6.17 Loan Commitment from Comerica Bank
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Comerica Bank
Comerica Private Banking
0000 X. Xxxxxxxx Xxx.
Suite 255
Bloomfield Hills, MI 48304
000-000-0000
Xxxx XxXxxxxxx
Vice President
Tuesday, July 28, 1998
Xxxxxx Xxxxxxxx
X.X.X. Enterprises, L.L.C.
0000 Xxxx Xxxxx Xxxx
Xxxxx 000
Xxxx, XX 00000
Dear Xx. Xxxxxxxx:
Thank you for giving us the opportunity to discuss your investment in
Andretti Wine Group. I am pleased to confirm that Comerica Bank (Comerica)
has approved the following secured term loans and line of credit ("the Loan")
in the name of AWG, Ltd. The following shall evidence the terms and
understanding in relation thereto (collectively the "Commitment"):
LOAN #1
Borrower AWG, Ltd.
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Purpose To refinance the current mortgage and other debt obligations.
Amount $1,650,000
Term Up to a seven year term with 15 year amortization
Interest Rate Interest will be calculated at your option based on the
following:
A) A variable rate based on Comerica's Prime Rate. The
interest rate changes are effective as and when Comerica's
Prime Rate changes. As of today, Comerica's Prime Rate is
equivalent to 8.50%.
B) A fixed interest rate as quoted by the Bank and accepted by
the Borrower, to be determined at the time of closing. As of
today, the fixed interest rate is equivalent to 7.60%.
Late Fee In addition, a late charge equal to 5% of each late
payment will be charged within 10 calendar days after the
payment due date.
Repayment The loan will be repaid in monthly installments of
approximately $15,293 inclusive of interest (based on a fixed
interest rate of 7.60%). In the event of a change in the
variable rate of interest applicable to the loan, this payment
amount may be recalculated from time to time at Comerica's
option to provide for proper amortization within the loan
term. Additionally, all payments are to be automatically
deducted from a Comerica Bank checking account, otherwise a
$10.00 monthly fee will be added to the monthly payment
amount.
Prepayment The note will contain a prepayment premium,
but the calculation will be determined by the rate of
interest selected by the Borrower. If Borrower selects a
variable rate, option A is applicable; if Borrower
selects a fixed rate, option B is applicable.
A) No prepayment premium. Borrower may prepay the principal in
whole or in part at any time.
B) Upon five (5) days written notice to Comerica, or at any
time upon any voluntary or involuntary payment (whether by
acceleration of the note or otherwise), Borrower may prepay
the note in whole or in part in an amount of at least
$10,000.00 upon payment of the prepayment premium as
outlined in the note.
Collateral A first real state mortgage on property located at 0000 Xxx
Xxxxx Xxxx, Xxxx, Xxxxxxxxxx. Subject to a Phase I
environmental audit satisfactory to the Bank. Maximum loan to
value of 75%. To be cross-collateralized with Loans #2 and #3
below.
Guaranties The loan will be supported by the unsecured personal
guaranties of Xxxxxx Xxxxxxxx and Xxxxx Xxxxxxxx, each limited
to 50% of the loan balance.
Commitment Fee One-half percent (1/2%) of the loan amount, plus out of pocket
fees, payable at closing.
Other Fees Xxxxxxxx agrees to pay all out-of-pocket fees and closing
costs, including, but not limited to, appraisal, filing,
recording, title, and attorney fees.
Insurance Borrower must maintain hazard insurance naming Comerica as
mortgagee or loss payee on any assets taken as collateral by
Comerica.
LOAN #2
Borrower AWG, Ltd.
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Purpose To refinance the current mortgage and other debt obligations
Amount $850,000
Term Seven year term with 7 year amortization
Interest Rate Interest will be calculated at your option based on the
following:
A) A variable rate based on Comerica's Prime Rate. The
interest rate changes are effective as and when Comerica's
Prime Rate changes. As of today, Comerica's Prime Rate is
equivalent to 8.50%.
B) A fixed interest rate as quoted by the Bank and accepted by
the Borrower, to be determined at the time of closing. As of
today, the fixed interest rate is equivalent to 7.60%.
Late Fee In addition, a late charge equal to 5% of each late payment
will be charged within 10 calendar days after the payment due
date.
Repayment The loan will be repaid in monthly installments of
approximately $12,997 inclusive of interest (based on a fixed
interest rate of 7.60%). In the event of a change in the
variable rate of interest applicable to the loan, this payment
amount may be regulated from time to time at Comerica's option
to provide for proper amortization within the loan term.
Additionally, all payments are to be automatically deducted
from a Comerica Bank checking account, otherwise a $10.00
monthly fee will be added to the monthly payment amount.
Prepayment The note will contain a prepayment premium but the calculation
will be determined by the rate of interest selected by the
Borrower. If Borrower selects a variable rate, option A is
applicable; if Borrower selects a fixed rate, option B is
applicable.
A) No prepayment premium. Borrower may prepay the principal in
whole or in part at any time.
B) Upon five (5) days written notice to Comerica, or at any
time upon any voluntary or involuntary prepayment (whether
by
acceleration of her note or otherwise), Borrower may prepay
the note in whole or in part in an amount of at least
$10,000.00 upon payment of the prepayment premium as
outlined in the note.
Collateral A first security interest on the following business assets:
*Machinery and Equipment
*Vines
*Winery Permit
To be cross-collateralized with Loan #1 above and Loan #3
below.
Guaranties The loan will be supported by the unsecured personal
guaranties of Xxxxxx Xxxxxxxx and Xxxxx Xxxxxxxx, each limited
to 50% of the loan balance.
Commitment One-half percent (1/2%) of the loan amount,
Fee plus out of pocket fees, payable at closing.
Other Fees Xxxxxxxx agrees to pay all out-of-pocket fees and closing
costs, including, but not limited to, appraisal, filing,
recording, title, and attorney fees.
Insurance Borrower must maintain hazard insurance naming Comerica as
mortgagee or loss payee on any assets taken as collateral by
Comerica.
LOAN #3
Borrower AWG, Ltd.
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Purpose To provide a working capital line of credit
Amount $200,000
Term One year term; to mature on April, 1999.
Interest Rate Interest will be calculated at a variable rate based on
Comerica's Prime Rate plus .25%. The interest rate changes are
effective as and when Comerica's Prime Rate changes. As of
today, Comerica's Prime Rate is equivalent to 8.50%.
Late Fee In addition, a late charge equal to 5% of each late
payment will be charged within 10 calendar days after the
payment due date.
Advances Borrower may request advances via telephone or in writing up
until 3:00 pm each business day. Verbal requests must be
followed up in
writing (letter or fax) within three business days. Advances
may be made via direct deposit to Borrowers Comerica account,
cashier check, or Fed wire. Requests for wires must be in
writing. Comerica is not obligated to make any advances under
this credit facility.
Repayment Interest charges are to be paid on a monthly basis.
Additionally, all payments are to be automatically deducted
from a Comerica Bank checking account, otherwise a $10.00
monthly fee will be added to the monthly payment amount.
Collateral A first security interest on the following business assets:
* Accounts Receivable
* Inventory
To be cross-collateralized with Loans #2 and #3 above.
Guaranties The loan will be supported by the unsecured personal
guaranties of Xxxxxx Xxxxxxxx and Xxxxx Xxxxxxxx, each limited
to 50% of the loan balance.
Other Fees Xxxxxxxx agrees to pay all out-of-pocket fees and closing
costs, including, but not limited to, appraisal, filing,
recording, title, and attorney fees.
Insurance Borrower must maintain hazard insurance naming Comerica as
mortgagee or loss payee on any assets taken as collateral by
Comerica.
Financial Borrower agrees to provide such financial information as
Information Comerica Information shall reasonably request from time to
time, including annual financial statements and complete
federal tax returns for the Borrower and Guarantor(s).
Conditions As a condition to funding these loans, the following
requirements must be met:
* Completion of the initial public offering of the preferred
stock under SEC Registration No. 333 with a minimum capital
raise of $3,000,000
* Copies of invoices of equipment purchased since December 31,
1997 and to be purchased over the next six months
* Details of 12/31/96 and 12/31/97 operating expenses
* Completion of construction for clear title
* Title insurance coverage satisfactory to the Bank
* A survey satisfactory to the Bank
* Flood insurance coverage if required by the Flood Disaster
Protection Act of 1973
* Re-certification of appraisal satisfactory to the Bank
* Receipt of satisfactory Phase I environmental audit
* Receipt of complete copies of last two years federal tax
returns of Xxxxxx Xxxxxxxx
* Evidence of debt repayment for refinances
* Opening of depository accounts at Comerica Bank
* Corporate papers and such documentation as required by the
Bank's legal counsel in the closing of these loans
Documentation AS A CONDITION TO FUNDING THIS CREDIT FACILITY, COMERICA MUST
BE PROVIDED WITH ALL DOCUMENTS AND INFORMATION REQUIRED BY
COMERICA, IN FORM AND IN SUBSTANCE, SATISFACTORY TO COMERICA.
A FURTHER CONDITION OF ADVANCING UNDER THIS CREDIT FACILITY IS
COMERICA'S CONTINUED SATISFACTION WITH THE BORROWERS FINANCIAL
CONDITION, OPERATIONS, AND ECONOMIC ENVIRONMENT WHICH MAY BE
REVIEWED BY COMERICA AT ANY TIME.
If the foregoing terms and conditions are agreeable to Borrower, please
indicate your acceptance of this Commitment by signing below where indicated
and return this letter to my attention within 30 days from the date of this
letter. If your written acceptance is not received by me within said period
of time, this Commitment shall automatically become null and void. This
Commitment may only be accepted as drawn, and may not be accepted in part,
conditionally or subject to modification. The loan must be fully closed, if
at all, on or before October 31, 1998. Neither this Commitment nor any rights
under the Commitment are assignable, in whole or in part, voluntarily by
operation of law or otherwise.
I appreciate this opportunity to enhance your banking relationship with
Comerica Bank's Private Banking division. Please call me at 000-000-0000 if
you have any questions regarding the terms of this Commitment or the closing
of this transaction.
Sincerely,
/s/ Xxxx XxXxxxxxx
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Xxxx XxXxxxxxx
ACCEPTANCE
The undersigned hereby accept(s) this Commitment and agree(s) to be fully
bound by the terms and conditions set forth therein.
Dated 7/31 , 1998.
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For AWG, Ltd.
By: /s/ Xxxxxx Xxxxxxxx Xxx: Chairman
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Xxxxxx Xxxxxxxx
