SECOND AMENDED AND RESTATED
FORBEARANCE AGREEMENT
This Second Amended and Restated Forbearance
Agreement (this “ Agreement ”) is dated as of
February 25, 2009, by and among the lenders identified on the
signature pages hereof (such lenders, together with their
respective successors and permitted assigns, are referred to
hereinafter each individually as a “ Lender ”
and collectively as the “ Lenders ”), WELLS
FARGO FOOTHILL, INC. , a California corporation, as the
arranger and administrative agent for the Lenders (in such
capacity, together with its successors and assigns in such
capacity, “ Agent ”), B & B B, INC. ,
a Nevada corporation (“ B&BB ”),
CASABLANCA RESORTS, LLC , a Nevada limited liability company
(“ CBR ”), OASIS INTERVAL MANAGEMENT, LLC
, a Nevada limited liability company (“ OIM ”),
OASIS INTERVAL OWNERSHIP, LLC , a Nevada limited liability
company (“ OIO ”), OASIS RECREATIONAL
PROPERTIES, INC. , a Nevada corporation (“ ORP
”), RBG, LLC , a Nevada limited liability company
(“ RBG ”), VIRGIN RIVER CASINO
CORPORATION , a Nevada corporation (“ VRCC
”; B&BB, CBR, OIM, OIO, ORP, RBG and VRCC are referred to
hereinafter each individually as a “ Borrower ”
and collectively, jointly and severally, as the “
Borrowers ”), BLACK GAMING, LLC , a Nevada
limited liability company (“ Black Gaming ”) and
R. BLACK, INC. , a Nevada corporation (together with Black
Gaming, collectively, jointly and severally, the “
Guarantors ”) with reference to the
following:
WHEREAS , Borrowers, Lenders, and Agent are parties to
that certain Credit Agreement entered into as of December 20,
2004, as amended by that Joinder Agreement and Amendment dated as
of December 31, 2006, that certain First Amendment to Credit
Agreement entered into as of October 26, 2007, that certain
Second Amendment to Credit Agreement entered into as of
June 20, 2008, that certain Forbearance, Consent and Third
Amendment to Credit Agreement entered into as of November 3,
2008, that certain First Amendment [to] Forbearance Consent and
Third Amendment to Credit Agreement entered into as of
January 15, 2009, and that certain Second Amendment to
Forbearance, Consent and Third Amendment to Credit Agreement dated
as of February 2, 2009 (as further amended, restated,
supplemented, or otherwise modified from time to time, the “
Credit Agreement ”); and
WHEREAS , Defaults and Events of Default have occurred
under the Credit Agreement as a result of (i) Borrowers’
failure to achieve EBITDA in the amounts required under
Section 6.16(a)(i) of the Credit Agreement for the
12 month periods ending September 30, 2008 and
December 31, 2008, (ii) Borrowers’ failure to pay the
Overadvance amount existing as of September 30, 2008 and
continuing thereafter as required under Section 2.5 of the
Credit Agreement, and (iii) Borrowers’ Default or Event
of Default under Section 7.9 of the Credit Agreement with
respect to the representations of the Borrowers under
Section 4.12(a) of the Credit Agreement required to be made in
connection with the delivery of the financial statements to be
delivered pursuant to Section 5.3 of the Credit Agreement for
the periods ending August 31, 2008, September 30, 2008,
October 31, 2008, November 30, 2008 and December 31, 2008
(such events in clauses (i) , (ii) and (iii)
of this paragraph are referred to collectively as the “
Events of Default ”); and
WHEREAS , a further Default or Event of Default will
occur under the Credit Agreement if Borrowers fail to pay interest
on the Senior Secured Notes when due (the “ Anticipated
Event of Default ” and, together with the Events of
Default, the “ Designated Events of Default ”);
and
WHEREAS , Borrowers have requested that the Agent and
Lenders continue to forbear from enforcing their rights that arise
because of the Designated Events of Default and continue to consent
to the Borrowers temporarily suspending casino operations at one of
its currently operating Casinos (the “ Suspended
Location ”); and
WHEREAS , Borrowers, Lenders, and Agent are parties to
that certain Amended and Restated Forbearance Agreement dated as of
February 12, 2009 (the “ Amended and Restated
Forbearance Agreement ”), pursuant to which Agent and
Lenders have agreed to forbear from enforcing their rights that
arise because of the Designated Events of Default and to continue
to consent to the temporary suspension of operations at the
Suspended Location for a limited period of time provided that
Borrowers comply with the terms of the Amended and Restated
Forbearance Agreement; and
WHEREAS , the parties hereto desire to amend and restate
the Amended and Restated Forbearance Agreement in its entirety as
provided herein;
NOW THEREFORE , for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree that the Amended and Restated Forbearance
Agreement is amended and restated in its entirety as
follows:
1. Defined Terms . All capitalized
terms used herein (including, without limitation, in the preamble
and recitals hereof) without definition shall have the meanings
ascribed thereto in the Credit Agreement.
2.1 The Lender Group hereby agrees, as of the
Forbearance Effective Date (as defined below), to forbear from
exercising any rights or remedies under Section 8.1 of the
Credit Agreement with respect to the Designated Events of Default
until the earliest of any of the following: (i) the date of
the occurrence of a breach or default under this Agreement;
(ii) the date of the occurrence of a Default or Event of
Default that is not a Designated Event of Default; (iii) the
termination of that certain Forbearance Agreement dated as of
February 19, 2009, by and among the Borrowers, Guarantors and
the holders of the Senior Secured Notes party thereto; or
(iv) March 2, 2009 (subject to Section 5(b)
below) (collectively, the “ Forbearance Termination
Date ”).
2.2 Each Borrower and Guarantor hereby
acknowledge and agree that upon the Forbearance Termination Date,
the forbearance provided under this Section 2 shall
terminate and the Lender Group shall have the right to exercise any
and all rights and remedies under Section 8.1 of the Credit
Agreement or otherwise under the Loan Documents or under applicable
law or at equity due to the existence of the Designated Events of
Default. Each Borrower and Guarantor hereby further acknowledge and
agree that, from and after the Forbearance Termination Date, the
Lender Group shall be under no obligation of any kind whatsoever to
forbear from exercising any remedies on account of the Designated
Events of Default or any other Event of Default (whether similar or
dissimilar to the Designated Events of Default).
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2.3 The foregoing notwithstanding, if and to the
extent that the Lender Group continues to make Advances or
otherwise extend credit under the Credit Agreement, notwithstanding
the occurrence of any Default or Event of Default, whether
specified herein or otherwise, (a) such Advances or other
extension of credit which hereafter may be made available to
Borrowers shall be made, issued, caused to be issued, or executed,
as applicable, in the Lender Group’s sole and absolute
discretion, and (b) no such action shall be construed as
(i) a waiver or forbearance of any member of the Lender
Group’s rights, remedies, and powers against Borrowers,
Guarantors or the Collateral (including, without limitation, the
right to terminate without notice the making of Advances or the
making of any other extensions of credit under the Credit
Agreement) or (ii) a waiver of any such Default or Event of
Default or the Designated Events of Default.
3. Consent . Notwithstanding
anything to the contrary contained in Section 6.3(d) of the
Credit Agreement, the Lenders hereby consent and continue to
consent to the Borrowers suspending casino operations at the
Suspended Location at any time during the period beginning on the
Forbearance Effective Date (as defined below) and ending on the
Forbearance Termination Date (the “ Forbearance Period
”), so long as the Borrowers do not sell, transfer or remove
any Collateral or other personal property (including any Gaming
Equipment) from the Suspended Location or make any material
alterations to the Suspended Location, except as previously
permitted; provided , however , that the Borrowers
may transfer Collateral or other personal property (including any
Gaming Equipment) from the Suspended Location to one of the
Borrowers’ other Casinos, so long as the removal of such
equipment from the Suspended Location does not materially affect
the Borrowers’ ability to operate a casino at the Suspended
Location.
4. Amendment to Credit Agreement .
Schedule 1.1 of the Credit Agreement, Definitions, is hereby
amended and modified by amending and restating the following
definition:
““
Forbearance Period ” has the meaning specified
therefor in that certain Second Amended and Restated Forbearance
Agreement dated as of February 25, 2009, by and among the
Borrowers, Guarantors, Agent and Lenders.”
5. Covenants of Borrowers . In
consideration of the continued forbearance from the exercise of
remedies by Agent and the undersigned Lenders, Borrowers covenant
and agree that, during the Forbearance Period, Borrowers
shall:
(a) Not later than Friday, March 6,
2009, have provided the Agent and the Lenders a 13-week cash flow
forecast for the succeeding 13 calendar weeks, in form and
substance satisfactory to Agent; and
(b) Not later than Monday, March 2,
2009, have provided the Agent and the Lenders with a term sheet for
a restructuring of the indebtedness of the Borrowers and, in such
event, the Forbearance Period shall be extended until March 9,
2009.
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6. Acknowledgment of Borrowers and
Guarantors . As a material inducement to the execution by Agent
and the undersigned Lenders of this Agreement, each Borrower and
Guarantor hereby acknowledge, confirm and agree as
follows:
(a) As of February 24, 2009, the total
aggregate outstanding principal amount of the Obligations under the
Credit Agreement with respect to the Advances is $14,857,486.30,
and all Obligations owing by Borrowers, together with interest
accrued and accruing thereon, and all fees, costs, expenses and
other charges now or hereafter payab
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