EXHIBIT 10.65
SECURITY AND REIMBURSEMENT
AGREEMENT
(securing repayment under a Development
Agreement)
THIS AGREEMENT is made and entered
into as of the 20 th day of September, 2005 by and among
the NAMBÉ PUEBLO GAMING ENTERPRISE BOARD and its permitted
successors and assigns (the “Board”), located at Rt. 1
Box 117-BB, Nambé Pueblo, New Mexico 87506 and GAMING
ENTERTAINMENT (SANTA FE), LLC, a Nevada limited liability company
established and operated by Full House Resorts, Inc., a Delaware
corporation, with offices at 4670 So. Fort Apache Road, Suite 190,
Las Vegas, Nevada 89147 (“FHRI”), and the PUEBLO OF
NAMBÉ, a federally recognized Native American Tribe (the
“Tribe”) for the limited purposes of
Section 26.
RECITALS
A. The pueblo of Nambé (the
“Tribe”) is a federally recognized Indian tribe and
possesses sovereign governmental powers over the tribal lands,
which are held in trust by the united states of America for the
benefit of the pueblo.
B. The tribe desires to build a
gaming facility on the tribal lands (the “gaming
facility”).
C. The tribe has established the
board as a duly constituted instrumentality of the tribe with all
appropriate power and authority.
D. The tribe has assigned to the
board its authority over the development and conduct of gaming on
the property.
E. The board intends to finance
construction of the gaming facility with up to $40,000,000 of debt
to be incurred by FHRI and subject to only limited recourse against
the revenues of the gaming enterprise (the “lender
financing”).
F. FHRI will incur the debt on
behalf of the board pursuant to the development agreement. FHRI
requires that the board commit to secure the repayment of the funds
advanced by FHRI, designated transitional advances, by issuing a
security interest in favor of FHRI in all of the current and future
revenues of the gaming enterprise to be developed and constructed
whether from the proceeds of the transitional advances or otherwise
and whether in conjunction with FHRI or otherwise.
G. The obligations of the board to
make any payments under this agreement are limited to the same
extent as the obligations of the board are limited under the
development agreement. Recourse under this agreement is limited to
the collateral and the proceeds, if any, realized by FHRI upon the
disposition thereof, and the board shall not be obligated to apply
any other assets or revenues to the payment or performance of its
obligations hereunder.
H. FHRI requires as a condition to
the issuance of the transitional advances and providing the items
and obligations of FHRI in the development agreement of the
parties, among other things: (i) that the board agree to reimburse,
indemnify and repay any and all amounts advanced and paid by FHRI
in accordance with this agreement and the development agreement and
(ii) that the board agrees, that all amounts due and owing under
this agreement will be evidenced by the development agreement, this
agreement and the documents and
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I. Instruments referred to in either
agreement, provided however, that any indemnification,
reimbursement or payment by the board shall be limited to the
collateral.
J. FHRI and the board have signed an
agreement providing for the management of a gaming enterprise (the
“enterprise”) at the gaming facility by FHRI (the
“management agreement”) and FHRI and the board have
signed an agreement regarding development, financing and
construction of the gaming facility (the “development
agreement”). All capitalized terms in this security and
reimbursement agreement not otherwise defined herein shall have the
definitions set forth in the management agreement or development
agreement, respectively.
K. FHRI and the board wish, by the
execution hereof, to set forth their agreements in regard to
advancing of funds by FHRI to the board.
SECURITY AGREEMENT FOR
ADVANCES
NOW THEREFORE, in consideration of
TEN DOLLARS ($10.00), the advancing of funds to the Board by FHRI,
and other good valuable consideration, the receipt and sufficiency
of which is acknowledged, the Board and FHRI hereby agree as
follows:
1. SECURITY
(“COLLATERAL”). As security for the full and punctual
payment and performance of Board ‘s obligations under this
Agreement, Board irrevocably grants, pledges and assigns, subject
to the terms of this Agreement, a continuing lien on and security
interest in, the distributable share of Total Net Revenues of Board
or the Tribe from the Enterprise, the distributable share of Total
Net Revenues from any other Tribal gaming business of the kind
contemplated and the distributable share of Total Net Revenues of
any future gaming business of any kind which is operated by or for
the Tribe, whether or not operated under an Agreement with FHRI,
provided, however, that these funds shall cease to be collateral
for this Agreement when they are transferred from the accounts of
any of these Businesses to the Tribe’s general operating bank
account in the normal course of business. In no instance shall any
enforcement of any kind whatsoever be allowed against any assets of
Tribe other than those specified in this subsection.
2. RESERVED.
3. RESERVED.
4. OBLIGATIONS ABSOLUTE. The
obligations of the Board to FHRI are unconditional, irrevocable and
continuing until paid and performed in full, and shall be paid and
performed in strict accordance with the terms of this Agreement
under all circumstances, including without limitation, the
following:
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(i)
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Any lack of
validity or enforceability of any Development Agreement of the
parties or Transitional Advance;
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(ii)
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The existence
of any claim, set-off, defense or other right that the Board may
have at any time against FHRI, or any affiliate of FHRI, or against
Lender or any other lender participating in the Lender Financing
(or any persons or entities for whom any such party may be acting),
or against any other person or entity, whether in connection with
this Agreement, the transactions contemplated herein or any
unrelated transaction;
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(iii)
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Any other
circumstance or happening whatsoever.
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5. RESERVED.
6. REPRESENTATIONS AND WARRANTIES.
The Board represents and warrants to FHRI as follows:
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(i)
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The Tribe is a
federally recognized Indian tribe recognized as eligible by the
Secretary of the Interior for the special programs and services
provided by the United States to Indians because of their status as
Indians and is recognized as possessing powers of
self-government.
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(ii)
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The Board is a
duly constituted instrumentality of the Tribe with authority
delegated by the Tribe to develop and operate a Gaming
Enterprise.
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(iii)
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The Board has
all requisite power and authority to execute, deliver and perform
this Agreement.
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7. TRANSFER OF COLLATERAL. Except as
allowed pursuant to the Development Agreement, no Collateral shall
be sold, transferred, assigned, pledged, made subject to any other
security interest, or otherwise disposed of or encumbered (each, a
“Transfer”) without the express prior written consent
of FHRI. Any Transfer in violation of this Agreement shall be null
and void, ab initio.
8. EVENTS OF DEFAULT. An
“Event of Default” shall exist if any of the following
shall have occurred:
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(i)
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The Board shall
fail to comply with any of the covenants or agreements made by it
in this Agreement and such failure shall not be remediable, or if
remediable, such failure shall have continued unremedied for twenty
(20) days after written notice thereof has been given to the
Board by FHRI.
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(ii)
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Any
representation or warranty made by the Board in this Agreement
shall fail to have been correct or shall have been misleading in
any material respect on the date made or as of the time recited;
or
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(iii)
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The Board shall
have defaulted in any of its obligations with respect to:
(1) the Development Agreement or (2) any agreement
entered into with respect to the Gaming Facility by and between the
Tribe, the Board and FHRI or affiliate of FHRI.
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9. REMEDIES. If an Event of Default
shall occur, all amounts advanced by, or on behalf of, FHRI,
together with interest thereon from the date of such advance at the
applicable rate allowed by the Development Agreement or the
Transitional Advance provisions, shall be payable by the Board, on
demand, and shall be secured by the Collateral.
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10. RECEIPT OF SALES PROCEEDS. Upon
any sale of the Collateral by FHRI (whether by virtue of the power
of sale herein granted, pursuant to judicial process or otherwise),
the receipt of FHRI or the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the
Collateral so sold, and such purchaser or purchasers shall not be
obligated to see to the application of any part of the purchase
money paid over FHRI or such officer or be answerable in any way
for the misapplication or non-application thereof.
11. APPLICATION OF COLLATERAL. All
proceeds of any Collateral now or at any time hereafter received or
retained by FHRI pursuant to this Agreement (including without
limitation, any proceeds from the sale of the Collateral, and all
distributions, dividends and other payments received by FHRI in
respect of the Collateral) shall be applied: (i) first, to the
payment of accrued and unpaid interest; (ii) second, to the
payment of the principal amount owned; and (iii) third, to the
Board or otherwise as directed by a court of competent
jurisdiction.
12. WAIVERS;
MODIFICATIONS.
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(i)
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No failure or
delay on the part of FHRI to insist on strict performance in
exercising any privilege, right or remedy shall operate as a waiver
thereof or a waiver of any term, provision or condition hereof, nor
shall any single or partial exercise of any privilege, right or
remedy preclude any other or further exercise thereof or the
exercise of any other privilege, right or remedy.
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(ii)
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A waiver in one
or more instances of any of the terms, covenants, conditions or
provisions hereof shall apply to the particular instance or
instances and at the particular time or times only, and no such
waiver shall be deemed a continuing waiver, but all of the terms,
covenants, conditions and other provisions of this Agreement shall
survive and continue to remain in full force and effect; and no
waiver shall be effective unless in writing, dated and signed by
FHRI.
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(iii)
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No change,
amendment, modification, cancellation or discharge hereof, shall be
valid unless in writing, dated and signed by the party against whom
such change, amendment, modification, cancellation or discharge is
sought to be charged.
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13. REMEDIES CUMULATIVE. All rights
and remedies afforded to the parties hereto by reason of this
Agreement are separate and cumulative remedies, and shall be in
addition to all other rights and remedies in favor of such parties
existing at law or in equity or otherwise. No one of such remedies,
whether or not exercised by any such party, shall be deemed to
exclude, limit or prejudice the exercise of any other legal or
equitable remedy or remedies available to such parties so
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