CREDIT AGREEMENT Dated as of November 10, 2005 between CASH SYSTEMS, INC. as Borrower, and BANK OF AMERICA, N.A., as Lender
EXECUTION
VERSION
Dated
as
of November 10, 2005
between
CASH
SYSTEMS, INC.
as
Borrower,
and
BANK
OF AMERICA, N.A.,
as
Lender
TABLE
OF CONTENTS
|
Section
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Page
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1.
|
LINE
OF CREDIT AMOUNT AND TERMS
|
1
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|
1
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.1
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Line
of Credit Amount.
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|
1
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|
|
1
|
.2
|
Availability
Period.
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|
1
|
|
|
1
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.3
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Repayment
Terms.
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|
1
|
|
|
1
|
.4
|
Interest
Rate.
|
|
1
|
|
|
1
|
.5
|
Optional
Interest Rates.
|
|
2
|
|
|
1
|
.6
|
Applicable
Margin.
|
|
2
|
|
|
1
|
.7
|
Letters
of Credit.
|
|
3
|
|
|
1
|
.8
|
Increase
Options.
|
|
3
|
|
|
2.
|
OPTIONAL
INTEREST RATES
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|
4
|
|
|
|
2
|
.1
|
Optional
Rates.
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|
4
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|
2
|
.2
|
LIBOR
Rate.
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|
4
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|
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3.
|
FEES
AND EXPENSES
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5
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3
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.1
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Fees.
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5
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3
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.2
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Expenses.
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6
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3
|
.3
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Reimbursement
Costs.
|
|
6
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|
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4.
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COLLATERAL
|
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7
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|
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4
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.1
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Personal
Property.
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|
7
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5.
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DISBURSEMENTS,
PAYMENTS AND COSTS
|
|
7
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|
|
|
5
|
.1
|
Disbursements
and Payments.
|
|
7
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|
|
5
|
.2
|
Telephone
and Telefax Authorization.
|
|
7
|
|
|
5
|
.3
|
Direct
Debit (Pre-Billing).
|
|
8
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|
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5
|
.4
|
Banking
Days.
|
|
8
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|
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5
|
.5
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Interest
Calculation.
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|
8
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|
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5
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.6
|
Default
Rate.
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|
9
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|
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6.
|
CONDITIONS
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9
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|
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6
|
.1
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Initial
Advance.
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|
9
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6
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.2
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Subsequent
Advances.
|
|
10
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|
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7.
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REPRESENTATIONS
AND WARRANTIES
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|
10
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7
|
.1
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Formation.
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10
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7
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.2
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Authorization.
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10
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7
|
.3
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Enforceable
Agreement.
|
|
10
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7
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.4
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Good
Standing.
|
|
10
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7
|
.5
|
No
Conflicts.
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11
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|
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7
|
.6
|
Financial
Information.
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|
11
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|
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7
|
.7
|
Lawsuits.
|
|
11
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|
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7
|
.8
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Collateral.
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11
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|
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7
|
.9
|
Governmental
Authorization.
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11
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|
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7
|
.10
|
Permits,
Franchises.
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|
11
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|
|
7
|
.11
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Other
Obligations.
|
|
11
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|
|
7
|
.12
|
Tax
Matters.
|
|
11
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|
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7
|
.13
|
No
Event of Default.
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|
11
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|
|
7
|
.14
|
Insurance.
|
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12
|
|
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7
|
.15
|
Location
of Borrower.
|
|
12
|
|
i
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8.
|
COVENANTS
|
|
12
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|
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|
8
|
.1
|
Use
of Proceeds.
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12
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8
|
.2
|
Financial
Information.
|
|
12
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|
|
8
|
.3
|
Funded
Debt to EBITDA Ratio.
|
|
13
|
|
|
8
|
.4
|
Minimum
EBITDA.
|
|
13
|
|
|
8
|
.5
|
Liquidity.
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14
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|
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8
|
.6
|
Fixed
Charge Coverage Ratio.
|
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14
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|
|
8
|
.7
|
Maintenance
Capital Expenditures.
|
|
14
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|
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8
|
.8
|
Bank
as Principal Depository.
|
|
14
|
|
|
8
|
.9
|
Other
Debts.
|
|
14
|
|
|
8
|
.10
|
Other
Liens.
|
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15
|
|
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8
|
.11
|
Maintenance
of Assets.
|
|
15
|
|
|
8
|
.12
|
Investments.
|
|
15
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|
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8
|
.13
|
Loans.
|
|
15
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|
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8
|
.14
|
Change
of Management.
|
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16
|
|
|
8
|
.15
|
Additional
Negative Covenants.
|
|
16
|
|
|
8
|
.16
|
Notices
to Bank.
|
|
17
|
|
|
8
|
.17
|
Insurance.
|
|
17
|
|
|
8
|
.18
|
Compliance
with Laws.
|
|
17
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|
|
8
|
.19
|
ERISA
Plans.
|
|
18
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|
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8
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.20
|
Books
and Records.
|
|
18
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|
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8
|
.21.
|
Audits.
|
|
18
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|
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8
|
.22
|
Perfection
of Liens.
|
|
18
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|
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8
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.23
|
Cooperation.
|
|
18
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|
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9.
|
DEFAULT
AND REMEDIES
|
|
18
|
|
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|
9
|
.1
|
Failure
to Pay.
|
|
18
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|
|
9
|
.2
|
Other
Loan Documents or Bank Agreements.
|
|
18
|
|
|
9
|
.3
|
Cross-default.
|
|
19
|
|
|
9
|
.4
|
False
Information.
|
|
19
|
|
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9
|
.5
|
Bankruptcy.
|
|
19
|
|
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9
|
.6
|
Receivers.
|
|
19
|
|
|
9
|
.7
|
Lien
Priority.
|
|
19
|
|
|
9
|
.8
|
Lawsuits.
|
|
19
|
|
|
9
|
.9
|
Judgments.
|
|
19
|
|
|
9
|
.10
|
Material
Adverse Change.
|
|
19
|
|
|
9
|
.11
|
Government
Action.
|
|
19
|
|
|
9
|
.12
|
Default
under Related Documents.
|
|
20
|
|
|
9
|
.13
|
ERISA
Plans.
|
|
20
|
|
|
9
|
.14
|
Other
Breach Under Agreement.
|
|
20
|
|
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10.
|
ENFORCING
THIS AGREEMENT; MISCELLANEOUS
|
|
20
|
|
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|
10
|
.1
|
GAAP.
|
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20
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|
|
10
|
.2
|
Nevada
Law.
|
|
20
|
|
|
10
|
.3
|
Successors
and Assigns.
|
|
20
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|
|
10
|
.4
|
Arbitration
and Waiver of Jury Trial.
|
|
20
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|
|
10
|
.5
|
Severability;
Waivers.
|
|
22
|
|
|
10
|
.6
|
Attorneys’
Fees.
|
|
22
|
|
|
10
|
.7
|
One
Agreement.
|
|
22
|
|
|
10
|
.8
|
Indemnification.
|
|
22
|
|
|
10
|
.9
|
Notices.
|
|
23
|
|
|
10
|
.10.
|
Headings.
|
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23
|
|
|
10
|
.11
|
Waiver
of Immunity.
|
|
23
|
|
|
10
|
.12.
|
Counterparts.
|
|
23
|
|
|
10
|
.13
|
Affiliate
Sharing Notice.
|
|
23
|
|
|
10
|
.14
|
USA
PATRIOT Act Notice.
|
|
24
|
|
ii
LOAN
AGREEMENT
This
Agreement dated as of November 10, 2005 , is between Bank of America, N.A.
(the
"Bank") and Cash Systems, Inc., a Delaware corporation (the
"Borrower").
|
1.
|
LINE
OF CREDIT AMOUNT AND TERMS
|
| 1.1 | Line of Credit Amount. |
|
(a)
|
During
the Availability Period (defined below), the Bank will provide
a line of
credit (the "Line") to the Borrower. The amount of the line of
credit (the
"Commitment") is Five Million Five Hundred Thousand Dollars ($5,500,000),
subject to increase pursuant to .
|
|
(b)
|
This
is a revolving line of credit. During the Availability Period,
the
Borrower may repay principal amounts and reborrow them. Each advance
from
the Line shall be for at least One Million Dollars ($1,000,000),
or for
the amount of the remaining Commitment, if
less.
|
|
(c)
|
The
Borrower agrees not to permit the principal balance outstanding
to exceed
the Commitment. If the Borrower exceeds this limit, the Borrower
will
immediately pay the excess to the Bank upon the Bank's
demand.
|
| 1.2 | Availability Period. |
The
Line
is available between the date of this Agreement and November 9, 2007, or
such
earlier date as the availability may terminate as provided in this Agreement
(the "Expiration Date") (the "Availability Period").
| 1.3 | Repayment Terms. |
|
(a)
|
The
Borrower will pay interest on December 1, 2005, and then on the
same day
of each month thereafter until payment in full of any principal
outstanding under this facility.
|
|
(b)
|
The
Borrower will repay in full any principal, interest or other charges
outstanding under this facility no later than the Expiration Date.
Any
interest period for an optional interest rate (as described below)
shall
expire no later than the Expiration Date.
|
| 1.4 | Interest Rate. |
|
(a)
|
The
interest rate is a rate per year equal to the Bank's Prime Rate
plus the
Applicable Margin as defined below.
|
|
(b)
|
The
Prime Rate is the rate of interest publicly announced from time
to time by
the Bank as its Prime Rate. The Prime Rate is set by the Bank based
on
various factors, including the Bank’s costs and desired return, general
economic conditions and other factors, and is used as a reference
point
for pricing some loans. The Bank may price loans to its customers
at,
above, or below the Prime Rate. Any change in the Prime Rate shall
take
effect at the opening of business on the day specified in the public
announcement of a change in the Bank's Prime
Rate.
|
|
(c)
|
The
Borrower may make prepayments in whole or in part at any time on
any
principal bearing interest based on the Bank's Prime Rate plus
the
Applicable Margin. All prepayments of principal shall be applied
as the
Bank shall determine in its sole
discretion.
|
1
| 1.5 | Optional Interest Rates. |
Instead of the interest rate based on the rate stated in the paragraph entitled “Interest Rate” above, the Borrower may elect the LIBOR Rate as the optional interest rate for this facility during interest periods agreed to by the Bank and the Borrower. The optional interest rate shall be subject to the terms and conditions described later in this Agreement. Any principal amount bearing interest at an optional rate under this Agreement is referred to as a "Portion."
| 1.6 | Applicable Margin. |
The
Applicable Margin shall be the following amounts per annum, based upon the
Funded Debt to EBITDA (as defined in the “Covenants” section of this Agreement),
as set forth in the most recent Compliance Certificate (as defined in the
“Covenants” section of this Agreement) (or, if no Compliance Certificate is
required, the Borrower’s most recent financial statements) received by the Bank
as required in the Covenants section; provided, however, that, until the
Bank
receives the first Compliance Certificate or financial statement, such amounts
shall be those indicated for pricing level I set forth below:
|
Applicable
Margin
(in
percentage points per annum)
|
|||
|
Pricing
Level
|
Funded
Debt to EBITDA
|
LIBOR
Margin
|
Base
Rate Margin
|
|
I
|
Less
than or equal to 0.75:1.00
|
1.25%
|
0.00%
|
|
II
|
Greater
than 0.75:1.00,
but
less than or equal to 1.25:1.00
|
1.50%
|
0.25%
|
|
III
|
Greater
than 1.25:1.00 but less than or equal to 1.75:1.00
|
1.75%
|
0.50%
|
|
IV
|
Greater
than
1.75:1.00
|
2.25%
|
1.00%
|
The
Applicable Margin shall be in effect from the date the most recent Compliance
Certificate or financial statement is received by the Bank until the date
the
next Compliance Certificate or financial statement is received; provided,
however, that if the Borrower fails to timely deliver the next Compliance
Certificate or financial statement, the Applicable Margin from the date such
Compliance Certificate or financial statement was due until the date such
Compliance Certificate or financial statement is received by the Bank shall
be
the highest pricing level set forth above.
2
| 1.7 | Letters of Credit. |
|
(a)
|
During
the Availability Period, at the request of the Borrower, the Bank
will
issue:
|
|
(i)
|
Commercial
letters of credit with a maximum maturity of three hundred sixty-five
(365) days but not to extend beyond the Expiration Date. Each commercial
letter of credit will require drafts payable at
sight.
|
|
(ii)
|
Standby
letters of credit with a maximum maturity of three hundred sixty-five
(365) days but not to extend beyond the Expiration Date. The standby
letters of credit may include a provision providing that the maturity
date
will be automatically extended each year for an additional year
unless the
Bank gives written notice to the contrary; provided, however, that
each
letter of credit must include a final maturity date which will
not be
subject to automatic extension.
|
|
(b)
|
The
amount of the letters of credit outstanding at any one time (including
the
drawn and unreimbursed amounts of the letters of credit) may not
exceed
Two Million Five Hundred Thousand Dollars ($2,500,000).
|
|
(c)
|
In
calculating the principal amount outstanding under the Line, the
calculation shall include the amount of any
letters of credit outstanding, including amounts drawn on any letters
of
credit and not yet reimbursed.
|
|
(d)
|
The
Borrower agrees:
|
|
(i)
|
Any
sum drawn under a letter of credit may, at the option of the Bank,
be
added to the principal amount outstanding under this Agreement.
The amount
will bear interest and be due as described elsewhere in this
Agreement.
|
|
(ii)
|
If
there is a default under this Agreement, to immediately prepay
and make
the Bank whole for any outstanding letters of
credit.
|
|
(iii)
|
The
issuance of any letter of credit and any amendment to a letter
of credit
is subject to the Bank's written approval and must be in form and
content
satisfactory to the Bank and in favor of a beneficiary acceptable
to the
Bank.
|
|
(iv)
|
To
sign the Bank's form Application and Agreement for Commercial Letter
of
Credit or Application and Agreement for Standby Letter of Credit,
as
applicable.
|
|
(v)
|
To
pay any issuance and/or other fees that the Bank notifies the Borrower
will be charged for issuing and processing letters of credit for
the
Borrower.
|
|
(vi)
|
To
allow the Bank to automatically charge its checking account for
applicable
fees, discounts, and other charges.
|
|
1.8
|
Increase
Options.
|
|
(a)
|
The
Borrower may request an increase to the Commitment of an aggregate
amount
of not more than Seven Million Five Hundred Thousand Dollars ($7,500,000)
to fund the cash acquisition price of the IGS Assets (defined below)
(the
"IGS Acquisition Increase"), provided
that:
|
3
(i) no
event
of default or default shall have occurred or be continuing or shall occur
as a
result of the increase in the Commitment, tested on a pro forma basis as
a
condition to the increase.
(ii) Borrower
provides the Bank evidence that Borrower has entered into a transaction for
acquisition of the IGS Assets, and financial information in a form satisfactory
to the Bank confirming the amount of acquired cash flow on a trailing
twelve-month basis from the acquisition by the Borrower of the assets of
the
Indian Gaming Services Division from ▇▇▇▇▇▇▇ Springs Bank (the "IGS Cash
Flow"),
which acquisition is to include the acquisition of a sixty (60) machine ATM
network (the "IGS Assets").
(iii) As
a
condition to disbursement of the IGS Acquisition Increase, the Bank must
receive
evidence of Borrower's closing of the transaction for acquisition of the
IGS
Assets.
|
(b)
|
The
Borrower may request an additional increase to the Commitment of
an
aggregate amount of not more than Five Million Dollars ($5,000,000),
in
increments of not less than One Million Dollars ($1,000,000) provided
that
no event of default or default shall have occurred or be continuing
or
shall occur as a result of the increase in the Commitment, tested
on a pro
forma basis as a condition to the
increase.
|
|
2.
|
OPTIONAL
INTEREST RATES
|
| 2.1 | Optional Rates. |
Each
optional interest rate is a rate per year. No Portion will be converted to
a
different interest rate during the applicable interest period. Upon the
occurrence of an event of default under this Agreement, the Bank may terminate
the availability of optional interest rates for interest periods commencing
after the default occurs. At the end of any interest period, the interest
rate
will revert to the rate stated in the paragraph(s) entitled "Interest Rate"
above, unless the Borrower has designated another optional interest rate
for the
Portion.
| 2.2 |
LIBOR
Rate.
|
The
election of LIBOR Rates shall be subject to the following terms and
requirements:
|
(a)
|
The
interest period during which the LIBOR Rate will be in effect will
be one,
two, three, or six months. The first day of the interest period
must be a
day other than a Saturday or a Sunday on which banks are open for
business
in New York and London and dealing in offshore dollars (a "LIBOR
Banking
Day"). The last day of the interest period and the actual number
of days
during the interest period will be determined by the Bank using
the
practices of the London inter-bank
market.
|
|
(b)
|
Each
LIBOR Rate Portion will be for an amount not less than One Hundred
Thousand Dollars ($100,000).
|
|
(d)
|
The
"LIBOR Rate" means the interest rate determined by the following
formula.
(All amounts in the calculation will be determined by the Bank
as of the
first day of the interest period.)
|
LIBOR
Rate = London
Inter-Bank Offered Rate
(1.00
-
Reserve Percentage)
Where,
4
|
(i)
|
"London
Inter-Bank Offered Rate" means the interest rate at which the Bank
of
America's London Banking Center, London, Great Britain, would offer
U.S.
dollar deposits for the applicable interest period to other major
banks in
the London inter-bank market at approximately 11:00 a.m. London
time two
(2) London Banking Days before the commencement of the interest
period. A
"London Banking Day" is a day on which banks in London are open
for
business and dealing in offshore
dollars.
|
|
(ii)
|
"Reserve
Percentage" means the total of the maximum reserve percentages
for
determining the reserves to be maintained by member banks of the
Federal
Reserve System for Eurocurrency Liabilities, as defined in Federal
Reserve
Board Regulation D, rounded upward to the nearest 1/100 of one
percent.
The percentage will be expressed as a decimal, and will include,
but not
be limited to, marginal, emergency, supplemental, special, and
other
reserve percentages.
|
|
(e)
|
The
Borrower shall irrevocably request a LIBOR Rate Portion no later
than
12:00 noon Pacific time on the LIBOR Banking Day preceding the
day on
which the London Inter-Bank Offered Rate will be set, as specified
above.
For example, if there are no intervening holidays or weekend days
in any
of the relevant locations, the request must be made at least three
days
before the LIBOR Rate takes effect.
|
|
(f)
|
The
Bank will have no obligation to accept an election for a LIBOR
Rate
Portion if any of the following described events has occurred and
is
continuing:
|
|
(i)
|
Dollar
deposits in the principal amount, and for periods equal to the
interest
period, of a LIBOR Rate Portion are not available in the London
inter-bank
market; or
|
|
(ii)
|
the
LIBOR Rate does not accurately reflect the cost of a LIBOR Rate
Portion.
|
|
(g)
|
Each
prepayment of a LIBOR Rate Portion, whether voluntary, by reason
of
acceleration or otherwise, will be accompanied by the amount of
accrued
interest on the amount prepaid and a prepayment fee as described
below. A
"prepayment" is a payment of an amount on a date earlier than the
scheduled payment date for such amount as required by this Agreement.
The
Borrower shall provide the Bank with notice not less than three
(3)
business days prior to any voluntary
prepayment.
|
|
(h)
|
The
prepayment fee shall be in an amount sufficient to compensate the
Bank for
any loss, cost or expense incurred by it as a result of the prepayment,
including any loss of anticipated profits
and any loss or expense arising from the liquidation or reemployment
of
funds obtained by it to maintain such Portion or from fees payable
to
terminate the deposits from which such funds were obtained.
The Borrower shall also pay any customary administrative fees charged
by
the Bank in connection with the foregoing. For
purposes of this paragraph, the
Bank
shall be deemed to have funded each Portion by a matching deposit
or other
borrowing in the applicable interbank market, whether or not such
Portion
was in fact so funded.
|
|
3.
|
FEES
AND EXPENSES
|
| 3.1 |
Fees.
|
|
(a)
|
Upfront
Fee.
The Borrower agrees to pay a loan fee in the amount of Thirty-Nine
Thousand Dollars ($39,000). This fee is due on the date of this
Agreement.
|
|
(b)
|
Unused
Commitment Fee.
The Borrower agrees to pay a fee on any difference between the
Commitment
and the amount of credit it actually uses, determined by the average
of
the daily amount of credit outstanding during the specified period.
The
fee will be calculated as set forth below, based on the Borrower's
Funded
Debt to EBITDA, (as defined in the “Covenants” section of this Agreement),
as set forth in the most recent Compliance Certificate (or, if
no
Compliance Certificate is required, the Borrower’s most recent financial
statements) received by the Bank as required in the Covenants section,
The
calculation of credit outstanding shall include the undrawn amount
of
letters of credit. This fee is due quarterly in arrears on the
last day of
each calendar quarter during the Availability
Period.
|
5
|
Funded
Debt to EBITDA
|
Commitment
Fee
|
|
Less
than or equal to 0.75:1.00
|
0.20%
|
|
Greater
than 0.75:1.00, but less than or
equal to 1.25:1.00
|
0.20%
|
|
Greater
than 1.25:1.00 but less than or equal to 1.75:1.00
|
0.25%
|
|
Greater
than 1.75:1.00
|
0.35%
|
|
(b)
|
Waiver
Fee.
If the Bank, at its discretion, agrees to waive or amend any terms
of this
Agreement, the Borrower will, at the Bank's option, pay the Bank
a fee for
each waiver or amendment in an amount advised by the Bank at the
time the
Borrower requests the waiver or amendment. Nothing in this paragraph
shall
imply that the Bank is obligated to agree to any waiver or amendment
requested by the Borrower. The Bank may impose additional requirements
as
a condition to any waiver or
amendment.
|
|
(c)
|
Letter
of Credit Fee.
Fees for letters of credit shall be an annual amount equal to the
applicable LIBOR Margin set forth in Section 1.6 hereof multiplied
by the
amount of the outstanding letter(s) of credit. This fee is due
quarterly
in arrears on the last day of each calendar quarter during the
period any
letter of credit is outstanding.
|
|
(d)
|
Late
Fee.
To the extent permitted by law, the Borrower agrees to pay a late
fee in
an amount not to exceed four percent (4%) of any payment that is
more than
fifteen (15) days late. The imposition and payment of a late fee
shall not
constitute a waiver of the Bank’s rights with respect to the
default.
|
| 3.2 |
Expenses.
|
The
Borrower agrees to immediately repay the Bank for expenses that include,
but are
not limited to, filing, recording and search fees, appraisal fees, title
report
fees, and documentation fees.
| 3.3 |
Reimbursement
Costs.
|
|
(a)
|
The
Borrower agrees to reimburse the Bank for any expenses it incurs
in the
preparation of this Agreement and any agreement or instrument required
by
this Agreement. Expenses include, but are not limited to, reasonable
attorneys' fees, including any allocated costs of the Bank's in-house
counsel to the extent permitted by applicable
law.
|
|
(b)
|
The
Borrower agrees to reimburse the Bank for the cost of periodic
field
examinations of the Borrower’s books, records and collateral, and
appraisals of the collateral, at such intervals as the Bank may
reasonably
require. The actions described in this paragraph may be performed
by
employees of the Bank or by independent
appraisers.
|
6
|
4.
|
COLLATERAL
|
| 4.1 |
Personal
Property.
|
All
personal property now owned or owned in the future by the Borrower will secure
the Borrower’s obligations to the Bank under this Agreement. The collateral is
further defined in a security agreement and an assignment of contracts executed
by the Borrower, and includes but is not limited to:
(a) Machinery,
equipment, furniture and fixtures;
(b) Inventory;
(c) Receivables;
(d) stock,
membership interests and other securities of Borrower representing interests
in
Borrower's subsidiaries.
(e) Patents,
trademarks, software and other general intangibles;
(f) Contract
rights, goods, investment property, instruments, chattel paper, documents,
letter of credit rights, accounts, deposit accounts and commercial tort
claims.
In
addition, all personal property collateral owned by the Borrower securing
this
Agreement shall also secure all other present and future obligations of the
Borrower to the Bank. All personal property collateral securing any other
present or future obligations of the Borrower to the Bank shall also secure
this
Agreement.
|
5.
|
DISBURSEMENTS,
PAYMENTS AND COSTS
|
| 5.1 |
Disbursements
and Payments.
|
|
(a)
|
Each
payment by the Borrower will be made in U.S. Dollars and immediately
available funds by direct debit to a deposit account as specified
below
or, for payments not required to be made by direct debit, by mail
to the
address shown on the Borrower’s statement or at one of the Bank’s banking
centers in the United States.
|
|
(b)
|
Each
disbursement by the Bank and each payment by the Borrower will
be
evidenced by records kept by the Bank. In addition, the Bank may,
at its
discretion, require the Borrower to sign one or more promissory
notes.
|
| 5.2 |
Telephone
and Telefax Authorization.
|
|
(a)
|
The
Bank may honor telephone or telefax instructions for advances or
repayments or for the designation of optional interest rates and
telefax
requests for the issuance of letters of credit given, or purported
to be
given, by any one of the individuals authorized to sign loan agreements
on
behalf of the Borrower, or any other individual designated by any
one of
such authorized signers.
|
|
(b)
|
Advances
will be deposited in and repayments will be withdrawn from Account
Number
005011455636 owned by the Borrower, or such other of the Borrower’s
accounts with the Bank as designated in writing by the
Borrower.
|
7
| 5.3 |
Direct
Debit (Pre-Billing).
|
|
(a)
|
The
Borrower agrees that the Bank will debit deposit Account Number
005011455652 owned by the Borrower, or such other of the Borrower’s
accounts with the Bank as designated in writing by the Borrower
(the
"Designated Account") on the date each payment of principal and
interest
and any fees from the Borrower becomes due (the "Due
Date").
|
|
(b)
|
Prior
to each Due Date, the Bank will mail to the Borrower a statement
of the
amounts that will be due on that Due Date (the "Billed Amount").
The ▇▇▇▇
will be mailed ten
(10) days prior to the Due Date. The
calculations in the ▇▇▇▇ will be made on the assumption that no
new
extensions of credit or payments will be made between the date
of the
billing statement and the Due Date, and that there will be no changes
in
the applicable interest rate.
|
|
(c)
|
The
Bank will debit the Designated Account for the Billed Amount, regardless
of the actual amount due on that date (the "Accrued Amount"). If
the
Billed Amount debited to the Designated Account differs from the
Accrued
Amount, the discrepancy will be treated as
follows:
|
|
(i)
|
If
the Billed Amount is less than the Accrued Amount, the Billed Amount
for
the following Due Date will be increased by the amount of the discrepancy.
The Borrower will not be in default by reason of any such
discrepancy.
|
|
(ii)
|
If
the Billed Amount is more than the Accrued Amount, the Billed Amount
for
the following Due Date will be decreased by the amount of the
discrepancy.
|
|
Regardless
of any such discrepancy, interest will continue to accrue based
on the
actual amount of principal outstanding without compounding. The
Bank will
not pay the Borrower interest on any
overpayment.
|
|
(d)
|
The
Borrower will maintain sufficient funds in the Designated Account
to cover
each debit. If there are insufficient funds in the Designated Account
on
the date the Bank enters any debit authorized by this Agreement,
the Bank
may reverse the debit or create advances under the Line. The Bank
will
create advances on the dates payments become due. If a due date
does not
fall on a banking day, the Bank will create the advance on the
first
banking day following the due date. If the creation of an advance
under
the Line causes the total amount of credit outstanding to exceed
the
Commitment, the Borrower will immediately pay the excess to the
Bank upon
demand.
|
| 5.4 |
Banking
Days.
|
Unless
otherwise provided in this Agreement, a banking day is a day other than a
Saturday, Sunday or other day on which commercial banks are authorized to
close,
or are in fact closed, in the state where the Bank's lending office is located,
and, if such day relates to amounts bearing interest at an offshore rate
(if
any), means any such day on which dealings in dollar deposits are conducted
among banks in the offshore dollar interbank market. All payments and
disbursements which would be due on a day which is not a banking day will
be due
on the next banking day. All payments received on a day which is not a banking
day will be applied to the credit on the next banking day.
| 5.5 |
Interest
Calculation.
|
Except
as
otherwise stated in this Agreement, all interest and fees, if any, will be
computed on the basis of a three hundred sixty (360) day year and the actual
number of days elapsed. This results in more interest or a higher fee than
if a
three hundred sixty-five (365) day year is used. Installments of principal
which
are not paid when due under this Agreement shall continue to bear interest
until
paid.
8
| 5.6 |
Default
Rate.
|
Upon
the
occurrence of any default or after the Expiration Date or after judgment
has
been rendered on any obligation under this Agreement, all amounts outstanding
under this Agreement, including any interest, fees, or costs which are not
paid
when due, will at the option of the Bank bear interest at a rate which is
three
(3.0) percentage points higher than the rate of interest otherwise provided
under this Agreement. This may result in compounding of interest. This will
not
constitute a waiver of any default.
|
6.
|
CONDITIONS
|
|
6.1
|
Initial
Advance.
|
Before
the Bank is required to extend the initial advance to the Borrower under
this
Agreement, it must receive any documents and other items it may reasonably
require, in form and content acceptable to the Bank, including any items
specifically listed below.
(a) Authorization.
If
the
Borrower or any guarantor is anything other than a natural person, evidence
that
the execution, delivery and performance by the Borrower and/or such guarantor
of
this Agreement and any instrument or agreement required under this Agreement
have been duly authorized.
(b) Governing
Documents; Licenses and Approvals.
A
copy of
the Borrower's organizational documents, and copies of all licenses (including
gaming licenses), regulatory approvals, and permits necessary to the ongoing
business operations of the Borrower.
(c) Security
Agreements, Assignment of Contracts.
Signed
original security agreements and an assignment of contracts covering the
personal property collateral which the Bank requires.
(d) Perfection
and Evidence of Priority.
Evidence
that the security interests and liens in favor of the Bank are valid,
enforceable, properly perfected in a manner acceptable to the Bank and prior
to
all others' rights and interests, except those the Bank consents to in writing.
All title documents for motor vehicles which are part of the collateral must
show the Bank's interest.
(e) Payment
of Fees.
Payment
of all fees and other amounts due and owing to the Bank, including without
limitation payment of all accrued and unpaid expenses incurred by the Bank
as
required by the paragraph entitled "Reimbursement Costs."
(f) Good
Standing.
Certificates
of good standing for the Borrower from its state of formation and from any
other
state in which the Borrower is required to qualify to conduct its
business.
(g) Legal
Opinion.
A
written
opinion from the Borrower's legal counsel, covering such matters as the Bank
may
require. The legal counsel and the terms of the opinion must be acceptable
to
the Bank.
9
(h) Insurance.
Evidence
of insurance coverage, as required in the "Covenants" section of this
Agreement.
(i) Officer's
Certificate.
A
certificate signed by the chief executive officer of the Borrower regarding
such
matters as the Bank may require, including but not limited to matters relating
to the representations, warranties, and covenants contained in this
Agreement.
(j) Other
Required Documentation.
|
6.2
|
Subsequent
Advances.
|
Before
the Bank is required to extend each subsequent advance under this Agreement,
it
must receive any documents and other items it may reasonably require, in
form
and content acceptable to the Bank, and:
(a) there
shall be no default hereunder and no event which, with notice or the passage
of
time, would constitute an event of default hereunder;
(b) the
representations and warranties of the Borrower contained herein shall be
true
and correct as of the date of such subsequent advance.
Each
request for a subsequent advance shall be deemed a representation and warranty
by the Borrower that there is no default or event which could mature into
a
default hereunder and that the representations and warranties contained herein
are true and correct as of the date thereof.
|
7.
|
REPRESENTATIONS
AND WARRANTIES
|
When
the
Borrower signs this Agreement, and until the Bank is repaid in full, the
Borrower makes the following representations and warranties. Each request
for an
extension of credit constitutes a renewal of these representations and
warranties as of the date of the request:
| 7.1 |
Formation.
|
If
the
Borrower is anything other than a natural person, it is duly formed and existing
under the laws of the state or other jurisdiction where organized.
| 7.2 |
Authorization.
|
This
Agreement, and any instrument or agreement required hereunder, are within
the
Borrower's powers, have been duly authorized, and do not conflict with any
of
its organizational papers.
| 7.3 |
Enforceable
Agreement.
|
This
Agreement is a legal, valid and binding agreement of the Borrower, enforceable
against the Borrower in accordance with its terms, and any instrument or
agreement required hereunder, when executed and delivered, will be similarly
legal, valid, binding and enforceable.
| 7.4 |
Good
Standing.
|
In
each
state in which the Borrower does business, it is properly licensed, in good
standing, and, where required, in compliance with fictitious name
statutes.
10
| 7.5 |
No
Conflicts.
|
This
Agreement does not conflict with any law, agreement, or obligation by which
the
Borrower is bound.
| 7.6 |
Financial
Information.
|
All
financial and other information that has been or will be supplied to the
Bank is
sufficiently complete to give the Bank accurate knowledge of the Borrower's
(and
any guarantor's) financial condition, including all material contingent
liabilities. Since the date of the most recent financial statement provided
to
the Bank, there has been no material adverse change in the business condition
(financial or otherwise), operations, properties or prospects of the Borrower
(or any guarantor). If the Borrower is comprised of the trustees of a trust,
the
foregoing representations shall also pertain to the trustor(s) of the
trust.
| 7.7 |
Lawsuits.
|
There
is
no lawsuit, tax claim or other dispute pending or threatened against the
Borrower which, if lost, would impair the Borrower's financial condition
or
ability to repay the loan, except as have been disclosed in writing to the
Bank.
| 7.8 |
Collateral.
|
All
collateral required in this Agreement is owned by the grantor of the security
interest free of any title defects or any liens or interests of others, except
those which have been approved by the Bank in writing.
|
7.9
|
Governmental
Authorization.
|
No
approval, consent, exemption, authorization, or other action by, or notice
to,
or filing with, any governmental authority (including, without limitation,
any
nation, state or other political subdivision thereof, any central bank, and
any
entity exercising executive, legislative, judicial, regulatory or administrative
functions, and any corporation or other entity owned or controlled by any
of the
foregoing) is necessary or required in connection with the execution, delivery
or performance by, or enforcement against, the Borrower of this Agreement
or any
other instrument or agreement required hereunder.
| 7.10 |
Permits,
Franchises.
|
The
Borrower possesses all permits, memberships, franchises, contracts and licenses
required and all trademark rights, trade name rights, patent rights, copyrights,
and fictitious name rights necessary to enable it to conduct the business
in
which it is now engaged.
| 7.11 |
Other
Obligations.
|
The
Borrower is not in default on any obligation for borrowed money, any purchase
money obligation or any other material lease, commitment, contract, instrument
or obligation, except as have been disclosed in writing to the
Bank.
| 7.12 |
Tax
Matters.
|
The
Borrower has no knowledge of any pending assessments or adjustments of its
income tax for any year and all taxes due have been paid, except as have
been
disclosed in writing to the Bank.
| 7.13 |
No
Event of Default.
|
There
is
no event which is, or with notice or lapse of time or both would be, a default
under this Agreement.
11
| 7.14 |
Insurance.
|
The
Borrower has obtained, and maintained in effect, the insurance coverage required
in the "Covenants" section of this Agreement.
| 7.15 |
Location
of Borrower.
|
The
place
of business of the Borrower (or, if the Borrower has more than one place
of
business, its chief executive office) is located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇.
|
8.
|
COVENANTS
|
The
Borrower agrees, so long as credit is available under this Agreement and
until
the Bank is repaid in full:
| 8.1 |
Use
of Proceeds.
|
To
use
the proceeds of the line of credit on the Closing Date to repay that certain
bridge loan made by the Bank to the Borrower in the principal amount of
$3,000,000, together with accrued interest, and for proper working capital
and
general corporate purposes of Borrower and its Subsidiaries not in contravention
of any Law or of any Loan Document; and, if the IGS Acquisition Increase
is
made, to finance up to Seven Million Five Hundred Thousand Dollars ($7,500,000)
of the purchase price of the IGS Assets.
| 8.2 |
Financial
Information.
|
To
provide the following financial information and statements in form and content
acceptable to the Bank, and such additional information as requested by the
Bank
from time to time:
|
(a)
|
Within
ninety (90) days of the fiscal year end, the annual financial statements
of the Borrower. These financial statements must be audited (with
an
opinion satisfactory to the Bank) by a Certified Public Accountant
acceptable to the Bank.
|
|
(b)
|
Within
forty-five (45) days of the period's end (including the last period
in
each fiscal year), quarterly financial statements of the Borrower,
certified and dated by an authorized financial officer, and reflecting
the
current quarter results and year-to-date results, and comparisons
of prior
quarter and prior year-to-date
results.
|
|
(c)
|
Copies
of the Form 10-K Annual Report, Form 10-Q Quarterly Report and
Form 8-K
Current Report for the Borrower within five (5) days after the
date of
filing with the Securities and Exchange
Commission.
|
|
(d)
|
Financial
projections covering a time period acceptable to the Bank and specifying
the assumptions used in creating the projections. The projections
shall be
provided to the Bank no less often than 60 days after the end of
each
fiscal year.
|
|
(e)
|
Within
forty-five (45) days of the end of each fiscal year and within
forty-five
(45) days of the end of each quarter, a
certificate of the Borrower substantially in the form attached
hereto as
Exhbit "A" (each, a "Compliance Certificate"), signed by an authorized
financial officer and setting forth (i) the information and computations
(in sufficient detail) to establish that the Borrower is in compliance
with all financial covenants at the end of the period covered by
the
financial statements then being furnished and (ii) whether there
existed
as of the date of such financial statements and whether there exists
as of
the date of the certificate, any default under this Agreement and,
if any
such default exists, specifying the nature thereof and the action
the
Borrower is taking and proposes to take with respect thereto. The
first
Compliance Certificate hereunder shall be due on or before the
forty-fifth
(45th)
day following December 31, 2005 (the "Initial Compliance
Certificate").
|
|
(f)
|
Such
other financial information as the Bank may reasonably
require.
|
12
| 8.3 |
Funded
Debt to EBITDA Ratio.
|
To
maintain on a consolidated basis a ratio of Funded Debt to EBITDA not exceeding
the ratios indicated for each period specified below, with the first calculation
of Funded Debt to EBITDA reflected in the Initial Compliance Certificate,
and in
each subsequent Compliance Certificate:
| Period | Ratio | ||
| From Closing through 3/31/06 | 2.25:1.00 | ||
| From 6/30/06 through 9/30/06 | 2.00:1.00 | ||
| From 12/31/06 and thereafter | 1.75:1.00 |
“Funded
Debt” means all outstanding liabilities for borrowed money and other
interest-bearing liabilities, including current and long term debt.
“EBITDA"
means net income, less income or plus loss from discontinued operations and
extraordinary items, plus income taxes, plus interest expense, plus depreciation
and amortization. This ratio will be calculated at the end of each reporting
period for which the Bank requires financial statements, using the results
of
the trailing twelve-month period ending with that reporting period. For purposes
of computation of EBITDA, for the fiscal year ending December 31, 2005, an
adjustment acceptable to the Bank in the Bank's reasonable discretion shall
be
made for non-recurring expenses, and which adjustment shall not exceed Four
Million Five Hundred Thousand Dollars ($4,500,000). For purposes of computation
of EBITDA , for the first four quarters following the IGS Acquisition Increase,
the trailing twelve-month EBITDA will include the IGS Cash Flow for the
applicable periods.
"Funded
Debt to EBITDA" means, for the reporting period, the ratio of (a) Funded
Debt,
plus any letters of credit outstanding, plus capital leases outstanding on
the
last day of each calendar month in the most recent quarter, divided by three
(3), to (b) EBITDA.
| 8.4 |
Minimum
EBITDA.
|
To
maintain EBITDA for the trailing four quarter period ending on the determination
date in an amount not less than that indicated for each period specified
below,
with the first calculation of Minimum EBITDA reflected in the Initial Compliance
Certificate, and in each subsequent Compliance Certificate:
| Period | Minimum EBITDA | ||
| From Closing until the earlier of the | |||
| Expiration Date or the IGS | |||
| Acquisition Increase | $3,000,000 | ||
| From and after the IGS | |||
| Acquisition Increase | $6,000,000 |
13
| 8.5 |
Liquidity.
|
To
maintain on a consolidated basis minimum Unrestricted, Unencumbered Liquid
Assets of not less than Five Million Dollars ($5,000,000), measured at the
end
of each reporting period for which the Bank requires financial statements
from
the Borrower, with the first calculation of Unrestricted, Unencumbered Liquid
Assets reflected in the Initial Compliance Certificate, and in each subsequent
Compliance Certificate.
“Unrestricted,
Unencumbered Liquid Assets” are defined as unrestricted, unencumbered marketable
securities, cash and cash equivalents.
| 8.6 |
Fixed
Charge Coverage Ratio.
|
To
maintain a Fixed Charge Coverage Ratio of 1.25:1.00 or greater, measured
at the
end of each reporting period for which the Bank requires financial statements
from the Borrower, using the results of the trailing twelve-month period
ending
with that reporting period, with the first calculation reflected in the Initial
Compliance Certificate, and in each subsequent Compliance
Certificate.
“Fixed
Charge Coverage Ratio” means EBITDA minus unfinanced Maintenance Capital
Expenditures minus cash taxes minus shareholder distributions divided by
the sum
of: (a) cash interest expense (including capitalized interest), plus (b)
actual
principal reductions made on the line of credit, plus (c) the current portion
of
long term debt on any other long term obligations.
| 8.7 |
Maintenance
Capital Expenditures.
|
Not
to
spend or incur obligations for Maintenance Capital Expenditures of more than
five percent (5%) of annual revenues in any single fiscal year.
"Maintenance
Capital Expenditures" are defined as any expenditure for the maintenance,
repair, restoration, or refurbishment of any fixed assets.
| 8.8 |
Bank
as Principal Depository.
|
To
maintain the Bank as its principal depository bank, including for the
maintenance of business, cash management, operating and administrative deposit
accounts.
| 8.9 |
Other
Debts.
|
Not
to
have outstanding or incur any direct or contingent liabilities or lease
obligations (other than those to the Bank), or become liable for the liabilities
of others, without the Bank's written consent. This does not
prohibit:
|
(a)
|
Acquiring
goods, supplies, or merchandise on normal trade
credit.
|
|
(b)
|
Endorsing
negotiable instruments received in the usual course of
business.
|
|
(c)
|
Obtaining
surety bonds in the usual course of
business.
|
|
(d)
|
Liabilities,
lines of credit and leases in existence on the date of this Agreement
disclosed in writing to the Bank in the Borrower's most recent
financial
statement.
|
|
(e)
|
Purchase
money indebtedness which does not exceed Five Hundred Thousand
Dollars
($500,000.00) annually.
|
14
| 8.10 |
Other
Liens.
|
Not
to
create, assume, or allow any security interest or lien (including judicial
liens) on property the Borrower now or later owns, except:
|
(a)
|
Liens
and security interests in favor of the
Bank.
|
|
(b)
|
Liens
for taxes not yet due.
|
|
(c)
|
Liens
outstanding on the date of this Agreement disclosed in writing
and
acceptable to the Bank.
|
|
(d)
|
Liens
resulting from purchase money indebtedness referenced in Section
8.9(e)
above.
|
| 8.11 |
Maintenance
of Assets.
|
|
(a)
|
Not
to sell, assign, lease, transfer or otherwise dispose of any part
of the
Borrower's business or the Borrower's assets except in the ordinary
course
of the Borrower's business.
|
|
(b)
|
Not
to sell, assign, lease, transfer or otherwise dispose of any assets
for
less than fair market value, or enter into any agreement to do
so.
|
|
(c)
|
Not
to enter into any sale and leaseback agreement covering any of
its fixed
assets.
|
|
(d)
|
To
maintain and preserve all rights, privileges, and franchises the
Borrower
now has.
|
|
(e)
|
To
make any repairs, renewals, or replacements to keep the Borrower's
assets
in good working condition.
|
| 8.12 |
Investments.
|
Not
to
have any existing, or make any new, investments in any individual or entity,
or
make any capital contributions or other transfers of assets to any individual
or
entity, except for:
|
(a)
|
Existing
investments disclosed to the Bank in
writing.
|
|
(b)
|
Investments
in the Borrower’s current
subsidiaries.
|
|
(c)
|
Investments
in any of the following:
|
|
(i)
|
certificates
of deposit;
|
|
(ii)
|
U.S.
treasury bills and other obligations of the federal
government;
|
|
(iii)
|
readily
marketable securities (including commercial paper, but excluding
restricted stock and stock subject to the provisions of Rule 144
of the
Securities and Exchange
Commission).
|
| 8.13 |
Loans.
|
Not
to
make any loans, advances or other extensions of credit to any individual
or
entity, except for:
|
(a)
|
Existing
extensions of credit disclosed to the Bank in
writing.
|
|
(b)
|
Extensions
of credit to the Borrower’s current
subsidiaries.
|
15
|
(c)
|
Extensions
of credit in the nature of accounts receivable or notes receivable
arising
from the sale or lease of goods or services in the ordinary course
of
business to non-affiliated
entities.
|
|
(d)
|
Extensions
of credit that do not exceed an aggregate amount of Five Hundred
Thousand
Dollars ($500,000) outstanding at any one
time.
|
| 8.14 |
Change
of Management.
|
Not
to
make any substantial change in the present executive or management personnel
of
the Borrower.
| 8.15 |
Additional
Negative Covenants.
|
Not
to,
without the Bank's written consent:
|
(a)
|
Enter
into any consolidation, merger, or other combination, or become
a partner
in a partnership, a member of a joint venture, or a member of a
limited
liability company.
|
|
(b)
|
Acquire
or purchase a business or its assets, except that the Borrower
may make
such an acquisition or purchase if:
|
|
(i)
|
the
subject of the proposed acquisition or purchase (the "Target Business")
is
generally in the same line of business as the Borrower, and the
acquisition of the Target Business will not require the Borrower
to
materially alter its business purpose;
|
|
(ii)
|
the
aggregate amount expended for such acquisitions or purchases during
the
Availability Period does not exceed Four Million Dollars ($4,000,000)
(which limit shall increase to Seven Million Five Hundred Thousand
Dollars
($7,500,000) if and when the IGS Acquisition Increase is
made);
|
| (iii) | the Borrower provides to the Bank: |
| (A) | at least thirty (30) days' advance written notice of such acquisition; |
|
(B)
|
copies
of the most recent audited quarterly and annual financial statements
of
the Target Business, audited (with an opinion satisfactory to the
Bank) by
a Certified Public Accountant acceptable to the
Bank;
|
|
(C)
|
copies
of the documents evidencing the acquisition of the Target Business,
certified by an officer of the Borrower to be true and correct
copies of
such documents; and
|
|
(D)
|
such
other assurances, certificates, documents, consents or opinions
as the
Bank reasonably may require, including but not limited to documents
necessary to pledge such acquired assets to the Bank as additional
collateral for the Line.
|
(c) Engage
in
any business activities substantially different from the Borrower's present
business.
|
(d)
|
Liquidate
or dissolve the Borrower's
business.
|
|
(e)
|
Create
any subsidiary without the Bank's consent and without entering
into a
pledge agreement pledging the Borrower's interest in such subsidiary
to
the Bank as additional collateral for the
Line.
|
16
| 8.16 |
Notices
to Bank.
|
To
promptly notify the Bank in writing of:
|
(a)
|
Any
lawsuit threatened or filed involving claims of over Five Hundred
Thousand
Dollars ($500,000) against the Borrower (or any guarantor or, if
the
Borrower is comprised of the trustees of a trust, any
trustor).
|
|
(b)
|
Any
substantial dispute between any governmental authority and the
Borrower
(or any guarantor or, if the Borrower is comprised of the trustees
of a
trust, any trustor).
|
|
(c)
|
Any
event of default under this Agreement, or any event which, with
notice or
lapse of time or both, would constitute an event of
default.
|
|
(d)
|
Any
material adverse change in the Borrower's (or any guarantor’s, or, if the
Borrower is comprised of the trustees of a trust, any trustor’s) business
condition (financial or otherwise), operations, properties or prospects,
or ability to repay the credit.
|
|
(e)
|
Any
change in the Borrower's name, legal structure, place of business,
or
chief executive office if the Borrower has more than one place
of
business.
|
|
(f)
|
Any
actual contingent liabilities of the Borrower (or any guarantor
or, if the
Borrower is comprised of the trustees of a trust, any trustor),
and any
such contingent liabilities which are reasonably
foreseeable.
|
| 8.17 |
Insurance.
|
|
(a)
|
General
Business Insurance.
To maintain insurance satisfactory to the Bank as to amount, nature
and
carrier covering property damage (including loss of use and occupancy)
to
any of the Borrower's properties, insurance, public liability insurance
including coverage for contractual liability, product liability
and
workers' compensation, and any other insurance which is usual for
the
Borrower's business. Each policy shall provide for at least thirty
(30)
days prior notice to the Bank of any cancellation
thereof.
|
|
(b)
|
Insurance
Covering Collateral.
To maintain all risk property damage insurance policies covering
the
tangible property comprising the collateral. Each insurance policy
must be
for the full replacement cost of the collateral and include a replacement
cost endorsement. The insurance must be issued by an insurance
company
acceptable to the Bank and must include a lender's loss payable
endorsement in favor of the Bank in a form acceptable to the
Bank.
|
|
(c)
|
Evidence
of Insurance.
Upon the request of the Bank, to deliver to the Bank a copy of
each
insurance policy, or, if permitted by the Bank, a certificate of
insurance
listing all insurance in force.
|
| 8.18 |
Compliance
with Laws.
|
To
comply
with the laws (including but not limited to any fictitious or trade name),
regulations, and orders of any government body with authority over the
Borrower's business, including but not limited to laws, regulations and orders
pertaining to environmental protection and gaming. The Bank shall have no
obligation to make any advance to the Borrower except in compliance with
all
applicable laws and regulations and the Borrower shall fully cooperate with
the
Bank in complying with all such applicable laws and regulations.
17
| 8.19 |
ERISA
Plans.
|
Promptly
during each year, to pay and cause any subsidiaries to pay contributions
adequate to meet at least the minimum funding standards under ERISA with
respect
to each and every Plan; file each annual report required to be filed pursuant
to
ERISA in connection with each Plan for each year; and notify the Bank within
ten
(10) days of the occurrence of any Reportable Event that might constitute
grounds for termination of any capital Plan by the Pension Benefit Guaranty
Corporation or for the appointment by the appropriate United States District
Court of a trustee to administer any Plan. "ERISA" means the Employee Retirement
Income Security Act of 1974, as amended from time to time. Capitalized terms
in
this paragraph shall have the meanings defined within ERISA.
| 8.20 |
Books
and Records.
|
To
maintain adequate books and records.
| 8.21 |
Audits.
|
To
allow
the Bank and its agents to inspect the Borrower's properties and examine,
audit,
and make copies of books and records at any reasonable time. If any of the
Borrower's properties, books or records are in the possession of a third
party,
the Borrower authorizes that third party to permit the Bank or its agents
to
have access to perform inspections or audits and to respond to the Bank's
requests for information concerning such properties, books and
records.
| 8.22 |
Perfection
of Liens.
|
To
help
the Bank perfect and protect its security interests and liens, and reimburse
it
for related costs it incurs to protect its security interests and
liens.
| 8.23 |
Cooperation.
|
To
take
any action reasonably requested by the Bank to carry out the intent of this
Agreement.
|
9.
|
DEFAULT
AND REMEDIES
|
If
any of
the following events of default occurs, the Bank may do one or more of the
following: declare the Borrower in default, stop making any additional credit
available to the Borrower, and require the Borrower to repay its entire debt
immediately and without prior notice. If an event which, with notice or the
passage of time, will constitute an event of default has occurred and is
continuing, the Bank has no obligation to make advances or extend additional
credit under this Agreement. In addition, if any event of default occurs,
the
Bank shall have all rights, powers and remedies available under any instruments
and agreements required by or executed in connection with this Agreement,
as
well as all rights and remedies available at law or in equity. If an event
of
default occurs under the paragraph entitled "Bankruptcy," below, with respect
to
the Borrower, then the entire debt outstanding under this Agreement will
automatically be due immediately.
| 9.1 |
Failure
to Pay.
|
The
Borrower fails to make a payment under this Agreement when due.
| 9.2 |
Other
Loan Documents or Bank Agreements.
|
Any
default occurs under any other agreement between the Borrower and the Bank
executed in connection with the Line (each, a "Loan Document" and collectively,
the "Loan Documents"), or any other agreement the Borrower (or any Obligor)
or
any of the Borrower's related entities or affiliates has with the Bank or
any
affiliate of the Bank. For purposes of this Agreement, “Obligor” shall mean any
guarantor, any party pledging collateral to the Bank, or, if the Borrower
is
comprised of the trustees of a trust, any trustor.
18
| 9.3 |
Cross-default.
|
Any
default occurs under any agreement in connection with any credit the Borrower
(or any Obligor) or any of the Borrower's related entities or affiliates
has
obtained from anyone else or which the Borrower (or any Obligor) or any of
the
Borrower's related entities or affiliates has guaranteed.
| 9.4 |
False
Information.
|
The
Borrower or any Obligor has given the Bank false or misleading information
or
representations.
| 9.5 |
Bankruptcy.
|
The
Borrower, any Obligor, or any general partner of the Borrower or of any Obligor
files a bankruptcy petition, a bankruptcy petition is filed against any of
the
foregoing parties, or the Borrower, any Obligor, or any general partner of
the
Borrower or of any Obligor makes a general assignment for the benefit of
creditors.
| 9.6 |
Receivers.
|
A
receiver or similar official is appointed for a substantial portion of the
Borrower's or any Obligor's business, or the business is terminated, or,
if any
Obligor is anything other than a natural person, such Obligor is liquidated
or
dissolved.
| 9.7 |
Lien
Priority.
|
The
Bank
fails to have an enforceable first lien (except for any prior liens to which
the
Bank has consented in writing) on or security interest in any property given
as
security for this Agreement (or any guaranty).
| 9.8 |
Lawsuits.
|
Any
lawsuit or lawsuits are filed against the Borrower or any Obligor in an
aggregate amount of Five Hundred Thousand Dollars ($500,000) or more in excess
of any insurance coverage.
| 9.9 |
Judgments.
|
Any
judgments or arbitration awards are entered against the Borrower or any Obligor,
or the Borrower or any Obligor enters into any settlement agreements with
respect to any litigation or arbitration, in an aggregate amount of Five
Hundred
Thousand Dollars ($500,000) or more in excess of any insurance
coverage.
| 9.10 |
Material
Adverse Change.
|
A
material adverse change occurs, or is reasonably likely to occur, in the
Borrower's (or any Obligor's) business condition (financial or otherwise),
operations, properties or prospects, or ability to repay the credit; or the
Bank
determines that it is insecure for any other reason.
| 9.11 |
Government
Action.
|
Any
government authority takes action that the Bank believes materially adversely
affects the Borrower's or any Obligor's financial condition or ability to
repay.
19
| 9.12 |
Default
under Related Documents.
|
Any
default occurs under any guaranty, subordination agreement, security agreement,
deed of trust, mortgage, or other document required by or delivered in
connection with this Agreement or any such document is no longer in effect,
or
any guarantor purports to revoke or disavow the guaranty.
| 9.13 |
ERISA
Plans.
|
Any
one
or more of the following events occurs with respect to a Plan of the Borrower
subject to Title IV of ERISA, provided such event or events could reasonably
be
expected, in the judgment of the Bank, to subject the Borrower to any tax,
penalty or liability (or any combination of the foregoing) which, in the
aggregate, could have a material adverse effect on the financial condition
of
the Borrower:
|
(a)
|
A
reportable event shall occur under Section 4043(c) of ERISA with
respect
to a Plan.
|
|
(b)
|
Any
Plan termination (or commencement of proceedings to terminate a
Plan) or
the full or partial withdrawal from a Plan by the Borrower or any
ERISA
Affiliate.
|
| 9.14 |
Other
Breach Under Agreement.
|
A
default
occurs under any other term or condition of this Agreement not specifically
referred to in this Article. This includes any failure or anticipated failure
by
the Borrower (or any other party named in the Covenants section) to comply
with
any financial covenants set forth in this Agreement, whether such failure
is
evidenced by financial statements delivered to the Bank or is otherwise known
to
the Borrower or the Bank.
|
10.
|
ENFORCING
THIS AGREEMENT; MISCELLANEOUS
|
| 10.1 |
GAAP.
|
Except
as
otherwise stated in this Agreement, all financial information provided to
the
Bank and all financial covenants will be made under generally accepted
accounting principles, consistently applied.
| 10.2 |
Nevada
Law.
|
This
Agreement is governed by Nevada law.
| 10.3 |
Successors
and Assigns.
|
This
Agreement is binding on the Borrower's and the Bank's successors and assignees.
The Borrower agrees that it may not assign this Agreement without the Bank's
prior consent. The Bank may sell participations in or assign this loan, and
may
exchange information about the Borrower (including, without limitation, any
information regarding any hazardous substances) with actual or potential
participants or assignees. The Bank will provide written notice to the Borrower
of any sale or assignment of an interest in this loan. If a participation
is
sold or the loan is assigned, the purchaser will have the right of set-off
against the Borrower.
| 10.4 |
Arbitration
and Waiver of Jury Trial.
|
|
(a)
|
This
paragraph concerns the resolution of any controversies or claims
between
the parties, whether arising in contract, tort or by statute, including
but not limited to controversies or claims that arise out of or
relate to:
(i) this agreement (including any renewals, extensions or modifications);
or (ii) any document related to this agreement (collectively a
"Claim").
For the purposes of this arbitration provision only, the term “parties”
shall include any parent corporation, subsidiary or affiliate of
the Bank
involved in the servicing, management or administration of any
obligation
described or evidenced by this
agreement.
|
20
|
(b)
|
At
the request of any party to this agreement, any Claim shall be
resolved by
binding arbitration in accordance with the Federal Arbitration
Act (Title
9, U.S. Code) (the "Act"). The Act will apply even though this
agreement
provides that it is governed by the law of a specified state. The
arbitration will take place on an individual basis without resort
to any
form of class action.
|
|
(c)
|
Arbitration
proceedings will be determined in accordance with the Act, the
then-current rules and procedures for the arbitration of financial
services disputes of the American Arbitration Association or any
successor
thereof ("AAA"), and the terms of this paragraph. In the event
of any
inconsistency, the terms of this paragraph shall control. If AAA
is
unwilling or unable to (i) serve as the provider of arbitration
or (ii)
enforce any provision of this arbitration clause, the Bank may
designate
another arbitration organization with similar procedures to serve
as the
provider of arbitration.
|
|
(d)
|
The
arbitration shall be administered by AAA and conducted, unless
otherwise
required by law, in any U.S. state where real or tangible personal
property collateral for this credit is located or if there is no
such
collateral, in the state specified in the governing law section
of this
agreement. All Claims shall be determined by one arbitrator; however,
if
Claims exceed Five Million Dollars ($5,000,000), upon the request
of any
party, the Claims shall be decided by three arbitrators. All arbitration
hearings shall commence within ninety (90) days of the demand for
arbitration and close within ninety (90) days of commencement and
the
award of the arbitrator(s) shall be issued within thirty (30) days
of the
close of the hearing. However, the arbitrator(s), upon a showing
of good
cause, may extend the commencement of the hearing for up to an
additional
sixty (60) days. The arbitrator(s) shall provide a concise written
statement of reasons for the award. The arbitration award may be
submitted
to any court having jurisdiction to be confirmed, judgment entered
and
enforced.
|
|
(e)
|
The
arbitrator(s) will give effect to statutes of limitation in determining
any Claim and may dismiss the arbitration on the basis that the
Claim is
barred. For purposes of the application of the statute of limitations,
the
service on AAA under applicable AAA rules of a notice of Claim
is the
equivalent of the filing of a lawsuit. Any dispute concerning this
arbitration provision or whether a Claim is arbitrable shall be
determined
by the arbitrator(s). The arbitrator(s) shall have the power to
award
legal fees pursuant to the terms of this
agreement.
|
|
(f)
|
This
paragraph does not limit the right of any party to: (i) exercise
self-help
remedies, such as but not limited to, setoff; (ii) initiate judicial
or
non-judicial foreclosure against any real or personal property
collateral;
(iii) exercise any judicial or power of sale rights, or (iv) act
in a
court of law to obtain an interim remedy, such as but not limited
to,
injunctive relief, writ of possession or appointment of a receiver,
or
additional or supplementary
remedies.
|
|
(g)
|
The
filing of a court action is not intended to constitute a waiver
of the
right of any party, including the suing party, thereafter to require
submittal of the Claim to
arbitration.
|
|
(h)
|
By
agreeing to binding arbitration, the parties irrevocably and voluntarily
waive any right they may have to a trial by jury in respect of
any Claim.
Furthermore, without intending in any way to limit this agreement
to
arbitrate, to the extent any Claim is not arbitrated, the parties
irrevocably and voluntarily waive any right they may have to a
trial by
jury in respect of such Claim. This provision is a material inducement
for
the parties entering into this
agreement.
|
|
____________
|
|
INITIAL
HERE
|
21
| 10.5 |
Severability;
Waivers.
|
If
any
part of this Agreement is not enforceable, the rest of the Agreement may
be
enforced. The Bank retains all rights, even if it makes a loan after default.
If
the Bank waives a default, it may enforce a later default. Any consent or
waiver
under this Agreement must be in writing.
| 10.6 |
Attorneys’
Fees.
|
The
Borrower shall reimburse the Bank for any reasonable costs and attorneys'
fees
incurred by the Bank in connection with the enforcement or preservation of
any
rights or remedies under this Agreement and any other documents executed
in
connection with this Agreement, and in connection with any amendment, waiver,
"workout" or restructuring under this Agreement. In the event of a lawsuit
or
arbitration proceeding, the prevailing party is entitled to recover costs
and
reasonable attorneys' fees incurred in connection with the lawsuit or
arbitration proceeding, as determined by the court or arbitrator. In the
event
that any case is commenced by or against the Borrower under the Bankruptcy
Code
(Title 11, United States Code) or any similar or successor statute, the Bank
is
entitled to recover costs and reasonable attorneys' fees incurred by the
Bank
related to the preservation, protection, or enforcement of any rights of
the
Bank in such a case. As used in this paragraph, "attorneys' fees" includes
the
allocated costs of the Bank's in-house counsel.
| 10.7 |
One
Agreement.
|
This
Agreement and any related security or other agreements required by this
Agreement, collectively:
|
(a)
|
represent
the sum of the understandings and agreements between the Bank and
the
Borrower concerning this credit;
|
|
(b)
|
replace
any prior oral or written agreements between the Bank and the Borrower
concerning this credit; and
|
|
(c)
|
are
intended by the Bank and the Borrower as the final, complete and
exclusive
statement of the terms agreed to by
them.
|
In
the
event of any conflict between this Agreement and any other agreements required
by this Agreement, this Agreement will prevail. Any reference in any related
document to a “promissory note” or a “note” executed by the Borrower and dated
as of the date of this Agreement shall be deemed to refer to this Agreement,
as
now in effect or as hereafter amended, renewed, or restated.
| 10.8 |
Indemnification.
|
The
Borrower will indemnify and hold the Bank harmless from any loss, liability,
damages, judgments, and costs of any kind relating to or arising directly
or
indirectly out of (a) this Agreement or any document required hereunder,
(b) any
credit extended or committed by the Bank to the Borrower hereunder, and (c)
any
litigation or proceeding related to or arising out of this Agreement, any
such
document, or any such credit. This indemnity includes but is not limited
to
attorneys' fees (including the allocated cost of in-house counsel). This
indemnity extends to the Bank, its parent, subsidiaries and all of their
directors, officers, employees, agents, successors, attorneys, and assigns.
This
indemnity will survive repayment of the Borrower's obligations to the Bank.
All
sums due to the Bank hereunder shall be obligations of the Borrower, due
and
payable immediately without demand.
22
| 10.9 |
Notices.
|
Unless
otherwise provided in this Agreement or in another agreement between the
Bank
and the Borrower, all notices required under this Agreement shall be personally
delivered or sent by first class mail, postage prepaid, or by overnight courier,
to the addresses on the signature page of this Agreement, or sent by facsimile
to the fax numbers listed on the signature page, or to such other addresses
as
the Bank and the Borrower may specify from time to time in writing. Notices
and
other communications shall
be
effective (i) if mailed, upon the earlier of receipt or five (5) days after
deposit in the U.S. mail, first class, postage prepaid, (ii) if telecopied,
when
transmitted, or (iii) if hand-delivered, by courier or otherwise (including
telegram, lettergram or mailgram), when delivered.
| 10.10 |
Headings.
|
Article
and paragraph headings are for reference only and shall not affect the
interpretation or meaning of any provisions of this Agreement.
|
10.11
|
Waiver
of Immunity.
|
To
the
extent that the Borrower has acquired or hereafter may acquire any immunity
(sovereign or otherwise) from any legal action, suit, arbitration or other
proceeding, from jurisdiction of any court or arbitration panel or from set-off
or any legal process (whether through service or notice, attachment prior
to
judgment, attachment in aid of execution of judgment, execution of judgment
or
otherwise) with respect to itself or any of its property, the Borrower hereby
irrevocably and unconditionally waives and agrees not to plead or claim such
immunity in respect of its obligations under this Agreement or any document
or
agreement required hereunder.
| 10.12 |
Counterparts.
|
This
Agreement may be executed in as many counterparts as necessary or convenient,
and by the different parties on separate counterparts each of which, when
so
executed, shall be deemed an original but all such counterparts shall constitute
but one and the same agreement.
| 10.13 |
Affiliate
Sharing Notice.
|
Notice
to
Individual Borrowers, Guarantors and Pledgors (“Obligors”): From time to time
Bank of America, N.A. (the “Bank”) may share information about the Obligor’s
experience with Bank of America Corporation (or any successor company) and
its
subsidiaries and affiliated companies (the “Affiliates”). The Bank may also
share with the Affiliates credit-related information contained in any
applications, from credit reports and information it may obtain about the
Obligor from outside sources. If the Obligor is an individual, the Obligor
may
instruct the Bank not to share this information with the Affiliates. The
Obligor
can make this election by (1) calling the Bank at ▇.▇▇▇.▇▇▇.▇▇▇▇, (2) visiting
the Bank online at ▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇,
selecting “Privacy & Security,” and then selecting “Set Your Privacy
Preferences," or (3) contacting the Obligor’s client manager or local banking
center. To help the Bank complete the Obligor’s request, the Obligor should
include the Obligor’s name, address, phone number, account number(s) and social
security number. If the Obligor makes this election, certain products or
services may not be made available to the Obligor. This request will apply
to
information from applications, consumer reports and other outside sources
only,
and may take six to eight weeks to be fully effective. Through the normal
course
of doing business, including servicing the Obligor’s accounts and better serving
the Obligor’s financial needs, the Bank will continue to share transaction and
account experience information, as well as other general information among
the
Affiliates.
23
|
10.14
|
USA
PATRIOT Act Notice.
|
Federal
law requires all financial institutions to obtain, verify and record information
that identifies each person who opens an account or obtains a loan. The Bank
will ask for the Borrower’s legal name, address, tax ID number or social
security number and other identifying information. The Bank may also ask
for
additional information or documentation or take other actions reasonably
necessary to verify the identity of the Borrower, guarantors or other related
persons.
This
Agreement is executed as of the date stated at the top of the first
page.
| Bank of America, N.A. | Cash Systems, Inc. |
| By:_____________________________ | By:____________________________________ |
| Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ |
| Title: Senior Vice-President | Title: Chief Financial Officer |
| Address where notices to | Address where notices to |
| the Bank are to be sent: | the Borrower are to be sent: |
| ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ | ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ |
| ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ | ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ |
| Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ | Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ |
| Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ | Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ |
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EXHIBIT
"A"
FORM
OF
COMPLIANCE CERTIFICATE
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