Attached files
| file | filename |
|---|---|
| 8-K/A - NEVADA GOLD & CASINOS INC | v181944_8ka.htm |
| EX-99.1 - NEVADA GOLD & CASINOS INC | v181944_ex99-1.htm |
| EX-10.1 - NEVADA GOLD & CASINOS INC | v181944_ex10-1.htm |
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F
O R T R E S S
CREDIT
CORP.
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1345
AVE OF THE
AMERICAS
46TH
FLOOR
NEW
YORK, NY 10105
|
April 14,
2010
Nevada
Gold & Casinos, Inc.
50 Briar
Hollow Lane, Suite 500W
Houston,
TX 77027
Attention: Robert
B. Sturges, Chief Executive Officer
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Re:
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Financial
Accommodations Relating to the Acquisition of Casino Card Rooms in
Washington State
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Dear
Sirs:
Nevada
Gold & Casinos, Inc. (“Sponsor”) has requested that
Fortress Credit Corp. and/or its affiliates, successors and assigns (“Fortress” or “Agent”) consider providing
certain financial accommodations (the “Loan”) to either: (i) newly
formed single asset, bankruptcy remote, special purpose entities acceptable to
Agent, (ii) a newly formed, bankruptcy remote, special purpose entity acceptable
to Agent that is not licensed by the Washington State Gambling Commission and
that holds, directly or indirectly, all of the equity interests of those
entities that own the assets of the card rooms described below, or (iii)
Sponsor, which is also not licensed by the Washington State Gambling Commission
and that holds, directly or indirectly, all of the equity interests of those
entities that own the Purchased Assets (for convenience, such entities or entity
are referred to herein as “Borrowers”).
The
proceeds of the Loan shall be used to finance a portion of the purchase price
for the assets of certain Casino Card Room businesses in Washington State (the
“Businesses”), the
balance of the purchase price to be paid in cash. The Loan will be
secured by first priority perfected security interests over the Businesses and
all other assets of the Borrowers (unless the Borrower is Sponsor, in which
event such security interest will be in the Purchased Assets (as defined in the
Outline of Proposed Terms and Conditions attached hereto (the “Term Sheet”)) and hereafter
acquired assets of the entities that purchase the Purchased Assets), a pledge of
all equity interests in those entities that own the Purchased Assets, if
different from the Borrower, and such other collateral as Agent may require, in
each case in favor of Agent. The Loan will also benefit from
full-recourse guarantees from guarantors to be specified by Agent.
Agent is
willing to consider providing the Loan on a fully underwritten basis,
substantially on the terms and conditions set forth in the Term
Sheet. Agent’s proposal for the Loan is subject to the satisfaction
of the terms and conditions contained in this proposal letter and in the Term
Sheet.
Sponsor
acknowledges that the Term Sheet is intended as an outline only and does not
purport to summarize all the conditions, covenants, representations, warranties
and other provisions that would be contained in definitive legal documentation
for the Loan. The Loan documentation shall include, in addition to
the provisions that are summarized in the Term Sheet, provisions that, in the
opinion of Agent are customary or typical for this type of transaction and other
provisions that Agent determines to be appropriate in the context of the
proposed transaction.
1
This proposal letter and the attached
Term Sheet are not intended to be, and shall not be deemed to be or construed
as, a commitment by Agent to provide the Loan or to provide any other financial
accommodation to Sponsor, Borrowers or any affiliate of Sponsor, and with the
exception of (i) this paragraph, (ii) the two immediately succeeding paragraphs
and (iii) the sections of the Term Sheet titled “Expense Deposit” and “Binding
Provisions” all of which shall be binding on Sponsor and Borrowers under all
circumstances, this proposal letter and the attached Term Sheet shall not be
deemed or construed to be a binding obligation of Borrowers or Sponsor to
negotiate or execute any documents evidencing the Loan. Agent
may, in its sole and absolute discretion, suggest alternative financial
accommodations or structures that assure adequate protection for it or decline
to provide the Loan.
This
proposal letter, including the Term Sheet, is delivered to Sponsor and Borrowers
on the condition that neither the existence of this proposal letter, including
the Term Sheet, nor any of its contents, shall be disclosed except as may be
compelled to be disclosed in a judicial or administrative proceeding or as
otherwise required by law or to Grant Thornton Limited, in its capacity as
court-appointed receiver over the Businesses, or its counsel; provided, that
this proposal letter, including the Term Sheet, may be disclosed on a
confidential basis to Sponsor’s and Borrowers’ accountants, attorneys, financing
sources and other professional advisors retained in connection with the proposed
Loan who have been informed of, and agree to abide by, such confidentiality
arrangement.
This
proposal letter, including the Term Sheet, (i) supersedes all prior discussions,
agreements, commitments, arrangements, negotiations or understandings, whether
oral or written, of the parties with respect thereto; (ii) shall be governed by
the laws of the State of New York, without giving effect to the conflicts of law
or choice of law provisions thereof; and (iii) may be signed in multiple
counterparts and may be delivered by facsimile, each of which shall be deemed an
original counterpart and all of which together shall constitute one and the same
instrument. If this proposal letter, including the Term Sheet,
becomes the subject of a dispute, each of the parties hereto hereby waives trial
by jury.
2
Should
the terms and conditions of the proposal contained herein meet with your
approval, please indicate your acceptance by signing and returning a copy of
this proposal letter to Agent by 5:00 p.m. (CDT) on April 15, 2010.
Very
truly yours,
FORTRESS
CREDIT CORP.
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By:
/s/ Constantine M. Dakolias
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Name:
Constantine M. Dakolias
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Title:
President
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Agreed
and accepted on this
14th day of
April, 2010:
NEVADA
GOLD & CASINOS, INC.
By: /s/
Robert B. Sturges
Name: Robert M.
Sturges
Title: Chief
Executive Officer
3
SUBJECT
IN ALL RESPECTS TO DUE DILIGENCE, INTERNAL APPROVALS, LEGAL REVIEW AND
FINAL
DOCUMENTATION SATISFACTORY TO FORTRESS: NOT A COMMITMENT TO MAKE A
LOAN
EXHIBIT
A
OUTLINE OF PROPOSED TERMS
AND CONDITIONS
This
Outline of Proposed Terms and Conditions (“Term Sheet”) is attached to,
and delivered in connection with, that certain letter agreement, dated April 14,
2010, by and between Fortress Credit Corp. and the Sponsor (as defined below),
and shall be subject to all of the terms and conditions set forth
therein.
This
Term Sheet is based on preliminary information provided by
Sponsor. This Term Sheet is not a commitment to lend or otherwise
make financial accommodations and is subject in all respects to, among other
things, Agent’s (as defined below) due diligence, legal review, credit review
procedures and internal approvals customary for a transaction of this nature,
and final documentation approved by Agent, all in Agent's sole and absolute
discretion.
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Borrowers:
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At
Agent’s sole discretion, either: (i) newly formed single asset, bankruptcy
remote, special purpose entities acceptable to Agent, or (ii) a newly
formed, bankruptcy remote, special purpose entity acceptable to Agent that
is not licensed by the Washington State Gambling Commission and that
holds, directly or indirectly, all of the equity interests of those
entities that own the Purchased Assets (as defined below), or (iii)
Sponsor, which is also not licensed by the Washington State Gambling
Commission and that holds, directly or indirectly, all of the equity
interests of those entities that own the Purchased Assets (for
convenience, such entities or entity are referred to herein as “Borrowers”). In
the event that there is a single Borrower as contemplated by clause (ii)
or (iii) above, references to “Borrowers” contained herein shall mean the
Borrower or, if required by the context in which such term is used, the
Borrower and each entity that owns the Purchased Assets,
collectively. If Borrower is not Sponsor, Borrowers shall be
directly or indirectly owned and controlled by Sponsor and such other
individuals and entities required by Agent following Agent’s due diligence
regarding the Sponsor, Borrowers and their affiliates. The
Borrowers shall be jointly and severally liable for repayment of the Loan
(including all interest accrued thereon and fees and expenses payable by
Borrowers in relation thereto).
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Sponsor:
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Nevada
Gold & Casinos, Inc. (“Sponsor”).
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Agent:
Lender:
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Fortress
Credit Corp. and/or its affiliates, successors and assigns (“Agent”).
Fortress
Credit Corp. and/or its affiliates, successors and
assigns
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Purpose:
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To
provide financial accommodations towards the acquisition (“Acquisition”) by
Borrowers (or a wholly-owned subsidiary of Borrowers), of the assets of:
(i) Big Nevada, Inc., Little Nevada, Inc., Golden Nugget Tukwila, Inc.,
Mill Creek Gaming, Inc., Royal Casino Holdings, Inc., Silver Dollar Mill
Creek, Inc. and Hollydrift Gaming, Inc. (including the card room
businesses thereof, other than “The Drift on Inn Casino” currently
operated by Hollydrift Gaming, Inc. (collectively, the “Card Rooms”)), and (ii)
Gameco, Inc., Gaming Consultants, Inc. and Gaming Management, Inc. (those
assets described in clauses (i) and (ii), collectively, the “Purchased
Assets”).
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Page 1
of 8
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Fortress/Nevada
Gold & Casinos
Term
Sheet
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Closing
Date:
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The
closing of the Loan contemplated herein shall occur at the closing of the
Acquisition provided that the conditions precedent described below have
been satisfied in Agent’s sole discretion or waived by Agent (the “Closing
Date”).
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Collateral:
Cash
Management:
Guarantors:
Loan
Facility:
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The
Loan will be secured by a first priority, perfected security interest in
(i) all present and hereafter acquired assets of Borrowers (unless the
Borrower is Sponsor, in which event such security interest will be in the
Purchased Assets and hereafter acquired assets of the entities that
purchase the Purchased Assets);1 (ii) all of the
equity interests in those entities that own the Purchased Assets, if
different from the Borrower; and (iii) such other collateral as Agent may
reasonably require based on its due diligence.
To
the extent not prohibited by the Washington State Gambling Commission, (a)
control agreements will be required to be delivered over all of the
Borrowers’ (and their direct and indirect subsidiaries, if any) deposit
and securities accounts relating to the Card Rooms at the Closing Date,
pursuant to which Agent shall be granted control over such accounts upon
the occurrence of any event of default under the Loan Documents, and (b)
there will be a full cash sweep of Excess Cash Flow (as defined below)
into Agent’s account of all Borrowers’ net proceeds from operations from
and after the Initial Maturity Date if the Loan is validly extended
pursuant to the terms of the Loan Documents (such net proceeds to be
applied as described in the section titled “Mandatory Prepayments” below),
and/or after the occurrence of any event of default under the Loan
Documents.
The
Loan will be unconditionally cross-guaranteed by the Borrowers, the
Sponsor and the company (NG Washington, LLC) operating three current card
rooms that is an affiliate of the Sponsor, and those entities that will
own the Purchased Assets, if different from the Borrower (the “Guarantors”). All
such guaranties will be full-recourse.
$5,070,000
(Five Million Seventy Thousand Dollars) senior secured term loan (the
“Loan
Amount”).
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Initial
Maturity Date:
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The
second anniversary of the Closing Date (the “Initial Maturity
Date”).
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Extended
Maturity Date:
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One
option to extend the maturity of the Loan to a date (the “Extended Maturity
Date”) that is one year after the Initial Maturity Date, subject to
the Extension Conditions hereinafter
defined.
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Page 2
of 8
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Fortress/Nevada
Gold & Casinos
Term
Sheet
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Interest
Rate:
Default
Rate and Late Charge:
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30-day
LIBOR + nine percent (9%) (“Interest Rate”) (subject
to a 30-day LIBOR floor of two percent (2%)). Interest will be
calculated on the basis of the actual number of days elapsed based on a
360-day year, and payable monthly in arrears (an “Interest Payment
Date”).
All
interest, principal and other amounts due and payable under the Loan
Facility and not paid when due will bear interest at a rate that is ten
percent (10%) per annum above the Interest Rate then otherwise applicable
thereto. Borrowers shall also pay an additional charge
applicable to any amount under the Loan Facility not paid when due, such
charge equal to five percent (5%) of such amount; provided, however, that
such charge shall not be applicable in connection with any failure by
Borrowers to pay all amounts due under the Loan Facility as of the Initial
Maturity Date (or Extended Maturity Date, if applicable), unless such
amounts remain unpaid five days after the Initial Maturity Date (or
Extended Maturity Date, if applicable).
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Asset
Sales:
Optional
Prepayments:
Mandatory
Prepayments:
Repayment
Fee:
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Asset
sales of the Purchased Assets (or assets hereafter acquired by
the entities that own the Card Rooms) (including without limitation sales
of any Card Room) shall only be permitted with the express written consent
of Agent, which consent Agent may withhold in its sole discretion;
provided, however, that sales by Borrowers in the ordinary course of
business of assets that are not, individually or in the aggregate,
material to the operation of any Card Room shall not require Agent’s
consent.
The
Loan shall be prepayable, at Borrowers’ option, in whole or in part, on
any payment date under the Loan Documents, subject to the payment of any
Repayment Fee applicable thereto.
Mandatory
Prepayments shall include, without limitation, (a) 100% of all net
proceeds of any sale of the Purchased Assets (or assets
hereafter acquired by the entities that own the Card
Rooms) (other than such sales in the ordinary course of
business of assets that are not, individually or in the aggregate,
material to the operation of any Card Room), and (b) such percentage of
the Excess Cash Flow (as defined below) from Card Room operations
following the Initial Maturity Date if the Loan is validly extended
pursuant to the terms of the Loan Documents as is specified in the section
titled “Scheduled Amortization” below. All such prepayments
shall be applied (y) to pay any and all outstanding amounts due to Agent
under the terms of the Loan Documents (other than amounts described in
clause (z) of this sentence); and then (z) to repay the Loan and pay any
Repayment Fee due on the repayment amount.
Any
repayment occurring prior to the first anniversary of the Closing Date
shall not be subject to any additional fee or charge (including without
limitation any Repayment Fee). Thereafter, a Repayment Fee
shall be payable by Borrowers upon any repayment of the Loan, in whole or
in part, as follows:
(a) two
percent (2%) of the repayment amount if made on or after the first
anniversary of the Closing Date, and prior to the date that is 18 months
after the Closing Date;
(b) four
percent (4%) of the repayment amount if made on or after the date that is
18 months after the Closing Date and on or prior to the Initial Maturity
Date; and
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Page 3
of 8
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Fortress/Nevada
Gold & Casinos Term Sheet
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(c) if
Borrower validly exercises its option to extend the maturity of the Loan
to the Extended Maturity Date:
(i) six
percent (6%) of the repayment amount if made after the Initial Maturity
Date and before the date that is 6 months thereafter; and
(ii) eight
percent (8%) of the repayment amount if made on or after the date that is
6 months after the Initial Maturity Date and on or before the Extended
Maturity Date.
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Extension
Fee:
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One
percent (1%) of the then outstanding Loan Amount, payable upon the
exercise of Borrowers’ extension option.
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Extension
Conditions:
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To
include, without limitation:
(i) No
continuing default or event of default (either as of the exercise of the
extension option, or as of the Initial Maturity Date);
(ii) No
material adverse change with respect to the condition, financial or
otherwise, business, operations, assets, liabilities or prospects of the
Card Rooms, Borrowers, Sponsor, or any Guarantor (“Material Adverse
Change”), as determined by Agent in its sole
discretion;
(iii) Borrowers
shall demonstrate an aggregate ratio of outstanding indebtedness to TTM
Adjusted EBITDA of not more than 2.0:1.0 for the 12 calendar
month period ending with the last calendar month where financials are
available prior to the commencement of the extension term;
(iv)
Borrowers shall demonstrate an aggregate ratio of outstanding
indebtedness to combined annualized 3-month Adjusted EBITDA of not more
than 2.0:1.0 for the 3 calendar month period ending with the last calendar
month where financials are available prior to the commencement of the
extension term;
(v) Payment
of the Extension Fee;
(vi) Borrowers
shall have reimbursed Agent for all costs and expenses (including
reasonable attorneys’ fees) incurred by Agent in connection with the
requested extension; and
(vii) The
outstanding amounts due to Agent under the terms of the Loan Documents
shall be less than Three Million Dollars ($3,000,000).
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Conditions
Precedent:
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The
making of the Loan is subject to, without limitation, satisfaction of the
following conditions precedent:
(i) The agreement pursuant to which
Borrowers acquire the Purchased Assets (the “Purchase Agreement”) and
the other documents related thereto shall be in form and substance
satisfactory to Agent.
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Page 4
of 8
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Fortress/Nevada
Gold & Casinos
Term
Sheet
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(ii) All conditions precedent to the Purchase
Agreement shall have been satisfied, including the payment by Borrowers of
100% of the cash portion of the purchase price for the Purchased Assets as
set forth in the Purchase Agreement.
(iii) After the execution of the Purchase
Agreement, such documents shall not be amended or supplemented in any way
without the written consent of Agent.
(iv)
All documentation relating to any existing leases, leasehold mortgages,
estoppels and SNDAs shall be in form and substance reasonably satisfactory
to Agent.
(v)
Agent shall have received the results of such lien searches as it may
request in each relevant jurisdiction with respect to
the Borrowers and the entities that own the Card Rooms, if
different from the Borrowers, and such searches shall reveal no liens on
their assets except for liens to be discharged on or prior to the Closing
Date or as otherwise permitted by Agent.
(vi)
Agent shall have received (a) opinions of Borrower’s independent counsel
reasonably satisfactory to Agent and (b) such corporate
resolutions, certificates and other documents as Agent shall reasonably
request.
(vii)
Agent shall have received all fees required to be paid, and all expenses
for which invoices have been presented, on or before the Closing
Date.
(viii)
The completion of all legal documentation required by Agent.
(ix)
The completion of other customary conditions.
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Scheduled
Amortization:
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If
the Loan is validly extended pursuant to the terms of the Loan Documents,
100% of Borrowers’ Excess Cash Flow (as defined below) from and after the
Initial Maturity Date shall be paid to Agent and applied (a) to pay any
and all outstanding amounts due to Agent under the terms of the Loan
Documents (other than amounts described in clause (b) of this sentence);
and then (b) to repay the Loan and pay any Repayment Fee due on the
repayment amount.
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Insurance:
Reserves
and Capital
Expenditures
Budget:
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Insurance
coverages must be acceptable to Agent.
The
Loan Documents shall include standard reserves for insurance and taxes
(including without limitation gaming taxes), as well as a reserve for
Agent-approved capital and maintenance expenses regarding the Card Rooms
(the “CME
Reserve”). Borrowers shall deliver to Agent a proposed twelve-month
capital expenditure budget regarding the Card Rooms (the “CapEx Budget”), in
sufficient detail acceptable to Agent in its sole discretion, on an annual
basis, with the first CapEx Budget to be delivered within 30 days after
the Closing Date, and subsequent CapEx Budgets to be delivered on or
before April 30 of each year thereafter. The budgeted amount of
capital expenditures set forth in each CapEx Budget shall be subject to
the approval of Agent in its reasonable discretion. The CME Reserve
shall initially be set in an amount equal to fifty percent (50%) of the
budgeted twelve-month capital expenditures set forth in the first CapEx
Budget approved by Agent, and shall then be re-set concurrently with the
delivery of each subsequent CapEx Budget approved by Agent in an amount
equal to fifty percent (50%) of the budgeted twelve-month capital
expenditures set forth in the then-most recent CapEx Budget approved by
Agent (the “Threshold
Amount”). If and to the extent that, at any time, the
balance of the CME Reserve is less than the Threshold Amount, then the CME
Reserve shall be funded on a monthly basis from 100% of Borrowers’ Excess
Cash Flow (and after required funding of the insurance and taxes reserves
referenced above), until the amount in the CME Reserve is at an amount
equal to the Threshold Amount.
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Page 5
of 8
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Fortress/Nevada
Gold & Casinos Term Sheet
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During
each fiscal year, the Agent-approved capital and maintenance expenses set
forth in the CapEx Budget for such fiscal year shall be funded as follows:
(i) first, Borrower shall fund 100% of such capital and maintenance
expenses until the aggregate amount funded by Borrower during such fiscal
year equals 50% of the budgeted capital expenditures for such fiscal year,
and (ii) second, funds maintained in the CME Reserve may be utilized to
fund the remaining capital and maintenance expenses for such fiscal
year.
No
other debt permitted except unsecured trade payables in the ordinary
course of business (not to exceed at any time a commercially reasonable
amount as determined by Agent in its sole discretion).
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Additional
Debt:
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Restriction
on Distributions and Required Amortization:
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No
dividends or other distributions shall be paid by Borrowers (and all
Borrowers’ net cash from operations must be held in their operating
accounts over which Agent has a control agreement or in Agent’s account
(as the case may be), as described above) unless the amount in the CME
Reserve is, at the time of any proposed distribution, at least equal to
the Threshold Amount, in which event, so long as no event of default
exists or would result therefrom, a distribution of Excess Cash Flow (as
defined below) may be made by the Borrowers; provided, however, that
concurrently with any such distribution, Borrowers shall repay a portion
of the Loan in an amount equal to the amount of such
distribution.
“Excess Cash Flow” means
all cash or cash equivalents received by or on behalf of Borrowers in
connection with the operation of the Card Rooms for the immediately prior
calendar month, minus (i)
interest paid in cash with respect to the Loan during such period, (ii)
interest paid in cash with respect to any other debt permitted under the
Loan Documents during such period, (iii) the amount of any taxes
(including without limitation gaming taxes) required to be paid by such
entity (or the owners of the Card Rooms, if different form Borrower) in
cash (including any deductions for interest paid) with respect to such
period, (iv) the amount of any permitted management fees paid by the
entities that own and operate the Card Rooms in cash to Sponsor during
such period, and (v) expenses paid in cash directly related to the
operation of the Card Rooms during such period. Excess Cash
Flow paid to Agent will be applied first to any Repayment Fee due as a
result of such repayment, and then to principal on the
Loan.
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Page 6
of 8
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Fortress/Nevada
Gold & Casinos
Term
Sheet
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Notwithstanding
the foregoing, so long as no event of default exists or would result
therefrom, the entities that own the Card Rooms may: (i) to the extent due
and payable on a non-accelerated basis and otherwise permitted under the
Loan Documents, make regularly scheduled payments of interest with respect
to any other debt permitted under the Loan Documents, provided that
interest expense with respect to any such permitted debt shall not exceed
$660,000 in any fiscal year, (ii) to the extent due and payable, pay tax
obligations of Borrowers subject to verification by Agent, and (iii) pay
monthly management fees to Sponsor in an aggregate amount not to exceed 3%
of such entities’ gross revenue for such period. As used herein, the term
“gross revenue” shall not include match play coupons, and with respect to
table games and slot machines, shall be calculated based the net win at
such table games and slot machines.
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Expense
Deposit:
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Sponsor
agrees to pay all reasonable fees and expenses (including, without
limitation, attorneys’ fees and expenses) incurred by or on behalf of
Agent in connection with this Term Sheet and the Loan (“Expenses”), whether or
not the Acquisition actually occurs or the transaction described herein
actually closes. Without limiting the foregoing, Sponsor shall
deliver to Agent concurrently with the execution and delivery of this Term
Sheet an expense deposit of $65,000 to be credited against Expenses
incurred by or on behalf of Agent.
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Representations
and
Warranties:
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The
Loan Documents will contain representations and warranties customarily
found in loan documents for similar transactions and others appropriate to
the specific transaction.
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Covenants:
Financial
Covenants:
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The
Loan Documents will contain covenants customarily found in loan documents
for similar transactions and others appropriate to the specific
transaction.
The
Loan Documents will contain financial covenants as required by Agent
including, without limitation, the following:
Borrowers
shall demonstrate an aggregate ratio of outstanding indebtedness to TTM
Adjusted EBITDA at the end of each calendar quarter during each year of
the Loan term of not more than the following threshold
ratios:
First
Year: 3.5:1.0
Second
Year:
3.0:1.0
Extension
Year: 2.0:1.0
“Adjusted
EBITDA” shall be defined to include, without limitation, corporate
overhead attributable to the assets being purchased, and to exclude,
without limitation, extraordinary or non-operating gains or
losses.
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Page 7
of 8
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Fortress/Nevada
Gold & Casinos Term Sheet
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Financial
Reporting
Requirements:
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The
fiscal year of each Borrower shall end April 30.
Borrowers
and Guarantors shall provide to Agent in form and substance acceptable to
Agent: (i) quarterly certified cash flow statements of Borrowers with
respect to each Card Room both exclusive and inclusive of allocations of
Drop and Hold Amounts and Percentage (“Allocations”), within
20 days after the end of each fiscal quarter, (ii) monthly summary reports
in sufficient detail acceptable to Agent with respect to each Card Room’s
results, significant events, capital expenditures, gaming
issues/violations, table mix, drop/hold and such other further information
with respect to the Purchased Assets as requested by Agent, within 20 days
after the end of the month; (iii) certified monthly statements comparing
actual to budgeted results and variance analysis by Card Room and on a
consolidated Card Room basis, within 20 days after the end of the month,
(iv) monthly certified profit and loss statements by Card Room and on a
consolidated Card Room basis, within 20 days after the end of the month,
(v) monthly certified balance sheets by Card Room and on a consolidated
Card Room basis, within 20 days after the end of the month, (vi) audited
annual financial statements for each Card Room and on a consolidated Card
Room basis, within five business days after the date such audited annual
financial statements are required to be submitted to the Washington State
Gaming Commission pursuant to Washington law in effect from time to time,
(vii) certified quarterly financial statements and operating statements of
Borrowers and Guarantors, within 45 days after the end of each quarter,
each such reports covering such quarter to date, and including detailed
balance sheets, and (viii) such other information concerning Borrowers’
and the Card Room’s operations and finances as Agent may reasonably
request from time to time. Additionally, any and all information received
by Borrowers or the Sponsor related to the Purchased Assets shall be made
available to Agent within five business days after request
therefrom.
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Other
Reporting Requirements:
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The
Loan Documents will contain other reporting requirements customarily found
for similar transactions and others appropriate to the specific
transaction.
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Governing
Law & Jurisdiction:
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Borrowers
and the Guarantors will submit to the non-exclusive jurisdiction and venue
of the federal and state courts of the State of New York and shall waive
any right to trial by jury. New York law shall govern the Loan
Documents (except any leasehold mortgages, which shall be governed by
Washington law).
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Binding
Provisions
Sponsor
represents and warrants to Agent that Sponsor has not engaged or worked with any
broker, finder, or agent in connection with the transactions contemplated
herein. Sponsor hereby agrees to release, indemnify, protect, and
hold harmless Agent and its respective officers, directors, employees,
affiliates, advisors (including legal counsel), agents and controlling persons
(each, an “Indemnified
Party”) from and against any and all claims, damages and liabilities
(whether direct, indirect or consequential) to which any Indemnified Party may
become subject arising out of or in connection with this Term Sheet or the Loan,
including without limitation claims from any broker, finder, or agent asserting
any agreement or arrangement with Sponsor in connection with the transactions
contemplated herein. Without limiting the foregoing, Agent shall not
be liable for any indirect or consequential damages of any kind arising out of
or in connection with this Term Sheet. This Term Sheet and its terms
are submitted on a confidential basis and shall not be disclosed by Sponsor or
Borrowers; provided, that this Term Sheet and its terms may be disclosed on a
confidential basis to Sponsor’s and Borrowers’ accountants, attorneys, financing
sources and other professional advisors retained in connection with the proposed
Loan who have been informed of, and agree to abide by, such confidentiality
arrangement. This Term Sheet shall be governed by the laws of the
State of New York. With the exception of this paragraph, and the
paragraph above titled “Expense Deposit” (each of which shall be binding), no
provision of this Term Sheet shall be binding on the parties
hereto.
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Page 8
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Fortress/Nevada
Gold & Casinos Term Sheet
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