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EXHIBIT 10.2
[NATIONAL CITY BANK LETTERHEAD]
January 18, 2000
Bayfront Ventures
0000 Xxxx Xxxxxx
Xxxxx Xxxx, XX 00000
Attn.: Xxx Xxxx
Dear Xxx:
The National City Bank of Evansville (the "Bank") is pleased
to extend to Bayfront Ventures (the "Borrower") a committed line of credit (the
"Line of Credit"). This letter agreement (the "Loan Agreement") outlines the
terms and conditions pertaining to the Line of Credit.
1. LINE OF CREDIT.
(a) The Bank agrees to make loans (the "Advances") to the
Borrower from time to time from the Closing Date to and including the first
anniversary of the closing date, in an aggregate amount not to exceed $500,000
outstanding at any one time. The "Closing Date" is the date, not later than
February 1, 2000, when all of the conditions precedent specified in part A of
Annex I have been met.
(b) The Borrower may prepay the Advances from time to time in
whole or in part without premium or penalty. The Borrower may also reborrow
amounts previously prepaid, subject to the provisions of paragraph 1(c).
(c) By requesting any Advance, the Borrower shall be deemed to
have represented that all of the conditions precedent specified in part B of
Annex I have been satisfied as of the date of the request. Each Advance must be
in the amount of $5,000 or more. If a written or telephonic request for an
Advance is received on or before 2:00 p.m. Indiana time on a business day, the
requested Advance will be disbursed in such a way as the Bank and the Borrower
may agree or, in the absence of a contrary agreement, by crediting the
Borrower's account number _______________ (the "Business Account") on the same
business day. If a request is received later than 2:00 p.m., the Advance will be
disbursed on the next business day.
2. USE OF PROCEEDS.
The proceeds of the Advances made by the Bank under this Loan
Agreement shall be used by the Borrower for the Borrower's general business
purposes.
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January 18, 2000
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3. THE NOTE.
The Borrower's obligation to repay any Advances under the Line
of Credit shall be evidenced by and payable pursuant to the terms of a single
revolving promissory note in the form of Exhibit A (the "Note").
4. COLLATERAL AND GUARANTEES.
The papers described below (the "Security Instruments") shall
secure and guarantee repayment of the Advances:
o A guaranty in the form of Exhibit B, whereby Princesa
Partners, a Florida general partnership ("Princesa
Partners"), shall have guaranteed payment of the
Borrower's obligations under this Loan Agreement,
including the Borrower's obligation to repay the Advances
with interest called for by the Note and pay costs and
expenses pursuant to paragraph 10 of this Loan Agreement
(collectively the "Obligations").
o A security agreement executed by the Borrower and Princesa
Partners, substantially in the form of Exhibit C, and
covering the property described therein (the "Security
Agreement").
o A ship mortgage of Princesa Partners substantially in the
form of Exhibit D, and covering the vessel Princesa,
official number 1073261 (the "Ship Mortgage").
o A guaranty in the form of Exhibit E (the "Concorde
Guaranty") whereby Concorde Gaming Corporation, a Colorado
corporation ("Concorde"), shall have guaranteed payment of
the Obligations.
5. PAYMENT.
All payments of principal and interest under the Note and of
any amounts payable hereunder shall be made in immediately available funds. In
the event any payment is not received from the Borrower on the date it is due,
the Bank is authorized to debit the Business Account for the amount of such
payment at the close of business on the due date or at any time thereafter.
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January 18, 2000
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6. REPORTING.
So long as the Bank is committed to make Advances or any
Obligations are outstanding, the Borrower will deliver the following information
to the Bank, with such detail and supporting documentation as the Bank may
reasonably request:
o As soon as practicable, and in any event within 45 days
after the end of each fiscal quarter commencing with the
fiscal quarter ending December 31, 1999, a copy of the
financial statements of the Borrower, Princesa Partners
and Concorde for such quarter, consisting of their
respective balance sheets as at the end of such quarter
and their related statements of income for such quarter
and for the year-to-date then ended, all prepared in such
a manner as to present substantially the same information
as would be presented in financial statements prepared in
accordance with GAAP.
o As soon as practicable, but in any event within 120 days
after the end of each fiscal year of the Borrower,
Princesa Partners and Concorde, commencing with the fiscal
year ending September 30, 1999, copies of their annual
financial statements, consisting of their respective
balance sheets as of the end of such year, and their
related statements of income for such year, all prepared
in accordance with GAAP, and accompanied by the audit
report of Concorde prepared by a certified public account
reasonably acceptable to the Bank, containing an
unqualified opinion thereon, and a copy of such
accountant's management letters to the Borrower and
Princesa Partners. o Such other financial information
concerning the Borrower, Princesa Partners and Concorde as
the Bank may reasonably request.
7. SPECIAL COVENANTS.
The Borrower will comply with the following special covenants
so long as the Bank is obligated to make Advances or any Obligations are
outstanding:
o The Borrower will pay off the line of credit and not
reborrow for one period of at least 30 consecutive days
during the term of this Loan Agreement.
o The Borrower will comply with the financial covenants set
forth in paragraphs 19(l), (m) and (n) of the Guaranty,
Subordination Agreement, Security Agreement and Indemnity
made as of October 22, 1998 by the
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January 18, 2000
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Borrower for the benefit of certain lenders listed therein
(the "Prior Agreement"); provided, however, that the
Borrower's obligation to comply with such financial
covenants shall continue notwithstanding payment of the
obligations guaranteed by the Borrowers pursuant to the
terms of the prior agreement.
o The Borrower will maintain a depositary account at a
financial institution located in Miami Dade County,
Florida, and will daily deposit the Gross Cash Receipts in
excess of operating cash needs in such account. The
Borrower will instruct the depositary institution to
transmit all of the funds deposited in such account to the
Business Account via automated clearinghouse each day, as
soon as such funds are available for withdrawal under such
depositary institution's funds availability rules.
8. OTHER COVENANTS.
The Borrower will comply with the additional covenants set
forth in Annex II so long as the Borrower has any obligations to the Bank under
this Loan Agreement, whether or not evidenced by the Note.
9. EVENTS OF DEFAULT.
Each of the following shall be an "Event of Default"
hereunder:
o The Borrower shall fail to make any payment due under this
Loan Agreement or under the Note, and the failure to pay
shall continue for a period of ten days after the Bank
mails to Borrower written notice of the Borrower's failure
to make any payment.
o The Borrower, Princesa Partners or Concorde shall be named
a debtor in a petition filed under the U.S. Bankruptcy
Code.
o Any representation made by or on behalf of the Borrower in
connection with this Loan Agreement or the transactions
contemplated hereby shall prove to have been materially
false or misleading when made.
o The Borrower shall fail to comply with any covenant
contained in this Loan Agreement (except the covenant to
pay the principal of and interest on the Note and any
amounts due under this Loan Agreement when due), in Annex
II or in any Security Instrument, and the Borrower shall
fail to cure such breach within the applicable period of
grace, if any.
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January 18, 2000
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o Princesa Partners or Concorde shall notify the Bank that
it repudiates its guaranty.
o An Event of Default, as therein defined, shall occur under
any of the Loan Documents defined in paragraph 11(a).
Upon or after the occurrence of any Event of Default or event
which, with the giving of notice or passage of time, would be an Event of
Default, the Bank may terminate its commitment to make Advances. Upon the
occurrence of an Event of Default, the Bank may also demand payment in full of
the principal of and interest on the Note and any amounts owing under this Loan
Agreement and commence exercising its remedies under any security instruments.
10. COSTS AND EXPENSES.
The Borrower will pay on demand to the Bank all of the costs
and expenses incurred by the Bank in connection with the negotiation, drafting,
execution, administration and enforcement of this Loan Agreement, the Note and
the other instruments to be delivered in connection with this Loan Agreement,
including the reasonable fees and out-of-pocket expenses of counsel with respect
thereto.
11. MISCELLANEOUS.
This Loan Agreement and the other documents and instruments to
be delivered to the Bank in connection with this Loan Agreement (the "Loan
Documents") shall be governed by and construed in accordance with the laws of
the state of Indiana.
o No failure of delay on the part of the Bank in exercising
any right, power or remedy under the Loan Documents shall
operate as a waiver thereof.
o The Loan Documents shall be binding upon and shall inure
to the benefit of the Borrower, Princesa Partners,
Concorde and the Bank and their respective successors and
assigns; provided, however, that the Borrower shall not
have the right to assign any rights hereunder without the
prior written consent of the Bank.
o This Loan Agreement may not be amended except by a writing
signed by both an officer on behalf of the Bank and an
authorized representative of the Borrower.
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o The Loan Documents take the place of any preliminary
discussions between the Bank and the Borrower and
supercede any previous written agreements or
understandings between the Bank and the Borrower.
12. ACCEPTANCE.
The Borrower's signature below indicates its approval of all
of the terms of this Loan Agreement. This Loan Agreement shall become a contract
binding upon the Bank and the Borrower and their respective successors, assigns,
heirs and representatives if it is accepted on or before January 21, 2000, and
if a fee of $3,000 is paid to the Bank by that date. If this Loan Agreement is
not accepted by that date it shall be of no further force or effect.
Very truly yours,
NATIONAL CITY BANK OF EVANSVILLE
By
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Its Executive Vice President
Enclosures
Accepted and agreed to this
____ day of ______________, 2000.
BAYFRONT VENTURES
By Concorde Cruises, Inc., its General Partner
By
--------------------------------------------
Its President
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January 18, 2000
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and by
GOLDCOAST ENTERTAINMENT CRUISES, INC., Its General Partner
By
-------------------------------------
Its President
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Annex I
CONDITIONS TO LENDING
Part A
- The Bank will not make the first Advance under the Loan Agreement to which
these conditions are annexed (the "Loan Agreement") until the Bank receives the
following items, each in form and substance satisfactory to the Bank:
1. A duplicate (or counterpart) of the Loan Agreement duly accepted on
behalf of the Borrower.
2. The Note, duly executed on behalf of the Borrower.
3. Each Security Instrument described in paragraph 4 of the Loan
Agreement, duly executed on behalf of each party thereto.
4. Financing statements sufficient, when filed, to perfect the security
interests granted under any security agreements described in paragraph 4 of the
Loan Agreement.
5. Current searches in all appropriate filing offices showing that (i)
no state or federal tax liens have been filed and remain in effect against the
Borrower; (ii) no financing statements have been filed and remain in effect
against the Borrower except such as the Bank reasonable approves; and (iii) no
liens have been filed and remain in effect against the vessel Princesa, except
the First Preferred Ship Mortgage made as of October 15, 1998, in favor of the
Bank, individually and as agent for certain Xxxxxxx.
6. A certified copy of the resolutions of the General Partners of the
Borrower evidencing approval of the Loan Agreement and the other Loan Documents.
7. Copies of the Partnership Agreement of the Borrower, certified by a
partner of the Borrower as being true and correct copies thereof.
8. A signed copy of a certificate of one or more officers of a general
partner of the Borrower which shall certify the names of the persons authorized
to sign the Loan Agreement and the other Loan Documents to be delivered pursuant
to the Loan Agreement and to request Advances under the Loan Agreement.
9. A signed opinion of counsel for the Borrower addressed to the Bank
(i) to the effect that no litigation is pending or threatened against the
Borrower, except such as has been disclosed to the Bank or is covered by
insurance, (ii) to the effect that the Loan Documents have been duly and validly
authorized, executed and delivered by the Borrower and are enforceable, except
as limited by applicable bankruptcy, insolvency, reorganization,
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moratorium or similar laws affecting the enforcement of creditors' rights
generally and except to the extent that general equitable principles may limit
the right to obtain specific performance, and (iii) addressing other matters as
the bank may reasonably request.
10. A closing fee of $5,000.00
Part B
The obligation of the Bank to make each Advance (including the initial
Advance) shall be subject to the further conditions that on the date of such
Advance (a) the representations and warranties made by the Borrower to induce
the Bank to enter into the Loan Agreement are correct on and as of the date of
such Advance as though made on and as of such date, except to the extent that
such representations and warranties related solely to an earlier date; and (b)
no event has occurred and is continuing, or would result from such Advance,
which constitutes an Event of Default.
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Annex II
OTHER COVENANTS
The Borrower will comply with the additional covenants set forth below
so long as the Bank has any obligations under the letter agreement to which
these covenants are attached (the "Loan Agreement") or any amount is outstanding
under the Note:
1. The Borrower will keep accurate books of record and account in which
true and complete entries will be made in accordance with generally accepted
accounting principles consistently applied and, upon request of the Bank, will
give any representative of the Bank access to, and permit such representative to
examine, copy or make extracts from, any and all books, records and documents in
its possession, to inspect any of its properties and to discuss its affairs,
finances and accounts with any of its principal officers, all at such times
during normal business hours and as often as the Bank may reasonably request.
2. The Borrower will comply with the requirements of applicable laws
and regulations, the non-compliance with which would materially and adversely
affect its business or the financial condition of the Borrower.
3. The Borrower will pay or discharge before delinquent, (a) all taxes,
assessments and governmental charges levied or imposed upon it or upon its
income or profits, or upon any properties belonging to it, prior to the date on
which penalties attach thereto, (b) all federal, state and local taxes required
to be withheld by it, and (c) all lawful claims for labor, materials and
supplies which, if unpaid, might be law become a lien or charge upon any
properties of the Borrower; provided, that the Borrower shall not be required to
pay any such tax, assessment, charge or claim whose amount, applicability or
validity is being contested in good faith by appropriate proceedings.
4. The Borrower will keep and maintain all of its properties necessary
or useful in its business in good condition, repair and working order; provided,
however, that nothing in this paragraph shall prevent the Borrower from
discontinuing the operation and maintenance of any of its properties if such
discontinuance is, in the judgment of the Borrower, desirable in the conduct of
its business and not disadvantageous in any material respect to the Bank.
5. The Borrower will obtain and maintain insurance with insurers
believed by the Borrower to be responsible and reputable, in such amounts and
against such risks, including without limitation, liability insurance, property
and casualty insurance and business interruption insurance, as is usually
carried by companies engaged in similar business and owning similar properties
in the same general areas in which the Borrower operates. The policies of
insurance maintained by the Borrower pursuant to this paragraph shall name the
Bank as loss payee.
6. The Borrower will preserve and maintain its general partnership
existence and all of its rights, privileges and franchises; provided, however,
that the Borrower shall not be
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required to preserve any of its rights, privileges and franchises if its general
partners shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Borrower and that the loss thereof is not
disadvantageous in any material respect to the Bank.
7. Except for a) existing encumbrances of which the Borrower has
advised the Bank in writing, and b) the creation of purchase money security
interests of less than $100,000 in either slot machines or computer equipment,
the Borrower will not, without the prior written consent of the Bank, create,
incur, assume or suffer to exist any mortgage, deed of trust, pledge, lien,
security interest or other charge or encumbrance of any nature on any of its
assets, now owned or hereafter acquired, or assign or otherwise convey any right
to receive income or give its consent of the subordination of any right or claim
of the Borrower to any right or claim of any other person.
8. The Borrower will not sell, lease, assign, transfer or otherwise
dispose of all or a substantial part of its assets (whether in one transaction
or in a series of transactions) to any other person.
9. Except for its planned merger with Princesa Partners, the Borrower
will not consolidate with or merge into any person, or permit any other person
to merge into it, or acquire (in a transaction analogous in purpose or effect to
a consolidation or merger) all or substantially all the assets of any other
person.
10. The Borrower will not adopt, permit or consent to any change in
accounting principles other than as required by GAAP and will not adopt, permit
or consent to any change in its fiscal year.
