Exhibit 10.5
SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS AMENDMENT TO LOAN AND SECURITY AGREEMENT and REVOLVING PROMISSORY NOTE
(the "Second Amendment") is entered into this 25th day of April, 2003, by and
between VOYAGER ENTERTAINMENT INTERNATIONAL, INC., a North Dakota corporation
("Borrower"), VOYAGER VENTURES, INC., a Nevada corporation and wholly owned
subsidiary of Borrower ("VVI") and ▇▇▇ ▇▇▇▇▇, an individual ("Lender"),
sometimes hereinafter referred to individually as a "Party" or collectively as
the "Parties."
1. The Parties agree to modify the recitals of that certain Loan and
Security Agreement dated November 15, 2002 (the "Agreement"), as amended by
agreement on February 15, 2003 as follows:
WHEREAS, Borrower has entered into various financing arrangements with
Residential Resources Financial Services, Inc. ("RRI") to provide $100
million in bond/security financing (the "Development Financing") for
development of a mixed-use entertainment complex located in Las Vegas,
Nevada (the "Project");
WHEREAS, as part of the Development Financing with RRI, Borrower has
committed to pay for certain itemized costs to enable RRI to have the
bond/security offering credit enhanced to a "AAA" credit rating (the
"Credit Enhancement");
WHEREAS, Borrower has requested an extension of credit from Lender for the
use and benefit of Borrower for the Credit Enhancement and other components
of the Project, to be secured by certain personal property and other assets
of VVI; and
WHEREAS, Lender is willing to make available to Borrower a credit facility
in the form of a line of credit, subject and pursuant to all of the
covenants, conditions and provisions of this Agreement.
WHEREAS, Borrower has been unable to secure the Credit Enhancement through
the efforts of RRI and therefore has been required to continue its best
efforts to secure the needed financing for the Project;
WHEREAS, Lender understands that Borrower is in need of sufficient funds to
maintain its business operations as it pursues the needed financing for the
Project and is therefore willing to extend an additional TWO HUNDRED
THOUSAND DOLLARS AND NO CENTS ($200,000.00) extension of credit to
Borrower, above the FIVE HUNDRED THOUSAND DOLLARS AND NO CENTS
($500,000.00) that it has already extended to Borrower prior to this Second
Amendment; and
WHEREAS, Borrower has agree that prior to the disbursement of any funds as
provided herein it will obtain all requisite board or other approval that
may be required pursuant to Borrower's bylaws.
NOW, THEREFORE, in consideration of the foregoing recitals and the
extension of credit by Lender to Borrower and other consideration, the
parties agree as follows:
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2. The Parties agree to modify paragraph 1 of that certain Loan and
Security Agreement dated November 15, 2002 (the "Agreement"), as amended by
agreement on February 15, 2003 as follows:
1. Line of Credit.
1.1. Lender will make loans to Borrower hereunder from time to
time (the "Line of Credit"). The aggregate unpaid principal of the
Line of Credit outstanding at any one time will not exceed SEVEN
HUNDRED THOUSAND DOLLARS AND NO CENTS (U.S. $700,000.00).
1.2. The Line of Credit will be evidenced a REVOLVING PROMISSORY
NOTE (the "Note"), a copy of which is attached hereto as Exhibit A and
incorporated herein by this reference, containing the following
material terms:
1.2.1. The aggregate unpaid principal not to exceed SEVEN HUNDRED
THOUSAND DOLLARS AND NO CENTS (U.S. $700,000.00) shall be paid in full
to Lender when sufficient funding of Development Financing has been
secured so the escrow funds can be released, or on or before July 31,
2003, whichever is sooner; and
1.2.2. A lump-sum interest payment of SEVEN HUNDRED THOUSAND
DOLLARS AND NO CENTS (U.S. $700,000.00) shall be paid in full to
Lender when sufficient funding of Development Financing has been
secured so the escrow funds can be released, or on or before July 31,
2003, whichever is sooner.
3. The Parties agree to modify paragraph 6 of that certain Loan and
Security Agreement dated November 15, 2002 (the "Agreement"), as amended by
agreement on February 15, 2003 as follows:
6. Disbursement of Funds. The following procedures for the disbursement of
funds shall be used by the parties:
6.1. Unchanged.
6.2. All disbursements above the first FIVE HUNDRED THOUSAND
DOLLARS (U.S. $500,000.00) from the Line of Credit shall be
available on the following terms:
6.2.1. Deleted;
6.2.2. Unchanged; and
6.2.3. Unchanged.
6.3. Unchanged.
4. The Parties agree to modify paragraph 9 of that certain Loan and
Security Agreement dated November 15, 2002 (the "Agreement"), as amended by
agreement on February 15, 2003 as follows:
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9. Unchanged.
9.1. ONE MILLION FIVE HUNDRED THOUSAND (1,500,000) shares of common
stock of Voyager Entertainment International, Inc., to which Rule 144 of
the securities laws apply shall be delivered to Lender as follows:
9.1.1. Upon the disbursement of the first FIVE HUNDRED THOUSAND
DOLLARS (U.S. $500,000.00), as delineated in paragraph 6.1, above, Borrower
shall deliver to Lender THREE HUNDRED THOUSAND (300,000) shares of common
stock of Voyager Entertainment International, Inc., to which Rule 144 of
the securities laws apply; and
9.1.2. Upon the availability of the disbursement above the first FIVE
HUNDRED THOUSAND DOLLARS (U.S. $500,000.00), as delineated in paragraph
6.2, above, Borrower shall deliver to Lender ONE MILLION TWO HUNDRED
THOUSAND (1,200,000) shares of common stock of Voyager Entertainment
International, Inc., restricted pursuant to the provisions of SEC Rule 144.
9.2. Unchanged.
9.3. Unchanged.
9.4. If the shares of common stock of Borrower are subdivided or
combined into a greater or smaller number of shares of common stock, or if
a dividend is paid on the common stock in shares of common stock, the
shares of common stock issued to Lender shall not be proportionately
reduced in case of subdivision of shares or stock dividend; however, they
will be proportionately increased in the case of combination of shares by
the ratio which the total number of shares of common stock outstanding
immediately after such event bears to the total number of shares of common
stock outstanding immediately prior to such event. This provision shall be
retroactive to the commencement of the Agreement.
5. The Parties agree to modify the first paragraph of that certain
Revolving Promissory Note dated November 15, 2002 (the "Note"), as amended
by agreement on February 15, 2003 as follows:
FOR VALUE RECEIVED, the undersigned, VOYAGER ENTERTAINMENT
INTERNATIONAL, INC., a North Dakota corporation ("Maker"), hereby
promises to pay to the order of ▇▇▇ ▇▇▇▇▇, an individual (together with
his successors and assigns, ("Holder"), the principal sum not to exceed
SEVEN HUNDRED THOUSAND DOLLARS (U.S. $700,000.00) or the aggregate
unpaid principal amount of all advances or re-advances by the Maker
pursuant to that certain loan agreement entitled "Loan and Security
Agreement," (the "Loan Agreement") executed on even date, and to repay
the outstanding aggregate unpaid principal amount, plus a lump-sum
interest payment of SEVEN HUNDRED THOUSAND DOLLARS AND NO CENTS (U.S.
$700,000.00) when sufficient funding of Development Financing has been
secured so the escrow funds can be released, as defined in the Loan
Agreement, or on or before July 31, 2003, whichever is sooner. All
payments of principal and interest shall be made at Holders offices
located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or at such
other places as the Holder may designate to Maker in writing
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6. Except for the modifications as expressly noted herein, all other
provisions of the Agreement and Note shall remain unchanged and enforced.
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed and delivered as of the date and year first above written.
LENDER:
/s/ ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
BORROWER:
VOYAGER ENTERTAINMENT INTERNATIONAL, INC., a North
Dakota corporation
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
Its: President
VVI:
VOYAGER VENTURES, INC., a Nevada corporation
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
Its: President
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