EXHIBIT 10.22
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LOAN AGREEMENT
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AMONG
PRINCESA PARTNERS,
A FLORIDA GENERAL PARTNERSHIP
CONCORDE CRUISES, INC.,
A SOUTH DAKOTA CORPORATION
CONAMI, INC.,
A FLORIDA CORPORATION
BAYFRONT VALET, LLC,
A FLORIDA LIMITED LIABILITY COMPANY
AND
CONCORDE GAMING CORPORATION,
A COLORADO CORPORATION
("BORROWER")
AND
FIRST NATIONAL BANK
("LENDER")
DATED AS OF OCTOBER 31, 2003
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS............................................................................................2
1.01 Specific Definitions..................................................................................2
1.02 Certain Other Terms...................................................................................8
SECTION 2. THE LOAN...............................................................................................9
2.01 The Loan - General....................................................................................9
2.02 Interest Rate.........................................................................................9
2.03 Late Charge...........................................................................................9
2.04 Terms of Payment.....................................................................................10
2.05 Application of Payments..............................................................................10
2.06 Payments.............................................................................................10
2.07 Prepayment...........................................................................................10
2.08 Use of Proceeds......................................................................................10
SECTION 3. SECURITY..............................................................................................11
SECTION 4. REPRESENTATIONS AND WARRANTIES........................................................................11
4.01 Organization, Powers, Compliance with Laws, Etc......................................................11
4.02 Authorization of Borrowing, Etc......................................................................11
4.03 Tax Liability........................................................................................12
4.04 Litigation and Other Matters.........................................................................12
4.05 Compliance With Law..................................................................................12
4.06 Financial Statements.................................................................................12
4.07 True and Correct Information.........................................................................12
4.08 Loan Not for Purpose of Margin Stock.................................................................12
4.09 Loan Not to Acquire a Security.......................................................................12
4.10 Licenses; Investigations; Compliance.................................................................13
4.11 No Default...........................................................................................13
4.12 Participation of Partners and Employees..............................................................13
4.13 Status of Borrower...................................................................................13
4.14 Agreements...........................................................................................14
4.15 City Agreements......................................................................................14
4.16 ERISA................................................................................................14
4.17 No Lien on Collateral................................................................................14
4.18 Environmental Reports................................................................................14
4.19 Access...............................................................................................14
4.20 Hazardous Substances Representations of Borrower.....................................................14
4.21 Intellectual Property................................................................................15
4.22 Maintenance of Property..............................................................................15
4.23 Accuracy of Loan Document Representations; Compliance................................................15
4.24 Ownership of Facilities..............................................................................15
4.25 Employee Matters.....................................................................................15
SECTION 5. CONDITIONS PRECEDENT..................................................................................16
SECTION 6. COVENANTS.............................................................................................17
6.01 Existence, Properties, Etc...........................................................................17
6.02 Insurance............................................................................................17
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6.03 Collection of Proceeds...............................................................................18
6.04 Payments of Debt, Taxes, Etc.........................................................................18
6.05 Restrictions on Transfer.............................................................................18
6.06 Financial Statements and Reports.....................................................................18
6.07 Hazardous Substances.................................................................................19
6.08 Notice of Litigation.................................................................................20
6.09 Change in Nature of Business.........................................................................20
6.10 No Defaults..........................................................................................20
6.11 Further Assurances...................................................................................20
6.12 ERISA................................................................................................21
6.13 Notice of Events of Default..........................................................................21
6.14 Licenses.............................................................................................21
6.15 Conduct of Business..................................................................................21
6.16 Application of Loan Proceeds.........................................................................21
6.17 Material Effect......................................................................................21
6.18 Inspections/Books and Records........................................................................21
6.19 Compliance With Non-Gaming Governmental Requirements and Laws........................................21
6.20 Regulation T, U and X................................................................................21
6.21 Merger, Consolidation or Transfer of Assets..........................................................21
6.22 Management Agreement.................................................................................21
6.23 Loans or Fundings....................................................................................21
6.24 Guaranties...........................................................................................21
6.25 Maintenance of Properties, Etc.......................................................................21
6.26 Gaming Compliance/Termination........................................................................21
6.27 Changes in Jurisdiction..............................................................................21
6.28 Liens................................................................................................21
6.29 Additional Debt......................................................................................21
6.30 Other Restrictions...................................................................................21
6.31 Non-Impairment.......................................................................................21
6.32 Minimum Debt Service Coverage Ratio..................................................................21
6.33 Minimum Tangible Net Worth...........................................................................21
6.34 Minimum Fixed Charge Coverage Ratio..................................................................21
6.35 Maximum Leverage Ratio...............................................................................21
6.36 Independent Consultant...............................................................................21
6.37 Deposit of Pledged Revenues..........................................................................21
SECTION 7. EVENTS OF DEFAULT.....................................................................................21
7.01 Event of Default.....................................................................................21
7.02 Remedies.............................................................................................21
SECTION 8. MISCELLANEOUS.........................................................................................21
8.01 No Waiver; Remedies Cumulative.......................................................................21
8.02 Notices..............................................................................................21
8.03 Fees/Taxes/Attorneys Fees............................................................................21
8.04 Indemnification......................................................................................21
8.05 Consent to Loan Participation........................................................................21
8.06 Amendments, Etc......................................................................................21
8.07 Successors and Assigns Included in Parties...........................................................21
8.08 Binding Effect and Assignment........................................................................21
8.09 Marshalling; Payments Set Aside......................................................................21
8.10 Section Titles.......................................................................................21
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8.11 Reliance by Lender...................................................................................21
8.12 Invalid Provisions to Affect No Others...............................................................21
8.13 Number and Gender....................................................................................21
8.14 Time of Essence......................................................................................21
8.15 Not Joint Venturers..................................................................................21
8.16 Estoppel Certificate.................................................................................21
8.17 Notice of Change in Location.........................................................................21
8.18 Renewal or Extension.................................................................................21
8.19 Tax Identification Number............................................................................21
8.20 Term.................................................................................................21
8.21 Name and Logo........................................................................................21
8.22 Remedies Cumulative..................................................................................21
8.23 Integration; Conflicting Terms.......................................................................21
8.24 Governing Law and Construction.......................................................................21
8.25 Consent to Jurisdiction..............................................................................21
8.26 Waiver of Right to Trial by Jury.....................................................................21
8.27 Counterparts.........................................................................................21
8.28 Confidentiality......................................................................................21
EXHIBITS
Exhibit A - Form of Notes
Exhibit B - Existing Debt to be Paid
Exhibit C - Transactional Cost Payments
Exhibit D - Schedule of Litigation, Etc.
Exhibit E - Compliance Certificate
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LOAN AGREEMENT
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THIS LOAN AGREEMENT ("the Agreement") is dated as of the date set forth
on the cover hereof among PRINCESA PARTNERS, a Florida general partnership
("Princesa"), CONCORDE CRUISES, INC., a South Dakota corporation ("Cruises"),
CONAMI, INC., a Florida corporation ("Conami"), BAYFRONT VALET, LLC, a Florida
limited liability company ("Valet"), CONCORDE GAMING CORPORATION, a Colorado
corporation ("Concorde") (Princesa, Cruises, Conami, Valet and Concorde are
individually referred to herein as a "Borrower" and collectively as the
"Borrower"), and FIRST NATIONAL BANK ("Lender").
RECITALS:
WHEREAS, Princesa owns a vessel and equipment on which Cruises conducts
a gaming enterprise under the name Bayfront Ventures;
WHEREAS, Cruises leases the vessel and equipment from Princesa pursuant
to the Charter (as defined below) for purposes of Cruises' gaming enterprise;
WHEREAS, Cruises leases a dock and certain other facilities for use in
Cruises' gaming enterprise from an instrumentality of the City of Miami pursuant
to the Use Agreement defined below;
WHEREAS, Valet operates a garage owned by an instrumentality of the
City of Miami pursuant to the Valet Parking Agreement (defined below), which
Valet uses to provide parking for Cruises' gaming enterprise;
WHEREAS, Cruises owns all the interests in Valet and is a 20% general
partner of Princesa and Conami is the other general partner of Princesa holding
an 80% interest therein;
WHEREAS, Concorde owns all the issued and outstanding stock of Cruises
and Conami and certain other corporations;
WHEREAS, Xxxxx Xxxx controls Concorde and BHL Capital Corporation
("BHL");
WHEREAS, Xxxxxx Xxxx is the wife of Xxxxx Xxxx;
WHEREAS, Borrower desires to obtain a loan for the purposes of (a)
refinancing Cruises' and Princesa's current lending obligations, all on the
terms and subject to the conditions set forth herein;
WHEREAS, in order to induce Lender to make the Loan, Xxxxx Xxxx, Xxxxxx
Xxxx and BHL have agreed to guaranty the Loan (as defined herein); and
WHEREAS, Lender has agreed to make the Loan to Borrower on the terms
provided herein and in the Promissory Notes in the form attached hereto as
Exhibit A (the "Notes"), which Notes evidence the Loan.
NOW, THEREFORE, in consideration of the foregoing Recitals and the
terms and conditions set forth below, the parties hereto agree as follows:
SECTION 1. DEFINITIONS
1.01 Specific Definitions. As used herein, the following terms shall
have the following meanings:
"ACCOUNTANT" means any Person who is an independent certified public
accountant employed or retained by Borrower and reasonably acceptable to Lender.
"AFFILIATE" means with respect to any Person, any other Person who,
directly or indirectly, controls, is controlled by, or is under common control
with the first Person.
"BHL" means BHL Capital Corporation, a South Dakota corporation, its
successors and assigns.
"BORROWER" means Princesa, Cruises, Conami, Valet, Concorde and their
respective successors and assigns, all of which shall have joint and several
liability hereunder.
"BUSINESS DAY" means each day other than a Saturday, a Sunday, legal
holiday, or other day on which national banks in Florida or Illinois are not
open for business.
"CASH" means, when used in connection with any Person, all monetary
and non-monetary items owned by that Person that are treated as cash in
accordance with GAAP.
"CHARTER" means the Agreement between Princesa, as owner, and Cruises
as successor of Bayfront Ventures, as charterer, dated October 10, 1998,
pursuant to which Princesa has let the Vessel to Cruises.
"COLLATERAL" means the Facilities, the Pledged Revenue, the Pledged
Accounts, and all other assets of Borrower.
"CONAMI" means Conami, Inc., a Florida corporation, its successors and
assigns.
"CONCORDE" means Concorde Gaming Corporation, a Colorado corporation,
its successors and assigns.
"CRUISES" means Concorde Cruises, Inc., a South Dakota corporation, its
successors and assigns.
"CURRENT CASH REQUIREMENTS" means reasonable xxxxx Cash required with
respect to the operations of the Gaming Enterprise Borrower plus the amount of
Cash required to be maintained to supply the gaming machines and the money
exchange cages with sufficient Cash to provide for the pay out of winnings and
to provide Cash or change to customers for the purpose of the Facilities.
"DEBT" means any of the following:
(a) all debt of such Person, whether or not represented by
bonds, debentures, note or securities, for the repayment of money
borrowed (whether or not recourse for payment is available to the whole
of the assets of such Person or only a portion thereof), if and to the
extent such obligations would appear as a liability upon a balance
sheet of such Person prepared in accordance with GAAP;
(b) all deferred obligations of the Person for the payment of
the purchase price of property or assets purchased; all obligations of
such Person representing the balance deferred and unpaid of the
purchase price of any property or interest therein or in respect of
conditional sales, except any such balance that constitutes a trade
payable in the ordinary course of business in connection with obtaining
goods, materials or services;
(c) all guaranties, endorsements, assumptions and other
contingent obligations in respect of, or agreements to purchase or
otherwise acquire, debt of others; and reimbursement obligations of
such person with respect to letters of credit and bankers acceptances
or similar credit obligations;
(d) all obligations under interest rate protection agreements,
foreign currency xxxxxx and similar agreements;
(e) all obligations secured by any mortgage, pledge or lien
existing on property owned in whole or in part by the Person, whether
or not the debt secured thereby shall have been assumed;
(f) all installment purchase contracts, loans secured by
purchase money security interests and lease-purchase agreements or
capital leases (including leases of real property), in each case
computed in accordance with GAAP;
(g) any obligation of the Person (whether or not classified as
debt under GAAP, including an operating lease) entered into for the
purpose of directly or indirectly supporting, credit enhancing or
paying any Debt of another Person, including any agreement to purchase
any asset or obligation and any room rate, occupancy, or operating
guaranty; and
(h) a guaranty or agreement by such Person (other than by
endorsement of negotiable instruments for collection in the ordinary
course of business), direct or indirect, primary or contingent, in any
manner of any part or all of the obligations of another person of the
type described in clauses (a) through (g) above.
"DEBT SERVICE" means with respect to Debt for any time period, the
aggregate of payments made or to be made in respect of principal (whether by
maturity, purchase, amortization or mandatory sinking fund payments), interest,
lease payment, servicing fee, or similar payments; provided that with respect to
Debt bearing interest at a variable or floating rate, Debt Service shall be
calculated by assuming that the interest rate borne by such Debt is equal to the
average annual rate (as computed over the last preceding four consecutive fiscal
quarters); and provided that, with respect to any Debt the principal of which is
not fully amortized over its stated term either in level installments of
principal or in approximately equal payments of principal and interest, Debt
Service shall be computed on the assumption that the principal of such Debt is
retired in level Debt Service payments of principal and interest commencing on
the first date that any amount is payable thereon and ending on the stated
maturity date of such Debt.
"DEBT SERVICE COVERAGE RATIO" shall mean, with respect to any period of
four consecutive fiscal quarters, the ratio of (i) Pledged Revenues received
less the Operating Expenses paid during such period to (ii) Debt Service for the
twelve-month period commencing on the first day following the end of such period
on all Debt of the Gaming Enterprise Borrower.
"DEFAULT" means the occurrence of any event that, with the passage of
time, notice, or both (whether such notice or lapse of time is required under
Section 7.01 or under some other provision of this Agreement) would if not cured
constitute an Event of Default.
"DEFAULT RATE" shall have the meaning given to such term in the Notes.
"DEPOSIT AGREEMENT" means the Deposit, Security, Pledge and Account
Control Agreement dated the date hereof between the Borrower, the Lender, and
the Lender as Depository.
"EBITDA" means, for any period, the sum of the amounts for such period
of (i) Net Income, (ii) interest expense, (iii) provisions for taxes based on
Net Income, if any, (iv) total depreciation expense, (v) total amortization
expense, (vi) management fees (if any), and (vii) other non-cash charges
determined in accordance with GAAP.
"ENVIRONMENTAL LAWS" means any applicable federal, state or local
statute, law, regulation, order, consent, decree, judgment, permit, license,
code, covenant, deed restriction, common law, treaty, convention, ordinance or
other requirement relating to public health, safety or the environment,
including, without limitation, those relating to releases, discharges or
emissions to air, water, land or groundwater, to the withdrawal or use of
groundwater, to the use and handling of polychlorinated biphenyls or asbestos,
to the disposal, treatment, storage or management of Hazardous Substances or
crude oil, or any fraction thereof, or to exposure to toxic or Hazardous
Substances, to the handling, transportation, discharge or release of gaseous or
liquid Hazardous Substances and any regulation, order, notice or demand issued
pursuant to such law, statute or ordinance, in each case applicable to the
property of Borrower, including without limitation, if applicable, the
following: the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of
1986, the Solid Waste Disposal Act, as amended by the Resource Conservation and
Recovery Act of 1976 and the Hazardous and Solid Waste Amendments of 1984, the
Hazardous Materials Transportation Act, as amended, the Federal Water Pollution
Control Act, as amended by the Clean Water Act of 1976, the Safe Drinking Water
Act, the Clean Air Act, as amended, the Toxic Substances Control Act of 1976,
the Occupational Safety and Health Act of 1977, as amended, the Emergency
Planning and Community Right-to-Know Act of 1986, the National Environmental
Policy Act of 1975, the Oil Pollution Act of 1990, and any applicable similar or
implementing federal or state law, and any applicable federal or state statute
and any further amendments to these laws providing for financial responsibility
for cleanup or other actions with respect to the release or threatened release
of Hazardous Substances or crude oil and all rules and regulations promulgated
thereunder.
"EQUIPMENT" means all furnishings, equipment and tangible personal
property of any nature whatsoever owned by any Gaming Enterprise Borrower or
which any Gaming Enterprise Borrower has an interest in.
"EVENT OF DEFAULT" means an event so defined in Section 7.01.
"FACILITIES" means collectively, (1) the Vessel together with any dock
and adjacent properties in which any Gaming Enterprise Borrower has an interest
including without limitation under the Use Agreement; and (2) the Equipment.
"FINANCING STATEMENTS" means one or more financing statements given by
Borrower to Lender perfecting a security interest in the Pledged Revenues or
collateral described in the Security Agreement.
"FIXED CHARGE COVERAGE RATIO" means, as of the last day of each fiscal
quarter of the Gaming Enterprise Borrower, the ratio of (a) the sum of (i) the
Gaming Enterprise Borrower's EBITDA for the last four fiscal quarters of the
Gaming Enterprise Borrower then ending, minus (ii) capital expenditures of the
Gaming Enterprise Borrower during such four quarters for the maintenance,
repair, restoration or refurbishment of the Facilities but excluding any capital
expenditures adding to or further improving the Facilities or made from proceeds
of casualty insurance to repair or restore the Facilities following a covered
loss, and minus (iii) distributions or other payments (except arm's lengths
payments for goods and services provided to the Gaming Enterprise Borrower) to
the Gaming Enterprise Borrower's Affiliates during such four quarters, and minus
(iv) taxes, if any, required to be paid with respect to the income or revenues
of the Facilities during such four quarters to the extent not deducted in
arriving at EBITDA, to (b) the sum of Debt Service of the Gaming Enterprise
Borrower to the extent required to be paid in Cash during the next four quarters
following the quarter then ending.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession, which are applicable to the circumstances as of any date of
determination.
"GAMING ENTERPRISE BORROWER" means collectively Princesa, Cruises,
Conami and Valet, considered, if used for financial covenant purposes, as a
single business entity on a consolidated GAAP basis after eliminating any
intercompany obligations, and individually each of such entities.
"GAMING REGULATIONS" means all applicable state and federal laws,
ordinances, rules, regulations and orders pertaining to gaming activities or the
presence or use of gaming devices at the Facilities, whether now or hereafter
adopted or in effect.
"GOVERNMENT AUTHORITY" means any government body, regulatory authority
or court having jurisdiction over the Borrower or the Facilities.
"GOVERNMENT SECURITY" means any readily marketable direct full faith
and credit obligations of the United States of America or obligations
unconditionally guaranteed by the full faith and credit of the United States of
America.
"GUARANTOR" means a Person who has signed a Guaranty Agreement in such
form as shall be acceptable to Lender on even date hereof for the purpose of
inducing Lender to advance the proceeds of the Loan to Borrowers. Guarantors
shall include (i) Xxxxx Xxxx, (ii) Xxxxxx Xxxx, and (iii) BHL.
"GUARANTY AGREEMENT" means the agreements signed from time to time by
the Guarantors guaranteeing payment and performance of the Loan.
"HAZARDOUS SUBSTANCE" means any hazardous or toxic material, substance
or waste, pollutant or contaminant that is regulated under any statute, law,
ordinance, rule or regulation of any local, state, regional or federal authority
having jurisdiction over the property of Borrower, or its use, including but not
limited to any material substance or waste that is: (a) defined as a hazardous
substance under any Environmental Laws; (b) a petroleum hydrocarbon, including
crude oil or any fraction thereof and all petroleum products; (c) PCBs; (d)
lead; (e) asbestos; (f) flammable explosives; (g) infectious materials; (h)
radioactive materials; or (i) defined or regulated as a hazardous substance or
hazardous waste under any rules or regulations promulgated under any of the
Environmental Laws.
"INTEREST RATE" means the interest rate applicable under the
circumstances as set forth in each of the Notes.
"LENDER" means First National Bank and each Person who shall extend
credit to Borrower by participating in the Loan, and any successor and assign.
"LICENSE" means any of the Licenses defined in Section 4.10.
"LIEN" means any security interest, mortgage, pledge, lien, charge,
encumbrance, title retention agreement or analogous instrument, in, of, or on
any of the assets or properties, whether now owned or hereafter acquired,
whether arising by agreement or operation of law, whether or not filed, recorded
or otherwise perfected under applicable law, including any conditional sale or
other title retention agreement, any lease in the nature thereof, any option or
other agreement to sell or give a security interest in and any filing of or
agreement to give any financing statement under the Uniform Commercial Code (or
equivalent statutes) of any jurisdiction.
"LOAN" means the Loan as defined in Section 2.01.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Security
Agreements, the Guaranty Agreements, the Financing Statements, the Mortgage, the
Deposit Agreement, and all other agreements, instruments and documents
heretofore, herewith or hereafter executed and delivered by Borrower, Guarantors
or any of their Affiliates pursuant to, or in connection with, the Loan
evidenced by this Agreement.
"LOAN PRINCIPAL BALANCE" means, at any time, the aggregate amount of
credit then funded by the Lender under the Notes as described in Section 2.01,
as reduced by all repayments of principal on the Notes to the time of reference.
"MATERIAL ADVERSE EFFECT" means any set of circumstances or events
which (a) may reasonably be expected to have any material adverse effect
whatsoever upon the validity or enforceability of any Loan Documents, (b) may
reasonably be expected to be material and adverse to the condition (financial or
otherwise) or business operations of the Borrower, (c) may reasonably be
expected to be material and adverse to the condition (financial or otherwise) of
the Facilities, (d) materially impairs or may reasonably be expected to
materially impair the ability of the Borrower to perform its obligations under
the Loan Documents, or (e) materially impairs or may reasonably be expected to
materially impair the ability of the Lender to enforce the principal benefits
intended to be created and conveyed by the Loan Documents.
"MORTGAGE" means the first preferred ship mortgage between the Borrower
and the Lender as the same may from time to time be amended or supplemented in
accordance with the terms thereof.
"NET INCOME" means, with respect to any fiscal period, the net income
from continuing Facilities operations before extraordinary or non-recurring
items for that fiscal period, determined in accordance with GAAP, consistently
applied.
"NOTES" means the Promissory Notes issued by Borrower to Lender
substantially in the form attached hereto as Exhibit A.
"OPERATING EXPENSES" shall mean the current expenses of operation,
maintenance, and repair of the Facilities. Operating Expenses shall include,
without limitation, prizes, wages, the cost of materials and supplies used for
current operation and maintenance, advertising and marketing expenses, insurance
premiums, and charges for the accumulation of appropriate reserves for current
expenses that are not recurrent monthly but may reasonably be expected to be
incurred in accordance with GAAP. Operating Expenses shall not include any
management fee or allowance for depreciation or amortization or renewals or
replacements of capital assets.
"PERMITTED ENCUMBRANCES" means any of the following:
(a) Liens created by the Loan Documents;
(b) Liens (in addition to those described in (a) above) in the
form of a purchase money mortgage or security interest, installment
sale contract, financing lease, or similar encumbrance on Equipment so
long as the aggregate principal balances so secured do not exceed
$100,000; and provided that at no time shall such Permitted
Encumbrances be Liens on more than 15% of the number of non-table
gaming devices such as a slot machine or similar device then in use by
the Gaming Enterprise Borrower;
(c) clouds on title, title defects or irregularities, utility,
access and other easements and rights-of-way, restrictions and
exceptions that Lender reasonably determines shall not materially
interfere with or impair the value, usefulness or integrity of any
Facilities or the present or intended operations thereof;
(d) zoning or similar laws that Lender reasonably determines
shall not materially interfere with or impair the value, usefulness or
integrity of the Facilities, or the present or intended operations
thereof;
(e) with respect to any item, those items so identified and
consented to by Lender.
(f) Liens or other security interests in vehicles;
(g) inchoate mechanics Liens and any mechanics Liens that have
been bonded over or otherwise provided for such that the Lien may not
be enforced as against any of the Pledged Revenues or the Facilities;
and
(h) taxes accrued and not due; provided that reasonable sales
taxes on patron purchases are permitted, the imposition of which does
not result in a reduction of Pledged Revenues.
"PERSON" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization, government, or any agency, instrumentality or
political subdivision thereof.
"PLEDGED ACCOUNTS" shall mean all bank accounts of any Gaming
Enterprise Borrower, which accounts shall be pledged as security for the Loan.
"PLEDGED REVENUES" means all income, receipts and revenues of each
Gaming Enterprise Borrower from any source whether now existing or hereafter
arising, and wherever located, and subject to Permitted Encumbrances; provided,
that Pledged Revenues shall not include:
(a) amounts paid as winnings or prizes to gaming patrons;
(b) amounts collected and paid out for a sales or excise tax
imposed by a Government Authority where such tax is billed to the
purchaser as a separate item;
(c) credits for the exchange of goods or merchandise;
(d) uncollected credit transactions written off as bad debt in
accordance with GAAP; and
(e) any casualty insurance proceeds related to the Facilities
(except for business interruption insurance or its equivalent.
"PRINCESA" means Princesa Partners, a Florida general partnership, its
successors and assigns.
"RESPONSIBLE OFFICER" means (a) any person executing this Loan
Agreement or the Notes; (b) the person(s) designated in the resolutions or other
similar document delivered by Borrower to Lender; or (c) any other person who
Lender reasonably believes to be acting on behalf of Borrower.
"SECURITY AGREEMENT" means the agreements of even date herewith between
any Borrower and Lender pursuant to which Borrower has granted to Lender a first
priority security interest in the collateral described therein in accordance
with the terms of such agreement.
"TANGIBLE NET WORTH" means, at any date of determination, the
difference between: (a) the total assets appearing on the Gaming Enterprise
Borrower's consolidated balance sheet at such date prepared in accordance with
GAAP after deducting adequate reserves in each case where, in accordance with
GAAP, a reserve is proper; and (b) the total liabilities appearing on such
balance sheet. For purposes of determining total assets, the following shall not
be taken into account: (i) goodwill, organizational expenses, research and
development expenses, trademarks, trade names, copyrights, patents, patent
applications, licenses and rights therein, covenants not to compete, training
costs and similar intangibles; (ii) all deferred charges and unamortized
discount and expense on Debt other than deferred income taxes; (iii) securities
which are not readily marketable; (iv) unless reflected in the Gaming Enterprise
Borrower's audited financial statements, any write-up in the book value of any
assets resulting from a reevaluation thereof; (v) amounts due from officers or
Affiliates; and (vi) any asset acquired subsequent to the date of this Agreement
which the Lender, in its sole discretion, determines to be an intangible asset.
"TRANSFER" means (i) the creation of any Lien (other than a Permitted
Encumbrance) on the Facilities, the Pledged Accounts, or the Pledged Revenues or
any portion of any thereof, either directly or indirectly, (ii) any change in
the legal or equitable title of substantially all of the Facilities or in the
beneficial ownership of substantially all of the Facilities, whether or not of
record and whether or not for consideration, and (iii) any event, including
death, which causes Xxxxx and Xxxxxx Xxxx not to own, directly or indirectly, in
excess of 50% of all shares, membership interests and other interests, by vote
and by value of each entity making up Borrower.
"USE AGREEMENT" means the Use Agreement dated June 25, 1997, as amended
by an Addendum dated August 29, 1999 and by amendments dated September 2001, and
June 27, 0000, xxxxxxx Xxxxxxxx Xxxx Management Trust, the City of Miami and
Cruises as successor to Bayfront Ventures.
"VALET" means Bayfront Valet, LLC, a Florida limited liability company,
its successors and assigns.
"VALET PARKING AGREEMENT" means the Valet Parking Concession Agreement
dated December 8, 1998, as amended on June 27, 2002, between Valet and Bayfront
Park Management Trust.
"VESSEL" means the diesel-powered vessel Princesa, official number
1073261, which is documented under and pursuant to the laws of the United States
of America.
1.02 CERTAIN OTHER TERMS. For purposes of this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP.
SECTION 2. THE LOAN
2.01 THE LOAN - GENERAL.
(a) Lender, on the terms and conditions stated herein, shall
lend Borrower the maximum, aggregate principal sum of $5,650,000 (the
"Loan"), which shall be evidenced by the Notes as follows:
(i) LOAN A shall be in the amount of $5,050,000, which shall
be funded on the date hereof in its entirety, for the purpose of
refinancing the amount outstanding under the terms of the Loan
Agreement between Princesa and certain lenders, dated October
22, 1998, as amended to date, reducing the Gaming Enterprise
Borrower's revolving line of credit and providing funds for
transaction costs and working capital;
(ii) LOAN B shall be in the amount of $300,000, which shall
be funded in whole or in part on the date hereof, for the
purpose of extending to Borrower a revolving Line of Credit; and
(iii) LOAN C shall be in the amount of $300,000, which shall
be funded on the date of such purchase, but in no event later
than April 1, 2004, for the purpose of purchasing new gaming
equipment for the Facilities.
(b) Notwithstanding any other provision herein, Lender shall
have no obligation to fund the Loan unless: (i) no Event of Default or
other event that has a Material Adverse Effect has occurred and is
continuing; and (ii) all conditions set forth in Section 5 as
conditions to the effectiveness of this Agreement (unless waived in
connection with the execution of this Agreement) shall have been
satisfied.
(c) Amounts paid or prepaid under the Notes for Loans A and C
may not be reborrowed.
(d) Each member of Borrower shall be jointly and severally
liable for the Loan and all provisions of this Agreement.
2.02 INTEREST RATE.
(a) Interest Rate Prior to Default. Interest shall commence to
accrue with respect to the Loan Principal Balance on the date hereof.
The Loan Principal Balance shall bear interest at the Interest Rate, as
calculated under the terms of each Note.
(b) Default Rate. If an Event of Default occurs on any one or
more of the Notes, then, during the entire period during which such
Event of Default shall occur and be continuing, interest shall be
payable at the Default Rate as provided in the Notes.
2.03 LATE CHARGE. If any payment required under one of the Notes is
not paid when due, Borrower agrees to pay a late charge as provided in such
Note. This late charge shall apply individually to all payments past due and
there will be no daily pro rata adjustment. This provision shall not be deemed
to excuse a late payment or be deemed a waiver of any other rights Lender may
have including the right to declare the entire Loan Principal Balance and
interest, together with all other amounts due hereunder and under the Notes,
immediately due and payable.
2.04 TERMS OF PAYMENT. The Notes shall be payable upon the terms set
forth in each Note. Amounts due hereunder and under the Notes shall be a
continuing general obligation jointly and severally of Borrower, subject to the
terms hereof and the Notes.
2.05 APPLICATION OF PAYMENTS. All payments shall be applied first to
any expenses and costs of collection, then to late charges, then to interest and
then to the Loan Principal Balance. If an Event of Default exists, Lender may
apply any payments received to principal, interest, late charges or other
amounts due from Borrower in such order as Lender, in its sole discretion, shall
determine.
2.06 PAYMENTS. All payments and prepayments by Borrower of principal
of and interest on the Notes, and all other fees, expenses, and other
obligations under this Agreement payable to Lender hereunder, shall be paid to
Lender on the date due by check, wire transfer or a transfer of funds from
Borrower.
2.07 PREPAYMENT.
(a) Partial Prepayment. Borrower may prepay Loans A, B and C in
part at any time and from time to time without penalty or premium or
prepayment indemnity. All partial prepayments shall be applied first to
fees, expenses, and other obligations under this Agreement payable to
Lender hereunder, then to accrued interest, and then to the principal
installments in the inverse order of their maturities. No prepayment
shall postpone the due dates or reduce the dollar amount of any monthly
installment payments due pursuant to the terms of the Loans unless the
Lender consents to such postponements or reductions in writing. A
prepayment under this subsection shall be made only upon three days'
prior written notice to Lender.
(b) Full Prepayment of Loan A. Borrower may at any time prepay
Loan A in full, subject to paying (i) a release servicing fee to Lender
in the amount of $500, (ii) all interest accrued to the prepayment
date, and (iii) a prepayment indemnity. For purposes of this
subsection, the prepayment indemnity shall be calculated as follows:
(i) if the prepayment is prior to one year from the date hereof,
Borrower shall pay a prepayment indemnity equal to 3% of the principal
amount then being prepaid; (ii) if the prepayment is one year or more
from the date hereof but prior to two years from the date hereof,
Borrower shall pay a prepayment indemnity equal to 2% of the principal
amount then being prepaid; and (iii) if the prepayment is two years or
more from the date hereof, Borrower shall pay a prepayment indemnity
equal to 0.5% of the principal amount then being prepaid. A prepayment
under this subsection shall be made only upon three days' prior written
notice to Lender.
(c) Full Prepayment of Loans B and C. Borrower may prepay Loans
B and C in full at any time without penalty or premium or prepayment
indemnity. Upon prepayment in full, interest accrued to the prepayment
date shall be paid on such prepayment date. A prepayment under this
subsection shall be made only upon three days' prior written notice to
Lender.
2.08 USE OF PROCEEDS.
(a) The proceeds of Loans A and B shall be disbursed on the date
hereof as follows:
(i) $4,926,017.78 to pay off existing debt of Princesa
related to the Facilities as set forth in Exhibit B.
(ii) $246,496.75 to pay transactional costs in the amounts
set forth in Exhibit C.
(iii) The remaining proceeds shall be used to reduce account
payables relating to the Facilities and to provide working
capital therefor.
(b) The proceeds of Loan C shall be used to purchase gaming
Equipment, including 37 new slot machines, at the time such Equipment
is purchased.
SECTION 3. SECURITY
To secure payment of all obligations of Borrower to Lender under the
Notes and hereunder, Borrower hereby grants to Lender a pledge of, a lien on and
a security interest in, all of the right, title and interest of Borrower in the
Collateral, whether now or hereafter owned, existing, arising or acquired,
wherever held or located, and whenever received.
The pledge of and security interest in Pledged Revenues shall be valid,
binding and enforceable as of the execution and delivery of this Agreement and
the Deposit Agreement. Such security interest shall be fully perfected upon
filing UCC financing statements with the Florida and South Dakota Secretary of
State's office. The Pledged Revenues shall immediately be subject to the lien of
such pledge without physical delivery, possession, filing or any other act, and
Borrower's obligation to perform under this Agreement shall have priority over
any or all other obligations and liabilities of Borrower and the lien of such
pledge shall be prior to and valid and binding as against all parties having
claims of any kind in tort, contract, or otherwise against Borrower irrespective
of whether such parties have notice thereof. Borrower irrevocably agrees to
deposit all Pledged Revenues except the Current Cash Requirements daily pursuant
to the Deposit Agreement.
To further secure payment of all obligations of Borrower to Lender
under the Notes and hereunder, Borrower and the Guarantors shall enter into such
Security Agreements and Guaranty Agreements as provided in the Loan Documents.
SECTION 4. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender as of the date hereof that:
4.01 ORGANIZATION, POWERS, COMPLIANCE WITH LAWS, ETC. Each Borrower
(a) is validly organized and in good standing under the laws of its state of
organization and is registered to do business in every other jurisdiction in
which failure to register would have a Material Adverse Effect; (b) has full
power and authority to own its properties and to carry on its business as
presently conducted; and (c) has the power to execute, deliver and perform the
Loan Documents to which it is a party.
4.02 AUTHORIZATION OF BORROWING, ETC. The execution, delivery and
performance of the Loan Documents to which each Borrower is a party and the
borrowings hereunder:
(a) have been duly authorized by all requisite action of the
Borrower and will not violate any provision of law, any order of any
court or other agency of government (whether state or federal), or any
provisions of any indenture, agreement or other instrument to which
Borrower is a party or by which it or any of its properties is bound;
(b) do not require any consent or approval not heretofore
obtained of any person, including but not limited to any security
holder or creditor;
(c) do not violate or conflict with any provision of the
governing documents of the Borrower;
(d) do not constitute a "transfer of an interest" or an
"obligation incurred" that is avoidable by a trustee under Section 548
of the Bankruptcy Code of 1978, as amended, or constitute a "fraudulent
conveyance," "fraudulent obligation" or "fraudulent transfer" within
the meaning of the Uniform Fraudulent Conveyances Act or Uniform
Fraudulent Transfer Act, as enacted in any applicable jurisdiction, and
(e) will not cause or permit the acceleration of any obligation
owed under any mortgage, indenture or loan or credit agreement or any
other contractual obligation to which the Borrower is a party or by
which the Borrower or any of its properties is bound or affected.
The Loan Documents to which Borrower is a party constitute the legal, valid and
binding obligations of Borrower, enforceable against Borrower in accordance with
their respective terms.
4.03 TAX LIABILITY. The Borrower has filed all tax returns that are
required to be filed, and has paid, or made provision for the payment of, all
taxes with respect to the periods, property or transactions covered by said
returns, or pursuant to any assessment received by the Borrower except such
taxes, if any, as are being contested in good faith by appropriate proceedings
and as to which adequate reserves have been established and maintained.
4.04 LITIGATION AND OTHER MATTERS. Except as set forth in Exhibit D,
there are no actions, suits or proceedings pending, or to the knowledge of
Borrower overtly threatened, against or affecting it, or the Facilities, or
involving the validity or enforceability of any of the Loan Documents or the
priority of the Lien thereof, or any basis therefor, at law or in equity, or
before or by any Government Authority; and Borrower is not in default with
respect to any order, writ, injunction, decree or demand of any Government
Authority.
4.05 COMPLIANCE WITH LAW. Except as set forth in Exhibit D, no
consent, approval or authorization of, or registration, declaration or filing
with, any Government Authority that has not been obtained is required on the
part of Borrower in connection with the execution and delivery of the Loan
Documents or the compliance with the terms, provisions or conditions thereof,
or, if so required, such consent, approval or authorization has been requested
and/or obtained. Borrower is not in violation of or subject to any contingent
liability on account of any statute, law, rule, ordinance, order, writ,
injunction or decree.
4.06 FINANCIAL STATEMENTS. Borrower's financial statements fairly
present the financial position thereof as of such dates and the results of
operations for the periods shown and have been prepared in accordance with GAAP.
4.07 TRUE AND CORRECT INFORMATION. All financial and other
information provided to Lender by or on behalf of Borrower in connection with
Borrower's request for the Loan (exclusive of projections and valuations) are
true and correct in all material respects and, as to projections or valuations,
present a good faith opinion as to such projections and valuations.
4.08 LOAN NOT FOR PURPOSE OF MARGIN STOCK. Borrower is not engaged in
the business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulations T, X and U issued by the Board
of Governors of the Federal Reserve System), and no proceeds of the Loan will be
used to purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock.
4.09 LOAN NOT TO ACQUIRE A SECURITY. No proceeds of the Loan will be
used to acquire any security in any transaction that is subject to Sections 13
and 14 of the Securities Exchange Act of 1934.
4.10 LICENSES; INVESTIGATIONS; COMPLIANCE.
(a) Licenses. Except as set forth in Exhibit D, Borrower has all
requisite power and authority and now holds all necessary licenses,
authorizations, approvals, permits, franchises, consents, privileges,
waivers and certificates to own and operate the Facilities
("Licenses"). Each such License that is necessary to the operation of
the Facilities is validly issued and in full force and effect, and the
Licenses constitute in all material respects, all of the authorizations
necessary for the operation of the Facilities, in the same manner as it
is presently conducted. Borrower has fulfilled and performed all of its
obligations with respect thereto, and complete and correct copies of
all material Licenses have been delivered to Lender. No event has
occurred that results in, or after notice or lapse of time or both
would result in, suspension, surrender, failure to renew, revocation or
termination of any material License.
(b) Investigations. Except as set forth in Exhibit D, Borrower
is not a party to and Borrower does not have any knowledge of any
investigation, notice of violation, order or complaint issued by or
before any court or regulatory body or of any other proceedings that
could in any manner result in suspension, surrender, failure to renew,
revocation or termination of any material License or otherwise threaten
or adversely affect the validity or continued effectiveness of the
Licenses of Borrower. Borrower has no reason to believe that any
Licenses will not be renewed in the ordinary course. Borrower believes
it has fully cooperated with every regulatory body having jurisdiction
over any of the Licenses or the activities of Borrower with respect
thereto, and Borrower has filed all material reports, applications,
documents, instruments, and information required to be filed by it
pursuant to applicable laws, rules and regulations. Borrower has no
reason to believe that any Licenses to operate the Facilities that are
listed in Exhibit D cannot be obtained on a timely basis.
(c) Bonding. Borrower has posted all required bonds required
under its Licenses and all Gaming Regulations.
(d) No Other Laws and Regulations. The conduct of Borrower's
business in connection with the Facilities is not subject to
registration with, notification to, or regulation, licensing,
franchising, consent or approval by any state or federal governmental
authority or administrative agency, except general laws and regulations
that are not related or applicable particularly or uniquely to the
operation of the Facilities, which do not materially restrict or limit
the operation of the Facilities, and with which Borrower is in
substantial compliance.
(e) Management Contract. Borrower has not entered into any
management agreement relating to the Facilities with anyone that is not
a party to this Agreement.
4.11 NO DEFAULT. No event has occurred and is continuing that is a
Default or an Event of Default.
4.12 PARTICIPATION OF PARTNERS AND EMPLOYEES. Except as set forth in
Exhibit D hereto, no partner, employee or agent of, or consultant to, Borrower
is prohibited by law, by regulation, by contract, or by the terms of any
license, franchise, permit, certificate, approval or consent from participating
in the business of Borrower as a partner, employee or agent of or consultant to,
or is the subject of any pending or, to the knowledge of Borrower, threatened
proceeding that, if determined adversely, would or could result in such a
prohibition.
4.13 STATUS OF BORROWER. Borrower is not insolvent (as such term is
defined in Section 101(32) of the Bankruptcy Code of 1978, as amended) and will
not be rendered insolvent (as such term is defined in
Section 101(32) of the Bankruptcy Code of 1978, as amended) by execution of this
Agreement, the Notes, or any other Loan Document or consummation of the
transactions contemplated thereby.
4.14 AGREEMENTS. Except as set forth in Exhibit D hereto, Borrower is
not party to any agreement or instrument or subject to any charter or ordinance
that could have a Material Adverse Effect. Except as set forth in Exhibit D
hereto, Borrower is not in default in the performance, observance or fulfillment
of any of the obligations, covenants or conditions contained in any agreement or
instrument to which it is a party.
4.15 CITY AGREEMENTS. Except as set forth in Exhibit D hereto, the
Use Agreement and the Valet Parking Agreement are in full force and effect and
no party thereto has breached or violated such agreements. All deposits required
to be made pursuant to each agreements have been made.
4.16 ERISA. Each employee benefit plan ("Plan") covered by Title IV
of the Employee Retirement Income Security Act of 1974 and the rules and
regulations thereunder ("ERISA") maintained, established, sponsored or
contributed to by Borrower or any member of a group that is under common control
with Borrower ("Borrower's ERISA Affiliates"):
(a) complies in all material respects with ERISA and the
Internal Revenue Code of 1986 (the "Code") including, without
limitation, all applicable funding standards of Part 3 of Subtitle B of
Title I of ERISA or Section 412 of the Code;
(b) is solvent; and
(c) is not subject to any termination proceeding.
Neither Borrower nor any of its ERISA Affiliates has any liability under Title
IV of ERISA to the Pension Benefit Guaranty Corporation ("PBGC") or any other
person with respect to any such Plan; and neither Borrower nor any of its ERISA
Affiliates contributes to or has contributed to any multi-employer plan (as
defined in Section 4001(a)(3) of ERISA) that is a defined benefit plan.
4.17 NO LIEN ON COLLATERAL. Except for the Permitted Encumbrances, on
and after date hereof, no Lien does or will exist on any portion of the
Collateral.
4.18 ENVIRONMENTAL REPORTS. All necessary environmental studies,
assessments, impact statements, or other undertakings as required by any
Government Authority for the operation and improvement of the Facilities have
been duly filed and approved.
4.19 ACCESS. The Facilities have sufficient public access.
4.20 HAZARDOUS SUBSTANCES REPRESENTATIONS OF BORROWER. Except as may
have been disclosed to Lender as of the date hereof:
(a) the Facilities have never been used by Borrower, or, to the
best of Borrower's knowledge, by any previous owners or occupants or
current occupants other than Borrower, to generate, manufacture,
refine, transport, treat, store, handle or dispose of any Hazardous
Substances, other than as permitted by and in compliance with all
Environmental Laws;
(b) no such Hazardous Substances exist on the Facilities except
as permitted by and in compliance with all Environmental Laws;
(c) no portion of the Facilities will be or has been constructed
with asbestos, asbestos-containing materials, urea formaldehyde
insulation or any other chemical or substance that has been determined
to be a hazard to health and/or the environment to the extent that the
Environmental Laws would require investigation and cleanup, or such
chemical or substance has been removed;
(d) there are no nor have there been electrical transformers or
other equipment that have dielectric fluid-containing polychlorinated
biphenyls (PCBs) located in, on or under the Facilities, except as
permitted by law and in compliance with all Environmental Laws;
(e) the Facilities do not now contain any underground storage
tanks and any prior underground storage tanks have been removed in
accordance with Environmental Laws; and
(f) Borrower has not received nor does it have any knowledge of
any summons, citation, directive, letter or other communication,
written or oral, from any local, state or federal government agency
concerning: (i) the existence of Hazardous Substances on the Facilities
or in the immediate vicinity; or (ii) the releasing, spilling, leaking,
pumping, pouring, emitting, emptying, or dumping of Hazardous
Substances onto the Facilities or into waters or other lands.
4.21 INTELLECTUAL PROPERTY. Except as set forth in Exhibit D hereto,
Borrower possesses adequate licenses (including, without limitation, licenses
related to computer programs), permits, franchises, patents, copyrights,
trademarks and trade names, or rights thereto, to conduct its business
substantially as is contemplated hereunder.
4.22 MAINTENANCE OF PROPERTY. The Facilities are in good working
order and condition, reasonable wear and tear excepted.
4.23 ACCURACY OF LOAN DOCUMENT REPRESENTATIONS; COMPLIANCE. All
representations and warranties of Borrower contained in all Loan Documents are
true and correct, and Lender may rely upon and have the same rights and remedies
as though such representations and warranties were set forth at length herein.
The written statements made by or on behalf of the Borrower to the Lender in
connection with this Agreement do not contain any untrue statement of a material
fact or omit a material fact necessary in order to make statements made not
misleading in light of all the circumstances existing at the date such
statements were made. Except as disclosed in Exhibit D hereto, there is no fact
known to the Borrower (other than matters of a general economic nature or
matters generally applicable to businesses of the types engaged in by the
Borrower) which presently constitutes a Material Adverse Effect or which might
foreseeably give rise to a Material Adverse Effect. Borrower shall duly observe
and perform all its obligations under all Loan Documents.
4.24 OWNERSHIP OF FACILITIES. The Borrower is the sole legal owner of
the Facilities (other than the Facilities subject to the Use Agreement and the
Valet Parking Agreement), as well as the sole legal and beneficial owner of the
revenues generated by the Facilities.
4.25 EMPLOYEE MATTERS. There is no strike or work stoppage in
existence or, to the Borrower's knowledge, threatened involving the Borrower
that would constitute a Material Adverse Effect.
SECTION 5. CONDITIONS PRECEDENT
This Agreement shall become effective upon its execution and delivery
by the parties hereto and when Lender shall have received each of the following
items in form and substance satisfactory to Lender (or Lender shall have waived
such receipt by executing this Agreement):
(a) the Loan Documents each duly executed and approved by the
appropriate parties, all such documents being in full force and effect
with no default thereunder;
(b) certificate to Lender signed by a Responsible Officer of
Borrower relating to the incumbency and genuine signatures of the
person or persons authorized to execute and deliver the Loan Documents
and any other certificates or documents to be delivered by Borrower in
connection therewith;
(c) copies of the following, certified as to authenticity by the
Borrower:
(i) all Licenses for the Facilities;
(ii) to the extent not identified above in this Section,
copies of all other agreements or contracts of Borrower that do
or could reasonably be expected to materially affect the conduct
of gaming activities of Borrower or the development, financing,
design, construction, installation, equipping or operation of
the Facilities, including any off-site improvement or
development contracts, any consulting, management, joint
venture, partnership, purchase, financing, mortgage, loan or
equipment transportation agreements, any lease, franchise,
licensing or easement contracts and any contracts with Equipment
vendors; and
(iii) to the extent not identified above in this Section,
copies of all resolutions, ordinances or other written actions
of Borrower relating to the Loan or the Loan Documents:
(d) certificate of the Borrower stating that after giving effect
to the Loan, the representations and warranties contained in the Loan
Documents are true and accurate and that no Default or Event of Default
exists as of the date hereof under the Loan Documents;
(e) a certificate relating to hazardous waste with respect to
the Facilities;
(f) chattel Lien searches covering the names of the Borrower
reflecting no Liens or encumbrances on the Collateral, other than
Permitted Encumbrances;
(g) an opinion of legal counsel for the Borrower as to the due
and valid existence of Borrower; as to the valid and binding nature of
and enforceability with respect to Borrower of all Loan Documents; as
to the absence of defaults and conflicts by Borrower; as to the absence
of any litigation that could adversely affect the Loan; as to the
proper place for filing of and the proper debtor's name to appear on
financing statements in regard to the Borrower's assets under the
Uniform Commercial Code; and as to such other matters incident to the
transaction herein contemplated as is customary or as Lender may
reasonably require;
(h) an opinion of legal counsel to Guarantors in form and
substance satisfactory to Lender;
(i) a collection bank agreement between Princesa, Lender and a
collection bank in form and substance satisfactory to Lender in its
sole discretion;
(j) to the extent not previously paid, payment of the Lender's
commitment fees for the Loans to the Lender in good funds;
(k) a Lender's loss payable endorsement to the Borrower's
insurance in form acceptable to the Lender in its sole discretion;
(l) evidence of the insurance coverage required by Section 6.02;
(m) a Deposit Agreement between the Lender, the Borrower and the
Lender as Depository, providing for the deposit of all Pledged
Revenues, the senior pledge of the Pledged Revenues to the Lender, and
the disbursement of Pledged Revenues pursuant to the Loan Documents in
form and substance satisfactory to the Lender;
(n) evidence satisfactory to Lender that (i) the Vessel has been
completed in accordance with its plans and specifications, (ii) an
official number has been assigned to the Vessel, (iii) an abstract of
title has been delivered showing Princesa as the owner of the Vessel
and no ship mortgages to exist except those to be paid from the
proceeds of the Loan; (iv) the Mortgage has been determined for
recording, and (v) the U.S. Coast Guard has issued a Certificate of
Documentation permitting the Vessel to be operated in the coastal
registry; and
(o) such other documents, instruments, approvals or opinions as
Lender may reasonably request.
SECTION 6. COVENANTS
Borrower covenants and agrees that from the date hereof (or such other
date specified in this Section 6) until payment in full of the principal of and
interest on the Loan, unless Lender shall otherwise consent in writing, Borrower
shall:
6.01 EXISTENCE, PROPERTIES, ETC. Do and cause to be done all things
necessary to preserve and keep in full force and effect its existence, and
conduct and operate its business with respect to the Facilities as contemplated
in the Loan Documents. 6.02 INSURANCE. Maintain liability, casualty and other
insurance with respect to the Facilities (subject to customary deductibles and
retention) with responsible insurance companies approved by the Lender in such
amounts and against such risks as are approved by the Lender and are carried by
responsible companies engaged in similar businesses and owning similar assets in
the general areas in which the Borrower operates and, in any event, (a) workers'
compensation insurance to the extent required to comply with all applicable
state, territorial and United States laws and regulations, and with a
longshoreman's and harbor worker's endorsement, (b) comprehensive general
liability insurance with minimum limits of $5,000,000, (c) umbrella liability
insurance providing excess liability coverages over and above the foregoing
underlying insurance policies up to a minimum limit of $5,000,000, (d) property
insurance protecting the Facilities for possible damage by fire, lightening,
wind-storm other damage, vandalism, riot, earthquake, civil commotion, malicious
mischief, hurricane and such other risks and hazards as are from time to time
covered by an "all risk" policy or a property policy covering "special" causes
of loss. Such insurance shall provide coverage of not less than 100% of actual
replacement value (as determined at each policy renewal based on the X.X. Xxxxx
Building Index or some other recognized means) of any improvements with a
deductible no greater than $500,000 (other than earthquake or flood insurance,
for which the deductible may be up to 5% of the replacement value), (e) hull and
machinery insurance on a named perils basis, covering the Vessel and contents
against all such usual marine risks as are provided in the American Institute
Hull Clauses as most recently amended; (f) with respect to the Vessel,
protection and indemnity insurance as per Form SP23, covering liability to
customers, crew, and third parties, including fixed or floating object coverage
and "dram shop" or liquor liability coverage, with a combined single limit of
not less than $15,000,000; (g) with respect to the Vessel, war risk hull and
machinery insurance in an
amount not less than the full replacement cost of the Vessel; and (h) all risk
business interruption insurance, including extra expense and extended indemnity,
and increased cost of operation insurance for full recovery of any actual loss
in net income sustained for a period of one year.
6.03 COLLECTION OF PROCEEDS. Cooperate with Lender in obtaining the
benefits of any insurance, bonds or other proceeds lawfully or equitably payable
to it in connection with the transaction contemplated hereby and the collection
of any debt or obligation of Borrower to Lender incurred hereunder.
6.04 PAYMENTS OF DEBT, TAXES, ETC. (a) Promptly pay all of its Debt
and perform all other obligations with respect to the Facilities, including but
not limited to promptly and timely performing all covenants, agreements and
promises under the Notes and the other Loan Documents; (b) promptly pay and
discharge or cause to be paid and discharged promptly all taxes, assessments,
and governmental charges or levies imposed upon it or upon its income and
profits, or upon any of its property, before the same shall become in default,
as well as all lawful claims for labor, materials and supplies or otherwise
which, if unpaid, might become a Lien or charge upon any of such properties; and
(c) pay from the proceeds of the Loan all accounts payable of Borrower more than
60 days old and not allow any undisputed accounts payable of Borrower to
thereafter become more than 60 days old; provided, however, that Borrower shall
not be required to pay and discharge or to cause to be paid and discharged any
such tax, assessment, charge, levy, accounts payable or claim so long as (i) the
validity thereof shall be contested in good faith by appropriate proceedings and
Borrower shall have set aside on its books adequate reserves with respect to any
such tax, assessment, charge, claim or levy to the extent required by its
auditors to comply with GAAP, and (ii) the non-payment or non-discharge of such
tax, assessment, charge, levy or claim can not result in a Lien (other than a
Permitted Encumbrance) being imposed against all or any portion of the
Facilities or any Pledged Revenues.
6.05 RESTRICTIONS ON TRANSFER. Not effect or permit a Transfer
(except a Transfer that creates a Permitted Encumbrance) without the prior
written consent of Lender; provided that, without Lender's consent, (a) Borrower
may sell or otherwise dispose of personal property constituting part of the
Facilities if and to the extent that (i) such property is promptly replaced with
reasonably equivalent property of equal or greater value that is free of any
Liens or encumbrances other than Permitted Encumbrances, or (ii) such property
is no longer needed or useful in connection with the operation of the
Facilities. Upon Borrower's request, Lender shall execute and deliver such
instruments as may be reasonably necessary to evidence the release of any
property sold or otherwise disposed of by Borrower as permitted by this Section.
6.06 FINANCIAL STATEMENTS AND REPORTS. Furnish Lender with current
financial information regarding Borrower as Lender or its participants may
reasonably require pursuant to federal and/or state laws. During the term of the
Loan, Borrower shall provide to Lender:
(a) Annual Audit of Borrower. Within one hundred and twenty days
of the end of each fiscal year copies of audited financial statements
including detailed audit reports and management letters prepared by an
Accountant in connection with each annual audit of the Borrower
prepared in conformity with GAAP and other applicable laws and
regulations.
(b) Quarterly Operating Statements. Commencing with first fiscal
quarter ending after the date hereof, Borrower shall deliver to Lender,
when available, but no later than thirty days after the end of each
fiscal quarter of the Borrower, quarterly operating statements prepared
by management of the Gaming Enterprise Borrower that are in form
reasonably satisfactory to Lender.
(c) Monthly Statements. Commencing with the first month ending
after the date hereof, Borrower shall deliver to Lender, when
available, but no later than fifteen days after the end of the relevant
month, a balance sheet of the Gaming Enterprise Borrower as of the end
of such
month, an income statement of the Gaming Enterprise Borrower for the
relevant month, accounts payable aging of the Gaming Enterprise
Borrower as of the last day of the relevant month, a monthly
reconciliation of cash for the Gaming Enterprise Borrower for the
relevant month, and a monthly account statement for all bank accounts
of the Gaming Enterprise Borrower.
(d) Compliance Certificate. Concurrently with the annual audits,
quarterly operating statements and monthly statements delivered
pursuant to subsections (a), (b) and (c) above, Borrower shall provide
Lender a certificate of the chief financial officer of Borrower in
substantially the form attached hereto as Exhibit E stating whether or
not he or she has actual knowledge after due inquiry of the occurrence
of any Event of Default under any of the Loan Documents or any event
that with the giving of the notice or the passage of time would
constitute an Event of Default under any the Loan Documents, other than
Events of Default previously reported and remedied and, if so, stating
in reasonable detail the facts with respect to such Event of Default.
(e) Security Audits. At the written request of Lender, Borrower
shall deliver to Lender within thirty days of completion and receipt by
Borrower of copies of all security audits, if any, of all or any
portion of the Facilities that were prepared by a Government Authority
and in the possession or control of Borrower.
(f) Reports to Others. Borrower shall deliver to Lender within
thirty days following Lender's written request therefor, copies of all
reports required by law and applicable regulations submitted to or
received from any federal or state gaming authorities (exclusive of
employee background checks or other information the confidentiality of
which must be maintained under applicable federal or state law or
regulation).
(g) Other Information. With reasonable promptness, from time to
time, such other information regarding the operations, business,
affairs and financial condition of Borrower as Lender may reasonably
request, and subject to Borrower's reasonable confidentiality
requirements.
If Borrower fails to furnish any such statements within thirty days
after the time period provided above, Lender may, after providing Borrower
notice, cause an audit to be made of the respective books and records at the
sole cost and expense of Borrower. At its sole cost and expense except that such
cost and expense shall be paid by Borrower if an Event of Default has occurred
and is continuing, Lender also shall have the right, at reasonable times and
upon reasonable notice, to examine all books, accounts and records relating to
the operation of the Facilities at Borrower's place of safekeeping.
6.07 HAZARDOUS SUBSTANCES.
(a) Comply and shall require all occupants of the Facilities to
comply with all applicable federal, state and local laws, rules,
regulations and orders with respect to the discharge, generation,
removal, transportation, storage and handling of Hazardous Substances;
(b) remove any Hazardous Substances existing in or on the
Facilities in violation of any applicable Environmental Law immediately
upon discovery of same, in accordance with applicable laws, ordinances
and orders of government authorities having jurisdiction thereof;
(c) pay or cause to be paid all costs associated with such
removal and which are required under applicable law;
(d) indemnify Lender from and against all losses, claims and
costs arising out of the migration of Hazardous Substances from or
through the Facilities onto or under other properties;
(e) keep the Facilities free of any Lien imposed pursuant to any
applicable state or federal law, rule, regulation or order in
connection with the existence of Hazardous Substances on the
Facilities;
(f) not install or permit to be installed or to exist in or on
the Facilities any asbestos, asbestos-containing materials, urea
formaldehyde insulation or any other chemical or substance that has
been determined to be a hazard to health and environment, except as
permitted by and in compliance with all applicable Environmental Laws;
(g) not cause or permit to exist any release of any Hazardous
Substances onto the Facilities or into waters or other lands; and
(h) give all notifications and prepare all reports required by
applicable Environmental Laws or any other applicable law with respect
to Hazardous Substances existing on, released from or emitted from the
Facilities.
6.08 NOTICE OF LITIGATION. Give prompt written notice to Lender of
the commencement of any action, suit or proceeding before any court or any
governmental department, board, agency or other instrumentality directly
affecting Borrower or any property of Borrower or to which Borrower is a party
in which an adverse determination or result could constitute a Material Adverse
Effect, stating in reasonable detail the nature and status of such action, suit
or proceeding.
6.09 CHANGE IN NATURE OF BUSINESS. Not make any material change in
the nature of the business of Borrower conducted at the Facilities as carried on
at the date hereof or as contemplated at the date hereof except as previously
disclosed to Lender.
6.10 NO DEFAULTS. Not permit any breach, default or event of default
to occur with respect to Borrower under any note, loan agreement, indenture,
lease, mortgage, contract for deed, security agreement or other material
contractual obligation binding upon Borrower that is not cured within the
applicable cure provisions thereof.
6.11 FURTHER ASSURANCES. From time to time at its expense execute and
deliver or endorse any and all instruments, documents, conveyances, assignments
and other agreements and writings, make any records, file any notices, and
obtain any consents, all as may be necessary or appropriate in connection
herewith, which Lender may reasonably request, to cure any defects in the
creation, execution and delivery of this Agreement or protect, perfect or
enforce the Loan Documents or the rights of Lender under this Agreement (but any
failure in request to assure that Borrower executes, delivers, or endorses any
such item shall not affect or impair the validity, sufficiency or enforceability
of the Loan Documents, regardless of whether any such item was or was not
executed, delivered or endorsed in a similar context or on any other occasion).
6.12 ERISA. Comply in all material respects with the ERISA if
applicable.
6.13 NOTICE OF EVENTS OF DEFAULT. Furnish to Lender as soon as
possible and in any event within five Business Days after any partner, employee
or agent of Borrower has obtained knowledge of the occurrence of an Event of
Default that is continuing on the date of such statement, a statement signed by
Borrower setting forth details of such Event of Default or event and the action
Borrower has taken, is taking or proposes to take to correct the same.
6.14 LICENSES. Obtain and hold all necessary Licenses with respect to
the operations of the Facilities.
6.15 CONDUCT OF BUSINESS. Preserve all of the rights, privileges, and
franchises necessary in the normal conduct of the business of the Facilities;
operate the Facilities in a businesslike manner; not assign this Agreement or
any interest herein or all or any part of any Loan to be made hereunder without
the prior written consent of Lender, except as may be otherwise permitted
herein.
6.16 APPLICATION OF LOAN PROCEEDS. Use the proceeds of the Loan
solely for the purposes provided for in Section 2.08 hereof.
6.17 MATERIAL EFFECT. Promptly transmit to Lender, upon receipt
thereof, any communication that could affect Lender's security for the Loan and
promptly respond fully to any inquiry of Lender made with respect thereto.
6.18 INSPECTIONS/BOOKS AND RECORDS. At all times keep proper books of
record and accounts for the Facilities, and, upon 24 hours written request of
Lender, provide any duly authorized representative of Lender access during
normal business hours to, and permit such representative to reasonably examine,
copy or make extracts from, any and all books, records and documents in
Borrower's possession or control relating to the Facilities or any of the
representations or covenants of Borrower hereunder or in the Loan Documents
(such access to be given immediately upon request in the case of any emergency
or a material change in financial or other condition of Borrower). Lender and
its representatives shall have the right at all reasonable times upon 24 hours
written notice to inspect, examine and copy all books and records of Borrower.
6.19 COMPLIANCE WITH NON-GAMING GOVERNMENTAL REQUIREMENTS AND LAWS.
In addition to laws and regulations described herein relating to compliance with
gaming-related laws and regulations, at all times:
(a) comply promptly with all other permits, laws, statutes,
ordinances, orders, rules, codes, regulations, licenses, authorizations
and requirements of all Government Authorities applicable to the
Facilities (or its operation), including without limitation,
appropriate supervising boards of fire underwriters and similar
agencies and the requirements of any insurer issuing coverage on the
Facilities, except for such matters that are being contested diligently
and in good faith by proper proceedings and where security satisfactory
to Lender has been provided to ensure the continued operation of the
Facilities during the pendency of such contest;
(b) obtain or cause to be obtained as promptly as possible any
License and make any filing or registration therewith which at the time
shall be required with respect to the performance of its obligations
under this Agreement or the other Loan Documents or for the operation
of its business as presently conducted or as contemplated by it; and
promptly provide written notice to Lender of the receipt of any notice
of any investigation or charge of violation thereof from any Government
Authority or of any administrative or adjudicative proceedings that
could in any manner result in the termination of any License or could
reasonably be expected to adversely effect the Loan, the Facilities,
the Pledged Accounts, or the Pledged Revenues, and in such event
provide Lender with such additional reports and information Lender may
reasonably require.
6.20 REGULATION T, U AND X. Not use the proceeds from the Loan in
violation of Section 7 of the Securities Exchange Act of 1934, as amended, or
any regulation issued pursuant thereto, including, without limitation,
Regulations T, U or X of the Board of Governors of the Federal Reserve System,
12 C.F.R., Chapter II or to: (i) purchase any security within the meaning of the
Securities Exchange Act of 1934, as amended, or (ii) refinance any borrowing,
the proceeds of which were used to purchase any such security.
6.21 MERGER, CONSOLIDATION OR TRANSFER OF ASSETS. Not to dissolve,
merge with or into or consolidate with any other Person, or to sell, transfer or
convey all or substantially all of its interest in the Facilities, the Pledged
Accounts or the Pledged Revenues.
6.22 MANAGEMENT AGREEMENT. Not enter into any management agreement
unless the manager subordinates payment of its management fees to payment on
this Loan and the Notes.
6.23 LOANS OR FUNDINGS. Not make any loan of Pledged Revenues or
advance to, or otherwise extend any credit funded by Pledged Revenues to,
Borrower's officers, Affiliates, or any member of Borrower.
6.24 GUARANTIES. Not as to the Gaming Enterprise Borrower assume,
guarantee, endorse or otherwise become liable upon the obligation of any person,
firm or corporation except for Permitted Encumbrances or pursuant to Section
6.29 below or by endorsement of negotiable instruments for deposit or collection
in the ordinary course of business.
6.25 MAINTENANCE OF PROPERTIES, ETC. Maintain, repair and preserve
the Facilities in good working order and condition, ordinary wear and tear
excepted, and from time to time make or cause to be made all necessary and
proper replacements, repairs, renewals and improvements so that the efficiency
and value of the Facilities will not be materially impaired; and in particular
within 90 days from the date hereof complete the remodeling of the bathrooms and
install new carpeting and reupholstered furniture on the Vessel.
6.26 GAMING COMPLIANCE/TERMINATION. At all times comply with all
terms and conditions of the Gaming Regulations, the violation of which would
materially impair the conduct of gaming presently permitted or purported to be
authorized at the Facilities or that would materially reduce EBITDA otherwise
available from the Facilities. Promptly after learning thereof, Borrower shall
notify Lender in writing of any termination, revocation, suspension or
limitation or proposed or threatened termination, revocation, suspension or
limitation by any Government Authority of the authority of Borrower to operate
gaming in any portion of the Facilities.
6.27 CHANGES IN JURISDICTION. Not change the state of organization of
any Borrower without providing Lender with 60 days advance notice of such
change.
6.28 LIENS. Not incur, or permit the incurrence of, any Liens
(including, any mechanics', laborers' and materialmen's Liens) on all or any
portion of the Collateral other than Permitted Encumbrances and other than as
otherwise expressly may be permitted hereunder or in any other Loan Document.
6.29 ADDITIONAL DEBT. Not incur, nor permit the incurrence of, any
additional Debt of the Gaming Enterprise Borrower except:
(a) with the written consent of Lender; or
(b) so long as no uncured Default exists, unsecured Debt due in
less than six months provided that the aggregate of all such Debt at
any time does not exceed the greater of $50,000 or 2% of the Gaming
Enterprise Borrower's Tangible Net Worth; or
(c) so long as no uncured Default exists, unsecured Debt in an
amount which will not cause the ratio of the Gaming Enterprise
Borrower's EBITDA to Debt Service for any fiscal year of the Gaming
Enterprise Borrower to fall below 1.35 to 1 based on the Gaming
Enterprise
Borrower's EBITDA for the 12 calendar months immediately
preceding the incurrence of such Debt and the maximum Debt Service on
all Debt of the Gaming Enterprise Borrower including the additional
Debt for the current fiscal year of the Gaming Enterprise Borrower and
all future fiscal years of the Gaming Enterprise Borrower; or
(d) any unsecured Debt the proceeds of which are used solely to
refund existing outstanding Debt of a maturity in excess of one year
and which has a lower annual Debt Service than the Debt refinanced.
6.30 OTHER RESTRICTIONS. Not install on the Facilities any materials,
equipment, fixtures or other items of personal property which are subject to a
security agreement or other arrangements under which the seller reserves the
right to remove or to repossess such items or to consider them personal property
after their incorporation in the Facilities unless the same shall constitute a
Permitted Encumbrance.
6.31 NON-IMPAIRMENT. Not take any action that shall impair the
contractual rights of any third party under any of the Loan Documents. Upon
execution of any Loan Document, the Loan Documents shall become valid and
binding obligations of Borrower, enforceable in accordance with their terms for
purposes of the laws of all applicable jurisdictions.
6.32 MINIMUM DEBT SERVICE COVERAGE RATIO. Not permit the Debt Service
Coverage Ratio of the Gaming Enterprise Borrower to be less than 1.35 as of the
last day of each fiscal quarter commencing with the quarter ending December 31,
2003.
6.33 MINIMUM TANGIBLE NET WORTH. Not permit the Tangible Net Worth of
the Gaming Enterprise Borrower at the end of any fiscal year of the Gaming
Enterprise Borrower commencing with Borrower's fiscal year ending in calendar
2003 to be less than the sum of $2,850,000 plus an amount equal to at least 10%
of the Gaming Enterprise Borrower's Net Income for each prior fiscal year
(commencing with the Gaming Enterprise Borrower's fiscal year ending in calendar
2003) ending on or before such fiscal year end.
6.34 MINIMUM FIXED CHARGE COVERAGE RATIO. Not permit the Gaming
Enterprise Borrower's Fixed Charge Coverage Ratio to be less than 3 to 1 as of
the last day of each fiscal quarter of the Gaming Enterprise Borrower commencing
with the fiscal quarter of the Gaming Enterprise Borrower ending June 30, 2004.
6.35 MAXIMUM LEVERAGE RATIO. Not permit the ratio, as of the last day
of each fiscal quarter of the Gaming Enterprise Borrower commencing with the
first fiscal quarter of the Gaming Enterprise Borrower ending after the date
hereof, of (i) Debt of the Gaming Enterprise Borrower to (ii) EBTIDA of the
Gaming Enterprise Borrower for the Gaming Enterprise Borrower's last four fiscal
quarters then ended to exceed the levels set forth below for the periods set
forth below.
Period Total Debt to EBITDA Ratio
-------------------------------------------------------- --------------------------
First four fiscal quarters ending after date hereof 5.2 to 1
First four fiscal quarters thereafter 4.7 to 1
Remaining fiscal quarters through final maturity of Loan 4.3 to 1
6.36 INDEPENDENT CONSULTANT. Employ an independent consultant to make
recommendations to Borrower in regard to Borrower's method of operation should
the Gaming Enterprise Borrower fail to meet the minimum debt service coverage
ratio provided for in Section 6.32 and provide the Lender with a copy of all
reports of such consultant.
6.37 DEPOSIT OF PLEDGED REVENUES. Transfer the Pledged Revenues less
Current Cash Requirements to the Depository (as defined in the Deposit
Agreement) at the time and in the manner required in Section 3 hereof and the
Deposit Agreement.
As to the Use Agreement and the Valet Parking Agreement:
(a) Not assign, sell, pledge, mortgage or otherwise transfer or
encumber the interest of Borrower in the Use Agreement or the Valet
Parking Agreement; provided that on the occurrence of an Event of
Default Cruises and Valet shall assign their interests thereunder to
Lender by executing the Security Assignment of Use Agreement and Valet
Parking Concession Agreement in substantially the form provided by
Lender prior to the date hereof and use their best efforts to secure
the acknowledgement and consent of the City of Miami and Bayfront Park
Management Trust to such Assignment; and
(b) Not (i) cause or permit the Use Agreement or the Valet
Parking Agreement to be modified or amended (except for extensions in
the term as provided for therein), (ii) waive any of its rights under
the Use Agreement or the Valet Parking Agreement, (iii) cause or permit
the termination of the Use Agreement or the Valet Parking Agreement or
(iv) default or commit an act or omit an act which with notice or the
passage of time would constitute a default under or allow the other
parties to terminate the Use Agreement or the Valet Parking Agreement.
SECTION 7. EVENTS OF DEFAULT.
7.01 EVENT OF DEFAULT. The occurrence of any of the following events
shall constitute an Event of Default (hereinafter called Events of Default):
(a) failure to pay principal or interest, when due and payable
pursuant to the terms of the Loan Documents;
(b) any material representation or warranty made herein or in
any of the Loan Documents or any written report, certificate, financial
statement or other instrument heretofore or at any time hereafter
furnished by or on behalf of Borrower to Lender shall prove to have
been false or misleading in any material respect when made;
(c) default by Borrower under Sections 6.19, 6.26 or 6.28;
(d) any payments with respect to other Debt become accelerated
because of a default or other nonperformance with respect thereto;
(e) Borrower shall (i) fail to pay any amounts other than
principal and interest when due, or (ii) fail to duly and punctually
perform or observe any of the covenants or agreements contained in any
of the Loan Documents (and not otherwise expressly addressed in this
Section), and such failure to perform continues for a period of thirty
days after written notice thereof given by Lender to Borrower;
(f) the occurrence of a non-permitted Transfer as defined in
clauses (ii) and (iii) of the definition of Transfer;
(g) any member of Borrower or any Guarantor shall: (i) apply for
or consent to the appointment of, or the taking of possession by, a
receiver, custodian trustee or liquidator of itself or of all or a
substantial part of its property; (ii) admit in writing its inability,
or be generally unable, to
pay its debts as they become due; (iii) make a general assignment for
the benefit of creditors; (iv) commence a voluntary case under the
federal bankruptcy laws (as now or hereafter in effect); (v) be
adjudicated insolvent or be the subject of an order for relief under
any chapter of the Bankruptcy Code (11 U.S.C. Section 101, et seq.);
(vi) file a petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganization, winding up or
composition or adjustment of debts; or (vii) acquiesce to, or fail to
controvert in a timely manner, any petition filed against it in an
involuntary case under such bankruptcy laws;
(h) a case or other proceeding shall be commenced, without the
application or consent of any member of Borrower or any Guarantor, in
any court of competent jurisdiction, seeking the liquidation,
reorganization, dissolution, winding up, or composition or readjustment
of debts, of any member of Borrower or any Guarantor, the appointment
of a trustee, receiver, custodian, liquidator or the like of any member
of Borrower or any Guarantor or of all or any substantial part of its
assets, or any similar action with respect to any member of Borrower or
any Guarantor under the federal bankruptcy laws (as now or hereafter in
effect) or any other laws relating to bankruptcy, insolvency,
reorganization, winding up or composition or adjustment of debts, and
such case or proceeding shall continue undismissed, or unstayed and in
effect, for a period of ninety days, or an order for relief against any
member of Borrower or any Guarantor shall be entered in an involuntary
case under such bankruptcy laws;
(i) any member of Borrower or any Guarantor shall be dissolved,
liquidated or wound up or shall fail to maintain its respective
existence as a going concern in good standing or die;
(j) a garnishment summons or writ of attachment is issued
against or served upon Lender for the attachment of any property of any
member of Borrower or any Guarantor in Lender's possession or any debt
owing to any member of Borrower or any Guarantor which, in the opinion
of Lender, gives rise to a Material Adverse Effect, unless appropriate
papers are filed by such Person contesting the same within ninety days
after the date of such service (and after notice of such service being
given to such Person); or a levy is made under any process on the
Facilities and such levy shall not be immediately bonded over and shall
continue unstayed for seventy five days or more;
(k) any judgment shall be entered against any member of Borrower
or any Guarantor that, in the opinion of Lender, gives rise to a
Material Adverse Effect, and which judgment shall not be vacated, set
aside or stayed within sixty days from the entry thereof;
(l) any Lien for labor, material, taxes or otherwise is filed
against the Facilities and such Lien shall not be released or bonded
over to Lender's satisfaction within sixty days after the filing
thereof;
(m) any judgment, writ or warrant of attachment or other similar
process is docketed, entered or filed against the Facilities, and such
order, judgment, writ of execution or similar process shall not be
vacated, set aside or stayed within sixty days from the entry thereof;
(n) any Borrower or any Guarantor shall fail to provide Lender
with financial information required to be provided under the Loan
Documents on or before the date required or, if only required to be
provided on request of Lender, within thirty days after it is requested
by Lender; or
(o) Borrower shall violate any term or provision of the Gaming
Regulations relating to the Facilities, which violation materially
impairs the continued operation of the Facilities in
substantially the manner in which the Facilities were operated prior to
such violation; or there shall be any material amendment to the Gaming
Regulations that materially impairs the continued operation of the
Facilities; or there shall be any termination, revocation, suspension
or limitation by any Government Authority of the right of Borrower to
lawfully operate any portion of the Facilities; or, Borrower, for any
reason, terminates gaming activities at the Facilities.
7.02 REMEDIES. Upon the occurrence of an Event of Default, or at any
time thereafter until such Event of Default is cured to the written satisfaction
of Lender (or in the absolute discretion of Lender, waived by Lender), Lender
may exercise one or more of the following rights and remedies:
(a) declare all of the principal of and interest on the Loan to
be immediately due and payable, and the same shall thereupon be
immediately due and payable, without presentment or other notice or
demand;
(b) exercise or enforce any and all other rights or remedies
available by law or agreement against Borrower, or against any other
person or property; and
(c) exercise or enforce any and all other rights or remedies
available under any of the Loan Documents.
SECTION 8. MISCELLANEOUS
8.01 NO WAIVER; REMEDIES CUMULATIVE. No failure on the part of Lender
to exercise and no delay in exercising any right, power or privilege under any
Loan Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege under any Loan Document preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The remedies provided in the Loan Documents are cumulative and not
exclusive of any remedies provided by law or in equity or by statute.
8.02 NOTICES. Notices permitted or required to be given hereunder
shall be deemed sufficient if given by (i) registered or certified mail, postage
prepaid, return receipt requested, addressed to the respective addresses of the
parties or at such other addresses as the respective parties may designate by
like notice from time to time, or (ii) telephonic facsimile transmission.
Notices so given shall be effective upon the earlier of (a) receipt by the party
to which notice is given, or (b) on the fifth Business Day following the date
such notice was posted.
Notice to Lender shall be addressed to:
First National Bank
00000 X. Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
With copy to:
Xxxxx X. Xxxxx
Xxxxxx & Xxxxxxxxx
Xxx Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Phone: (000) 000-0000
Fax:: (000) 000-0000
Notices to Borrower shall be addressed to:
Concorde Gaming Corporation
0000 Xxxx Xxxxxx
Xxxxx Xxxx, Xxxxx Xxxxxx 00000
Phone:
Fax:
With copy to:
Xxxxxx X. Xxxxxx
Xxxxxxxx & Xxxxxxxx LLP
0000 Xxxxxxxx Xxxxx
000 Xxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
8.03 FEES/TAXES/ATTORNEYS FEES. In addition to any other payments
provided for in the Loan Documents, Borrower shall reimburse Lender, upon
demand, for all reasonable costs and expenses actually incurred, including
without limitation reasonable attorney's fees paid or incurred by Lender in
connection with:
(a) the preparation, negotiation or review of the Loan
Documents, the review and analysis of materials requested from Borrower
by Lender, the rendering of any opinions reasonably required by Lender,
and any other services deemed reasonably necessary by Lender in
connection with the execution and delivery of the Loan Documents or in
connection with the Loan;
(b) the review, negotiation or preparation of any extensions,
amendments or modifications to any of the Loan Documents requested by
Borrower or, if an Event of Default has occurred and is continuing,
requested by Lender, and any other services deemed reasonably necessary
by Lender in connection therewith; and
(c) the enforcement by Lender during the term hereof or
thereafter of the rights or remedies of Lender hereunder or under any
Loan Documents, instruments or agreements related thereto, including
without limitation costs and expenses of collection in the Event of
Default, whether or not suit is filed with respect thereto and whether
such costs are paid or incurred, or to be paid or incurred, prior to or
after entry of judgment.
Borrower agrees to pay all stamp, document, transfer, recording or
filing taxes or fees and similar impositions now or hereafter reasonably
determined by Lender to be payable in connection with the Loan Documents, or any
other documents, instruments or transactions pursuant to or in connection
herewith or
therewith, and Borrower agrees to hold Lender harmless from and against any and
all present or future claims, liabilities or losses with respect to or resulting
from any omission to pay or delay in paying any such taxes, fees or impositions,
unless such omission or delay is due to gross negligence or willful misconduct
on the part of Lender. All such expenses, taxes or reasonable attorney's fees
shall be payable to Lender on demand. The obligations of Borrower under this
Section shall survive the repayment of the Notes and the Loan.
8.04 INDEMNIFICATION.
(a) To the extent permitted by applicable law, Borrower agrees
to indemnify and hold harmless Lender, its officers, agents (including
outside legal counsel) and employees ("Indemnified Parties"), against
any and all losses, claims, damages or liability to which Indemnified
Parties may become subject under any law in connection with the
carrying out of the transactions contemplated by this Agreement or any
other Loan Document, or the conduct of any activity on the Facilities
or any accident, injury, death or damage to any person or property
occurring in, on or about the Facilities or any street, drive,
sidewalk, curb or passageway adjacent thereto (other than as a result
of an act of commission or omission, including negligence or willful
misconduct, of any such party), and to reimburse the Indemnified
Parties, for any out-of-pocket legal and other expenses (including
reasonable attorneys' fees, whether incurred at trial, on appeal, in
bankruptcy proceedings, or otherwise) incurred by Indemnified Parties,
in connection with investigating any such losses, claims, damages or
liabilities or in connection with defending any actions relating
thereto, except to the extent any such loss, claim, damage or liability
is caused by, related to or connected with the negligence or willful
misconduct or breach of any Loan Documents by Indemnified Parties.
Indemnified Parties agree, at the request and reasonable expense of
Borrower, to cooperate in the making of any investigation in defense of
any such claim and promptly to assert any or all of the rights and
privileges and defenses that may be available to Indemnified Parties.
Borrower further agrees to hold harmless Indemnified Parties from and
against all losses, damages, penalties, liabilities, or expenses
(including reasonable legal fees, whether incurred at trial, on appeal,
in bankruptcy proceedings, or otherwise) due to or arising out of any
misrepresentation or omission in information furnished to Lender by
Borrower or out of a breach of any covenant, representation or
undertaking of Borrower contained in this Agreement or any other Loan
Document. The provisions of this Section shall survive the payment of
the Notes and the Loan.
(b) To the extent permitted by applicable law, without limiting
the generality of the foregoing, Borrower shall bear all loss, expense
(including reasonable attorneys' fees, whether incurred at trial, on
appeal, in bankruptcy proceedings, or otherwise) and damage in
connection with, and agrees to indemnify and hold harmless Indemnified
Parties from all claims, demands and judgments made or recovered
against Indemnified Parties by third parties because of bodily
injuries, including death at any time resulting from any of the
foregoing, and/or because of damages to property of Indemnified Parties
(including loss of use) from any cause whatsoever, arising out of, or
in connection with the Facilities, if due to any act or omission or
commission, including negligence, of Borrower or any lessee of the
Facilities or any part thereof, or any of their respective agents,
contractors, subcontractors, servants, directors, officers, employees,
licensees or invitees, except to the extent any such loss, claim,
damage or liability is caused by, related to or connected with the
negligence or willful misconduct or breach of any Loan Documents by
Indemnified Parties. Borrower's liability hereunder shall not be
limited to the extent of insurance or subject to any exclusions from
coverage in any insurance policy. The obligations of Borrower under
this Section shall survive the repayment of the Notes and the Loan.
(c) To the extent permitted by applicable law, Borrower hereby
agrees to defend, indemnify and hold harmless Indemnified Parties from
and against any and all claims, losses, damages, liabilities,
judgments, costs and expenses (including, without limitation,
reasonable attorneys' fees and costs incurred in the investigation,
defense and settlement of claims or remediation of contamination,
whether incurred at trial, on appeal, in bankruptcy proceedings, or
otherwise) incurred by the Indemnified Parties as a result of or in
connection with the presence or removal of Hazardous Substances or as a
result of or in connection with activities covered under Section 6.07.
Borrower shall bear, pay and discharge, as and when the same become due
and payable any and all such judgments or claims for damages, penalties
or otherwise, against the Indemnified Parties, shall hold the
Indemnified Parties harmless against all claims, losses, damages,
liabilities, costs and expenses, administrative proceedings, and
negotiations of any description with any and all persons, political
subdivisions or government agencies arising out of any of the
occurrences set forth in Section 6.07, except to the extent any such
loss, claim, damage or liability is caused by, related to or connected
with the negligence or willful misconduct or breach of any Loan
Documents by Indemnified Parties. These covenants, representations,
warranties and indemnities shall be deemed continuing covenants,
representations, warranties and indemnities running with the Facilities
for the benefit of Indemnified Parties, and any successors and assigns
of Indemnified Parties. The amount of all such indemnified loss,
damage, expense or cost shall bear interest thereon at the highest rate
of interest in effect on the Notes and shall become additional debt
secured hereby and shall become immediately due and payable in full on
demand of Lender, its successors and assigns. Proceeds of insurance
obtained by Borrower, to the extent paid to Lender, shall be applied
towards the satisfaction of Borrower's obligations under this Section.
The provisions of this Section shall survive the payment of the Notes
and the Loan.
8.05 CONSENT TO LOAN PARTICIPATION. Borrower agrees and consents to
Lender's sale or transfer, whether now or later, of one or more participation
interests in the Loan to one or more purchasers, whether related or unrelated to
Lender. Lender may provide, without any limitation whatsoever, to any one or
more purchasers, or potential purchasers, any information or knowledge Lender
may have about Borrower or about any other matter relating to the Loan, and
Borrower hereby waives any rights to privacy it may have with respect to such
matters; provided, however, that Lender shall comply with all laws, including
but not limited to federal and state securities laws, in connection with the
offer or sale of such participation interests. Borrower also agrees that the
purchasers of any such participation interests will be considered as the
absolute owners of such interests in the Loan and will have all the rights
granted to Lender hereunder. Borrower further waives all rights of offset or
counterclaim that it may have now or later against Lender or against any
purchaser of such a participation interest and unconditionally agrees that
either Lender or such purchaser may enforce Borrower's obligation under the Loan
irrespective of the failure or insolvency of any holder of any interest in the
Loan. Borrower further agrees that the purchaser of any such participation
interests may enforce its interests irrespective of any personal claims or
defenses that Borrower may have against Lender.
8.06 AMENDMENTS, ETC. No amendment, modification or waiver of any
provision of the Loan Documents and no consent to any departure by Borrower
therefrom shall in any event be effective unless the same shall be in writing
and signed by or on behalf of Lender, and then such amendment, modification,
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. Neither this Agreement nor any provision hereof may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought.
8.07 SUCCESSORS AND ASSIGNS INCLUDED IN PARTIES. Whenever in this
Agreement one of the parties hereto is named or referred to, the heirs, legal
representatives, successors and assigns of such parties shall be included and
all covenants and agreements contained in this Agreement by or on behalf of
Borrower or by or on behalf of Lender shall bind and inure to the benefit of
their respective heirs, legal representatives, successors and assigns, whether
so expressed or not.
8.08 BINDING EFFECT AND ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of Borrower, Lender, and their respective
successors and permitted assigns, except that Borrower may not transfer or
assign its rights hereunder without the prior written consent of Lender.
8.09 MARSHALLING; PAYMENTS SET ASIDE. Lender shall be under no
obligation to marshal any assets in favor of Borrower or any other Person or
against or in payment of the Loan and other Debt of Borrower to Lender. To the
extent that Borrower makes a payment or payments to Lender or Lender exercises
its rights of setoff, and such payment or payments or the proceeds of such
setoff or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to a trustee,
receiver or any other party under any bankruptcy law, state or federal law,
common law or equitable cause, then to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such enforcement or setoff had not occurred.
8.10 SECTION TITLES. The Section titles contained in this Agreement
shall be without substantive meaning or content of any kind whatsoever and shall
not govern the interpretation of any of the provisions of this Agreement.
8.11 RELIANCE BY LENDER. All covenants, agreements, representations
and warranties made herein and in any Loan Document by Borrower shall,
notwithstanding any investigation by Lender, be deemed to be material to and to
have been relied upon by Lender and shall survive the execution and delivery of
this Agreement.
8.12 INVALID PROVISIONS TO AFFECT NO OTHERS. If any provision of the
Loan Documents shall be held invalid or unenforceable by a court of competent
jurisdiction, then such provision shall be deemed inapplicable, and the balance
of the Loan Documents shall remain in full force and effect.
8.13 NUMBER AND GENDER. Whenever the singular or plural number,
masculine or feminine or neuter gender is used herein, it shall equally include
the other.
8.14 TIME OF ESSENCE. Time is of the essence in the performance of
this Agreement.
8.15 NOT JOINT VENTURERS. Lender is not, and shall not by reason of
any provision of any of the Loan Documents be deemed to be, a joint venturer
with or partner or agent of Borrower.
8.16 ESTOPPEL CERTIFICATE. At any time and from time to time, within
fifteen Business Days after receipt from Lender of a written request therefor,
Borrower shall prepare, execute and deliver to Lender, and/or any other party
that Lender may designate, an estoppel certificate stating that to the best of
Borrower's knowledge: (a) the amount of the unpaid principal balance and accrued
interest on the Loan on the date thereof; (b) the date upon which the last
payment on the Loan was made and the date the next payment is due; (c) that the
provisions of the Loan Documents have not been amended or changed in any manner;
(d) to the best of Borrower's knowledge, there are no defaults or events of
default then existing under the terms of the Loan Documents; and (e) Borrower
has no defenses, claims or offsets against full enforcement hereof according to
the terms hereof, or listing and describing any such amendments, changes,
defaults, events of default, defenses, claims or offsets that do exist.
8.17 NOTICE OF CHANGE IN LOCATION. Borrower shall promptly notify
Lender of any change in location of Borrower's jurisdiction of organization.
8.18 RENEWAL OR EXTENSION. All provisions of this Agreement relating
to the Notes and the Loan Documents shall apply with equal force and effect to
the Notes or Loan Documents hereinafter executed that in whole or in part
represent a renewal, extension for any period, increase or rearrangement' of any
part of the Notes or such Loan Documents.
8.19 TAX IDENTIFICATION NUMBER. The federal tax identification number
for Borrower is 00-0000000 as to Princesa, 00-0000000 as to Cruises, 00-0000000
as to Conami, 00-0000000 as to Valet and 00-0000000 as to Concorde.
8.20 TERM. This Agreement shall be and remain in effect until such
time as all outstanding obligations under the Notes, this Agreement and the
other Loan Documents have been discharged in full.
8.21 NAME AND LOGO. Lender may use Borrower's names and logos in any
tombstone ads or other promotional materials without payment of any additional
consideration.
8.22 REMEDIES CUMULATIVE. The rights and remedies herein specified of
the parties hereto are cumulative and not exclusive of any rights or remedies
the parties hereto would other-wise have at law or in equity or by statute.
8.23 INTEGRATION; CONFLICTING TERMS. This Agreement together with the
other Loan Documents comprises the entire agreement of the parties on the
subject matter hereof and supersedes and replaces all prior agreements, oral and
written, on such subject matter. If any term of any of the other Loan Documents
expressly conflicts with the provisions of this Agreement or the Notes, the
provisions of this Agreement shall control, and if any term of this Agreement
shall expressly conflict with a provision of the Notes, the provisions of the
Notes shall control.
8.24 GOVERNING LAW AND CONSTRUCTION. Except as may be otherwise
expressly provided herein, this Agreement and the other Loan Documents shall be
construed in accordance with and governed by the laws of the State of Illinois
(without regard to conflict of law principles) and applicable federal and
maritime law. Whenever possible, each provision of this Agreement and the other
Loan Documents and any other statement, instrument or transaction contemplated
hereby or relating hereto shall be interpreted in such manner as to be effective
and valid under such applicable law, but, if any provision of this Agreement and
the other Loan Documents or any other statement, instrument or transaction
contemplated hereby or relating hereto shall be held to be prohibited or invalid
under such applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement and the other Loan
Documents or any other statement, instrument or transaction contemplated hereby
or thereby or relating hereto. The parties shall endeavor in good-faith
negotiations to replace any invalid, illegal or unenforceable provisions with a
valid provision the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provision.
8.25 CONSENT TO JURISDICTION. The Borrower hereby irrevocably
consents to the jurisdiction of the courts in Xxxx County, Illinois and to the
jurisdiction of the United States District Court for the Northern District of
Illinois over any action brought to enforce the terms of the Loan Documents and
over the Borrower.
8.26 WAIVER OF RIGHT TO TRIAL BY JURY. Each party to this Agreement
hereby expressly waives any right to trial by jury of any claim, demand, action
or cause of action arising under any Loan Document or in any way connected with
or related or incidental to the dealings of the party hereto or any of them with
respect to any Loan Document, or the transactions related thereto, in each case
whether now existing or hereafter arising, and whether sounding in contract or
tort or otherwise; and each party hereby agrees and
consents that any such claim, demand, action or cause of action shall be decided
by court trial without a jury, and that any party to this Agreement may file an
original counterpart or a copy of this section with any court as written
evidence of the consent of the signatories hereto to the waiver of their right
to trial by jury.
8.27 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute a single executed
document.
8.28 CONFIDENTIALITY. Lender agrees that it shall keep confidential
in accordance with its customary procedures for the treatment of confidential
information the financial statements and other information provided hereunder or
under any of the Loan Documents, except Lender may disclose the financial
statements and other information if necessary for business reasons to any
assignee or potential assignee of or participant or potential participant in the
Loan, to Lender's legal counsel, to any consultant of Lender, to directors,
officers, employees of any agents for Lender in its ongoing business and to any
independent auditors of Lender; provided such other persons agree to treat such
confidential information as confidential. If required by law, such information
may also be provided to the Securities and Exchange Commission, the National
Association of Securities Dealers, the Office of the Comptroller, any state bank
regulatory authority, and to insurance regulatory authorities (including,
without limitation, the National Association of Insurance Commissioners), and
any successor agencies of the foregoing. If such information is otherwise
required to be disclosed by law, including in any court proceeding, including
(but not limited to) responses to any summons or subpoena in connection with any
litigation, Lender shall notify Borrower of any law, court proceeding, summons
or subpoena and Lender may, but shall not be required to, seek a protective
order prior to disclosure. In addition, Lender is permitted to disclose all such
information that (a) becomes generally available to the public other than as a
result of disclosure by Lender or its directors, officers, employees or
advisors, or (b) becomes available to Lender on a non-confidential basis from a
source not known by Lender to be bound by an undertaking of confidentiality, or
(c) Lender needs to disclose for the protection or enforcement of any of its
rights or interests against Borrower.
[signature page follows]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
BORROWER: PRINCESA PARTNERS, A FLORIDA GENERAL
PARTNERSHIP
By: Conami, Inc., general partner
By: /s/ Xxxxx X. Xxxx
Its: President
By: Concorde Cruises, Inc., general partner
By: /s/ Xxxxx X. Xxxx
Its: President
CONCORDE CRUISES, INC.
By: /s/ Xxxxx X. Xxxx
Its: President
CONAMI, INC.
By: /s/ Xxxxx X. Xxxx
Its: President
BAYFRONT VALET, LLC
By: CONCORDE CRUISES, INC., its sole manager
and member
By: /s/ Xxxxx X. Xxxx
Its: President
CONCORDE GAMING CORPORATION.
By: /s/ Xxxxx X. Xxxx
Its: President
LENDER: FIRST NATIONAL BANK
By: /s/ [illegible]
Its: Executive Vice President
