata Share of such Borrowing, such Lender shall
pay to Agent Bank forthwith on demand such amount, together with interest
thereon at the Federal Funds Rate. In any case where a Lender does not for any
reason make available to Agent Bank such Lender's Pro Rata Share of such
Borrowing, Agent Bank, in its sole discretion, may, but shall not be obligated
to, fund to Borrowers such Lender's Pro Rata Share of such Borrowing. If Agent
Bank funds to Borrowers such Lender's Pro Rata Share of such Borrowing and if
such Lender subsequently pays to Agent Bank such corresponding amount, such
amount so paid shall constitute such Lender's Pro Rata Share of such Borrowing.
Nothing in this Section 9.03(a) shall alter the respective rights and
obligations of the parties hereunder in respect of a Defaulting Lender or a
Non-Pro Rata Borrowing.
b. Requests by Agent Bank for funding by
Lenders of Borrowings will be made by telecopy. Each Lender shall make the
amount of its Pro Rata Share of such Borrowing available to Agent Bank in
Dollars and in immediately available funds, to such bank and account, in El
Segundo, California as Agent Bank may designate, not later than 9:00 A.M. (San
Francisco time) on the Funding Date designated in the Notice of Borrowing with
respect to such Borrowing, but in no event earlier than two (2) Banking
Business Days following Lender's receipt of the applicable Notice of Borrowing.
c. Nothing in this Section 9.03 shall be
deemed to relieve any Lender of its obligation hereunder to make its Pro Rata
Share of Borrowings on any Funding Date, nor shall any Lender be responsible
for the failure of any other Lender to perform its obligations to advance its
Pro Rata Share of any Borrowing hereunder, and the Pro Rata Share of the
Aggregate Commitment of any Lender shall not be increased or decreased as a
result of the failure by any other Lender to perform its obligation to advance
its Pro Rata Share of any Borrowing.
Section 9.04. Distribution and Apportionment of Payments.
a. Subject to Section 9.04(b), payments
actually received by Agent Bank for the account of Lenders
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shall be paid to them promptly after receipt thereof by Agent Bank, but in any
event within one (1) Banking Business Day, provided that Agent Bank shall pay
to Lenders interest thereon, at the Federal Funds Rate from the Banking
Business Day following receipt of such funds by Agent Bank until such funds are
paid in immediately available funds to Lenders. Subject to Section 9.04(b),
all payments of principal and interest in respect of Funded Outstandings, all
payments of the fees described in this Credit Agreement, and all payments in
respect of any other Obligations shall be allocated among such other Lenders as
are entitled thereto, in proportion to their respective Pro Rata Shares or
otherwise as provided herein. Agent Bank shall promptly distribute, but in any
event within one (1) Banking Business Day, to each Lender at its primary
address set forth on the appropriate signature page hereof or on the applicable
Assignment and Assumption Agreement, or at such other address as a Lender may
request in writing, such funds as it may be entitled to receive, provided that
Agent Bank shall in any event not be bound to inquire into or determine the
validity, scope or priority of any interest or entitlement of any Lender and
may suspend all payments and seek appropriate relief (including, without
limitation, instructions from Requisite Lenders or all Lenders, as applicable,
or an action in the nature of interpleader) in the event of any doubt or
dispute as to any apportionment or distribution contemplated hereby. The order
of priority herein is set forth solely to determine the rights and priorities
of Lenders as among themselves and may at any time or from time to time be
changed by Lenders as they may elect, in writing in accordance with Section
10.01, without necessity of notice to or consent of or approval by Borrowers or
any other Person. All payments or other sums received by Agent Bank for the
account of Lenders (including, without limitation, principal and interest
payments, the proceeds of any and all insurance maintained with respect to any
of the Collateral, and any and all condemnation proceeds with respect to any of
the Collateral) shall not constitute property or assets of the Agent Bank and
shall be held by Agent Bank, solely in its capacity as administrative and
collateral agent for itself and the other Lenders, subject to the Loan
Documents.
b. Notwithstanding any provision hereof to the
contrary, until such time as a Defaulting Lender has funded its Pro Rata Share
of Borrowing which was previously a Non Pro Rata Borrowing, or all other
Lenders have received payment in full (whether by repayment or prepayment) of
the principal due in respect of such Non Pro Rata Borrowing, all
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principal sums owing to such Defaulting Lender hereunder shall be subordinated
in right of payment to the prior payment in full of all principal in respect of
all Non Pro Rata Borrowing in which the Defaulting Lender has not funded its
Pro Rata Share. This provision governs only the relationship among Agent Bank,
each Defaulting Lender, and the other Lenders; nothing hereunder shall limit
the obligation of Borrowers to repay all Borrowings in accordance with the
terms of this Credit Agreement. The provisions of this section shall apply and
be effective regardless of whether an Event of Default occurs and is then
continuing, and notwithstanding (i) any other provision of this Credit
Agreement to the contrary, (ii) any instruction of Borrowers as to their
desired application of payments or (iii) the suspension of such Defaulting
Lender's right to vote on matters which are subject to the consent or approval
of Requisite Lenders or all Lenders. No Nonusage Fee shall accrue in favor of,
or be payable to, such Defaulting Lender from the date of any failure to fund
Borrowings or reimburse Agent Bank for any Liabilities and Costs as herein
provided until such failure has been cured, and Agent Bank shall be entitled to
(A) withhold or setoff, and to apply to the payment of the defaulted amount and
any related interest, any amounts to be paid to such Defaulting Lender under
this Credit Agreement, and (B) bring an action or suit against such Defaulting
Lender in a court of competent jurisdiction to recover the defaulted amount and
any related interest. In addition, the Defaulting Lender shall indemnify,
defend and hold Agent Bank and each of the other Lenders harmless from and
against any and all Liabilities and Costs, plus interest thereon at the Default
Rate, which they may sustain or incur by reason of or as a direct consequence
of the Defaulting Lender's failure or refusal to abide by its obligations under
this Credit Agreement.
Section 9.05. Rights, Exculpation, Etc. Neither Agent
Bank, any Affiliate of Agent Bank, nor any of their respective officers,
directors, employees, agents, attorneys or consultants, shall be liable to any
Lender for any action taken or omitted by them hereunder or under any of the
Loan Documents, or in connection herewith or therewith, except that Agent Bank
shall be liable for its gross negligence or willful misconduct. In the absence
of gross negligence or willful misconduct, Agent Bank shall not be liable for
any apportionment or distribution of payments made by it in good faith pursuant
to Section 9.04, and if any such apportionment or distribution is subsequently
determined to have been made in error the sole recourse of any Person to whom
payment was
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due, but not made, shall be to recover from the recipients of such payments any
payment in excess of the amount to which they are determined to have been
entitled. Agent Bank shall not be responsible to any Lender for any recitals,
statements, representations or warranties herein or for the execution,
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of this Credit Agreement, any of the Security Documentation or any
of the other Loan Documents, or any of the transactions contemplated hereby and
thereby; or for the financial condition of the Borrowers or any of their
Affiliates. Agent Bank shall not be required to make any inquiry concerning
either the performance or observance of any of the terms, provisions or
conditions of this Credit Agreement or any of the Loan Documents or the
financial condition of the Borrowers or any of their Affiliates, or the
existence or possible existence of any Default or Event of Default.
Section 9.06. Reliance. Agent Bank shall be entitled to
rely upon any written notices, statements, certificates, orders or other
documents, telecopies or any telephone message believed by it in good faith to
be genuine and correct and to have been signed, sent or made by the proper
Person, and with respect to all matters pertaining to this Credit Agreement or
any of the Loan Documents and its duties hereunder or thereunder, upon advice
of legal counsel (including counsel for Borrowers), independent public
accountant and other experts selected by it.
Section 9.07. Indemnification. To the extent that Agent
Bank is not reimbursed and indemnified by Borrowers, Lenders will reimburse,
within ten (10) Banking Business Days after notice from Agent Bank, and
indemnify and defend Agent Bank for and against any and all Liabilities and
Costs which may be imposed on, incurred by, or asserted against it in any way
relating to or arising out of this Credit Agreement, the Security Documentation
or any of the other Loan Documents or any action taken or omitted by Agent Bank
or under this Credit Agreement, the Security Documentation or any of the other
Loan Documents, in proportion to each Lender's Pro Rata Share; provided that no
Lender shall be liable for any portion of such Liabilities and Costs resulting
from Agent Bank's gross negligence or willful misconduct. The obligations of
Lenders under this Section 9.07 shall survive the payment in full of all
Obligations and the termination of this Credit Agreement. In the event that
after payment and distribution of any amount by Agent Bank to Lenders, any
Lender or third party, including Borrowers, any creditor of Borrowers or a
trustee in
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bankruptcy, recovers from Agent Bank any amount found to have been wrongfully
paid to Agent Bank or disbursed by Agent Bank to Lenders, then Lenders, in
proportion to their respective Pro Rata Shares, shall reimburse Agent Bank for
all such amounts. Notwithstanding the foregoing, Agent Bank shall not be
obligated to advance Liabilities and Costs and may require the deposit by each
Lender of its Pro Rata Share of any material Liabilities and Costs anticipated
by Agent Bank before they are incurred or made payable.
Section 9.08. Agent Individually. With respect to its
Pro Rata Share of the Aggregate Commitment hereunder and the Borrowings made by
it, Agent Bank shall have and may exercise the same rights and powers hereunder
and is subject to the same obligations and liabilities as and to the extent set
forth herein for any other Lender. The terms "Lenders", "Requisite Lenders" or
any similar terms may include Agent Bank in its individual capacity as a Lender
or one of the Requisite Lenders, but Requisite Lenders shall not include Agent
Bank solely in its capacity as Agent Bank and need not necessarily include
Agent Bank in its capacity as a Lender. Agent Bank and any Lender and its
Affiliates may accept deposits from, lend money to, and generally engage in any
kind of banking, trust or other business with any Borrower or any of its
Affiliates as if it were not acting as Agent Bank or Lender pursuant hereto.
Section 9.09. Successor Agent Bank; Resignation of Agent
Bank; Removal of Agent Bank.
a. Agent Bank shall automatically cease to be
Agent Bank hereunder in the event a petition in bankruptcy shall be filed by or
against Agent Bank or the Federal Deposit Insurance Corporation or any other
Governmental Authority shall assume control of Agent Bank or Agent Bank's
interests under the Credit Facility. Further, Lenders (other than Agent Bank)
may unanimously remove Agent Bank at any time upon the occurrence of gross
negligence or wilful misconduct by Agent Bank by giving at least thirty (30)
Banking Business Days' prior written notice to Agent Bank, Borrowers and all
other Lenders. Such resignation or removal shall take effect upon the
acceptance by a successor Agent Bank of appointment pursuant to clause (b) or
(c).
b. Upon any such notice of resignation by or
removal of Agent Bank, Requisite Lenders shall appoint a successor Agent Bank
which appointment shall be subject to Borrowers' consent (other than upon the
occurrence and during
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the continuance of any Event of Default), which shall not be unreasonably
withheld or delayed. Any successor Agent Bank must be a bank (i) the senior
debt obligations of which (or such bank's parent's senior unsecured debt
obligations) are rated not less than Baa-2 by Moody's Investors Services, Inc.
or a comparable rating by a rating agency acceptable to Requisite Lenders and
(ii) which has total assets in excess of Ten Billion Dollars
($10,000,000,000.00).
c. If a successor Agent Bank shall not have
been so appointed within said thirty (30) Banking Business Day period, the
retiring or removed Agent Bank, with the consent of Borrowers (other than upon
the occurrence and during the continuance of any Event of Default) (which may
not be unreasonably withheld or delayed), shall then appoint a successor Agent
Bank who shall meet the requirements described in subsection (b) above and who
shall serve as Agent Bank until such time, if any, as Requisite Lenders, with
the consent of Borrowers (other than upon the occurrence and during the
continuance of any Event of Default), appoint a successor Agent Bank as
provided above.
Section 9.10. Consent and Approvals.
a. Each consent, approval, amendment,
modification or waiver specifically enumerated in this Section 9.10(a) shall
require the consent of Requisite Lenders:
(i) Approval of Borrowings with less
than full compliance with requirements of Article IIIB
(Section 2.06);
(ii) Approval of any amendment,
modification or termination or agreement to amend, modify or
terminate the Subordinated Debt (Section 5.03);
(iii) Consent to modification to
financial reporting requirements or production of additional
financial or other information (Section 5.08);
(iv) Approval of a change in the
method of calculation of any financial covenants, standards or
terms as a result of a change in accounting principle (Section
6.15);
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(v) Direct Agent Bank to declare the
unpaid balance of the Credit Facility fully due and payable
(Section 7.02);
(vi) Direct the disposition of
insurance proceeds or condemnation awards under certain
circumstances (Section 8.02);
(vii) Approval of appointment of
successor Agent Bank (Section 9.09);
(viii) Approval of certain Protective
Advances (Section 9.11(a));
(ix) Approval of a Post-Foreclosure
Plan and related matters (Section 9.11(e));
(x) Consent to action or proceeding
against any Borrower or the Collateral by any Lender (Section
9.12);
(xi) Except as referred to in
subsection (b) below, approval of any amendment, modification
or termination of this Credit Agreement, or waiver of any
provision herein (Section 10.01).
b. Each consent, approval, amendment,
modification or waiver specifically enumerated in Section 10.01(i) through
(iii) shall require the consent of all Lenders.
c. In addition to the required consents or
approvals referred to in subsection (a) above, Agent Bank may at any time
request instructions from Requisite Lenders with respect to any actions or
approvals which, by the terms of this Credit Agreement or of any of the Loan
Documents, Agent Bank is permitted or required to take or to grant without
instructions from any Lenders, and if such instructions are promptly requested,
Agent Bank shall be absolutely entitled to refrain from taking any action or to
withhold any approval and shall not be under any liability whatsoever to any
Lender for refraining from taking any action or withholding any approval under
any of the Loan Documents until it shall have received such instructions from
Requisite Lenders. Without limiting the foregoing, no Lender shall have any
right of action whatsoever against Agent Bank as a result of Agent Bank acting
or refraining from acting under this Credit Agreement, the
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Security Documentation or any of the other Loan Documents in accordance with
the instructions of Requisite Lenders or, where applicable, all Lenders. Agent
Bank shall promptly notify each Lender at any time that the Requisite Lenders
have instructed Agent Bank to act or refrain from acting pursuant hereto.
d. Each Lender agrees that any action taken by
Agent Bank at the direction or with the consent of Requisite Lenders in
accordance with the provisions of this Credit Agreement or any Loan Document,
and the exercise by Agent Bank at the direction or with the consent of
Requisite Lenders of the powers set forth herein or therein, together with such
other powers as are reasonably incidental thereto, shall be authorized and
binding upon all Lenders, except for actions specifically requiring the
approval of all Lenders. All communications from Agent Bank to Lenders
requesting Lenders' determination, consent, approval or disapproval (i) shall
be given in the form of a written notice to each Lender, (ii) shall be
accompanied by a description of the matter or thing as to which such
determination, approval, consent or disapproval is requested, or shall advise
each Lender where such matter or thing may be inspected, or shall otherwise
describe the matter or issue to be resolved, (iii) shall include, if reasonably
requested by a Lender and to the extent not previously provided to such Lender,
written materials and a summary of all oral information provided to Agent Bank
by Borrowers in respect of the matter or issue to be resolved, and (iv) shall
include Agent Bank's recommended course of action or determination in respect
thereof. Each Lender shall reply promptly, but in any event within ten (10)
Banking Business Days (the "Lender Reply Period"). Unless a Lender shall give
written notice to Agent Bank that it objects to the recommendation or
determination of Agent Bank (together with a written explanation of the reasons
behind such objection) within the Lender Reply Period, such Lender shall be
deemed to have approved of or consented to such recommendation or
determination. With respect to decisions requiring the approval of Requisite
Lenders or all Lenders, Agent Bank shall submit its recommendation or
determination for approval of or consent to such recommendation or
determination to all Lenders and upon receiving the required approval or
consent shall follow the course of action or determination recommended to
Lenders by Agent Bank or such other course of action recommended by Requisite
Lenders, and each non-responding Lender shall be deemed to have concurred with
such recommended course of action.
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Section 9.11. Agency Provisions Relating to Collateral.
a. Agent Bank is hereby authorized on behalf of
all Lenders, without the necessity of any notice to or further consent from any
Lender, from time to time prior to an Event of Default, to take any action with
respect to any Collateral or Loan Document which may be necessary to perfect
and maintain liens of the Security Documentation upon the Collateral granted
pursuant to the Loan Documents. Agent Bank may make, and shall be reimbursed
by Lenders (in accordance with their Pro Rata Shares), to the extent not
reimbursed by Borrowers, for, Protective Advance(s) during any one (1) calendar
year with respect to the Collateral up to the sum of (i) amounts expended to
pay real estate taxes, assessments and governmental charges or levies imposed
upon such Collateral, (ii) amounts expended to pay insurance premiums for
policies of insurance related to such Collateral, and (iii) One Hundred
Thousand Dollars ($100,000.00). Protective Advances in excess of said sum
during any calendar year for any Collateral shall require the consent of
Requisite Lenders. In addition, Agent Bank is hereby authorized on behalf of
all Lenders, without the necessity of any notice to or further consent from any
Lender, to waive the imposition of the late fees provided for in Section
2.08(a) up to a maximum of two (2) times per calendar year, including any
extensions.
b. Lenders hereby irrevocably authorize Agent
Bank, at its option and in its discretion, to release any Security
Documentation granted to or held by Agent Bank upon any Collateral (i) upon
Credit Facility Termination and repayment and satisfaction of all Borrowings,
and all other Obligations and the termination of this Credit Agreement, or (ii)
if approved, authorized or ratified in writing by Agent Bank at the direction
of all Lenders. Agent Bank shall not be required to execute any document to
evidence the release of the Security Documentation granted to Agent Bank for
the benefit of Lenders herein or pursuant hereto upon any Collateral if, in
Agent Bank's opinion, such document would expose Agent Bank to liability or
create any obligation or entail any consequence other than the release of such
Security Documentation without recourse or warranty, and such release shall not
in any manner discharge, affect or impair the Obligations or any Security
Documentation upon (or obligations of Borrowers in respect of) any property
which shall continue to constitute part of the Collateral.
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c. Except as provided in this Credit Agreement,
Agent Bank shall have no obligation whatsoever to any Lender or to any other
Person to assure that the Collateral exists or is owned by Borrowers or is
cared for, protected or insured or has been encumbered or that the Security
Documentation granted to Agent Bank herein or in any of the other Loan
Documents or pursuant hereto or thereto have been properly or sufficiently or
lawfully created, perfected, protected or enforced or are entitled to any
particular priority.
d. Should Agent Bank (i) employ counsel for
advice or other representation (whether or not any suit has been or shall be
filed) with respect to any Collateral or any part thereof, or any of the Loan
Documents, or the attempt to enforce any security interest or Security
Documentation on any of the Collateral, or (ii) commence any proceeding or in
any way seek to enforce its rights or remedies under the Loan Documents,
irrespective of whether as a result thereof Agent Bank shall acquire title to
any Collateral, either through foreclosure, deed in lieu of foreclosure or
otherwise, each Lender, upon demand therefor from time to time, shall
contribute its share (based on its Pro Rata Share) of the reasonable costs
and/or expenses of any such advice or other representation, enforcement or
acquisition, including, but not limited to, fees of receivers or trustees,
court costs, title company charges, filing and recording fees, appraisers' fees
and fees and expenses of attorneys to the extent not otherwise reimbursed by
Borrowers; provided that Agent Bank shall not be entitled to reimbursement of
its attorneys' fees and expenses incurred in connection with the resolution of
disputes between Agent Bank and other Lenders unless Agent Bank shall be the
prevailing party in any such dispute. Any loss of principal and interest
resulting from any Event of Default shall be shared by Lenders in accordance
with their respective Pro Rata Shares. It is understood and agreed that in the
event Agent Bank determines it is necessary to engage counsel for Lenders from
and after the occurrence of an Event of Default, said counsel shall be selected
by Agent Bank.
e. In the event that all or any portion of the
Collateral is acquired by Agent Bank as the result of a foreclosure or the
acceptance of a deed or assignment in lieu of foreclosure, or is retained in
satisfaction of all or any part of Borrowers' obligations, title to any such
Collateral or any portion thereof shall be held in the name of Agent Bank or a
nominee or subsidiary of Agent Bank, as agent, for the ratable benefit of Agent
Bank and Lenders. Agent Bank shall
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prepare a recommended course of action for such Collateral (the
"Post-Foreclosure Plan"), which shall be subject to the approval of the
Requisite Lenders. In the event that Requisite Lenders do not approve such
Post-Foreclosure Plan, any Lender shall be permitted to submit an alternative
Post-Foreclosure Plan to Agent Bank, and Agent Bank shall submit any and all
such additional Post-Foreclosure Plans to the Lenders for evaluation and the
approval of Requisite Lenders. In accordance with the approved
Post-Foreclosure Plan, Agent Bank shall manage, operate, repair, administer,
complete, construct, restore or otherwise deal with the Collateral acquired and
administer all transactions relating thereto, including, without limitation,
employing a management agent, leasing agent and other agents, contractors and
employees, including agents of the sale of such Collateral, and the collecting
of rents and other sums from such Collateral and paying the expenses of such
Collateral; actions taken by Agent Bank with respect to the Collateral, which
are not provided for in the approved Post-Foreclosure Plan or reasonably
incidental thereto, shall require the consent of Requisite Lenders by way of
supplement to such Post-Foreclosure Plan. Upon demand therefor from time to
time, each Lender will contribute its share (based on its Pro Rata Share) of
all reasonable costs and expenses incurred by Agent Bank pursuant to the
Post-Foreclosure Plan in connection with the construction, operation,
management, maintenance, leasing and sale of such Collateral. In addition,
Agent Bank shall render or cause to be rendered by the managing agent, to each
of the Lenders, monthly, an income and expense statement for such Collateral,
and each of the Lenders shall promptly contribute its Pro Rata Share of any
operating loss for such Collateral, and such other expenses and operating
reserves as Agent Bank shall deem reasonably necessary pursuant to and in
accordance with the Post-Foreclosure Plan. To the extent there is net
operating income from such Collateral, Agent Bank shall, in accordance with all
applicable Gaming Laws and the Post-Foreclosure Plan, determine the amount and
timing of distributions to Lenders. All such distributions shall be made to
Lenders in accordance with their respective Pro Rata Shares. Lenders
acknowledge that if title to any Collateral is obtained by Agent Bank or its
nominee, such Collateral will not be held as a permanent investment but will be
liquidated as soon as practicable. Agent Bank shall undertake to sell such
Collateral, at such price and upon such terms and conditions as the Requisite
Lenders shall reasonably determine to be most advantageous. Any purchase money
mortgage or deed of trust taken in connection with the disposition of such
Collateral in accordance with the immediately preceding
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sentence shall name Agent Bank, as agent for Lenders, as the beneficiary or
mortgagee. In such case, Agent Bank and Lenders shall enter into an agreement
with respect to such purchase money mortgage defining the rights of Lenders in
the same Pro Rata Shares as provided hereunder, which agreement shall be in all
material respects similar to this Article IX insofar as the same is appropriate
or applicable.
Section 9.12. Lender Actions Against Collateral. Each
Lender agrees that it will not take any action, nor institute any actions or
proceedings, against Borrowers, or any other obligor hereunder, under the
Security Documentation or under any other Loan Documents with respect to
exercising claims against or rights in any Collateral without the consent of
Requisite Lenders.
Section 9.13. Ratable Sharing. Subject to Section 9.03 and
9.04, Lenders agree among themselves that (i) with respect to all amounts
received by them which are applicable to the payment of the Obligations,
equitable adjustment will be made so that, in effect, all such amounts will be
shared among them ratably in accordance with their Pro Rata Shares, whether
received by voluntary payment, by counterclaim or cross action or by the
enforcement of any or all of the Obligations, or the Collateral, (ii) if any of
them shall by voluntary payment or by the exercise of any right of counterclaim
or otherwise, receive payment of a proportion of the aggregate amount of the
Obligations held by it which is greater than its Pro Rata Share of the payments
on account of the Obligations, the one receiving such excess payment shall
purchase, without recourse or warranty, an undivided interest and participation
(which it shall be deemed to have done simultaneously upon the receipt of such
payment) in such Obligations owed to the others so that all such recoveries
with respect to such Obligations shall be applied ratably in accordance with
their Pro Rata Shares; provided, that if all or part of such excess payment
received by the purchasing party is thereafter recovered from it, those
purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to that party to the extent necessary to
adjust for such recovery, but without interest except to the extent the
purchasing party is required to pay interest in connection with such recovery.
Borrowers agree that any Lender so purchasing a participation from another
Lender pursuant to this Section 9.13 may, to the fullest extent permitted by
law, exercise all its rights of payment with respect to such participation as
fully as if such Lender were the direct creditor of Borrowers in the amount of
such
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participation. No Lender shall exercise any setoff, banker's lien or other
similar right in respect to any Obligations without the prior written approval
by Agent Bank.
Section 9.14. Delivery of Documents. Agent Bank shall as
soon as reasonably practicable distribute to each Lender at its primary address
set forth on the appropriate counterpart signature page hereof, or at such
other address as a Lender may request in writing, (i)copies of all documents to
which such Lender is a party or of which is executed or held by Agent Bank on
behalf of such Lender, (ii) all documents of which Agent Bank receives copies
from Borrowers pursuant to Article VI and Section 10.03, (iii) all other
documents or information which Agent Bank is required to send to Lenders
pursuant to the terms of this Credit Agreement, (iv) other information or
documents received by Agent Bank at the request of any Lender, and (v) all
notices received by Agent Bank pursuant to Section 5.20. In addition, within
fifteen (15) Banking Business Days after receipt of a request in writing from a
Lender for written information or documents provided by or prepared by
Borrowers, Agent Bank shall deliver such written information or documents to
such requesting Lender if Agent Bank has possession of such written information
or documents in its capacity as Agent Bank or as a Lender.
Section 9.15. Notice of Events of Default. Agent Bank
shall not be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default (other than nonpayment of principal of or interest
on the Credit Facility) unless Agent Bank has received notice in writing from a
Lender, Borrowers referring to this Credit Agreement or the other Loan
Documents, describing such event or condition and expressly stating that such
notice is a notice of a Default or Event of Default. Should Agent Bank receive
such notice of the occurrence of a Default or Event of Default, or should Agent
Bank send Borrowers a notice of Default or Event of Default, Agent Bank shall
promptly give notice thereof to each Lender.
ARTICLE X
GENERAL TERMS AND CONDITIONS
The following terms and conditions shall be applicable
throughout the term of this Credit Agreement:
Section 10.01. Amendments and Waivers. (a) No amendment or
modification of any provision of this Credit
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Agreement shall be effective without the written agreement of Requisite Lenders
(after notice to all Lenders), Borrowers (except for amendments to Section
9.04(a) which do not require the consent of Borrowers), and (b) no termination
or waiver of any provision of this Credit Agreement, or consent to any
departure by Borrowers therefrom (except as expressly provided in Section
9.11(a) with respect to waivers of late fees), shall in any event be effective
without the written concurrence of Requisite Lenders (after notice to all
Lenders), which Requisite Lenders shall have the right to grant or withhold at
their sole discretion, except that the following amendments, modifications or
waivers shall require the consent of all Lenders:
(i) modify any requirement hereunder that any
particular action be taken by all the Lenders or by the Requisite Lenders,
modify this Section 10.01 or change the definition of "Requisite Lenders", or
remove Agent Bank under Section 9.09(a), shall be effective unless consented to
by all of the Lenders;
(ii) increase the Aggregate Commitment or the
Syndication Interest of any Lender, release any Collateral except as
specifically provided in the Credit Agreement, release any Borrower from
liability thereunder, extend the Maturity Date or change any provision
expressly requiring the consent of all Lenders shall be made without the
consent of each Lender; or
(iii) reduce any fees described in Section 2.07(b) or
extend the due date for, or reduce or postpone the amount of, any Scheduled
Reductions on the Credit Facility, or reduce the rate of interest or postpone
the payment of interest on the Credit Facility, shall be made without the
consent of all of the Lenders.
No amendment, modification, termination or waiver of any provision of Article
IX or any other provision referring to Agent Bank shall be effective without
the written concurrence of Agent Bank, but only if such amendment,
modification, termination or waiver alters the obligations or rights of Agent
Bank. Any waiver or consent shall be effective only in the specific instance
and for the specific purpose for which it was given. No notice to or demand on
Borrowers in any case shall entitle Borrowers to any other further notice or
demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this Section 10.01
shall be binding on each
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assignee, transferee or recipient of Agent Bank's or any Lender's Syndication
Interest under this Credit Agreement or the Credit Facility at the time
outstanding.
Section 10.02. Failure to Exercise Rights. Nothing herein
contained shall impose upon Banks or Borrowers any obligation to enforce any
terms, covenants or conditions contained herein. Failure of Banks or
Borrowers, in any one or more instances, to insist upon strict performance by
Borrowers or Banks of any terms, covenants or conditions of this Credit
Agreement or the other Loan Documents, shall not be considered or taken as a
waiver or relinquishment by Banks or Borrowers of their right to insist upon
and to enforce in the future, by injunction or other appropriate legal or
equitable remedy, strict compliance by Borrowers or Banks with all the terms,
covenants and conditions of this Credit Agreement and the other Loan Documents.
The consent of Banks or Borrowers to any act or omission by Borrowers or Banks
shall not be construed to be a consent to any other or subsequent act or
omission or to waive the requirement for Banks' or Borrowers' consent to be
obtained in any future or other instance.
Section 10.03. Notices and Delivery. Unless otherwise
specifically provided herein, any consent, notice or other communication herein
required or permitted to be given shall be in writing and may be personally
served, telecopied or sent by courier service or United States mail and shall
be deemed to have been given when delivered in person or by courier service,
upon receipt of a telecopy (or on the next Banking Business Day if such
telecopy is received on a non-Banking Business Day or after 5:00 p.m. on a
Banking Business Day) or four (4) Banking Business Days after deposit in the
United States mail (registered or certified, with postage prepaid and properly
addressed). Notices to Agent Bank pursuant to Articles II shall not be
effective until received by Agent Bank. For the purposes hereof, the addresses
of the parties hereto (until notice of a change thereof is delivered as
provided in this Section 10.03) shall be as set forth below each party's name
on the signature pages hereof, or, as to each party, at such other address as
may be designated by such party in an Assignment and Assumption Agreement or in
a written notice to all of the other parties. All deliveries to be made to
Agent Bank for distribution to the Lenders shall be made to Agent Bank at the
addresses specified for notice on the signature page hereto and in addition, a
sufficient number of copies of each such delivery shall be delivered to Agent
Bank for delivery to each Lender at the address specified for
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deliveries on the signature page hereto or such other address as may be
designated by Agent Bank in a written notice.
Section 10.04. Modification in Writing. This Credit
Agreement and the other Loan Documents constitute the entire agreement between
the parties and supersede all prior agreements, including, without limitation,
the Commitment Letter, whether written or oral with respect to the subject
matter hereof, including, but not limited to, any term sheets furnished by any
of the Banks to Borrowers. Neither this Credit Agreement, nor any other Loan
Documents, nor any provision herein, or therein, may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against whom enforcement of the change, waiver, discharge or
termination is sought.
Section 10.05. Other Agreements. If the terms of any
documents, certificates or agreements delivered in connection with this Credit
Agreement are inconsistent with the terms of the Loan Documents, Borrowers
shall use their best efforts to amend such document, certificate or agreement
to the satisfaction of Agent Bank to remove such inconsistency.
Section 10.06. Counterparts. This Credit Agreement may be
executed by the parties hereto in any number of separate counterparts with the
same effect as if the signatures hereto and hereby were upon the same
instrument. All such counterparts shall together constitute but one and the
same document.
Section 10.07. Rights, Powers and Remedies are Cumulative.
None of the rights, powers and remedies conferred upon or reserved to Agent
Bank, Banks or Borrowers in this Credit Agreement are intended to be exclusive
of any other available right, power or remedy, but each and every such right,
power and remedy shall be cumulative and not alternative, and shall be in
addition to every right, power and remedy herein specifically given or now or
hereafter existing at law, in equity or by statute. Any forbearance, delay or
omission by Agent Bank, Banks or Borrowers in the exercise of any right, power
or remedy shall not impair any such right, power or remedy or be considered or
taken as a waiver or relinquishment of the right to insist upon and to enforce
in the future, by injunction or other appropriate legal or equitable remedy,
any of said rights, powers and remedies given to Agent Bank, Banks or Borrowers
herein. The exercise of any right or partial exercise thereof by Agent
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Bank, Banks or Borrowers shall not preclude the further exercise thereof and
the same shall continue in full force and effect until specifically waived by
an instrument in writing executed by Agent Bank or Banks, as the case may be.
Section 10.08. Continuing Representations. All agreements,
representations and warranties made herein shall survive the execution and
delivery of this Credit Agreement, the making of the Credit Facility hereunder
and the execution and delivery of each other Loan Document until and final
payment of all sums owing under the Credit Facility and each of the Credit
Facility have been irrevocably terminated.
Section 10.09. Successors and Assigns. All of the terms,
covenants, warranties and conditions contained in this Credit Agreement shall
be binding upon and inure to the sole and exclusive benefit of the parties
hereto and their respective successors and assigns.
Section 10.10. Assignment of Loan Documents by Borrowers or
Syndication Interests by Lenders.
a. This Credit Agreement and the other Loan
Documents to which Borrowers are parties will be binding upon and inure to the
benefit of Borrowers, the Agent Bank, each of the Banks, and their respective
successors and assigns, except that, Borrowers may not assign their rights
hereunder or thereunder or any interest herein or therein without the prior
written consent of all the Lenders. Any attempted assignment or delegation in
contravention of the foregoing shall be null and void. Any Lender may at any
time pledge its Syndication Interest in the Credit Facility, the Credit
Agreement and the Loan Documents to a Federal Reserve Bank, but no such pledge
shall release that Lender from its obligations hereunder or grant to such
Federal Reserve Bank the rights of a Lender hereunder absent foreclosure of
such pledge.
b. Each Lender may assign all or any part of its
Syndication Interest in the Credit Facility to any Affiliate of such Lender or
to any other Lender without consent and to one or more financial institutions
that are Eligible Assignees with the prior consent of the Agent Bank and
Borrowers (which consents shall not be unreasonably withheld or delayed);
provided, however, that Agent Bank and its Affiliates shall at all times during
the life of the Credit Facility hold aggregate Syndication Interests no less
than the amount of the largest Syndication Interest held by any Lender in the
Credit Facility; and further provided,
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however, that the minimum amount of each such assignment shall be Two Million
Dollars ($2,000,000.00), or such lesser amount as constitutes the remaining
amount of a Lender's Syndication Interest in the Credit Facility (except that
there shall be no minimum assignment among the Lenders or to their Affiliates),
and each assignee Lender (or assignor if so agreed between the assignee Lender
and such assignor) shall pay to the Agent Bank an assignment fee of Two
Thousand Five Hundred Dollars ($2,500.00) with respect to each such assignment.
Each such assignment shall be evidenced by an assignment substantially in the
form of an Assignment and Assumption Agreement or other form reasonably
acceptable to Agent Bank and Borrowers. Upon any such assignment, the assignee
financial institution shall become a Lender for all purposes under the Credit
Agreement and each of the Loan Documents and the assigning Lender shall be
released from its further obligations hereunder to the extent of such
assignment. Agent Bank agrees to give prompt notice to Borrowers and each of
the Lenders of each assignment made under this Section 10.10(b) and to deliver
to Borrowers and each of the Lenders each revision to the Schedule of Lenders'
Proportions in Credit Facility made as a consequence of each such assignment.
c. Each Lender may sell sub-participations
without notice to or consent of the Borrowers or Agent Bank to any Eligible
Subparticipant for all or any part of its Syndication Interest in the Credit
Facility; provided, however, that (i) such selling Lender shall remain
responsible for its total obligations under the Credit Agreement and each of
the Loan Documents, (ii) the Borrowers and the Agent Bank shall continue to
deal solely with such selling Lender in connection with such Lender's rights
and obligations under the Credit Agreement and each of the Loan Documents, and
(iii) such selling Lender shall not sell any participation under which the
Eligible Subparticipant would have rights to approve any amendment or waiver
relating to the Credit Agreement or any Loan Document except to the extent any
such amendment or waiver would (1) extend the final Maturity Date or the date
for the payment or any installments of fees, principal or interest due in
respect of the Credit Facility, (2) reduce the amount of any Scheduled
Reduction in respect to the Credit Facility, (3) reduce the interest rates
applicable to the Credit Facility or (4) release any material portion of the
Collateral or any Borrower. Notwithstanding the foregoing, the rights of the
Lenders to make assignments and to grant sub-participations shall be subject to
the approval by the Gaming Authorities of the assignee or sub-participant, to
the extent required by applicable Gaming Laws.
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Section 10.11. Action by Lenders. Whenever Banks shall have
the right to make an election, or to exercise any right, or their consent shall
be required for any action under this Credit Agreement or the Loan Documents,
then such election, exercise or consent shall be given or made for all Banks by
Agent Bank in accordance with the provisions of Section 10.01. Notices,
reports and other documents required to be given by Borrowers to Banks
hereunder may be given by Borrowers to Agent Bank on behalf of Banks, with
sufficient copies for distribution to each of the Banks, and the delivery to
Agent Bank shall constitute delivery to Banks. In the event any payment or
payments are received by a Lender other than Agent Bank, Borrowers consent to
such payments being shared and distributed as provided herein.
Section 10.12. Time of Essence. Time shall be of the
essence of this Credit Agreement.
Section 10.13. Choice of Law and Forum. This Credit
Agreement and each of the Loan Documents shall be governed by and construed in
accordance with the internal laws of the State of Nevada without regard to
principles of conflicts of law; provided, however, that Colorado law shall
govern the perfection and enforcement of the Security Documentation. Borrowers
further agree that the full and exclusive forum for the determination of any
action relating to this Credit Agreement, the Loan Documents, or any other
document or instrument delivered in favor of Banks pursuant to the terms
hereof, other than the Security Documentation, shall be either an appropriate
Court of the State of Nevada or the United States District Court or United
States Bankruptcy Court for the District of Nevada. The full and exclusive
forum for the determination of any action relating to the Security
Documentation or the Collateral shall either be an appropriate court of the
State of Colorado or the United States District or the United States Bankruptcy
Court for the District of Colorado.
Section 10.14. Arbitration.
a. Other than an action or legal proceeding
instituted by Agent Bank for the purpose of exercising any remedy under the
Security Documentation, upon the request of any party, whether made before or
after the institution of any legal proceeding, any action, dispute, claim or
controversy of any kind (e.g., whether in contract or in tort, statutory or
common law, legal or equitable) ("Dispute") now existing or hereafter arising
between the parties in any way arising out
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of, pertaining to or in connection with the Credit Agreement, Loan Documents or
any related agreements, documents, or instruments (collectively the
"Documents"), may, by summary proceedings (e.g., a plea in abatement or motion
to stay further proceedings), bring an action in court to compel arbitration of
any Dispute.
b. All Disputes between the parties shall be
resolved by binding arbitration governed by the Commercial Arbitration Rules of
the American Arbitration Association. Judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction.
c. No provision of, nor the exercise of any
rights under this arbitration clause shall limit the rights of any party, and
the parties shall have the right during any Dispute, to seek, use and employ
ancillary or preliminary remedies, judicial or otherwise, for the purposes of
realizing upon, preserving, protecting or foreclosing upon any property, real
or personal, which is involved in a Dispute, or which is subject to, or
described in, the Documents, including, without limitation, rights and remedies
relating to: (i) foreclosing against any real or personal property collateral
or other security by the exercise of a power of sale under the Security
Documentation or other security agreement or instrument, or applicable law,
(ii) exercising self-help remedies (including setoff rights) or (iii) obtaining
provisional or ancillary remedies such as injunctive relief, sequestration,
attachment, garnishment or the appointment of a receiver from a court having
jurisdiction before, during or after the pendency of any arbitration. The
institution and maintenance of an action for judicial relief or pursuit of
provisional or ancillary remedies or exercise of self-help remedies shall not
constitute a waiver of the right of any party, including the plaintiff, to
submit the Dispute to arbitration nor render inapplicable the compulsory
arbitration provision hereof.
Section 10.15. Waiver of Jury Trial. TO THE MAXIMUM EXTENT
PERMITTED BY LAW, BORROWERS AND EACH OF THE BANKS EACH MUTUALLY HEREBY
EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY ACTION, CAUSE OF ACTION,
CLAIM, DEMAND, OR PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS CREDIT
AGREEMENT, THE NOTE OR ANY OF THE LOAN DOCUMENTS, OR IN ANY WAY CONNECTED WITH,
RELATED TO, OR INCIDENTAL TO THE DEALINGS OF BORROWERS AND BANKS WITH RESPECT
TO THIS CREDIT AGREEMENT, THE NOTE OR ANY OF THE LOAN DOCUMENTS, OR THE
TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND IRRESPECTIVE OF WHETHER SOUNDING IN CONTRACT,
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TORT, OR OTHERWISE. TO THE MAXIMUM EXTENT PERMITTED BY LAW, BORROWERS AND EACH
OF THE BANKS EACH MUTUALLY AGREE THAT ANY SUCH ACTION, CAUSE OF ACTION, CLAIM,
DEMAND, OR PROCEEDINGS SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY AND
THAT THE DEFENDING PARTY MAY FILE AN ORIGINAL COUNTERPART OF THIS SECTION WITH
ANY COURT OR OTHER TRIBUNAL AS WRITTEN EVIDENCE OF THE CONSENT OF THE
COMPLAINING PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.
Section 10.16. Scope of Approval and Review. Any inspection
of the Hotel/Casino Facility shall be deemed to be made solely for Banks'
internal purposes and shall not be relied upon by the Borrowers or any third
party. In no event shall Lenders be deemed or construed to be joint venturers
or partners of Borrowers.
Section 10.17. Severability of Provisions. In the event any
one or more of the provisions contained in this Credit Agreement shall be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any
way be affected or impaired thereby.
Section 10.18. Cumulative Nature of Covenants. All
covenants contained herein are cumulative and not exclusive of each other
covenant. Any action allowed by any covenant shall be allowed only if such
action is not prohibited by any other covenant.
Section 10.19. Costs to Prevailing Party. If any action or
arbitration proceeding is brought by any party against any other party under
this Credit Agreement or any of the Loan Documents, the prevailing party shall
be entitled to recover such costs and attorney's fees as the court in such
action or proceeding may adjudge reasonable.
Section 10.20. Expenses.
a. Generally. Borrowers agree upon demand to
pay, or reimburse Agent Bank for, all of Agent Bank's documented reasonable
out-of-pocket costs and expenses of every type and nature incurred by Agent
Bank at any time (whether prior to, on or after the date of this Credit
Agreement) in connection with (i) any requests for consent, waiver or other
modification of any Loan Document made by Borrowers, other than to correct
errors attributable to the Banks; (ii) the negotiation, preparation and
execution of this Credit Agreement (including, without limitation, the
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satisfaction or attempted satisfaction of any of the conditions set forth in
Article III), the Security Documentation and the other Loan Documents and the
advance of Borrowings; (iii) the subordination or release of any Collateral,
including title charges, recording fees and reasonable attorneys' fees and
costs incurred in connection therewith; (iv) the creation, perfection or
protection of the Security Documentation on the Collateral (including, without
limitation, any fees and expenses for title and lien searches, filing and
recording fees and taxes, duplication costs and corporate search fees); and (v)
the protection, collection or enforcement of any of the Obligations or the
Collateral, including Protective Advances.
b. After Event of Default. Borrowers further
agree to pay, or reimburse Agent Bank and Lenders, for all reasonable
out-of-pocket costs and expenses, including without limitation reasonable
attorneys' fees and disbursements incurred by Agent Bank or Lenders after the
occurrence of an Event of Default (i) in enforcing any Obligation or in
foreclosing against the Collateral or exercising or enforcing any other right
or remedy available by reason of such Event of Default; (ii) in connection with
any refinancing or restructuring of the credit arrangements provided under this
Credit Agreement in the nature of a "work-out" or in any insolvency or
bankruptcy proceeding; (iii) in commencing, defending or intervening in any
litigation or arbitration proceeding or in filing a petition, complaint,
answer, motion or other pleadings in any legal proceeding relating to Borrowers
and related to or arising out of the transactions contemplated hereby; (iv) in
taking any other action in or with respect to any suit or proceeding (whether
in bankruptcy or otherwise) relating to the Borrowers or arising out of or
relating to the Credit Facility; (v) in protecting, preserving, collecting,
leasing, selling, taking possession of, or liquidating any of the Collateral;
or (vi) in attempting to enforce or enforcing any lien in any of the Collateral
or any other rights under the Security Documentation.
Section 10.21. Setoff. In addition to any rights and
remedies of the Agent Bank provided by law, if any Event of Default exists,
Agent Bank is authorized at any time and from time to time, without prior
notice to the Borrowers, any such notice being waived by the Borrowers to the
fullest extent permitted by law, to set-off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held by
Agent Bank to or for the credit or
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the account of any Borrower against any and all obligations of Borrowers under
the Credit Facility, now or hereafter existing, irrespective of whether or not
the Agent Bank shall have made demand under this Credit Agreement or any Loan
Document and although such amounts owed may be contingent or unmatured. Agent
Bank agrees promptly to notify the Borrowers (and Agent Bank shall promptly
notify each Lender) after any such setoff and application made by Agent Bank;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of Agent Bank under this
Section 10.21 are in addition to the other rights and remedies which Agent Bank
may have.
Section 10.22. Schedules Attached. Schedules are attached
hereto and incorporated herein and made a part hereof as follows:
Schedule 2.01(a) - Schedule of Lenders' Proportions in
Credit Facility
Schedule 2.01(c) - Aggregate Commitment Reduction Schedule
Schedule 3.16(a) - Schedule of Existing Real Estate Debt
Schedule 3.16(b) - Schedule of Existing Equipment Debt
Schedule 3.17 - Schedule of Significant Litigation
Schedule 4.16 - Schedule of Spaceleases
Schedule 4.17 - Schedule of Equipment Leases and Contracts
Schedule 4.25 - Schedule of Contingent Liabilities
Section 10.23. Exhibits Attached. Exhibits are attached
hereto and incorporated herein and made a part hereof as follows:
Exhibit A - Note - Form
Exhibit B - Lodge Property - Description
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Exhibit C - Notice of Borrowing - Form
Exhibit D - Authorized Representative's Certificate - Form
Exhibit E - Closing Certificate - Form
Exhibit F - Compliance Certificate - Form
Exhibit G - Legal Opinion - Form
Exhibit H - Assignment and Assumption Agreement - Form
Exhibit I - Payment Subordination Agreement - Form
Exhibit J - Title Report
IN WITNESS WHEREOF, the parties hereto have caused this Credit
Agreement to be executed as of the day and year first above written.
BORROWERS:
BLACK HAWK GAMING & DEVELOPMENT COMPANY,
INC., a Colorado corporation
By
-----------------------------------
Name
---------------------------------
Title
--------------------------------
GILPIN VENTURES, INC.,
a Colorado corporation
By
-----------------------------------
Name
---------------------------------
Title
--------------------------------
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GILPIN HOTEL VENTURE,
a Colorado joint venture
By: BLACK HAWK GAMING & DEVELOPMENT COMPANY,
INC.,a Colorado corporation, joint
venture partner
By
-----------------------------------
Name
---------------------------------
Title
--------------------------------
By: GILPIN VENTURES, INC., a Colorado
corporation, joint venture partner
By
-----------------------------------
Name
---------------------------------
Title
--------------------------------
Address for the Borrowers:
---------------------------------------------
---------------------------------------------
---------------------------------------------
Phone:
--------------------------------------
Fax:
-----------------------------------------
with a copy to:
---------------------------------------------
---------------------------------------------
---------------------------------------------
Phone:
--------------------------------------
Fax:
-----------------------------------------
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BANKS:
WELLS FARGO BANK, National Association,
Agent Bank and Lender
By
-----------------------------------
Name
---------------------------------
Title
--------------------------------
Address:
Wells Fargo Bank, N.A.
3800 Howard Hughes Parkway
Las Vegas, NV 89109
Attn: Dave Kramer, V.P.
Phone: (702) 791-6273
Fax: (702) 791-6248
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