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EXHIBIT 10.17
BNC NATIONAL BANK OF MINNESOTA
LOAN AGREEMENT
Dated as of June 20, 1996
CONCORDE GAMING CORPORATION, a Colorado corporation, having its
mailing address and principal place of business at 0000 Xxxx Xxxxxx, X.X. Xxx
000, Xxxxx Xxxx, Xxxxx Xxxxxx 00000-0000 ("Parent") and CONCORDE GAMING OF
SOUTH DAKOTA, INC., a South Dakota corporation, having its mailing address and
principal place of business at 0000 Xxxx Xxxxxx, X.X. Xxx 000, Xxxxx Xxxx,
Xxxxx Xxxxxx 00000-0000 ("Subsidiary") (Parent and Subsidiary shall hereinafter
be collectively and individually referred to as the "Co-Borrowers") and BNC
NATIONAL BANK OF MINNESOTA, a national banking association, having an office at
200 Metropolitan Centre, 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxxxx, XX 00000
(herein called the "Bank"), agree as follows:
1 DEFINITIONS. Capitalized terms in this Agreement have the meanings
defined in the accompanying Definitions Supplement, which the
Co-Borrowers acknowledge receiving and which is hereby made a part of
this Agreement.
2 [Intentionally Deleted.]
3 [Intentionally Deleted.]
4 LOAN COMMITMENT NUMBER 1: THE SHORT-TERM REVOLVER CREDIT COMMITMENT.
4.1 NATURE AND AMOUNT OF COMMITMENT. Subject to the terms and
conditions of this Agreement, the Bank shall make Advances
upon the request of either of the Co-Borrowers pursuant to a
Short-Term Revolver Credit Commitment. The maximum aggregate
principal amount of all Advances outstanding at any one time
under the Short-Term Revolver Credit Commitment shall not
exceed $500,000.00.
4.2 THE SHORT-TERM REVOLVING NOTE. The Obligation of the
Co-Borrowers to repay Advances made pursuant to the Short-Term
Revolver Credit Commitment shall be evidenced by a single
Short-Term Revolving Note of the Co-Borrowers in the form of
Exhibit A hereto to be made payable to the order of the Bank
by the Co-Borrowers in the principal amount of Five Hundred
Thousand and 00/100 Dollars ($500,000.00). The aggregate
principal amount of the indebtedness evidenced by such
Short-Term Revolving Note at any time shall be, however, and
the same is to be determined by, the aggregate principal
amount of all Advances made to the Co-Borrowers pursuant to
the Short-Term Revolver Credit Commitment less the aggregate
amount of principal repayments received by the Bank upon the
indebtedness evidenced by the Short-Term Revolving Note.
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4.3 SHORT-TERM REVOLVING NOTE INTEREST. The outstanding principal
indebtedness evidenced by the Short-Term Revolving Note shall
bear interest (computed upon the actual number of days elapsed
in a 360-day year) at the Reference Rate plus two percent
(2.0%) per annum and shall change when, if and to the extent
said Reference Rate changes. All accrued and unpaid interest
shall be payable in arrears upon the last day of each month,
commencing June 30, 1996, and continuing on the last day of
each calendar month thereafter and at maturity (whether by
acceleration or otherwise).
4.4 TERMINATION OF SHORT-TERM REVOLVING CREDIT COMMITMENT. The
Short-Term Revolving Credit Commitment shall terminate
automatically upon the earlier of (aa) June 21, 1997, or (bb)
the occurrence of a Default or an Event of Default, and the
Bank's obligation to make Advances thereunder shall terminate
without notice on such date.
5 LOAN COMMITMENT NO. 2: TERM LOAN COMMITMENT.
5.1 NATURE AND AMOUNT OF TERM LOAN COMMITMENT. Subject to the
terms and conditions of this Agreement, the Bank agrees to a
single Advance upon the request of either of the Co-Borrowers
to refinance Equipment pursuant to a Term Loan Commitment.
5.2 THE TERM NOTE. The obligation of Co-Borrowers to repay
Advances made under the Term Loan Commitment shall be
evidenced by a single note of Co-Borrowers in the form of
Exhibit B hereto to be made payable to the order of the Bank
by Co-Borrowers in the principal amount of Eight Hundred
Thousand and 00/100 Dollars ($800,000.00). The principal
balance of the Term Note shall be due and payable in
twenty-three (23) installments of $22,222.00 on the last day
of each calendar month, commencing July 31, 1996, and one
final installment of the remaining principal amount
outstanding on June 30, 1998.
5.3 TERM NOTE INTEREST. The outstanding principal indebtedness
evidenced by the Term Note shall bear interest (computed upon
the actual number of days elapsed in a 360-day year) from the
date hereof until paid at the Reference Rate plus two percent
(2.0%) per annum and shall change when, if and to the extent
said Reference Rate changes. All accrued and unpaid interest
shall be payable in arrears upon the last day of each month,
commencing June 30, 1996 and continuing on the last day of
each calendar month thereafter and at maturity (whether by
acceleration or otherwise). Principal amounts remaining
unpaid after the occurrence of a Default or an Event of
Default under the Loan Agreement shall bear interest from and
after that date in time until paid at a rate of two percent
(2%) per annum plus the rate otherwise payable.
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5.4 TERMINATION OF TERM LOAN COMMITMENT. The Bank's obligation to
make Advances under this Section 5 shall terminate
automatically upon the earlier of (aa) thirty (30) days after
the execution of this Agreement, or (bb) the occurrence of a
Default or an Event of Default.
6 PROCEDURES FOR LOAN REQUESTS/ADVANCES.
6.1 LOAN REQUESTS AND ADVANCES. The Bank may make Advances to
either of the Co-Borrowers in any amount and in any manner
requested orally or in writing by any Person authorized to
make requests on behalf of the Co-Borrowers. All requests for
Advances shall be made in amounts not less than $25,000 unless
the Bank decides to accept a loan request for a lesser amount.
The proceeds of loans to be made pursuant to this Agreement
shall be made available to the Co-Borrowers at the office of
the Bank in immediately available funds on the date requested
provided that the request is made on a business day prior to
11:00 a.m. This Agreement is subject to the general policies
of the Bank regarding the administration of loan requests.
6.2 [Intentionally Deleted.]
7 [Intentionally Deleted.]
8 OVERADVANCES. If at any time the aggregate principal amount of
Advances outstanding under this Agreement or any commitment hereunder
shall exceed any limitation set forth herein, the Co-Borrowers shall
immediately pay to the Bank the amount by which said principal amount
exceeds the limitation.
9 PAYMENT/PREPAYMENT/APPLICATION/FEE.
9.1 MANNER OF MAKING PAYMENTS. All payments of principal and
interest made by the Co-Borrowers in respect of the
Obligations shall be made to the Bank at its offices at 200
Metropolitan Centre, 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxxxx, XX
00000, and in funds there current not later than 11:00 am.
Minneapolis time on the date such payment is due or as the
Bank may otherwise direct. Any payments received after 11:00
a.m. Minneapolis time (or after the time the Bank may
otherwise direct) shall be deemed received on the following
Business Day.
9.2 PREPAYMENT WITHOUT PENALTY. Co-Borrowers shall have the
privilege of prepaying any of the Obligations to the Bank
without premium or penalty, in whole or in part, together with
accrued interest upon the amount prepaid. All prepayments
applied to principal shall be applied to installments in the
inverse order of maturity.
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9.3 APPLICATIONS. The Bank in its discretion may apply any
payment received to any Obligation of the Co-Borrowers that is
due and payable.
9.4 [Intentionally Deleted.]
9.5 COMMITMENT FEE. Co-Borrowers agree to pay to the Bank on the
date hereof a commitment fee equal to $13,000, which is equal
to one percent (1.0%) of the maximum credit accommodations
available under the Short-Term Revolver Credit Commitment and
the Term Loan Commitment.
10 SECURITY AGREEMENT. As security for the repayment of the Obligations,
the Co-Borrowers shall duly execute and deliver to the Bank a Security
Agreement in a form acceptable to the Bank, granting a first Security
Interest to the Bank in and to the Collateral.
11 GUARANTIES. As further security for repayment of the Obligations,
each of the Guarantors shall duly execute and deliver to the Bank an
absolute and unconditional Guaranty of the Obligations in a form
acceptable to the Bank. Such Guaranties shall be in addition to any
and all existing Guaranties in favor of the Bank.
12 [Intentionally Deleted.]
13 GENERAL REPRESENTATIONS AND WARRANTIES. The Co-Borrowers represent
and warrant to the Bank as follows:
13.1 ORGANIZATION, QUALIFICATION AND OWNERSHIP. Concorde Gaming
Corporation is a corporation duly organized and validly
existing under the laws of the State of Colorado and Concorde
Gaming of South Dakota, Inc. is a corporation duly organized
and validly existing under the laws of the State of South
Dakota, and that they (i) have full and adequate corporate
power to carry on their business as now conducted, (ii) are
duly licensed or qualified in all jurisdictions wherein the
nature of their activities require such licensing or
qualifying, and (iii) have full right and authority to enter
into and perform this Agreement. The Parent owns 100% of the
issued and outstanding capital stock of the Subsidiary.
13.2 FINANCIAL REPORTS. Co-Borrowers have delivered to the Bank a
copy of the consolidated audited financial report of the
Co-Borrowers dated as of and for the period ending September
30, 1995 (including a balance sheet and income and cash flow
statements and notes thereto). The Co-Borrowers have also
delivered unaudited financial statements including a balance
sheet and income and cash flow statements for the periods
ending December 31, 1995 and March 31, 1996. Such financial
statements have been prepared in accordance with GAAP on a
basis consistent, except as otherwise noted therein, with that
of the previous fiscal year or period and fairly reflect the
consolidated financial position of the
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Co-Borrowers as of the dates thereof, and the results of its
operations for the periods covered thereby. Since the date of
the most recent financial statement, there has been no
Material Adverse Occurrence relating to the condition,
financial or otherwise, of the Co-Borrowers. The Co-Borrowers
have disclosed to the Bank in writing any and all facts known
to the Co-Borrowers or which the Co-Borrowers believe might
materially and adversely affect the business, operations and
condition, financial or otherwise, of the Co-Borrowers and the
Co-Borrowers' ability to perform their Obligations under the
Loan Documents.
13.3 LITIGATION; TAX RETURNS. Except as disclosed to Bank in
writing, there is no litigation or governmental proceeding
pending, nor to the knowledge of the Co-Borrowers threatened,
against the Co-Borrowers for which there is a reasonable
possibility of an adverse determination, that would result in
any Material Adverse Occurrence in the properties, business or
operations of the Co-Borrowers. All United States federal,
state and local income tax returns for the Co-Borrowers
required to be filed have been filed on a timely basis, and
all amounts required to be paid as shown by said returns have
been paid in full. There are no pending or threatened
objections to or controversies in respect of the United States
federal income tax returns of the Co-Borrowers for any fiscal
year.
13.4 REGULATION U. No part of the proceeds of any Advance
hereunder will be used to purchase or carry any margin stock
or to extend credit to others for such a purpose.
13.5 NO DEFAULT. As of the date of this Agreement, the
Co-Borrowers are in full compliance with all of the terms and
conditions of this Agreement and no Default or Event of
Default is existing under this Agreement.
13.6 ERISA. To the extent applicable, Co-Borrowers are in
compliance in all material respects with ERISA.
13.7 LIENS. The Bank's Security Interests hereunder are first
priority Security Interests in all of the Collateral. There
are no Security Interests, liens or encumbrances on any of the
Collateral except such as are permitted by Subsection 15.4 or
Security Interests in favor of the Bank.
13.8 ENVIRONMENTAL LAW. The Co-Borrowers have not received any
notice to the effect that their respective operations are not
in compliance with any of the requirements of applicable
federal, state and local environmental, health and safety
statutes and regulations or are the subject of any federal or
state investigation evaluating whether any remedial action is
needed to respond to a release of any toxic or hazardous waste
or Hazardous Substance into the environment.
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13.9 REAFFIRMATION WITH ADVANCES. Each representation and warranty
shall be deemed to be restated and reaffirmed to the Bank on
and as of the date of each Advance under this Agreement,
except that any reference to the financial statements referred
to in this Section shall be deemed to refer to the financial
statements then most recently delivered to the Bank pursuant
to Section 14.
13.10 USE OF PROCEEDS. The Co-Borrowers will use the proceeds of
each Advance and other extension of credit by the Bank
hereunder only for working capital purposes, except to the
extent loans are made for the refinancing of Equipment in
accordance with this Agreement.
13.11 AUTHORIZATION; NO CONFLICT; NO APPROVALS, ETC. The execution
and delivery by each of the Co-Borrowers of each of the Loan
Documents and the performance thereof by each of the
Co-Borrowers, have been duly authorized by all necessary
corporate action (including any necessary stockholder action)
on its part, and do not and will not: (i) contravene any laws,
including without limitation, any Gaming Laws currently in
effect, applicable to or binding on it, the Collateral or
their respective businesses; (ii) violate any provision of its
respective charter or bylaws; (iii) result in a breach of or
constitute a default under (with or without the giving of
notice or lapse of time or both) any indenture, mortgage, deed
of trust, lease, loan or any other agreement or instrument to
which either of the Co-Borrowers is a party; (iv) require any
governmental license, notice, consent or approval by any
federal, state or local governmental authority; or (v) require
the Bank to provide any notice to or obtain any license or
other approval from any federal, state or local governmental
authority under any Gaming Laws.
13.12 LICENSES. The Co-Borrowers have obtained all licenses,
registrations and permits required under any Gaming Laws for
the conduct of its business and the ownership and operation of
the Equipment and the Bank is not required to provide any
notice nor obtain any license, permit or approval under any
Gaming Laws in connection with the execution of any Loan
Documents or the transactions evidenced thereby.
13.13 EQUIPMENT LIST. The Equipment described on Schedule 1 to the
Security Agreement and the current location of the Equipment
is true and correct in all respects.
13.14 VLT SPACE LEASES. Each of the VLT Space Leases described on
Schedule 1 to the Security Agreement continue in full force
and effect as of the date hereof, without default by any party
thereto, and a true and correct copy or original thereof,
together with all amendments thereto, has been delivered to
the Bank.
14 AFFIRMATIVE COVENANTS. Each of the Co-Borrowers agree that it will
and will cause its subsidiaries to:
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14.1 FINANCIAL INFORMATION.
14.1.1 [Intentionally Deleted.]
14.1.2 ANNUAL FINANCIAL REPORT. Within one hundred five
(105) days after the end of Co-Borrowers' fiscal year
provide the Bank with a complete audited financial
report prepared and certified without qualification
by Independent Public Accountants for the
Co-Borrowers on a consolidated basis. If the
Co-Borrowers shall fail to supply said report timely,
the Bank shall have the right to employ certified
public accountants acceptable to the Bank at the
Co-Borrowers' expense for said purpose.
14.1.3 MONTHLY FINANCIAL REPORTS/COVENANT COMPLIANCE
CERTIFICATE. Within thirty (30) days after the end
of each calendar month commencing June 30, 1996,
provide the Bank with a balance sheet and income
statements of the Co-Borrowers and their subsidiaries
for said month and year-to-date, on a consolidated
and consolidating basis, certified as correct by an
officer or the controller of Co-Borrowers; together
with a Covenant Compliance Certificate certified as
correct by an officer or the controller of the
Co-Borrowers.
14.1.4 FINANCIAL STATEMENT OF GUARANTOR. On or before June
15th of each year the Co-Borrowers will provide the
Bank with sworn financial statements for each
Guarantor, and all income tax returns of the
Guarantors promptly after they are filed with the
applicable governmental agencies.
14.1.5 OTHER INFORMATION. From time to time, at the Bank's
request, the Co-Borrowers shall provide the Bank with
any and all other material, reports, information, or
figures required by the Bank.
14.2 ACCESS TO RECORDS. Permit the Bank and its representatives
access to, and the right to make copies of, the books,
records, and properties of each of the Co-Borrowers and its
subsidiaries at all reasonable times; and permit the Bank and
its representative to discuss the financial matters of the
Co-Borrowers and its subsidiaries with all applicable officers
and their Independent Public Accountant (and, by this
provision, Co-Borrowers authorize their Independent Public
Accountant to participate in such discussions).
14.3 PAYMENT OF TAXES. Pay when due all taxes, assessments, and
other Liabilities against each of the Co-Borrowers and its
subsidiaries or its properties except those which are being
contested in good faith and for which an adequate reserve
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has been established; each of the Co-Borrowers and its
subsidiaries shall make all withholding payments when due.
14.4 NOTIFICATION OF MANAGEMENT CHANGE. Promptly notify the Bank
in writing of any substantial change in the present management
of either of the Co-Borrowers or its subsidiaries.
14.5 ERISA PLAN COMPLIANCE. Pay when due all amounts necessary to
fund in accordance with its terms any Plan.
14.6 COMPLIANCE WITH LAWS. Comply in all material respects with
all laws, acts, rules, regulations and orders of any
legislative, administrative or judicial body or official
applicable to its business operation or Collateral or any part
thereof, including, without limitation, all Gaming Laws;
provided, however, that Co-Borrowers may contest any such law,
act, rule, regulation or order in good faith by appropriate
proceedings so long as (i) Co-Borrowers first notify the Bank
in writing of such contest, and (ii) such contest does not, in
the Bank's sole discretion, adversely affect the Bank's right
or priority in the Collateral or impair Co-Borrowers' ability
to pay the Obligations when due.
14.7 NOTIFICATION OF PROCEEDINGS. Promptly notify the Bank in
writing and keep the Bank apprised of any litigation,
governmental or administrative proceeding which (i) involves
any gaming license or approval, including, without limitation,
any gaming license or approval required to be maintained by
any VLT Space Lessor, (ii) involves an amount in dispute in
excess of $100,000, (iii) relates to the matters which are the
subject of this Agreement, or (iv) if determined adversely to
either of the Co-Borrowers or its subsidiaries, would be a
Material Adverse Occurrence.
14.8 BANK ACCOUNTS/OTHER FINANCINGS. Maintain Co-Borrowers
business accounts at the Bank. The Parent also agrees that it
shall provide the Bank a good faith opportunity to (i) provide
any additional financing required for the business operations
of either of the Co-Borrowers or any of their subsidiaries,
and (ii) obtain the primary business accounts associated with
the 4 Bears Casino, and Lodge located in New Town, North
Dakota.
14.9 MINIMUM CASH COVERAGE. As of each fiscal year end, the
Co-Borrowers shall maintain on a consolidated basis the ratio
of (i) EBITDA to (ii) Debt Service plus taxes of not less than
1.0 to 1.0 for fiscal year end September 30, 1996, and 1.3 to
1.0 for each fiscal year end thereafter.
14.10 MINIMUM NET INCOME. Earn a minimum consolidated Net Income of
at least $800,000 in each fiscal year.
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14.11 DEBT LEVEL. Maintain on a consolidated basis the ratio of:
(i) Liabilities minus the outstanding principal amount of
Subordinated Debt to (ii) Capital Base at not greater than the
ratio of 2.6 to 1.0 at all times.
14.12 UPDATED EQUIPMENT LIST/VLT SPACE LEASES. Furnish the Bank,
within thirty (30) days after the end of each calendar month,
updated Equipment lists similar to Schedule 1 to the Security
Agreement showing the current location of all Equipment, which
list shall be accompanied by all amendments to and any new VLT
Space Leases. The Co-Borrowers agree that they shall not make
any material modifications to the VLT Space Leases without the
prior written consent of the Bank and any new VLT Space Leases
shall be executed in a form similar to that currently provided
to the Bank and provided further that such Leases shall
contain no restrictions on the assignment of such Leases to
the Bank by the Co-Borrowers.
14.13 SECURITIES REPORTS. As soon as available and in any event
within sixty (60) days after the end of the first three fiscal
quarters of each fiscal year of Parent, Form 10Qs of Parent
shall have been delivered to Bank and within one hundred five
(105) days after the end of each fiscal year of Parent, Form
10K of Parent shall have been delivered to the Bank.
14.14 COMPLIANCE BY VLT SPACE LESSORS. Use their best efforts to
cause each of the VLT Space Lessors to comply in all material
respects with all applicable Gaming Laws associated with
maintaining any video lottery terminal at the location of the
VLT Space Lessor.
15 NEGATIVE COVENANTS. Each of the Co-Borrowers agrees that they will
not and shall cause each of their subsidiaries not to:
15.1 [Intentionally Deleted.]
15.2 [Intentionally Deleted.]
15.3 PROHIBITION AGAINST DISTRIBUTIONS. Purchase or redeem any
shares of either of the Co-Borrowers' or any of their
subsidiaries stock or declare or pay any dividends (other than
dividends payable in capital stock) or make any distribution
to stockholders of any assets of either of the Co-Borrowers or
any of their subsidiaries or make any distribution which would
result in an Event of Default. Notwithstanding this Section,
distributions to Parent from any of its subsidiaries are
authorized prior to the occurrence of an Event of Default.
15.4 NEGATIVE PLEDGES. Create or permit to exist any Security
Interest on the Bank's Collateral, now owned or hereafter
acquired except: (i) those created in the Bank's favor and
held by the Bank; or (ii) lieus of current taxes not
delinquent
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or taxes which are being contested in good faith for which a
full cash reserve has been established at the Bank.
15.5 REORGANIZATION. Effect any material recapitalization; or be a
party to any merger or consolidation; or, except in the normal
course of business, sell, transfer, convey or lease all or any
substantial part of its property;
15.6 INVESTMENTS. Make any Investments with respect to any Person
or any business, except for (i) Investments permitted by
Section 15.7, and (ii) without duplication, prior to the
occurrence of any Default or Event of Default and provided
such Investment will not cause any such Default or Event of
Default, Investments not to exceed $1,000,000 per year that
are not otherwise prohibited.
15.7 DEBTS FROM INSIDERS. Permit any amount to be owing between or
amongst any of the Co-Borrowers and/or their subsidiaries, or
to any such entities by all or any of their respective
employees, officers, directors, or shareholders, or members of
their families, as a result of any borrowings, purchases,
investments, travel advances or other transactions or events,
except that prior to the occurrence of any Default or Event of
Default and provided such transaction will not cause any
Default or Event of Default, such indebtedness may be incurred
or extended provided the aggregate of all such amounts are not
in excess of $100,000 on a consolidated basis.
15.8 CONDITIONAL OBLIGATIONS. Become a guarantor or surety or
pledge its credit or its Collateral on any undertaking of
another, except to Co-Borrowers' customers in the ordinary
course of business.
15.9 OTHER DEFAULTS. Permit any default to occur under the terms
of any note, loan agreement, lease, Mortgage, contract for
deed, security agreement, or other contractual obligation
binding upon Co-Borrowers which would, with the giving of
notice or passage of time, permit the acceleration or
otherwise result in the maturity of Liabilities exceeding
$250,000 in the aggregate.
15.10 FISCAL YEARS. Change its fiscal year.
15.11 ERISA VIOLATIONS. Violate any provision of ERISA or of any
Plan.
15.12 INCONSISTENT AGREEMENTS. Enter into any agreement containing
any provision which would be violated or breached by
Co-Borrowers by the performance by Co-Borrowers of their
Obligations under any Loan Document.
15.13 CASINO MANAGEMENT AGREEMENT. Enter into any amendment or
modification of the Management Agreement without fifteen (15)
days prior written notification to the Bank, accompanied by a
true and correct copy of the proposed amendment.
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15.14 NO RELOCATION OF VLTS. Relocate any of the Equipment from
their current locations to any location outside of the State
of South Dakota without the prior written consent of the Bank,
nor relocate such Equipment to any new location within the
State of South Dakota unless: (i) all governmental licenses
and approvals required for any relocation have been obtained,
and (ii) the Bank has received all applicable original VLT
Space Leases with respect to any new location, together with
any executed financing statements, landlord consents and other
agreements necessary in the reasonable opinion of the Bank to
insure the continued first priority security interest of the
Bank in and to such Equipment.
16 DEFAULT AND REMEDIES. It shall be an Event of Default under this
Agreement if any one of the following shall occur:
16.1 Co-Borrowers fail to make any payment required under this
Agreement or any present or future supplements hereto or under
any other agreement between Co-Borrowers and the Bank,
including the Loan Documents, when due, or if payable upon
demand; or
16.2 Co-Borrowers fail to observe or perform any covenant,
condition or agreement in this Agreement, any of the other
Loan Documents or in any other agreement between the
Co-Borrowers and the Bank when and as required; or
16.3 Any warranty, representation or statement made or furnished to
the Bank by or on behalf of Co-Borrowers or any Guarantor
proves in have been false in a material respect when made or
reaffirmed by the Co-Borrowers or Guarantor; or
16.4 Co-Borrowers or any Guarantor becomes insolvent or
Co-Borrowers or any Guarantor generally fails to pay, or admit
in writing its or his inability to pay, its or his debts as
they become due; or
16.5 Co-Borrowers or any Guarantor applies for, consents to, or
acquiesces in, the appointment of a trustee, receiver or other
custodian for it or him or for any of its or his property, or
makes a general assignment for the benefit of creditors; or,
in the absence of such application, consent or acquiescence, a
trustee, receiver or other custodian is appointed for
Co-Borrowers or for Guarantor or for a substantial part of
Co-Borrowers' or any Guarantor's property; or
16.6 Any bankruptcy reorganization, debt arrangement, or other case
or proceeding under any bankruptcy or insolvency law, or any
dissolution or liquidation proceeding is commenced in respect
of Co-Borrowers or any Guarantor; or
16.7 Any judgments, writs, warrants of attachment, executions or
similar process (not covered by insurance) in the aggregate
amount that exceeds $100,000 is issued or levied against
Co-Borrowers, any Guarantor or any of its or his assets and is
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not released, vacated or fully bonded prior to any sale and in
any event within five days after its issue or levy; or
16.8 Any Guarantor attempts to revoke his or its Guaranty;
16.9 Any Guarantor dies; or
16.10 The Management Agreement is amended or modified in violation
of Section 15.13 hereof, or the Management Agreement is
canceled, terminated or voided in any material respect by any
of the parties thereto or by any governmental authority, or
the Parent and/or Xxxxx X. Xxxx Company is ousted as the
managers of, or its management role is materially curtailed
with respect to, the 4 Bears Casino and Lodge; provided,
however, that in connection with the involuntary occurrence of
any of the foregoing, Parent shall be provided one hundred
twenty (120) days from the occurrence of the same to
diligently contest and cure such action.
Upon the occurrence of any Event of Default, all Obligations shall be and
become immediately due and payable, at the option of the Bank, without any
declaration, notice, presentment, protest, demand or dishonor of any kind (all
of which are hereby waived) and the Co-Borrowers' ability to obtain any
additional Advances under this Agreement shall be immediately and automatically
terminated. Upon the occurrence of an Event of Default, the Bank shall have
all the rights and remedies of a secured party under the Commercial Code,
including, without limitation, any and all rights and remedies provided under
the Security Agreement.
17 CONDITIONS PRECEDENT TO LOANS. Without limiting the other conditions
of this Agreement, the obligation of the Bank to make any Advance
under this Agreement is further subject to the condition precedent
that the Bank shall have received on or before the date of the initial
Advance to be made hereunder all of the following:
17.1 The Short-Term Revolving Note, the Term Note, the Security
Agreement and each of the other Loan Documents, each executed
and delivered by the Co-Borrowers and any other applicable
party;
17.2 UCC searches from the filing offices in all states required by
the Bank which reflect that the Bank holds a first priority
Security Interest and no other Person holds a Security
Interest in any Collateral of Co-Borrowers, except for
Security Interests permitted by Subsection 15.4.;
17.3 Guaranties, in form and substance satisfactory to the Bank,
appropriately completed and duly executed by each of the
Guarantors;
17.4 Corporate resolutions of the Co-Borrowers in a form acceptable
to the Bank;
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17.5 A copy of the Co-Borrowers' respective articles of
incorporation certified by the Secretary of State and a copy
of the Co-Borrowers' bylaws;
17.6 A Certificate of Good Standing for the Co-Borrowers issued by
its state of incorporation and by those states requested by
the Bank;
17.7 Evidence of insurance for all insurance required by the Loan
Documents,
17.8 An officers certificate, in form and substance satisfactory to
the Bank, executed by the President of Co-Borrowers (the
"Officer's Certificate");
17.9 A current Covenant Compliance Certificate;
17.10 A landlord waiver or mortgagee waiver (if applicable);
17.11 Debt Subordination Agreements, in form and substance
satisfactory to the Bank, appropriately completed and duly
executed by each holder of Subordinated Debt (if applicable);
17.12 Co-Borrowers' legal opinion (if required);
17.13 True and correct copies of the Management Agreement, duly
certified by a corporate officer of the Parent and the Xxxxx
X. Xxxx Company; and
17.14 True and correct copies of all VLT Space Leases (including
amendments) with respect to the Equipment, duly certified by
the Presidents of the Co-Borrowers.
18 MISCELLANEOUS.
18.1 The performance or observance of any affirmative or negative
covenant or other provision of this Agreement and any
supplement hereto may be waived by the Bank in a writing
signed by the Bank but not otherwise. No delay on the part of
the Bank in the exercise of any remedy, power or right shall
operate as a waiver thereof, nor shall any single or partial
exercise of any remedy, power or right preclude other or
further exercise thereof or the exercise of any other remedy,
power or right. Each of the rights and remedies of the Bank
under this Agreement will be cumulative and not exclusive of
any other right or remedy which the Bank may have hereunder or
as allowed by law.
18.2 Any notice, demand or consent authorized by this Agreement to
be given to Co-Borrowers or the Bank shall be deemed to be
given when transmitted by telex or telecopier or personally
delivered, or three days after being deposited in the U.S.
mail, postage prepaid, or one day after delivery to Federal
Express or other overnight courier service, in each case
addressed to the respective address shown
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in the opening paragraph of this Agreement, or at such other
address as may be provided from time to time by either party
in writing as the designated address for notice hereunder.
18.3 This Agreement, including exhibits and schedules and other
agreements referred to herein, is the entire agreement between
the parties, cannot be changed, terminated or amended orally,
and shall be deemed effective as of the date it is accepted by
the Bank.
18.4 Each of the Co-Borrowers jointly and severally agrees to pay
and will reimburse the Bank on demand for all reasonable
out-of-pocket expenses incurred by the Bank relating to this
Agreement, including without limitation filing and recording
fees and reasonable attorneys' fees and reasonable legal
expenses, including costs of in-house counsel (whether or not
suit is commenced), whether incurred in the negotiation and
preparation of this Agreement, in the protection and
perfection of the Bank's Security Interest in the Collateral,
in the enforcement of any of the provisions of this Agreement
or of the Bank's rights and remedies hereunder and against the
Collateral, in the defense of any claim or claims made or
threatened against the Bank arising out of this transaction,
or otherwise including, without limitation, in each instance,
all reasonable attorneys' fees and legal expenses incurred in
connection with any appeal of a lower court's order or
judgment.
18.5 This Agreement and obligations thereunder shall be binding
upon each of the Co-Borrowers and the Bank and their
respective successors, assigns, heirs, and personal
representatives and shall inure to the benefit of
Co-Borrowers, the Bank and the successors and assigns of the
Bank, except that neither of the Co-Borrowers may assign or
transfer their rights hereunder without the prior written
consent of the Bank, and any assignment or transfer in
violation of this provision shall be null and void. In
connection with the actual or prospective sale by the Bank of
any interest or participation in the Obligations, Co-Borrowers
authorize the Bank to furnish any information in its
possession, however acquired, concerning Co-Borrowers or any
of their Affiliates to any Person or entity.
18.6 Each of the Co-Borrowers shall be jointly and severally liable
for the payment and performance of all Obligations, including,
without limitation, any obligations owing under this Agreement
and each of the other Loan Documents, and each of the
Co-Borrowers hereby acknowledges and agrees that it has not
executed and delivered any of such agreements, documents or
instruments as an accommodation maker, surety or guarantor,
all of which defenses, if any, are hereby forever waived and
released.
18.7 If any Person shall acquire a participation in Advances made
to Co-Borrowers hereunder, Co-Borrowers hereby grant to any
such Person holding a participation, and such Person shall
have and is hereby given a continuing Security Interest in
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any money, securities and other property of Co-Borrowers in
the custody or possession of such Participant as fully as if
such Participant had lent directly to the Co-Borrowers the
amount of such participation.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
BNC NATIONAL BANK OF MINNESOTA
By:
-------------------------------
Its:
------------------------
CONCORDE GAMING CORPORATION,
By:
-------------------------------
Its:
------------------------
CONCORDE GAMING OF SOUTH DAKOTA,
INC.
By:
-------------------------------
Its:
------------------------
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DEFINITIONS SUPPLEMENT
TO
BNC NATIONAL BANK
LOAN AGREEMENT
"ADVANCES" shall mean loans made by the Bank to the Co-Borrowers
hereunder and all loans evidenced by existing notes of the Co-Borrowers made
payable to the Bank.
"AFFILIATE" shall include, with respect to any party, any Person which
directly or indirectly controls, is controlled by, or is under common control
with such party and, in addition, in the case of Co-Borrowers, each officer,
director, shareholder, joint venturer or a partner of Co-Borrowers.
"AGREEMENT" shall mean this agreement as supplemented, revised and
modified from time to time.
"CAPITAL BASE" of Co-Borrowers at any date shall mean on a
consolidated basis with their subsidiaries the sum of (i) the Tangible Net
Worth on such date plus (ii) the outstanding principal amount of Subordinated
Debt on such date.
"CO-BORROWERS" shall individually and collectively, as the context may
require, mean Concorde Gaming Corporation, a Colorado corporation, and Concorde
Gaming of South Dakota, Inc., a South Dakota corporation.
"COLLATERAL" shall have the meaning provided in the Security
Agreement.
"COMMERCIAL CODE" shall mean the Uniform Commercial Code as enacted in
the State of Minnesota, as amended from time to time.
"CONTINGENT OBLIGATIONS" shall mean, with respect to any Person, all
of such Person's liabilities and obligations which are based upon one or more
contracts and are contingent upon and will not mature unless and until the
occurrence of some event or circumstance and which are not included within the
definition of Liabilities of such Person.
"COVENANT COMPLIANCE CERTIFICATE" shall mean the Compliance
Certificate in the form of Exhibit C to the Agreement or such other form as the
Bank may require from time to time.
"DEBT SERVICE" shall mean all scheduled payments of principal and
interest on the consolidated Liabilities of the Co-Borrowers and their
subsidiaries.
"DEBT SUBORDINATION AGREEMENT" shall mean that certain Debt
Subordination Agreement of even date herewith executed by Xxxxxxxx "Xxxxx" X.
Xxxx.
17
"DEFAULT" shall mean any event which, with the giving of notice or
passage of time, or both, would constitute an Event of Default.
"EBITDA" shall mean, on a consolidated basis, the Net Income of the
Co-Borrowers and their subsidiaries, less interest, taxes, depreciation and
amortization, each as determined in accordance with GAAP, plus any cash
actually received by the Parent from Xxxxx X. Xxxx Company which constitutes
the proceeds of any principal repayment received by Xxxxx X. Xxxx Company for
loans extended by it under the Management Agreement in connection with the
construction, development and operation of the 4 Bears Casino & Lodge.
"EQUIPMENT" shall have the meaning provided in the Security Agreement.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as the same may from time to time be amended, and the rules and
regulations promulgated thereunder by any governmental agency or authority, as
from time to time in effect.
"EVENT OF DEFAULT" shall have the meaning provided in Section 16 of the
Agreement.
"GAAP" shall mean Generally Accepted Accounting Principles
consistently applied and maintained throughout the period indicated and
consistent with the financial statements delivered to Bank pursuant to Section
14 of the Agreement. Whenever any accounting term is used herein which is not
otherwise defined, it shall be interpreted in accordance with GAAP.
"GAMING LAWS" shall mean the South Dakota State Lottery Act, S.D.
Codified Laws Section 42-7A-1, et seq., and the rules and regulations
promulgated thereunder, together with any other federal, state or local laws,
rules, regulations or ordinances applicable to the conduct of either of the
Co-Borrower's gaming businesses, including, without limitation, the ownership
and operation of the Equipment.
"GUARANTOR(S)" shall mean Xxxxxxxx "Xxxxx" X. Xxxx and any other
Person who enters into a Guaranty of any of the Obligations.
"GUARANTY(IES)" shall mean that certain Guaranty dated as of the date
hereof from Xxxxxxxx "Xxxxx" X. Xxxx and any other agreement whereby a Person
guarantees the payment or performance of any of the Obligations.
"HAZARDOUS SUBSTANCE" shall mean any "hazardous substance," "hazardous
waste," "pollutant," "contaminant" or other similar material as defined by any
United States federal, state, or local law or rule applicable to Co-Borrowers
or any of the Collateral.
"INDEPENDENT PUBLIC ACCOUNTANTS" shall mean any firm of independent
certified public accountants which is acceptable to the Bank.
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"INVESTMENTS" shall mean, with respect to any Person, all investments
by such Person in any other Persons in the form of loans or guaranties,
advances or capital contributions (excluding commission, travel, relocation,
and other advances to employees, officers, directors or shareholders, or
members of their families, made in the ordinary course of business), purchases
or other acquisitions for consideration of debt or equity or other securities
and all other items that are or would be classified as investments on a balance
sheet prepared in accordance with GAAP.
"LIABILITIES" of any Person shall mean those items which, in
accordance with GAAP, would appear as Liabilities on a balance sheet.
"LOAN DOCUMENT(S)" shall mean individually or collectively, as the
case may be, the Agreement, the Guaranties, the Short-Term Revolving Note, the
Term Note, the Security Agreement, the Debt Subordination Agreement and any and
all other documents executed, delivered or referred to herein, as originally
executed and as amended, revised, supplemented and replaced from time to time.
"MANAGEMENT AGREEMENT" shall mean that certain Management Agreement
dated December 7, 1992, entered into by and among Xxxxx X. Xxxx Company and the
Three Affiliated Tribes with respect to the development and management of the 4
Bears Casino & Lodge in New Town, North Dakota.
"MATERIAL ADVERSE OCCURRENCE" shall mean any occurrence of whatever
nature (including, without limitation, any adverse determination in any
litigation, arbitration or governmental investigation or proceeding) which
materially adversely affects the present or prospective financial condition or
operations of either of the Co-Borrowers, any of their subsidiaries, and/or a
Guarantor or impair the ability of either of the Co-Borrowers and/or a
Guarantor to perform its or their Obligations under this Agreement or any other
Loan Document.
"NET INCOME" for any period shall mean the consolidated Net Income of
the Co-Borrowers and their subsidiaries for such period, determined in
accordance with GAAP excluding, however, (1) extraordinary gains, and (2) gains
whether or not extraordinary from sales or other dispositions of assets other
than the sale of Inventory in the ordinary course of business.
"OBLIGATIONS" shall have the meaning provided in the Security
Agreement.
"PERSON" shall mean any natural person, corporation, firm,
partnership, association, government, governmental agency or any other entity,
whether acting in an individual, fiduciary or other capacity.
"PLAN" shall mean each employee benefit Plan or other class of
benefits covered by Title IV of ERISA, in either case whether now in existence
or hereafter instituted, of Co-Borrowers.
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"REFERENCE RATE" shall at any time mean at the time any determination
thereof is to be made, the fluctuating per annum rate of interest then most
recently reported in the Wall Street Journal as the "Prime Rate" (the base rate
on corporate loans at the 30 largest U.S. money center commercial banks) and if
reported as a range, the interest rate shall be the mid-point of the range. In
the event that the Wall Street Journal ceases to report the Prime Rate, then
"Prime Rate" shall mean the fluctuating interest rate per annum announced from
time to time by the Bank as its Prime Rate (or, if otherwise denominated, such
Lender's or Bank's reference rate for interest rate calculations on general
commercial loans for short-term borrowings). The Co-Borrowers acknowledge that
the Reference Rate may not be the lowest rate made available by Bank to its
customers and that Bank may lend to its customers at rates that are at, above
or below the Reference Rate.
"SECURITY AGREEMENT" shall mean that certain Security Agreement of
even date herewith, and any and all other Security Agreements heretofore or
hereafter, executed by the Co-Borrowers, as debtor, in favor of the Bank, as
secured party.
"SECURITY INTEREST" shall mean any lien, pledge, mortgage,
encumbrance, charge or security interest of any kind whatsoever (including,
without limitation, the lien or retained security title of a conditional
vendor) whether arising under a security instrument or as a matter of law,
judicial process or otherwise or the agreement by Co-Borrowers to grant any
lien, security interest or pledge, mortgage or encumber any asset.
"SHORT-TERM REVOLVER CREDIT COMMITMENT" shall mean the obligation of
the Bank to make Advances pursuant to Section 4 of the Agreement
"SHORT-TERM REVOLVING NOTE" shall mean the Short-Term Revolving Note
referred to in Section 4 of the Agreement.
"SUBORDINATED DEBT" shall mean indebtedness of Co-Borrowers for
borrowed money which is subordinated to the Obligations in writing on terms
satisfactory to Bank in its sole discretion.
"TANGIBLE NET WORTH" of Co-Borrowers and the subsidiaries shall mean
on a consolidated basis, the total of all assets appearing on a balance sheet
of Co-Borrowers, prepared in accordance with GAAP, after deducting all proper
reserves (including reserves for depreciation, obsolescence and amortization)
minus all Liabilities of such entities; excluding, however, from the
determination of total assets: (i) goodwill, memberships, trademarks, trade
names, service marks, copyrights, patents, licenses, organization expenses,
research and development expenses and other similar intangibles; (ii) all
deferred charges or unamortized debt discount; (iii) treasury stock; (iv)
securities that are not readily marketable; (v) any write-up in the book value
of any assets resulting from a revaluation thereof subsequent to September 30,
1995; (vi) notes or receivables due from employees, officers, directors or
shareholders; (vii) notes or receivables due from any Affiliate; (viii) all
other intangible assets in existence on the date of this Agreement and
determined by Bank, in its absolute discretion, to be intangible
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assets; and (ix) any asset acquired subsequent to the date of this Agreement
which the Bank determines, in its reasonable discretion, to be an intangible
asset.
"TERM LOAN COMMITMENT" shall mean the obligation of the Bank to make
Advances pursuant to Section 5 of the Agreement.
"TERM NOTE" shall mean the promissory note referred to in Section 5 of
the Agreement.
"TERMINATION DATE" shall have the meaning set forth in Section 3 of the
Agreement.
"VLT SPACE LEASES" shall mean each of the space leases entered into by
either of the Co-Borrowers with each of the VLT Space Lessors in connection
with the renting of space for the operation of the Equipment, each of which
Leases are more specifically described on Schedule I attached to the Security
Agreement.
"VLT SPACE LESSOR(S)" shall mean each of the Space Lessors who have
leased space to either of the Co-Borrowers with respect to maintaining and
operating the Equipment.
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