LOAN PURCHASE AGREEMENT
This Loan Purchase Agreement ("Agreement") dated as of February 1, 1998,
is entered into by and among FOOTHILL CAPITAL CORPORATION, a California
corporation ("Foothill"), LADSTOCK HOLDING CORPORATION, a Delaware
corporation ("Buyer"), and BWBH, INC., a Delaware corporation ("BWBH"), BWCC,
INC., a Delaware corporation ("BWCC"), MILLSITE 27, INC., a Delaware
corporation ("M27"), and SILVER HAWK CASINO, INC., a Delaware corporation,
("SHCI"): collectively and individually, "Borrowers").
1. RECITALS.
1.1 On or about June 7, 1996, Foothill, on the one hand, and
Borrowers, on the other hand, entered into that certain Amended and Restated
Loan and Security Agreement whereby Foothill agreed to loan, on a revolving
basis, up to a maximum amount of Twelve Million Five Hundred Thousand Dollars
($12,500,000); and
1.2 On or about June 7, 1996, Foothill and Borrowers entered into
that certain letter agreement which served as a first amendment to the
Amended and Restated Loan and Security Agreement ("First Amendment"); and
1.3 On or about February 9, 1998, Foothill and Borrowers entered
into that certain Second Amendment to Amended and Restated Loan and Security
Agreement ("Second Amendment": the Amended and Restated Loan Agreement, as
amended by the First Amendment and the Second Amendment is hereinafter
referred to as the "Loan Agreement"); and
1.4 The Obligations (as defined in the Loan Agreement: Capitalized
terms not otherwise defined herein have the meaning in the Loan Agreement)
were secured by the Collateral;
1.5 Pursuant to the Second Amendment, the definition of Collateral
was expanded to include all of the assets of the Bullpen casino; and
1.6 On or about August 21, 1998, all of the issued and outstanding
stock of Borrowers was acquired by Ladbrook Gaming Corporation, an affiliate
of Buyer, and Buyer has elected to finance the obligations of Borrowers from
its own funds; and
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1.7 Borrowers and Buyer approached Foothill and inquired as to
whether Foothill was willing to sell the Obligations, and all evidences of
same and Collateral securing same, to Buyer, to which, on the terms and
conditions set forth herein, it has agreed.
2. ASSIGNMENT OF LOAN AGREEMENT AND DEEDS OF TRUST. Upon and subject to
the satisfaction of all of the terms and conditions set forth in this
Agreement, Foothill hereby agrees to grant, assign and transfer to Buyer,
without recourse, and without representation or warranty, express or implied,
all of Foothill's right, title, interest, obligations and privileges under
the Loan Agreement and the money to become lendable thereunder and due
thereon with interest, and all of Foothill's right, title and interest under
the Collateral and the Loan Documents, and all rights accrued or to accrue
thereunder.
3. PURCHASE PRICE. The purchase price for the assignment of the Loan
Agreement and the Collateral (the "Purchase Price") shall be computed as
follows:
3.1 The outstanding Obligations owing to Foothill from Borrowers at
the time the Purchase Price is received by Foothill; PLUS
3.2 An amount equal to the Early Termination Premium, computed at
the time the Purchase Price is received by Foothill; PLUS
3.3 The sum of $25,000 representing an estimation of the attorney's
fees and other associated transactional costs incurred by Foothill in
assigning the Loan to Buyer.
4. METHOD OF PAYMENT OF PURCHASE PRICE. Buyer shall wire transfer the
Purchase Price to Foothill on or before February 19, 1999 (the "Closing") in
accordance with the following wire instructions:
Xxx Xxxxx Xxxxxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx
XXX: #000000000
Credit: Foothill Capital Corporation
Account: 323-266193
Re: Colorado Gaming & Entertainment, Co.
5. DELIVERY OF FOOTHILL DOCUMENTS. Within two (2) business days of the
Closing, Foothill shall deliver to Buyer, at the address set forth in
Section 11.1 hereof,
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fully-executed and, where applicable, acknowledged originals of the documents
set forth on Exhibit "A" attached hereto and incorporated by reference
hereby, and assignments of same to Buyer.
6. CLOSING COSTS. The costs incidental to the Closing shall be paid as
follows:
(a) Buyer shall pay the cost of obtaining any Indorsements or new
Title Insurance Policies, should it elect to obtain them.
(b) Buyer shall pay both its and Foothill's legal fees and other
incidental expenses incurred in connection with the transaction
contemplated by this Agreement.
A portion of the Purchase Price includes an estimated $25,000 in
attorney's fees for Foothill's counsel and other closing transactional costs.
Should Foothill's attorney's fees and other closing transactional costs be
less than that amount, Foothill shall refund within ninety (90) days any
amounts in excess of the actual fees. Should Foothill's counsel's fees and
other closing transactional costs exceed the sum of $25,000, Buyer shall
promptly pay the same upon invoicing by Foothill.
7. CONDITIONS TO FOOTHILL'S OBLIGATIONS. Foothill's obligations under
this Agreement shall be conditioned upon Foothill receiving the Purchase
Price on or before the Closing Date.
8. RELEASE.
8.1 Effective as of date of execution hereof and also as of the
Closing, Borrower each for itself and their shareholders, affiliates, agents,
principals, officers, directors and employees hereby release, discharge, and
acquit Foothill and its shareholders, subsidiaries, parent companies,
affiliates, agents, principals, officers, counsel, employees, consultants and
their respective successors and assigns, from any and all causes of action,
actions, judgments, liens, obligations, indebtedness, damages, losses,
claims, liabilities, and demands of any kind, nature and character
whatsoever, whether known or unknown, and whether anticipated or
unanticipated, directly or indirectly arising out of the lending
relationship and the Loan. This is intended as a full release, and no causes
of action, actions, judgements, liens, obligations, indebtedness, damages,
losses, claims, liabilities, and demands of any kind, nature and character
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whatsoever, whether known or unknown, and whether anticipated or
unanticipated, directly or indirectly, is reserved or retained by any of the
signatories hereto.
8.2 Borrowers each for itself and their shareholders, affiliates,
agents, principals, officers, directors and employees, hereby waive and
relinquish all rights and benefits under Section 1542 of the Civil Code of
California, which reads as follows:
"A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing
the release, which if known by him must have materially affected his
settlement with the debtor."
9. INDEMNITY.
9.1 INDEMNITY PROVISIONS. Borrowers and Buyer (individually and
collectively, jointly and severally, "Indemnitor") will defend, indemnify and
hold harmless Foothill, and each and all of its respective predecessors,
successors, servants, agents, employees, attorneys, directors, officers,
shareholders, partners, owners, representatives, assigns and companies,
(hereinafter collectively called "Indemnitees") and each of them against any
and all claims against Indemnitees (including all demands, actions, suits,
causes of action, obligations, controversies, debts, costs, expenses,
accounts, damages, judgments, and all out of pocket losses and/or liabilities
of any character whatsoever) brought by Borrowers, affiliates of Borrowers,
shareholders of Borrowers, or creditors of Borrowers arising out of or in any
way related to the Loan and the lending relationship. Said indemnification
shall include, but shall not be limited to, sums paid or liabilities incurred
in defense or settlement of, and expenses paid or incurred in connection
with, any and all claims, demands, agreements, contracts, actions, suits,
causes of action, arbitrations, obligations, controversies, debts, costs,
expenses, accounts, damages, judgments, losses and liabilities of any
character whatsoever paid or incurred by Indemnitees or asserted against
Indemnitees, including without limitation any and all costs or expenses
incurred by Indemnitees in enforcing the terms hereof, in procuring or
attempting to procure any release from liability, or in recovering or
attempting to recover any losses or any expenses paid or incurred as
aforesaid.
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9.2 NOTICE OF INDEMNITOR. The indemnification of Indemnitees by
Indemnitor shall be contingent upon notice to Indemnitor by or on behalf of
Indemnitees of any claim or action which may result in liability to
Indemnitor through such indemnification and an opportunity accorded Indemnitor
to defend against such claim or action.
9.3 INDEMNITOR'S DUTY TO DEFEND. Indemnitor agrees to defend
Indemnitees against any claims brought, or actions filed, against Indemnitees
with respect to the subject of the indemnity contained herein, whether such
claims or actions are rightfully or wrongfully brought or filed. In the event
that claims should be brought or actions filed with respect to the subject of
indemnity herein, Indemnitor agrees that Indemnitees may employ attorneys of
their own selection, but to be paid for by Indemnitor, to appear and defend
the claim or action on behalf of Indemnitees.
9.4 ENFORCEMENT RIGHTS OF INDEMNITEES. Upon failure of Indemnitor
within ten (10) days of entry of Final Judgement or Award against
Indemnitees, or the settlement by Indemnitees of any matter indemnified
against herein, to pay said Judgement, Award or Settlement, Indemnitees may,
but need not, pay such Judgment, Award or Settlement and make demand upon
Indemnitor for payment of same plus interest at the rate of Ten Percent (10%)
per annum, or the maximum interest rate allowed by law, whichever is less, on
the amount from the date paid, plus their actual attorneys' fees and costs.
Any such failure to satisfy in full any Final Judgment or Award against
Indemnitees, or to pay any settlement of a claim indemnified hereunder, shall
be an event of default.
10. REPRESENTATIONS AND WARRANTIES.
10.1 Foothill makes no warranty or representation, express or implied,
concerning any facts material or immaterial, concerning the status and
enforceability of the Loan Agreement or rights to the Collateral, and that the
assignment is an "as is, where is".
10.2 Foothill represents and warrants to Buyer that it owns the Loan
Documents and has not sold, assigned, or encumbered them to or in favor of
any third party, and the execution of this Agreement has been duly authorized
and is within its corporate powers.
10.3 Buyer represents and warrants that it is solely relying on its
own investigations with respect to all matters and facts concerning or
surrounding the Loan Agreement and
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rights with respect to the Collateral and its own discussions and
investigations with Borrowers.
The above representations and warranties shall be true as of the Closing and
shall survive the Closing.
11. MISCELLANEOUS.
11.1 NOTICES. All notices, approvals, disapprovals or elections
required or permitted to be given under this Agreement shall be in writing
and shall be delivered personally or mailed, certified or registered mail,
return receipt requested, or telefaxed, to the parties at the following
addresses and/or fax numbers:
If to Foothill: Foothill Capital Corporation
00000 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxxx Xxxxxx
(000) 000-0000
If to Buyer: Ladstock Holding Corporation
0000 Xxxxx Xxxxx
Xxxxx XX, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxx, Esq.
(000) 000-0000
Personally delivered notices shall be deemed given upon actual personal
delivery to the intended recipient. Mailed notices shall be deemed given upon
the earlier of three (3) business days after deposit into the United States
mail, registered or certified, with postage fully prepaid, or the date of
actual receipt as evidenced by the return receipt. Telefaxed notices shall be
deemed given upon telecommunication to the recipient at the number set forth
above.
11.2 NON-ASSIGNABILITY. Buyer shall not assign its rights or
obligations under this Agreement.
11.3 GOVERNING LAW. This Agreement shall be deemed to have been made
in the State of California and the validity, enforceability, construction,
interpretation and enforcement of this Letter Agreement and the rights of the
parties hereto shall be determined under, governed by and construed in
accordance with the laws of the State of California, without regard to the
principles of conflicts of law.
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11.4 VENUE. Buyer and Foothill agree that all actions or proceedings
arising in connection with this Letter Agreement shall be tried and litigated
only in the state and federal court located in the County of Los Angeles,
State of California or, at the sole election of Foothill, in any other court
in which Foothill shall initiate legal or equitable proceedings and which has
subject matter jurisdiction over the matter in controversy.
11.5 WAIVER OF TRIAL BY JURY. BUYER AND FOOTHILL HEREBY EXPRESSLY
WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, CAUSE OF
ACTION OR PROCEEDING ARISING UNDER OR WITH RESPECT TO OR IN ANY WAY RELATED
TO THIS LETTER AGREEMENT. BUYER OR FOOTHILL MAY FILE AN ORIGINAL COUNTERPART
OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT
OF THE OTHER PARTY HERETO TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.
11.6 ATTORNEYS' FEES. In the event of any action between Foothill and
Buyer for enforcement of any of the terms or conditions of this Agreement,
the prevailing party in such action shall be entitled to recover its
reasonable costs and expenses, including without limitation court costs and
attorneys' fees (including, without limitation, costs and fees pursuant to
11 U.S.C.), as awarded by a court of competent jurisdiction.
11.7 COUNTERPART EXECUTION. Delivery of any executed counterpart of
this Letter Agreement by telefacsimile shall be equally as effective as
delivery of a manually executed counterpart of this Letter Agreement. Any
party delivering an executed counterpart of this Letter Agreement by
telefacsimile also shall deliver a manually executed counterpart of this
Letter Agreement but the failure to deliver a manually executed counterpart
shall not affect the validity, enforceability, and binding effect of the
Letter Agreement.
11.8 ENTIRE AGREEMENT. This Agreement, together with the documents
described and referred to herein, contains all of the agreements of Foothill
and Buyer with regard to the transactions contemplated hereby, and supersedes
all prior agreements, understandings and negotiations, whether written or
oral.
11.9 AMENDMENT. This Agreement shall not be modified or amended
except by an instrument in writing duly executed by both Foothill and Buyer.
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11.10 HEADINGS. The paragraph headings and captions in this Agreement
are for convenience only and shall not limit or define the contents of this
Agreement.
11.11 TIME. Time is of the essence of this Agreement, it being
understood that the time for performance of each obligation, including
without limitation the Closing Deadline, has been the subject of negotiation
by the parties.
11.12 ADVICE OF COUNSEL. BUYER AND FOOTHILL HEREBY ACKNOWLEDGE AND
REPRESENT THAT THEY HAVE ENTERED INTO THIS LETTER AGREEMENT AFTER SEEKING AND
OBTAINING THE ADVICE OF THEIR COUNSEL, AFTER REPRESENTATION BY SUCH COUNSEL
REGARDING THIS LETTER AGREEMENT, INCLUDING THE IMPLICATIONS OF THE
REQUIREMENTS FOR THE WAIVERS AND RELEASES CALLED FOR HEREIN, THAT SUCH
COUNSEL HAS FULLY EXPLAINED TO BUYER AND FOOTHILL THE LEGAL EFFECTS OF THIS
LETTER AGREEMENT, INCLUDING THE LEGAL EFFECT OF SUCH REQUIRED WAIVERS AND
RELEASES, AND THAT BUYER AND FOOTHILL ARE FULLY AWARE OF ITS CONTENT AND
EFFECT.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
"Foothill"
FOOTHILL CAPITAL CORPORATION,
a California corporation
By
----------------------------
Xxxxxx Xxxxxx,
Vice President
"Buyer"
----------------------------,
a __________ corporation
By
----------------------------
Print Name:
-----------------
By
----------------------------
Print Name:
-----------------
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"Borrowers"
BWBH, INC.,
a Delaware corporation
By /s/ Xxxxxx Xxxxxxxx
------------------------------------
Print Name: Xxxxxx Xxxxxxxx, VP
-------------------------
By /s/ Xxxx Xxxxx
------------------------------------
Print Name: Xxxx Xxxxx, VP
-------------------------
BWCC, INC.,
a Delaware corporation
By /s/ Xxxxxx Xxxxxxxx
------------------------------------
Print Name: Xxxxxx Xxxxxxxx, VP
-------------------------
By /s/ Xxxx Xxxxx
------------------------------------
Print Name: Xxxx Xxxxx, VP
-------------------------
MILLSITE 27, INC.,
a Delaware corporation
By /s/ Xxxxxx Xxxxxxxx
------------------------------------
Print Name: Xxxxxx Xxxxxxxx, VP
-------------------------
By /s/ Xxxx Xxxxx
------------------------------------
Print Name: Xxxx Xxxxx, VP
-------------------------
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SILVER HAWK CASINO, INC.,
a Delaware corporation
By /s/ Xxxxxx Xxxxxxxx
------------------------------------
Print Name: Xxxxxx Xxxxxxxx, VP
-------------------------
By /s/ Xxxx Xxxxx
------------------------------------
Print Name: Xxxx Xxxxx, VP
-------------------------
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EXHIBIT "A"
List of Loan Documents Assigned
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