FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT

 

Reference is made to that certain Asset Purchase Agreement (the “Agreement”)
dated as of November 23, 2011 by and among COLORADO GRANDE ENTERPRISES, INC., a
Colorado corporation (“Seller”) and G INVESTMENTS, LLC, a Colorado limited
liability company (“Purchaser”).

 

WHEREAS, the parties desire to amend the Agreement as set forth in this First
Amendment to Asset Purchase Agreement (this “First Amendment”) dated as of April
11, 2012.

 

NOW, THEREFORE, in consideration of the premises and upon the terms and subject
to the conditions set forth herein, the parties hereby agree to amend the
Agreement as follows:

 

1.          Capitalized terms used but not otherwise defined herein shall have
the meanings ascribed to such terms in the Agreement.

 

2.          Seller and Purchaser agree that the assets set forth on Schedule I
attached hereto and made a part hereof (the “Defective Slot Machines”) shall be
excluded from all of the representations and warranties of Seller set forth in
Article IV of the Agreement. In furtherance of the foregoing, Seller (i) makes
no representations or warranties to Purchaser with respect to the Defective Slot
Machines including, without limitation, the representations and warranties of
Seller set forth in Sections 4.1.4 and 4.1.8 of the Agreement and (ii) shall not
indemnify and hold harmless a Purchaser Indemnified Person under Section 7.2 of
the Agreement for any Losses, directly or indirectly, which relate to the
Defective Slot Machines.

 

3.          Section 2.1 (Purchase Price and Payment) of the Agreement is hereby
amended by reducing the Purchase Price amount from “$3,200,000” to “$3,125,000”.

 

4.          The first sentence of Section 2.1.2 of the Agreement is hereby
deleted in its entirety and replaced with the following sentence:

 

“$2,325,000 to be evidenced by and paid in accordance with a promissory note
issued by Purchaser in favor of Seller bearing simple interest at 6.0% per annum
(the “Promissory Note”), in the form annexed hereto as Exhibit A, which
principal amount, plus accrued interest, shall be payable in monthly
installments amortized in accordance with the Promissory Note, with each
installment payment following the Closing payable in immediately available funds
by wire transfer to an account designated in writing by Seller.”

 

5.          Exhibit A (Promissory Note) of the Agreement is hereby deleted in
its entirety and replaced with the new Exhibit A attached hereto and made a part
hereof.

 

6.          Section 10.6 (Notices) of the Agreement is hereby amended by
changing the address for sending a copy of all notices to Purchaser as follows:

 

 

 

 

“with a copy to:          Jonathan H. Steeler, Esq.

Ryley Carlock & Applewhite

1700 Lincoln Street, Suite 3500

Denver, Colorado 80203

Facsimile No.: 303-595-3159

Email: jsteeler@rcalaw.com”

 

7.          Except as amended hereby, the Agreement remains unmodified and in
full force and effect, and the same is hereby ratified and reaffirmed in its
entirety.

 

8.          This First Amendment may be executed in one or more counterparts.

 

IN WITNESS WHEREOF, the undersigned have executed and delivered or caused to be
executed and delivered by its duly authorized officers this First Amendment as
of the date set forth above.

 

WITNESSED:   SELLER:             COLORADO GRANDE ENTERPRISES, INC.         /s/
LaTonia Johnson   By:  /s/ Robert B. Sturges     Name:   Robert B. Sturges    
Title:     Chief Executive Officer             PURCHASER:             G
INVESTMENTS, LLC         /s/ Arlene Minter   By: /s/ David J. Minter    
Name:   David J. Minter     Title:     Manager

 

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EXHIBIT A

 

Promissory Note

 

[see attached]

 

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[EXHIBIT A]

 

PROMISSORY NOTE

 

--------------------------------------------------------------------------------

 

$2,325,000.00 Cripple Creek, Colorado

 

[            ] __, 2012

 

FOR VALUE RECEIVED, the undersigned, G INVESTMENTS, LLC, a Colorado limited
liability company having an address at 3030 Orion Drive, Colorado Springs,
Colorado 80906 (“Borrower”) hereinafter promises to pay to the order of COLORADO
GRANDE ENTERPRISES, INC., a Colorado corporation having an address at c/o Nevada
Gold & Casinos, Inc., 50 Briar Hollow Lane, Suite 500W, Houston, Texas 77027
(hereinafter, with any subsequent holder, “Lender”) on or before [_________] 1,
2017 as provided herein (the “Maturity Date”), the principal amount of the
purchase financing loan made by Lender to Borrower equal to TWO MILLION THREE
HUNDRED TWENTY-FIVE THOUSAND DOLLARS ($2,325,000.00) (the “Principal Amount”),
with interest thereon, in lawful money of the United States of America in
immediately available funds, at the rate of six percent (6%) per annum for the
period commencing on the date hereof through and including the Maturity Date.

 

This Note is being issued by Borrower to Lender in partial consideration for the
sale and purchase of assets of Lender by Borrower pursuant to that certain Asset
Purchase Agreement (the “Purchase Agreement”), dated as of November 23, 2011, as
amended by the First Amendment dated as of April [__], 2012, by and between
Borrower and Lender.

 

INTEREST

 

Interest, which shall be calculated on a per annum basis for the periods and at
the rate set forth above, shall accrue from and including the date hereof
through and including the Maturity Date and shall be due and payable monthly on
the 1st day of each month with each installment of principal in accordance with
the Loan Amortization Schedule (the “Loan Amortization Schedule”) set forth on
Schedule I attached hereto and made a part hereof. Interest shall be computed on
the basis of a three hundred sixty-five (365) day year and the actual days
elapsed.

 

PRINCIPAL AMOUNT

 

Borrower shall pay the Principal Amount, together with accrued interest thereon,
as follows:

 

(i)          no monthly installments of Principal Amount and accrued interest
shall be due and payable for the first three (3) months following the date
hereof, in accordance with the Loan Amortization Schedule.

 

(ii)         one (1) monthly installment of Principal Amount and accrued
interest in the aggregate amount of FIVE THOUSAND DOLLARS AND 00/100 CENTS
($5,000.00), which shall be due and payable on the 1st day of the fourth (4th)
month following the date hereof, in accordance with the Loan Amortization
Schedule.

 

 

 

 

(i)          eight (8) equal monthly installments of Principal Amount and
accrued interest in the aggregate amount of TWENTY THOUSAND DOLLARS AND 00/100
CENTS ($20,000.00), which shall be due and payable on the 1st day of each month,
in accordance with the Loan Amortization Schedule.

 

(ii)         twelve (12) equal monthly installments of Principal Amount and
accrued interest in the aggregate amount of THIRTY THOUSAND DOLLARS AND 00/100
CENTS ($30,000.00), which shall be due and payable on the 1st day of each month,
in accordance with the Loan Amortization Schedule.

 

(iii)        thirty-six (36) equal monthly installments of Principal Amount and
accrued interest in the aggregate amount of FORTY THOUSAND DOLLARS AND 00/100
CENTS ($40,000.00), which shall be due and payable on the 1st day of each month,
in accordance with the Loan Amortization Schedule.

 

(iv)        a final installment of NINE HUNDRED AND SIX THOUSAND, TWO HUNDRED
NINETY-EIGHT DOLLARS AND 12/100 CENTS ($906,298.12) which shall be due and
payable on the Maturity Date.

 

On the Maturity Date, any monthly installment amount not yet paid by Borrower to
Lender shall be paid in full by Borrower to Lender, and Borrower shall have no
further obligations with respect to the Note whatsoever. Any payments of
Principal Amount or interest shall be made by wire transfer of immediately
available funds directly to the bank account of Lender designated by Lender in
writing to Borrower.

 

LATE FEE; DEFAULT INTEREST

 

If either (a) any accrued interest amount is not paid in full when due or (b)
any principal installment amount is not paid in full on or before the due date
provided herein, then, in either event (i) Borrower shall pay to Lender a late
charge equal to three percent (3%) of the required payment, with a minimum late
charge of $250.00, and (ii) the amount past due shall, until paid, accrue
interest at a default rate equal to the lesser of (A) eighteen percent (18%) per
annum, or (B) the maximum rate permitted by law (the “Default Rate”). Upon an
Event of Default (as defined herein), the outstanding Principal Amount of this
Note shall accrue interest at the Default Rate.

 

SECURITY

 

As collateral security for the payment of any and all amounts due and payable
under this Note (the "Obligations") and to induce Lender to agree to make the
purchase financing loan evidenced by this Note, (i) David J. Minter, Arlene
Minter and Minter Holdings LLC, as members of Borrower, shall enter into a
pledge agreement (the “Pledge Agreement”) pursuant to which such member of
Borrower shall pledge all of his, her or its membership interest in Borrower to
Lender, (ii) Borrower shall execute and deliver to Lender a security agreement
(the “Security Agreement”) pursuant to which Borrower shall grant a security
interest on all of its assets to secure the Obligations hereunder in favor of
Lender, and (iii) David J. Minter, individually, shall execute and deliver to
Lender a guarantee (the “Guarantee”) pursuant to which he shall personally
guarantee the Obligations hereunder in favor of Lender.

 

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PREPAYMENT

 

Borrower shall have the right to prepay all (but not less than all) of the
outstanding Principal Amount, together with any and all interest accrued on the
outstanding Principal Amount prepaid through and including the date of such
prepayment, at any time without premium or penalty.

 

Any payments received by Lender on account of this Note prior to the Maturity
Date shall be applied first, to any costs, expenses, or charges then owed Lender
by Borrower, if any, second, to accrued and unpaid interest, and third, to the
unpaid principal balance hereof. Any payments so received after acceleration
shall be applied in such manner as Lender may reasonably determine.

 

EVENTS OF DEFAULT

 

Lender, at its option, may declare the entire unpaid Principal Amount of this
Note and unpaid interest thereon to be immediately due and payable without
demand, notice or protest (which are hereby waived) upon the occurrence of any
one or more of the following events (each, an “Event of Default”):

 

(a)          The failure by Borrower to pay any amount due pursuant to this Note
within five (5) business days following written notice from Lender of Borrower’s
failure to make such payment when due; provided, however, that Borrower shall be
in default in the event Borrower fails to pay any amounts due under this Note on
the date when due (and shall not be entitled to such five (5) business day
notice and cure period) on more than two (2) occasions;

 

(b)          any act by, or against, Borrower, or its property or assets, which
act constitutes the application for, consent to, or sufferance of the
appointment of a receiver, trustee, or other person, pursuant to court action or
otherwise, over all, or any substantial part of Borrower’s property; the
granting of any trust mortgage or execution of an assignment for the benefit of
the creditors of Borrower, or the occurrence of any other voluntary or
involuntary liquidation or extension of debt agreement for Borrower;
adjudication of Bankruptcy or insolvency relative to Borrower; the entry of an
order for relief or similar order with respect to Borrower in any proceeding
pursuant to Title 11 of the United States Code (commonly referred to as the
Bankruptcy Code) or any other federal Bankruptcy law; the filing of any
complaint, application, or petition by or against Borrower initiating any matter
in which Borrower is or may be granted any relief from the debts of Borrower
pursuant to the Bankruptcy Code or any other insolvency statute or procedure;
the calling of a meeting of creditors of Borrower; the meeting by Borrower with
a formal court approved creditors’ committee; the offering by or entering into
by Borrower of any composition, extension or any other arrangement seeking
relief or extension for the debts of Borrower, or the initiation of any other
judicial or non-judicial proceeding or agreement by or against Borrower which
seeks or intends to accomplish a reorganization or arrangement with creditors;
which, if any of the foregoing events is not initiated by Borrower, such event
is not discharged or satisfied by Borrower within ninety (90) days of its
occurrence;

 

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(c)          except for any Permitted Liens (as defined in the Purchase
Agreement) or other liens on equipment acquired by Purchaser under the Purchase
Agreement, the imposition of any lien upon any assets of Borrower or the entry
of any judgment against Borrower in excess of $25,000, which lien is not bonded
or discharged or judgment is not satisfied or appealed from (with execution or
similar process stayed) within thirty (30) days of its imposition or entry;

 

(d)          the occurrence of a breach by Borrower of any of its obligations
under the Purchase Agreement, which breach Borrower fails to cure within five
(5) business days of Borrower’s receipt of written notice of such breach from
Lender;

 

(e)          the occurrence of an Event of Default (after any applicable notice
and cure period) under the Pledge Agreement or the Security Agreement;

 

(f)          the occurrence of an Event of Default (after any applicable notice
and cure period) under the Guarantee; or

 

(g)          the occurrence of a default or an event of default (after any
applicable notice and cure period) under any instrument, agreement, contract,
indenture or other document governing any indebtedness of Borrower to a third
party.

 

RIGHT OF SETOFF

 

LENDER AND BORROWER ACKNOWLEDGE AND AGREE THAT BORROWER HAS A RIGHT OF SETOFF
AGAINST THE PAYMENT OF AMOUNTS OUTSTANDING ON THIS NOTE AS SET FORTH IN SECTION
7.6 OF THE PURCHASE AGREEMENT. SUBJECT TO THE TERMS, CONDITIONS AND PROVISIONS
OF SECTION 7.6 OF THE PURCHASE AGREEMENT, BORROWER MAY WITHHOLD OR REDUCE THE
PAYMENT OF AMOUNTS OUTSTANDING ON THIS NOTE BY ANY AMOUNTS DUE FROM LENDER TO
BORROWER THEREUNDER.

 

NO WAIVER BY LENDER; ELECTION OF REMEDIES

 

No delay or omission by Lender in exercising or enforcing any of Lender’s
powers, rights, privileges, remedies, or discretions hereunder shall operate as
a waiver thereof on that occasion nor on any other occasion. No waiver of any
default hereunder shall operate as a waiver of any other default hereunder, nor
as a continuing waiver. Lender, in its sole discretion, may proceed to exercise
or enforce any right, power, privilege, remedy or interest that Lender may have
under this Note or applicable law whether at law, in equity, in rem or in any
other forum available under applicable law without pursuing, exhausting or
otherwise exercising or enforcing any other right, power, privilege, remedy or
interest that Lender may have against Borrower or any other person. Lender may
institute one or more proceedings (which may be separate proceedings) with
respect to this Note in such order and at such times as Lender may elect in its
sole discretion.

 

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COSTS OF COLLECTION

 

Borrower will pay on demand all attorneys’ reasonable fees and out-of-pocket
expenses incurred by Lender in the enforcement of the Note and Obligations of
Borrower to Lender.

 

SUCCESSORS AND ASSIGNS

 

This Note shall not be assignable by Borrower without the prior written consent
of Lender. This Note shall be binding upon Borrower and each endorser and
guarantor hereof and upon their respective heirs, successors, permitted assigns,
and representatives, and shall inure to the benefit of Lender and its
successors, endorsees, and assigns.

 

JOINT AND SEVERAL

 

The liabilities of Borrower and any guarantor of this Note are joint and
several; provided, however, the release by Lender of Borrower or any one or more
guarantor shall not release any other person obligated on account of this Note.
No person obligated on account of this Note may seek contribution from any other
person also obligated unless and until all liabilities, obligations and
indebtedness to Lender of the person from whom contribution is sought have been
satisfied in full.

 

GOVERNING LAW; CONSENT TO JURISDICTION

 

This Note is delivered to Lender in the State of Colorado, shall be governed by
and construed in accordance with the laws of the State of Colorado, but without
giving effect to any Colorado choice of law provisions that might otherwise make
the laws of a different jurisdiction govern or apply. IN ANY LITIGATION ARISING
OUT OF OR RELATING TO THIS NOTE, LENDER AND BORROWER EACH IRREVOCABLY CONSENT TO
THE JURISDICTION OF THE FEDERAL AND STATE COURTS OF TELLER COUNTY OF THE STATE
OF COLORADO AND WAIVE ALL DEFENSES TO THE JURISDICTION OF EITHER OF THE
FOREGOING COURTS INCLUDING, WITHOUT LIMITATION, FORUM NON-CONVENIENS. LENDER AND
BORROWER EACH ACKNOWLEDGE THAT IT HAS BEEN INFORMED THAT THE PROVISIONS HEREOF
CONSTITUTE A MATERIAL INDUCEMENT UPON WHICH THE OTHER PARTIES HAVE RELIED AND
ARE RELYING. LENDER AND BORROWER EACH MAY FILE AN ORIGINAL COUNTERPART OR A COPY
OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF SUCH OTHER
PARTY TO THE JURISDICTION OF THE FEDERAL AND STATE COURTS OF TELLER COUNTY OF
THE STATE OF COLORADO.

 

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WAIVERS

 

LENDER AND BORROWER EACH HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND
IRREVOCABLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM ARISING
OUT OF, UNDER, OR IN CONNECTION WITH THIS NOTE, ANY DOCUMENT, INSTRUMENT OR
AGREEMENT EVIDENCING, GOVERNING OR SECURING THIS NOTE, OR ANY COURSE OF CONDUCT,
COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTION OF ANY
PARTY. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR THE LENDER TO ACCEPT
THIS NOTE AND ENTER INTO THE LOAN EVIDENCED BY THIS NOTE.

 

Borrower waives diligence, demand, presentment for payment, notice of nonpayment
(EXCEPT AS PROVIDED HEREIN), protest and notice of protest, and Borrower further
consents to the release of all or any part of the security for the payment
hereof at the discretion of Lender, or the release of any party liable for this
obligation without affecting the liability of the other parties hereto. Any
delay on the part of Lender in exercising any right hereunder shall not operate
as a waiver of any such right, and any waiver granted for one occasion shall not
operate as a waiver in any other event.

 

MAXIMUM INTEREST RATE

 

All agreements between Borrower and Lender are hereby expressly limited so that
in no contingency or event whatsoever, whether by reason of acceleration of
maturity of the indebtedness evidenced hereby or otherwise, shall the amount
paid or agreed to be paid to Lender for the use or the forbearance of the
indebtedness evidenced hereby exceed the maximum permissible under applicable
law in effect as of the date hereof.

 

NOTICES

 

All notices, requests, demands, claims or other communications required or
permitted to be delivered, given or otherwise provided hereunder must be in
writing and must be delivered personally, delivered by a nationally recognized
overnight courier service, sent by certified or registered mail, postage prepaid
or (if a facsimile number is provided below) sent by facsimile (subject to
electronic confirmation of good facsimile transmission) addressed to the party
as specified below:

 

If to Borrower: David J. Minter   3030 Orion Drive   Colorado Springs, Colorado
80906   Facsimile No.: (719) 473-5259

 

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With a copy to: Jonathan H. Steeler, Esq.   Ryley Carlock & Applewhite   1999
Broadway Suite 1800   Denver, Colorado 80202-3025   Facsimile No.: (303)
595-3159         If to Lender: Nevada Gold & Casinos, Inc.   50 Briar Hollow
Lane, Suite 500W   Houston, Texas 77027   Attention: Robert B. Sturges, Chief
Executive Officer   Facsimile No.: (713) 621-6919     With a copy to: Wolff &
Samson PC   One Boland Drive   West Orange, New Jersey 07052   Attention: David
M. Hyman, Esq.   Facsimile No.: (973) 530-2209

 

Any such notice, request, demand, claim or other communication shall be deemed
to have been delivered and given (a) on the date of delivery if delivered
personally, (b) the first business day after it is deposited with such
nationally recognized overnight courier service, (c) the day of sending if sent
by facsimile prior to 4:00 p.m. (Eastern time) on any business day or the next
succeeding business day if sent by facsimile after 4:00 p.m. (Eastern time) on
any business day or on any day other than a business day, or (d) five (5)
business days after the date of mailing, if mailed by certified or registered
mail, postage prepaid, in each case, to the above address, or, if applicable,
facsimile number, or to such other address or addresses or facsimile number or
numbers as such party may subsequently designate to the other parties by written
notice given hereunder.

 

  BORROWER:         G INVESTMENTS, LLC         By:       David J. Minter,
Manager

 

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SCHEDULE I

 

Loan Amortization Schedule

 

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