Document:

Unassociated Document

 

MODIFICATION, ASSIGNMENT AND ASSUMPTION AGREEMENT

This Modification, Assignment and Assumption Agreement (this "Agreement") is entered into as of April 25, 2011 by and among ANDREA S. NEIMAN, a resident of Florida (the "Lender"), FLORIDA GAMING CENTERS, INC., a Florida corporation (the "Original Borrower"), and FLORIDA GAMING CORPORATION, a Delaware corporation (the "Borrower").

RECITALS

A.           The Lender made a loan (the "Original Loan") to William B. Collett, Jr. (“WBC”) in the original principal amount of $125,000, as evidenced by that certain Loan Agreement dated December 3, 2010 (the "Original Note").  The Original Note and any other documents and certificates executed and delivered by the Original Borrower to the Lender in connection with the Original Loan are hereinafter referred to as the "Loan Documents".  WBC assigned all of his duties and obligations under the Loan Documents to the Original Borrower and the Original Borrower assumed all of such duties and obligations.

B.           The Original Borrower and the Borrower are parties to that certain Credit Agreement dated as of April 25, 2011 (the "Credit Agreement") by and among the Original Borrower, the Borrower, the lenders party thereto (the “Senior Creditors”), and ABC Funding, LLC (the "Administrative Agent") whereby the Senior Creditors have agreed to make certain term loans to the Original Borrower pursuant to the terms and conditions set forth therein.  Each capitalized term not otherwise defined herein shall have the meaning given to it in the Credit Agreement.

C.           To satisfy Section 4.01(x) of the Credit Agreement, the Original Borrower and the Borrower have requested that the Lender agree to the following:

(1)           release the Original Borrower from all rights, duties and obligations under the Original Note, including without limitation, as an obligor thereof;

(2)           accept the Borrower as the new borrower under the Original Note with all rights, duties and responsibilities of the Original Borrower under the Original Note;

(3)           extend the maturity date of the Original Note to be at least six (6) months after the Maturity Date of the Credit Agreement;

(4)           at the Borrower's sole option, permit interest under the Original Note to be paid-in-kind instead of in cash; and

(5)           subordinate her interest in the Original Note to the Obligations on the terms and conditions acceptable to the Administrative Agent, pursuant to the form of Subordination Agreement attached hereto as Exhibit A (the "Subordination Agreement").

 

  

  

  

 

D.           The parties have agreed to the foregoing changes pursuant the terms and conditions set forth herein.

AGREEMENTS

NOW THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.           Representations Accurate. The parties represent and warrant that the above Recitals are true and accurate. The foregoing Recitals are incorporated herein by reference.

2.           Status of Loan.  The Original Borrower and the Borrower: (a) ratify, confirm and acknowledge that the Loan Documents represent their valid and enforceable and collectible obligations, and that they do not have any existing claims, defenses (personal or otherwise) or rights of setoff with respect thereto; and (b) acknowledge and agree that except as expressly set forth herein including, without limitation, Section 6 below, this Agreement in no way releases, relinquishes or otherwise affects the rights created by or arising under the Loan Documents.

3.           Modification.  In consideration of the foregoing, the mutual promises, undertakings, representations and covenants herein set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Loan Documents are amended as follows:

a.           The Loan Documents are amended to provide that any reference therein to a maturity date is hereby amended to reference a maturity date of the date six calendar months after the Maturity Date.

b.           The Original Note is amended to provide that, at the Borrower's sole option, payment of interest may be paid-in-kind rather than in cash.

4.           Assignment. In consideration of the foregoing, the mutual promises, undertakings, representations and covenants herein set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Original Borrower hereby assigns, transfers, conveys and sets over to the Borrower, all rights, duties, and obligations of the Original Borrower in and to the Loan Documents.

5.           Assumption. In consideration of the foregoing, the mutual promises, undertakings, representations and covenants herein set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower hereby assumes all rights, duties and obligations of the Original Borrower in and to the Loan Documents.

 

  

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6.           Consent.  The Lender hereby consents to and approves the assumption by the Borrower of the obligations of the Original Borrower under the Loan Documents (the "Transfer and Assumption"), and hereby releases the Original Borrower from all duties and obligations of the Original Borrower in and under the Loan Documents (including, without limitation, all payment and performance obligations) and agrees that the Transfer and Assumption does not constitute an Event of Default under any Loan Document.  Notwithstanding the foregoing, the Lender's consent set forth herein shall not be deemed or construed as (i) a waiver or release of any provision of the Loan Documents in respect of the Borrower, or (ii) a consent to any amendment or extension of the Loan Documents or any subsequent assignment or transfer of any of the Loan Documents, except as expressly set forth herein.  The Original Borrower is and shall not be required to guaranty any obligations of the Borrower under the Loan Documents.

7.           Subordination.  Pursuant to the Subordination Agreement attached as Exhibit A hereto and in consideration of the extension of credit by the Senior Creditors to the Original Borrower and the Borrower, the Lender hereby subordinates to the Senior Creditors all indebtedness of the Borrower to the Lender in connection with the Loan Documents, now existing and hereafter arising, and all extensions and renewals thereof, in favor of the Obligations and the Borrower and the Original Borrower hereby accept and acknowledge such subordination.  The Lender, the Borrower and the Original Borrower agree to execute and deliver to Administrative Agent the Subordination Agreement.

8.           Defined Terms.  As used in this Agreement, the following terms have the meanings specified below:

“Obligations” means all loans, advances, debts, liabilities, obligations, covenants and duties owing by the Original Borrower, the Borrower, any subsidiary or any affiliate thereof to the Administrative Agent, any Senior Creditor, any affiliate of the Administrative Agent, or any Senior Creditor, or any indemnified person under the Credit Agreement, of any kind or nature, present or future, arising under the Credit Agreement, any collateral document, any swap agreement or any and all other instruments and documents executed and delivered in connection with the Credit Agreement (together such documents, the “Loan Documents”), whether or not evidenced by any note, guaranty or other instrument, whether or not for the payment of money, whether arising by reason of an extension of credit, loan, guaranty, indemnification, or in any other manner, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising and however acquired.  The term includes, without limitation, all interest, charges, expenses, fees, reasonable attorneys’ fees and disbursements, reasonable paralegals’ fees (in each case whether or not allowed), and any other sum chargeable to the Original Borrower, the Borrower, any subsidiary or any affiliate of the Original Borrower or the Borrower under the Credit Agreement or any other Loan Document.

 

“Maturity Date” means October 25, 2016, or such other date as consented to by the Borrower, the Original Borrower, the Administrative Agent and each Senior Creditor in the manner provided under and in Section 9.02(b) of the Credit Agreement; provided, that the Lender agrees any such change to the Maturity Date shall be automatically consented to by the Lender without any further action on its part..

 

  

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9.           Integration.  The Original Borrower, the Borrower and the Lender acknowledge that there are and were no oral or written representations, warranties, understandings, stipulations, agreements or promises made by any party or by any agent, employee or other representative of any party, pertaining to the subject matter of this Agreement which have not been incorporated into this Agreement. No express or implied consent to any further modifications involving any of the matters set forth in the Loan Documents or this Agreement shall be inferred or implied by the Lender's execution of this Agreement. Any further modification of the Original Loan or of any Loan Document shall require the express written approval of the Lender. No provision hereof shall be modified or limited except by a written instrument signed by the parties hereto, expressly referring hereto and to the provision so modified or limited.

10.         No Prejudice. Execution of this Agreement by the Lender shall be without prejudice to the Lender's rights at any time in the future, to exercise any and all rights conferred upon the Lender by any of the Loan Documents in accordance with their original terms except as amended herein.

11.         Authority. The Original Borrower, the Borrower and the Lender each hereby warrants and represents to the others that the persons executing this Agreement have full authority to execute this Agreement on their respective behalves and to bind them, as the case may be. In addition, the Original Borrower and the Borrower warrant and represent to the Lender that the execution and delivery by them of this Agreement and the performance hereunder has not and will not result in a breach of, or constitute a default under, any deed of trust, mortgage deed, lease, bank loan, credit arrangement, or other instrument or agreement to which the Original Borrower or Borrower are parties or by which the Original Borrower or the Borrower may be bound or affected.

12.         Information Furnished by the Borrower.  The Borrower represents and warrants to the Lender that all information and materials provided to the Lender by the Borrower for the Lender's consideration in underwriting and approving the assignment and this assumption are, to the best of its information and belief, true and complete and that the Lender is entitled to rely thereon.

 

13.         No Relationship Among Parties. Nothing contained in this Agreement or in any of the other Loan Documents shall be construed as creating a joint venture or partnership between or among the Original Borrower, the Borrower, and the Lender; and the Lender shall have no right or control or supervision, except as it may exercise under the rights and remedies provided in the Loan Documents.

 

14.         Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Lender, the Original Borrower, and the Borrower and their respective successors and assigns.

 

  

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15.         Governing Law and Choice of Venue. This Agreement is delivered in and shall be governed by and construed according to the substantive laws and judicial decisions of the State of New York (regardless of the place of business, residence, location or domicile of the parties hereto or any of their constituent partners or principals).  If there is a lawsuit, the Borrower and the Original Borrower agree upon the Lender's request to submit to the jurisdiction of the courts of the Borough of Manhattan in New York City, State of New York.

 

16.         Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matters contained herein and shall not be amended, modified or terminated except by a writing signed by all of the parties hereto. The provisions of this paragraph 15 may not be waived except by a written waiver.

 

17.         Counterparts. This Agreement may be executed in any number of original counterparts, each of which shall be deemed an original, but all of which when taken together shall constitute one and the same instrument.

 

18.         WAIVER OF JURY TRIAL.  THE ORIGINAL BORROWER, THE BORROWER AND THE LENDER IRREVOCABLY WAIVE ANY RIGHT TO TRIAL BY JURY IN AN ACTION OR PROCEEDING:  (1) TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR IN CONNECTION WITH THIS AGREEMENT OR AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR (2) ARISING FROM ANY DISPUTE OR CONTROVERSY IN CONNECTION WITH OR RELATED TO THIS AGREEMENT OR ANY SUCH AMENDMENT, INSTRUMENT, DOCUMENT, OR AGREEMENT, AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

 

[REMAINDER OF PAGE INTENTIONALLY BLANK]

 

  

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IN WITNESS WHEREOF the undersigned have executed this Modification, Assignment and Assumption Agreement as of the date first set forth above.

 

	  	
Original Borrower:

	  	  
	  	
FLORIDA GAMING CENTERS, INC.,

	  	
a Florida corporation

	  	  	  
	  	
By

	 
/s/ William B. Collett, Jr.

	  	  	  
	  	
Name:

	 
William B. Collett, Jr.

	  	  	  
	  	
Title:

	CEO
	  	  	  
	  	
Borrower:

	  	  
	  	
FLORIDA GAMING CORPORATION,

	  	
a Delaware corporation

	  	  	  
	  	
By

	 
/s/ William B. Collett, Jr.

	  	  	  
	  	
Name:

	 
William B. Collett, Jr.

	  	  	  
	  	
Title:

	CEO
	  	  	  
	  	
Lender:

	  	  	  
	  	 
/s/ Andrea S. Neiman

	  	
Andrea S. Neiman

 

  

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EXHIBIT A

Form of Subordination AgreementFLORIDA GAMING CORPORATION

PROMISSORY NOTE

	
$1,905,000

	
New Albany, Indiana

	  	
April 25, 2011

Florida Gaming Corporation, a Delaware corporation ("Company"), the principal office of which is located at 2669 Charlestown Road, New Albany, Indiana  47150, for value received, hereby promises to pay to the order of Freedom Financial Corporation, an Indiana corporation, whose principal office address is 2669 Charleston Road, New Albany, Indiana  47150 ("Lender"), the sum of One Million Nine Hundred and Five Thousand Dollars ($1,905,000), together with interest thereon, on or before the "Note Maturity Date" as that term is defined below.

RECITALS

A.           Company is a party to that certain Credit Agreement dated as of April 25, 2011 (the "Credit Agreement") by and among Company, as Holdings, Florida Gaming Centers, Inc., as Borrower, the lenders party thereto ("Senior Creditors"), and ABC Funding, LLC, as the Administrative Agent ("Administrative Agent") whereby the Senior Creditors have agreed to make certain term loans to Florida Gaming Centers, Inc. pursuant to the terms and conditions set forth herein.  Each capitalized term not otherwise defined herein shall have the meaning given to it in the Credit Agreement (a copy of which has been provided to the Lender).

B.           Company owes Lender $1,905,000, consisting of (i) certain accounts receivable in the amount of $150,000 and (ii) $1,755,000 of accrued but unpaid consulting services rendered through March 31, 2011 (collectively, the "Debt").  In consideration of Company being a party to the Credit Agreement, Lender has agreed to the repayment terms set forth herein for the outstanding amount of the accounts receivable due and payable to Lender.

C.           In connection with this Note, Company and Lender have entered into that certain Subordination Agreement, dated as of April 25, 2011 (as amended or modified from time to time, the "Subordination Agreement"), by and among Company, Lender, Florida Gaming Centers, Inc. and the Administrative Agent, pursuant to which the parties have agreed, among other things, that the Indebtedness evidenced by this Note shall be subordinate in all respects to the Obligations under the Credit Agreement.

AGREEMENT

NOW THEREFORE, for valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Company and Lender agree to the following:

1.           Interest.  The Company shall pay interest, paid-in-kind instead of in cash,  at the rate of six percent (6.00%) per annum (the "Interest Rate") on the principal of this Note outstanding during the period beginning on the date hereof and ending on the Note Maturity Date.  Accrued interest under this Note shall be compounded annually.  Interest payable under this Note shall be computed on the basis of a year of 365 days and actual days elapsed occurring in the period for which payable.

 

  

 

 

Notwithstanding anything in this Note to the contrary, the interest rate charged hereon shall not exceed the maximum rate allowable by applicable law.  If any stated interest rate herein exceeds the maximum allowable rate, then the interest rate shall be reduced to the maximum allowable rate, and any excess payment of interest made by the Company at any time shall be applied to the unpaid balance of any outstanding principal of this Note.

 

2.           Payments.  Company shall make payments of interest only on this Note, beginning on May 1, 2011, and continuing on the 1st day of each and every month thereafter with a final payment of the outstanding principal balance of this Note, and all accrued interest thereon, payable on the Note Maturity Date.  No principal payments shall be made or accepted in respect thereof prior to the Note Maturity Date.

 

All payments made on this Note shall be applied, at the option of the Lender, first to late charges and collection costs, if any, then to accrued interest and then to principal.

 

3.           Note Maturity Date.  The outstanding principal of this Note, all accrued interest thereon and all other charges, fees or expenses hereunder shall be due and payable in full on the date six (6) months after the Maturity Date under the Credit Agreement (the "Note Maturity Date").

4.           Late Charge.  If Lender does not receive any payment due under this Note within ten (10) days of the Note Maturity Date, then Lender may charge a late charge of five percent (5.00%) of the amount of the overdue payment (the "Late Charge").

5.           Events of Default; Extinguishment.  If any of the following events ("Events of Default") shall occur:

 

(i)           the institution by the Company of proceedings to be adjudicated as bankrupt or insolvent, or the consent by it to institution of bankruptcy or insolvency proceedings against it or the filing by it of a petition or answer consenting to or seeking reorganization or release under the federal Bankruptcy Act, or any other applicable federal or state law, or the consent by it to the filing of any such petition or the appointment of a receiver, liquidator, assignee, trustee or other similar official of the Company, or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors;

 

(ii)           if, within sixty (60) days after the commencement of an action against the Company (and service of process in connection therewith on the Company) seeking any bankruptcy, insolvency, reorganization, liquidation, dissolution or similar relief under any present or future statute, law or regulation, such action shall not have been resolved in favor of the Company or all orders or proceedings thereunder affecting the operations or the business of the Company stayed, or if the stay of any such order or proceeding shall thereafter be set aside, or if, within sixty (60) days after the appointment without the consent or acquiescence of the Company of any trustee, receiver or liquidator of the Company or of all or any substantial part of the properties of the Company, such appointment shall not have been vacated;

 

  

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(iii)           any capital reorganization of the Company, any reclassification or recapitalization of the capital shares of the Company or any transfer of all or substantially all of the assets of the Company to any other person or any consolidation or merger involving the Company;  or

 

(iv)           any voluntary or involuntary dissolution, liquidation or winding-up of the Company,

 

then, the outstanding principal balance hereunder, together with all arrearages of interest and any other Indebtedness evidenced by this Note, will extinguish and all obligations (including, without limitation, all payment and performance obligations) and Indebtedness evidenced by this Note will be cancelled and no longer remain outstanding or enforceable by the Lender from the date of the occurrence of an Event of Default.

 

6.           Payment in Full.  The Lender agrees that this Note shall evidence all amounts owed by Company to the Lender in connection with the Debt, including all costs and expenses incurred by the Lender, including, without limitation, reasonable attorneys' fees and legal expenses, that have been incurred by the Lender in connection with the preparation and execution of this Note.

 

7.           Assignment and Binding Effect.  The rights and obligations of the Company and the Lender shall be binding upon and benefit the successors, permitted assigns, heirs, administrators and transferees of the parties. This Note may not be assigned by the Company or the Lender without the prior written consent of the other party.

 

8.           Waiver and Amendment.  This Note may not be amended, waived or modified except upon the written consent of the Company, the Lender and the Administrative Agent.

 

9.           Prepayment.  Subject to the prohibitions, limitations and restrictions set forth in the Subordination Agreement, this Note may be prepaid at the election of the Company upon 10 days prior written notice to the Lender.

 

10.           Notices.  Any notice, request or other communication required or permitted hereunder shall be in writing and shall be deemed to have been duly given when (i) delivered by hand (with written confirmation of receipt), or (ii) when received by the addressee, if sent by a nationally recognized overnight delivery service (receipt requested), in each case to the appropriate addresses set forth herein.  Any party hereto may by notice so given change its address for future notice hereunder.  The Lender and the Borrower hereby agree that a copy of all notices and other communications provided for herein shall be simultaneously delivered to the Administrative Agent at ABC Funding, LLC, 222 Berkeley Street, 18th Floor, Boston, MA  02166, attention of James Freeland and Adam Britt (Facsimile: (617) 598-4902).

 

11.           Waivers.  The Company hereby waives presentment, demand, protest and notice of dishonor and protest, and also waives all other exemptions; and agrees that extension or extensions of the time of payment of this Note or any installment or part thereof may be made before, at or after maturity by agreement by the Lender.  Subject to the prohibitions, limitations and restrictions set forth in the Subordination Agreement and Section 5 of this Note, the Company shall pay to the Lender, upon demand, all costs and expenses, including, without limitation, reasonable attorneys' fees and legal expenses, that may be incurred by the Lender in connection with the enforcement of this Note.

 

  

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12.           Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, excluding that body of law relating to conflict of laws.

 

13.           Heading; References.  All headings used herein are used for convenience only and shall not be used to construe or interpret this Note.  Except where otherwise indicated, all references herein to Sections refer to Sections hereof.

 

[SIGNATURE ON FOLLOWING PAGE]

  

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IN WITNESS WHEREOF, the Company has caused this Note to be issued this 25 day of April, 2011.

	
COMPANY:

	  
	  	  
	
FLORIDA GAMING CORPORATION, a

	  
	
Delaware corporation

	  
	  	  
	
By:

	

/s/ William B. Collett, Jr.

	  
	
Print Name: 

	

William B. Collett, Jr.

	  
	
Title:

	CEO	  
	  	  
	
Agreed and Acknowledged:

	  
	  	  
	
LENDER:

	  
	  	  
	
FREEDOM FINANCIAL CORPORATION,

	  
	
an Indiana corporation

	  
	  	  
	
By:

	

/s/ William B. Collett

	  
	
Print Name: 

	

William B. Collett

	  
	
Title:

	Chairman and CEO	  

 

  

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