Term Sheet for $1,000,000 Line of Credit between Diamondhead Casino Corporation and [REDACTED]

Contract Categories: Business Finance › Term Sheets
Summary

Diamondhead Casino Corporation (DHCC) and an undisclosed lender have agreed to a $1,000,000 unsecured line of credit, maturing on November 1, 2012. DHCC can borrow in increments of at least $50,000 with five business days' notice. The loan carries a 9% annual interest rate, with interest payments due quarterly and all amounts due at maturity. The lender receives options to purchase up to 300,000 DHCC shares at $1.75 per share, depending on the amount borrowed. The agreement is governed by Maryland law.

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EX-10.6 2 g22898exv10w6.htm EX-10.6 exv10w6
Exhibit 10.6
TERM SHEET FOR $1,000,000.00 LINE OF CREDIT
     
Lender:
   [REDACTED]
Borrower:
  Diamondhead Casino Corporation (“DHCC”)
Description of Loan:
  Type: Draw Down Line of Credit (LOC)
Maturity:
  November 1, 2012
Interest:
  9% per annum calculated on the number of days advances are outstanding using a 365 day year.
Repayment:
  Interest only on outstanding principal amount of the Loan shall be due and payable quarterly. All outstanding principal, interest, fees, charges and other amounts are due at Maturity.
Advances:
  In increments of not less than $50,000.00 with 5 business days notice given either by email, U.S. mail, or by fax.
Collateral:
  None-LOC will be unsecured.
Up Front Inducement:
  Upon execution of this Agreement, Lender will be entitled to 50,000 options to purchase common stock of DHCC at $1.75 per share.
Stock Option:
  In addition to the Up Front Inducement, Lender shall have the right to purchase a maximum of 250,000 shares of common, stock of DHCC at a purchase price of $1.75 per share based upon the amount drawn down by Borrower. For example, if the Borrower borrows only $500,000.00 of the $1,000,000.00 LOC, then the Lender would have the right to purchase shares of DHCC common stock based on the proportional amount borrowed ($500,000 divided by $1,000,000 x 250,000 shares equals 125,000 shares.) The Stock Purchase Option shall contain piggyback registration rights and anti-dilution provisions. All 300,000 options herein shall be exercisable prior to repayment in full by Borrower of the amount borrowed.
 
    
Governing Law:
  Loan document shall be governed by Maryland law.
     
BORROWER:
  LENDER:
 
    
/s/ Deborah A. Vitale
 
Diamondhead Casino Corporation
  [REDACTED]
By: Deborah A. Vitale, President
   
Date: 10/22/08
   Date:10/21/08