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EXHIBIT 10.3
SECURITY AGREEMENT
This Security Agreement is made and given as of this 18th day
of January, 2000, by BAYFRONT VENTURES, a Florida general partnership (the
"Borrower") and PRINCESA PARTNERS, a Florida general partnership ("Princesa") in
favor of National City Bank of Evansville ( the "Lender").
Recitals
A. The Lender and the Borrower have entered into a Loan
Agreement of even date herewith (the "Loan Agreement"), pursuant to which the
Lender will make loans to the Borrower from time to time in an aggregate amount
not to exceed $500,000 (the "Loan") outstanding at any one time for the
Borrower's general business purposes. The Loan is to be evidenced by a single
revolving promissory note (together with any renewals, extensions or amendments,
the "Note"). Princesa has guaranteed payment of the Borrower's obligations under
the Loan Agreement and the Note pursuant to a Guaranty of even date herewith
(the "Guaranty"). All capitalized terms used herein, unless otherwise defined
shall have the meaning ascribed to such terms in the Loan Agreement.
B. The Borrower and Princesa are and will be the owners of
certain furniture, fixtures and equipment more fully described in Exhibit A
attached hereto (collectively, the "Equipment"), free and clear of any liens or
security interests, except such liens as are permitted by the Loan Agreement and
by Article 3, Section 3.1 of a loan agreement dated October 22, 1998 (the "Prior
Agreement") by and between Princesa and certain lenders including the Lender.
C. As security for the repayment of the Loan and Princesa's
obligations under the Guaranty, the Lender has required that the Borrower and
Princesa execute and deliver to the Lender this security agreement (the
"Security Agreement"), granting a security interest to the Lender in, among
other things, the Equipment.
D. The Note, the Loan Agreement, the Guaranty, this Security
Agreement and any other instruments or documents given as security for the Loan
are referred to herein as the "Loan Documents".
NOW, THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged by the Borrower and Princesa, it is agreed as follows:
1. Grant of Security Interest. As security for the payment and
performance of the Note and all other liabilities, obligations and indebtedness
of the Borrower and Princesa to the Lender, due or to become due, direct or
indirect, absolute or contingent, joint or several, howsoever created, arising
or evidenced, now or hereafter at any time created, arising or evidenced under
or pursuant to the Loan Documents (hereinafter collectively referred to as the
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"Obligations"), the Borrower and Princesa do hereby transfer, assign and grant
to the Lender, its successors and assigns, a security interest in all of their
rights, title and interest in and to the following (hereinafter collectively
referred to as the "Collateral"), whether now owned or hereafter acquired or
arising:
(a) The Equipment; and
(b) All improvements, accessions, appurtenances, substitutions
and replacements to the Equipment, and all insurance proceeds and
condemnation awards payable therefrom or with respect thereto, together
with all proceeds and products thereof and all rights thereto.
2. The Borrower and Princesa represent, warrant, covenant and
agree:
(a) Organization. The Borrower and Princesa are general
partnerships, duly organized and existing pursuant to their respective
partnership agreements, and the Borrower and Princesa have full power
and authority to execute, deliver and perform the Loan Documents and to
own property and conduct business as presently conducted and as
proposed to be conducted.
(b) Authorization, Etc. The execution, delivery and
performance of this Security Agreement is duly authorized by all
necessary action on the part of the Borrower and Princesa and will not
(i) require any consent or approval of any entity which has not been
obtained; (ii) to their knowledge after due inquiry, violate any
provision of law, or (iii) violate any order of any court or other
agency of government having jurisdiction over the Borrower or Princesa,
the partnership agreement of the Borrower, the partnership agreement of
Princesa, or any provision of any indenture, agreement or other
instrument to which the Borrower or Princesa is a party or by which
they or any of their properties are bound. This Security Agreement
constitutes the legal, valid and binding obligation of the Borrower and
Princesa, enforceable against them in accordance with its terms
(subject to limitations as to enforceability which might result from
bankruptcy, insolvency or other similar laws affecting creditors'
rights generally).
(c) Performance by Borrower. Without the Lender's prior
written consent, neither the Borrower nor Princesa shall:
(i) sell, transfer or assign, or offer to sell,
transfer or assign, all or any part of the Collateral or
permit all or any part of the Collateral to be sold,
transferred or assigned;
(ii) remove or consent to the removal of any of the
Equipment from the vessel Princesa as described in the Ship
Mortgage referred to in the Loan Agreement, except as
necessary for repair of such Equipment, in the ordinary course
of business;
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unless 1) any such Equipment sold, transferred, assigned or removed is
promptly replaced with Equipment of at least equal value and utility,
and the security interest granted pursuant to this Security Agreement
attaches as a valid security interest in such replacement Equipment, or
2) the aggregate market value of all collateral sold, transferred,
assigned or removed and not replaced during the calendar year has not
exceeded $50,000.
(d) Title to Collateral. The Borrower or Princesa, as the case
may be, has good marketable title to all of the Collateral and none of
the Collateral is subject to any lien or security interest except for
the security interest created by this Security Agreement or the Prior
Agreement, including purchase money security interests in and financing
leases of equipment (used in the "Facilities" as defined in the Prior
Agreement) (the "Permitted Liens"). The Borrower and Princesa, other
than as disclosed, have not granted, and will not grant or permit to
exist, any lien or security interests in all or a portion of the
Collateral except Permitted Liens. The Borrower and Princesa shall
defend the Collateral against all claims and demands of all and any
other persons at any time claiming any interest therein adverse to the
Lender except for persons claiming Permitted Liens.
(e) Actions and Proceedings. To the best of the Borrower's or
Princesa's knowledge, there is no action, suit or proceeding at law or
in equity or by or before any governmental instrumentality or other
agency now pending or threatened against or affecting the Borrower or
Princesa which, if adversely determined, would have a material adverse
effect on the Borrower's or Princesa's interest in the Collateral or
would adversely affect the rights of the Borrower or Princesa to pledge
and assign all or a part of the Collateral or the rights and security
afforded the Lender hereunder.
(f) Insurance. The Borrower or Princesa, as the case may be,
agrees it will keep the Equipment insured at all times in accordance
with the requirements set forth in Section 6.2 of the Prior Agreement.
(g) Costs of Collection. In the event of any action or
proceeding to collect or realize upon the Collateral or to enforce any
of the Lender's rights hereunder, the Borrower shall pay all of the
Lender's reasonable costs and expenses, including without limitation
attorneys' fees and legal expenses incurred by the Lender, in
connection with or arising out of such collection or enforcement.
(h) Equipment to Remain Personal Property. The Borrower and
Princesa agree that, regardless of the manner of affixation, the
Equipment shall remain personal property and shall not become part of
the vessel Princesa, aboard which it is to be used, nor part of any
leasehold interest in real estate comprising the Project (as defined in
the Prior Agreement) or a fixture.
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3. Events of Default. It shall be an Event of Default under
this Security Agreement upon the happening of any of the following:
(a) an "Event of Default" shall occur and be continuing under
the Loan Agreement; or
(b) failure to comply with or perform in any material respect
any of the terms, conditions or covenants of this Security Agreement.
4. Remedies. Upon an Event of Default, the Lender may declare
all Obligations immediately due and payable, and may, at its option, without
notice, exercise any one or more of the following rights or remedies:
(a) either in person or by agent, with or without bringing any
action or proceeding, or by a receiver to be appointed by a court,
enforce and exercise all of the powers, rights and privileges of the
Borrower or Princesa, as the case may be, in respect of rights of
payment constituting Collateral and all of the powers, rights and
privileges reserved or granted to the Lender under this Security
Agreement; and
(b) may without demand, advertisement or notice of any kind
(except such notice as may be required under the applicable Uniform
Commercial Code (the "Code")) all of which are, to the extent permitted
by law, hereby expressly waived, lease or dispose of the Collateral by
public or private sale; and
(c) exercise any of the remedies available to a secured party
under the Code; and
(d) proceed to protect and enforce this Security Agreement by
suits or proceedings or otherwise, for the enforcement of any other
legal or equity available to the Lender; and
(e) take possession of the Collateral.
In the event that any notice is required to be given under the
Code such requirements for reasonable notice shall be satisfied by giving at
least ten (10) days' notice prior to the event or thing giving rise to the
requirement of notice. Upon an Event of Default, the Borrower and Princesa shall
make the Collateral available to the Lender at its direction.
5. Further Assurances. The Borrower and Princesa, as the case
may be, shall execute and deliver to the Lender, promptly and at the Borrower's
expense or Princesa's, such other documents and assurances and take such further
action as the Lender may reasonably request in order to effectively carry out
the intent and purpose of this Security Agreement and to establish and protect
the rights, interests and remedies of the Lender hereunder. This shall include,
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without limitation, providing Code financing statements and evidence of tax
filings and payments. The Borrower and Princesa agree that the Lender is
authorized, at its option, to file a carbon, photographic or other reproduction
of this Security Agreement as a financing statement, and such shall be
sufficient as a financing statement under the Code, and to file financing
statements or amendments thereto without the signature of the Borrower or
Princesa and, if a signature is required by law, then the Borrower or Princesa,
as the case may be, appoints Lender as their attorney-in-fact solely for the
purpose of executing any such financing statements.
6. Cumulative Remedies. All of the Lender's rights and
remedies herein are cumulative and in addition to any rights or remedies
available at law or in equity including the Code, and may be exercised
concurrently or separately. The Borrower shall pay all reasonable costs,
expenses, losses and legal costs (including attorneys' fees) incurred by the
Lender as a result of enforcing any terms or conditions of this Security
Agreement.
7. No Liability Imposed on Lender. The Lender shall not be
obligated to perform or discharge, nor does it hereby undertake to perform or
discharge any obligation, duty or liability, nor shall this Security Agreement
operate to place responsibility for the control, care, management or repair of
the Equipment upon the Lender, nor shall it operate to make the Lender
responsible for any dangerous or defective condition of the Equipment.
8. Indemnification. The Borrower and Princesa shall and do
hereby agree to indemnify against and to hold the Lender, its respective
officers, agents and employees, harmless of and from any and all liability, loss
or damage which any one or more of them may or might incur under or by reason of
this Security Agreement and of and from any and all claims and demands
whatsoever which may be asserted against any one or more of them by reason of
any alleged obligations or undertakings on their part to perform or discharge
any of the terms, covenants or agreements, excepting the gross negligence or
willful misconduct of Lender, its officers, agents and employees. Should Lender
incur any such liability, should Lender be required to defend against any such
claims or demands or should a judgment be entered against Lender, the amount
thereof, including costs, expenses, and reasonable attorneys' fees, which upon
payment by Lender shall bear interest thereon at the highest Default Rate (as
defined in the Prior Agreement) which would be applicable to any Note upon the
occurrence of an Event of Default under the Loan Agreement, shall be secured
hereby, and shall be added to the Obligations and the Borrower shall reimburse
the Lender for the same immediately upon demand.
9. Attorney in Fact. Upon the occurrence of any Event of
Default and at any time during the continuance thereof, the Borrower hereby
irrevocably appoints the Lender and its successors and assigns as its agent and
attorney-in-fact, which appointment shall be irrevocable during the term of this
Agreement, and which appointment is coupled with an interest, to exercise any
rights or remedies hereunder with respect to the Collateral or to endorse any
checks which constitute part of the Collateral.
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10. Expenses of Lender. All reasonable expenses in protecting,
storing, warehousing, insuring, handling and shipping of the Collateral, all
costs of keeping the Collateral free of liens, encumbrances and security
interests (other than the security interests created by this Agreement) and the
removing of the same and all excise, property, sales and use taxes imposed by
state, federal or local authority on any of the Collateral or with respect to
the sale thereof, shall be borne and paid for by the Borrower or Princesa, as
the case may be, and if the Borrower fails promptly to pay any amounts thereof
when due, the Lender may, at its option, but shall not be required to, pay the
same, and upon payment, the same shall constitute Obligations and shall bear
interest at the highest interest rate specified in the Note and shall be secured
by the security interests granted hereunder.
11. Continuing Rights. The rights and powers of the Lender or
receiver hereunder shall continue and remain in full force and effect until all
Obligations are paid in full.
12. Books and Records. The Lender shall have the same rights
to inspect, and the same duties with regards to confidentiality of, the
Borrower's books and records with respect to the Collateral, as are provided in
the Loan Agreement. The Lender shall have the authority, at any time, to require
the Borrower or Princesa as the case may be to place upon the Borrower's or
Princesa's books and records relating to the Collateral and other rights to
payment covered by the security interest created in this Security Agreement
hereby a notation stating that any such Collateral and other rights of payment
are subject to a security interest in favor of the Lender.
13. Principal Place of Business. The location of the principal
places of business of the Borrower and Princesa are set forth on the signature
page and will not be changed without thirty (30) days' prior written notice to
the Lender. The Borrower and Princesa represent that their respective books and
records concerning their respective accounts and chattel paper are located at
such address.
14. Name of Borrower. The Borrower's and Princesa's true names
are as set forth in the preamble hereto. The Borrower and Princesa have not used
any other name within the past five (5) years. The Borrower and Princesa agree
that they will not change names without thirty (30) days' written notice to the
Lender.
15. Successors and Assigns. This Security Agreement and each
and every covenant, agreement and provision hereof shall be binding upon the
Borrower and Princesa and their successors and assigns and shall inure to the
benefit of the Lender and its respective successors and assigns.
16. Severability. It is the intent of this Security Agreement
to confer to the Lender the rights and benefits hereunder to the full extent
allowable by law including all rights available under the Code. The
unenforceability or invalidity of any provisions hereof shall not render any
other provision or provisions herein contained unenforceable or invalid. Any
provisions found to be unenforceable shall be severable from this Security
Agreement.
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17. Notices. Notices permitted or required to be given
hereunder shall be deemed sufficient if given in the manner specified in the
Loan Agreement.
18. Captions and Headings. The captions and headings of the
various sections of this Security Agreement are for convenience only and are not
to be construed as confining or limiting in any way the scope or intent of the
provisions hereof. Whenever the context requires or permits, the singular shall
include the plural, the plural shall include the singular and the masculine,
feminine and neuter shall be freely interchangeable.
19. Governing Law; Jurisdiction, Etc. The provisions of the
Loan Agreement regarding governing law, jurisdiction, choice of forum and
enforcement of remedies are incorporated into this Security Agreement by
reference.
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IN WITNESS WHEREOF, the Borrower and Princesa have caused this
Security Agreement to be executed as of the date first above written.
BAYFRONT VENTURES
By CONCORDE CRUISES, INC., Its
General Partner
By
--------------------------------
Its President
Address of Principal Place of Business:
000 Xxxxx Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxx, XX 00000
Tax Identification No. 00-0000000
PRINCESA PARTNERS
By CONAMI, INC., Its General Partner
By
--------------------------------
Its President
Address of Principal Place of Business:
Princesa Partners
000 Xxxxx Xxxxxxxx Xxxx., Xxxxx 000
Xxxxx, XX 00000
Tax Identification No. 00-0000000
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EXHIBIT A
Description of Furniture, Fixtures and Equipment
The "Equipment" consists of all furniture, furnishings,
machinery and equipment of the Borrower or Princesa, whether now or hereafter
existing or owned, that is now or hereafter used, usable or intended to be used
in connection with, or located or intended to be located in, on or at, the
gaming vessel Princesa (as defined in the other Loan Documents), and shall
include, without limitation, all present and future slot, "keno" and other
gaming machines, equipment and devices, and all machinery, equipment, supplies,
furniture and furnishings used for or in connection with coin and money
changing, counting or storage, kitchen, dining room and food service facilities,
cleaning and maintenance, security and surveillance, office, bookkeeping and
back room facilities, and internal and external communications, and all
furniture, furnishings, equipment and supplies.
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