Exhibit 10.23
Loan Agreement between the Registrant and RealEcon, and Promissory Note, dated
January 16, 1995.
SECURED PROMISSORY NOTE
$146,000.00 January 16, 1995
FOR VALUE RECEIVED, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ HOTEL AND CASINO, INC., a Nevada
corporation, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ RESORTS, INC., a Nevada corporation, whose
address is ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ (collectively,
"Maker"), jointly and severally do hereby promise to pay to the order of
REALECON, a California corporation, at ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Lender"), or such other place as Lender may designate in
writing, in lawful money of the United States of America, the principal sum of
One Hundred Forty-Six Thousand Dollars ($146,000.00), together with interest on
the outstanding principal balance from time to time outstanding at a rate equal
to twelve percent (12%) per annum, compounded annually.
Maker is the owner and operator of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Hotel and Casino
located in Las Vegas, Nevada (the "Project"), and is currently engaged in the
business of, among other things, selling timeshare interests in the Project (the
"Timeshare Unit(s)"). This Note is made in connection with a Loan Agreement of
even date herewith between Maker and Payee (the "Loan Agreement").
This Note shall mature on May 16, 1995 (the "Maturity Date"). Required
payments on this Note of principal and accrued interest shall be due and payable
as follows (collectively, the "Required Payments"):
(a) Commencing on February 25, 1995 and continuing to and including March
26, 1995 (the "First Payment Period"), Maker, upon the closing of any sale of
any Timeshare Unit by Maker during such period, shall cause to be paid to Lender
by the escrow holder of such sale, directly out of escrow ("Escrow") from the
proceeds of sale of each such Timeshare Unit ("Proceeds"), the amount of One
Thousand Dollars ($1,000.00), until a total of Fifty Thousand Dollars
($50,000.00) has been paid to Lender during such First Payment Period.
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(b) Commencing on March 27, 1995 and continuing to and including April 25,
1995 (the "Second Payment Period"), Maker, upon the closing of any sale of any
Timeshare Unit by Maker during such period, shall cause to be paid to Lender by
the escrow holder of such sale, directly out of Escrow from the Proceeds, the
amount of One Thousand Two Hundred Dollars ($1,200.00), until a total of (i)
Sixty-Nine Thousand Six Hundred Dollars ($69,600.00), plus (ii) any deficiency
in the amounts which should have been paid to Lender during the First Payment
Period, is paid to Lender during such Second Payment Period.
(c) Commencing on April 26, 1995 and continuing to and including the
Maturity Date (the 'Third Payment Period"), Maker, upon the closing of any sale
of any Timeshare Unit by Maker during such period, shall cause to be paid to
Lender by the escrow holder of such sale, directly out of Escrow from the
Proceeds, the amount of One Thousand Dollars ($1,000.00), until such time as all
principal and accrued, but unpaid, interest under this Note is paid in full.
(d) In the event of any refinancing of the debt encumbering the Project (a
"Refinancing"), Borrower shall pay to Lender, within three (3) days following
such Refinancing, all outstanding amounts under this Note, including, without
limitation, principal and accrued, but unpaid, interest.
All principal and accrued, but unpaid, interest on this Note shall be due
and payable on the Maturity Date. All payments on this Note shall, at the option
of Lender or the holder of this Note, be applied first to the payment of accrued
interest, and after all such interest has been paid, any remainder shall be
applied to reduction of the principal balance. Principal and interest shall be
payable in lawful money of the United States.
Maker shall pay interest on all amounts (including both principal and
interest) outstanding under this Note after the Maturity Date (whether by
acceleration after a default or otherwise) at a rate equal to twelve percent
(12%) per annum, compounded annually, and such interest shall continue to
accrue
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until the date such default is cured pursuant to the provisions of this Note.
Anything herein to the contrary notwithstanding, if a late charge is assessed
hereunder, such amount shall not exceed the maximum amount permitted by law.
DG
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Initials
Maker has the right to prepay at any time, without penalty, all or any part
of the unpaid balance of the principal hereof.
Maker shall be in default under this Note if (i) any payment of principal
or interest is not paid to Lender or the holder of this Note when due; (ii)
maker shall be in default under the terms of the Loan Agreement; or (iii) Maker
shall make an assignment for the benefit of creditors, admit in writing its
inability to pay its debts generally as they become due, files a petition in
bankruptcy, be adjudicated insolvent or bankrupt, or petitions or applies to any
tribunal for a receiver or for any relief under bankruptcy or other debtor
protection statutes. Upon the occurrence of an event of default hereunder, the
whole of the unpaid principal and interest owing on this Note shall, at the
election of Lender or the holder hereof and without notice, become immediately
due and payable.
If this Note is not paid when due, whether at maturity or by acceleration,
the undersigned promises to pay all costs of collection, including, but not
limited to, reasonable attorneys' fees, and all expenses incurred in connection
with the protection or realization of any collateral incurred by Lender hereof
on account of any such collection, whether or not suit is filed hereon. The
undersigned expressly waives presentment, diligence, protest, and demand, notice
of protest, demand and dishonor and nonpayment of this Note, and all other
notices of any kind, and expressly agrees that this Note or any payment
hereunder, may be extended from time to time; and consents to the acceptance of
any security for this Note. To the fullest extent permitted by law, the defense
of the statute of limitations and any action on this Note is waived by the
undersigned.
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This Note may from time to time be extended or renewed by Lender, with or
without notice to the undersigned and any related right may be waived,
exchanged, surrendered, or otherwise dealt with, all without affecting the
liability of the undersigned.
All agreements between the undersigned and Lender hereof are expressly
limited so that in no contingency or event whatsoever, whether by reason of
advancement of the proceeds hereof, acceleration of maturity of the unpaid
principal balance hereof, or otherwise, shall the amount paid or agreed to be
paid to Lender hereof for the use, forbearance or detention of the money to be
advanced hereunder exceed the highest lawful rate permissible under applicable
usury laws. If, from any circumstances whatsoever, fulfillment of any provision
hereof or any security agreement securing this Note or any other agreement
referred to herein, at the time performance of such provision shall be due,
shall involve transcending the limit of validity prescribed by law which a court
of competent jurisdiction may deem applicable hereto, then ipso facto, the
obligation to be fulfilled shall be reduced to the limit of such validity, and
if from any circumstances the holder hereof shall ever receive as interest an
amount which would exceed the highest lawful rate, such amount which would be
excessive interest shall be applied to the reduction of the unpaid principal
balance due hereunder and not to the payment of interest. This provision shall
control every other provision of all agreements between the undersigned and the
holder hereof.
This Note is secured by the collateral assignment to Lender of certain
promissory notes payable to Maker pursuant to that certain Assignment of
Promissory Notes and that certain Assignment of Deeds of Trust, both of even
date herewith executed by Maker in favor of Lender.
Should Maker sell, convey, transfer, lease, dispose of, or further encumber
or refinance any debt which encumbers the Project, or any portion thereof
(whether voluntarily or involuntarily), without providing written notice to
Lender and paying to Lender the amounts set forth in subparagraph (d) above,
then Lender shall have the right, at its option, to declare all sums under this
Note to be immediately due and payable.
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The provisions hereof shall be binding upon the legal representatives,
successors and assigns of the undersigned, and shall inure to the benefit of
Lender, its legal representatives, successors and assigns.
This Note shall be governed by and construed in accordance with the laws of
the State of Nevada and the exclusive forum in the determination of any action
relating to the collection, validity, or enforceability of this Note shall be
the United States District Court located in the County of Orange, State of
California.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ RESORTS, INC., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ HOTEL AND
a Nevada Corporation CASINO, INC., a Nevada Corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ------------------------------
----------------------------- Its: Executive V.P. & Asst. Secretary
Its: President & Asst. Secretary
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AMENDMENT NO. 1 TO LOAN AGREEMENT
This Amendment No. 1 to Loan Agreement is made and entered into as March
13, 1995 (the "Effective Date"), by and between (i) REALECON, a California
corporation ('Lender"), and (ii) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ HOTEL AND CASINO, INC., a
Nevada corporation ("DRHCI"), and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ RESORTS, INC., a Nevada
corporation ("DRRI") (collectively, "Borrower"), with reference to the following
facts:
R E C I T A L S
A. Borrower and Lender have entered into that certain Loan Agreement dated
as of January 16, 1995 (the "Loan Agreement") under the terms and conditions of
which Borrower borrowed from Lender, and Lender loaned to Borrower, the sum of
One Hundred Twenty-Five Thousand Dollars ($125,000.00) in consideration for the
repayment by Borrower to Lender of the sum of One Hundred Forty-Six Thousand
Dollars ($146,000.00), together with interest on such One Hundred Forty-Six
Thousand Dollar ($146,000.00) amount, pursuant to the terms and conditions of
that certain Secured Promissory Note dated as of January 16, 1995 executed by
Borrower in favor of Lender (the "Note").
B. Borrower desires to Borrower from Lender an additional Seventy-Five
Thousand Dollars ($75,000.00) in consideration for increasing the principal
amount owed under the terms of the Note by Eighty-Seven Thousand Five Hundred
Dollars ($87,500.00), under the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing facts, and upon the
mutual covenants and conditions hereinafter contained, the parties hereto hereby
agree as follows:
1. Defined Terms. All terms used herein with their initial letter
capitalized shall have the same meaning as set forth in the Loan Agreement
unless otherwise defined herein.
2. Increase in Loan. In consideration for making an additional advance to
Borrower of Seventy-Five Thousand Dollars ($75,000.00), Borrower hereby agrees
to repay to Lender an additional principal sum under the Note of Eighty-Seven
Thousand Five Hundred Dollars ($87,500.00), together with additional interest on
such Eighty-Seven Thousand Five Hundred Dollar ($87,500.00) amount, pursuant to
the terms and conditions of the Note, as modified by that certain Note
Modification Agreement of even date herewith between Lender and Borrower, in the
form of that attached hereto as Exhibit "A" and incorporated herein by this
reference (the "Note Modification"). Concurrently with the execution hereof,
Borrower shall execute and deliver to Lender the Note Modification.
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3. Additional Collateral. Borrower's performance under the Note, as
modified by the Note Modification, shall be further secured pursuant to
Borrower's collateral assignment to Lender, and Borrower hereby grants a
security interest to Lender in and to, all of Borrower's right, title, and
interest in and to all of Borrower's right to receive any amounts under those
certain Vacation Partners Purchase Agreements (Nevada) listed on Exhibit "B"
attached hereto and incorporated herein by reference, which evidence amounts
owed to Borrower from the buyers' named therein in the aggregate principal
amount as of the date hereof of approximately Seventy-Nine Thousand Dollars
($79,000.00) (collectively, the "Additional Collateral Agreements"). Said
buyers' performance under the Additional Collateral Agreements are secured by
those certain Deeds of Trust which name Borrower as beneficiary, and which are
recorded in the county of ▇▇▇▇▇, state of Nevada, encumbering certain Timeshare
Interests purchased by the trustors under such Deeds of Trust (collectively, the
"Additional Collateral Deeds of Trust"). The assignment of the Additional
Collateral Agreements shall be evidenced by Borrower's execution and delivery to
Lender concurrently herewith of an Assignment of Purchase Agreements in the form
of that attached hereto as Exhibit "C" and incorporated herein by this reference
(the "Additional Collateral Agreements Assignment"). Concurrently herewith,
Borrower shall also execute and acknowledge and deliver to Lender an Assignment
of Deeds of Trust in the form of that attached hereto as Exhibit "D" assigning
to Lender all of Borrower's beneficial interest under the Additional Collateral
Deeds of Trust (the "Additional Collateral Deeds of Trust Assignment").
Concurrently herewith, Borrower shall also execute and deliver to Lender a UCC-2
Amendment to Financing Statement in the form of that attached hereto as Exhibit
"E."
Concurrently herewith, Borrower shall deliver to Lender the originals of
all Additional Collateral Agreements and Additional Collateral Deeds of Trust.
To the extent that Borrower does not have in its possession any of the
Additional Collateral Deeds of Trust, Borrower shall forward such original
Additional Collateral Deeds of Trust to Lender immediately following receipt
thereof. The Additional Collateral Agreements shall be deemed for all purposes
Collateral Agreements under the terms of the Loan Agreement, and the Additional
Collateral Deeds of Trust shall be deemed for all purposes Collateral Deeds of
Trust under the Loan Agreement, and shall be subject to all of the terms and
conditions of the Loan Agreement.
4. Agreement to Provide Additional Ten (10) Collateral Agreements. Borrower
acknowledges and agrees that Borrower shall deliver to Lender, and Lender shall
be entitled to list on Exhibit "B" attached hereto, the next ten (10)
consecutive Vacation Partners Purchase Agreements (Nevada) executed by Borrower
and the buyer's named therein with respect to the sale of Timeshare Interests in
the Project which actually result in a closing and sale of a Timeshare Interest
(the "Future Additional Collateral Agreements"), and such Future Additional
Collateral Agreements shall be deemed for all purposes Collateral Agreements
under the terms of the Loan Agreement, and shall be subject to all of the terms
and conditions of the Loan Agreement; provided, however, Borrower shall not be
obligated to pay to Lender, and such sums shall not be added to the amounts due
under the Note, any payments made to Borrower attributable to the Future
Additional Collateral Agreements through April 30, 1995. Commencing on May 1,
1995, in the event all amounts due under the Note, as amended by the Note
Modification, have not been paid to Lender, the Future Additional Collateral
Agreements shall be subject to all of the terms and conditions of the Loan
Agreement, including, without limitation, paragraph 2 thereof. Borrower shall
also deliver to Lender, immediately upon recordation the Deeds of Trust securing
the buyers' performance under the Future Additional Collateral Agreements (the
"Future Additional Collateral Deeds of Trust), and execute such additional
Assignments of Deeds of Trust
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assigning such deeds of trust to Lender, as Lender may request, and such Future
Additional Collateral Deeds of Trust shall be deemed for all purposes Collateral
Deeds of Trust under the Loan Agreement, and shall be subject to all of the
terms and conditions of the Loan Agreement.
5. Issuance of Stock. In partial consideration for advancing the additional
funds described in this Amendment, concurrently herewith, or within ten (10)
days following the Effective Date, DRHCI shall deliver to ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
("▇▇▇▇▇▇▇▇") a Stock Certificate executed by the President and Secretary of
DRHCI evidencing the issuance to ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ of ten thousand (10,000)
shares of common stock of DRHCI, as adjusted by any stock splits or dividends
subsequent to the date hereof (the "DRHCI Stock"). DRHCI hereby represents and
warrants to Lender and ▇▇▇▇▇▇▇▇ that, upon issuance of the stock certificates
representing the DRHCI Stock, the DRHCI Stock shall be duly and validly issued,
fully paid, and nonassessable. DRHCI also acknowledges and agrees that the
DRHCI Stock shall be owned by ▇▇▇▇▇▇▇▇ and shall not constitute collateral for
any amounts loaned to Borrower under the terms hereof or the Loan Agreement. The
failure of DRHCI to deliver the stock certificates representing the DRHCI Stock
in the manner provided for in this paragraph 5 shall constitute a material
default under the terms of the Loan Agreement.
6. Escrow Instruction. Concurrently herewith, Borrower shall execute and
deliver to the Escrow Holder Irrevocable Escrow Instructions in the form of
those attached hereto as Exhibit "F," instructing Escrow Holder, as a condition
of closing of each Timeshare Escrow, to pay the Required Payments to Lender
directly out of the proceeds of the sale from each such Timeshare Escrow,
pursuant to the terms and conditions of the Note, as amended by the Note
Modification, and to deliver the documents referenced in paragraph 4 hereof, as
an when escrow closings occur.
7. No Other Changes. Except as modified herein, the remaining terms and
conditions of the Loan Agreement shall remain unmodified and in full force and
effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first written above.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ HOTEL AND CASINO,
INC., a Nevada corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
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Its: Executive Vice President
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By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
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Its: President
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[SIGNATURES CONTINUED ON NEXT PAGE]
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ RESORTS, INC., a
Nevada Corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
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Its: Executive Vice President & Secretary
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REALECON, a California Corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Its: President
EXHIBITS
A Note Modification
B List of Additional Collateral Agreements
C Assignment of Purchase Agreements
D Assignment of Deeds of Trust
E UCC-2
F Escrow Instructions
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NOTE MODIFICATION AGREEMENT
This Note Modification Agreement ("Agreement") is made and entered into as
of March 13, 1995 ("Effective Date"), by and between (i) REALECON, a California
corporation ("Lender"), and (ii) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ HOTEL AND CASINO, INC., a
Nevada corporation, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ RESORTS, INC., a Nevada corporation
(collectively, "Maker").
RECITALS
A. Maker executed and delivered to Lender that certain Secured Promissory
Note dated as of January 16, 1995 in the principal amount of One Hundred
Forty-Six Thousand Dollars ($146,000.00) (the "Note"), the definitions of which
are incorporated herein by reference.
B. Maker and Payee desire to amend the terms of the Note under the terms
and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing facts, the parties hereto
hereby agree as follows:
1. Amendment to Principal Amount. As of the Effective Date, the principal
balance of the Note as of the date hereof shall be increased by Eighty-Seven
Thousand Five Hundred Dollars ($87,500.00) over and above the principal amount
otherwise owing on this Note as of such date.
2. New Maturity Date. The Note shall mature on July 16, 1995 (the "Maturity
Date"), and the Third Payment Period and the terms applicable thereto in the
Note shall be extended to such new Maturity Date.
3. Payments from Buyers' Under Collateral Agreements. In addition to all
other amounts which become due and payable under this Note, an amount equal to
any amounts which Borrower receives as payments under those certain Vacation
Partners Purchase Agreements (Nevada) from the buyers' thereunder, which have
been collaterally assigned to Lender as security for the payment of this Note
under the terms and conditions of the Loan Agreement or the Amendment No. 1 to
Loan Agreement between Borrower and Lender of even date herewith, shall be due
and payable to Lender within five (5) days of receipt of such amounts by
Borrower.
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4. No Other Changes. Except as expressly modified herein, the remaining
terms and conditions of the Note shall remain unmodified, and in full force and
effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ HOTEL AND CASINO,
INC., a Nevada Corporation
By: /s/ ▇▇▇▇▇▇ Granatsteien
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Its: Executive Vice President
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By: ▇▇▇▇▇ ▇▇▇▇▇
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Its: President
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ RESORTS, INC., a
Nevada Corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
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Its: President & Secretary
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REALECON, a California corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Its: President
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