EXHIBIT 10.3
AMENDED AND RESTATED
SECURITY AGREEMENT AND LOCKBOX AGREEMENT
This AMENDED AND RESTATED SECURITY AGREEMENT AND LOCKBOX AGREEMENT
(this "Restated Lockbox Agreement") dated as of May 28, 2003, by and among
PRESIDENT XXXXXXXXXX HOTEL, L.L.C., a Mississippi limited liability company,
having its principal place of business at 0000 Xxxxx Xxxxxxxxx, Xxxxxx,
Xxxxxxxxxxx 00000 ("Borrower"), XXXXXX BROTHERS HOLDINGS INC., a Delaware
corporation, with an address at 000 Xxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000 ("Lender") and TRIMONT REAL ESTATE ADVISORS, INC., a Georgia
corporation, with an address at 2300 Marquis Two Tower, 000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxx 00000 ATTN: Xx. Xxxx Xxxxxxxxxx ("Servicer").
STATEMENT OF BACKGROUND
A. On or about July 22, 1997, XXXXXX BROTHERS HOLDINGS INC., a Delaware
corporation ("Lender"), made a loan to PRESIDENT XXXXXXXXXX HOTEL, L.L.C., a
Mississippi limited liability company ("Borrower"), in the original
principal amount of $30,000,000.00 (the "Existing Loan") for the purpose of
financing the acquisition of a beach hotel, golf course, and marina complex
known as Xxxxxxxxxx Beach Resort located in Biloxi, Xxxxxxxx County,
Mississippi (the "Property"). The Existing Loan is evidenced by that certain
Promissory Note, dated as of July 22, 1997, executed by Borrower payable to
the order of Lender in the original principal amount of $30,000,000.00 (the
"Existing Note"). The Existing Loan is secured by, among other things: (i)
that certain Deed of Trust, Security Agreement, and Fixture Filing, dated as
of July 22, 1997, executed by Borrower in favor of Xxxxxx X. Xxxxxxx, Esq.,
as Trustee, for the benefit of Lender, and recorded on July 24, 1997, as
Document No. 97-3567 in the Office of the Chancery Clerk, Second Judicial
District, Xxxxxxxx County, Mississippi, encumbering, inter alia, the
Property (the "Existing Deed of Trust"); (ii) that certain Assignment of
Leases and Rents, dated as of July 22, 1997, executed and delivered by
Borrower, as assignor, in favor of Lender, as assignee, and recorded on July
24, 1997, as Document No. 97-3568 in the aforesaid records (the "Existing
Lease Assignment"); and (iii) that certain Security Agreement and Assignment
of Contractual Agreements Affecting Real Estate, dated as July 22, 1997,
executed by Borrower, as assignor, and Lender, as assignee (the "Existing
Security Agreement"). As additional security for the Loan, (i) Borrower
executed that certain Security Agreement and Lockbox Agreement, dated as of
July 22, 1997 (the "Existing Lockbox Agreement"); and (ii) President
Casinos, Inc., a Delaware corporation ("PCI") and The President Riverboat
Casino-Mississippi, Inc., a Mississippi corporation ("PRCM"; PCI and PRCM
are referred to herein collectively as the "Indemnitors"), executed and
delivered (i) that certain Indemnity and Guaranty Agreement, dated as of
July 22, 1997, in favor of Lender (the "Guaranty Agreement"), and (ii)
together with Borrower, that certain Indemnity Agreement, dated as of July
22, 1997, in favor of Lender (the "Hazardous Materials Indemnity"). Also, in
connection with the Existing Loan, PCI executed that certain Unconditional
Guaranty of Lease Obligations, dated as of July 22, 1997, in favor of Lender
(the "Sublease Guaranty"). The Guaranty Agreement, the Hazardous Materials
Indemnity, and the Sublease Guaranty are herein occasionally referred to
collectively as the "Indemnities." The Existing Note, the Existing Deed of
Trust, the Existing Lease Assignment, the Existing Security Agreement, the
Existing Lockbox Agreement, the Indemnities, and any and all other documents
evidencing, securing, guarantying, or otherwise relating to the Existing
Loan are hereinafter referred to collectively as the "Existing Loan
Documents."
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B. The Existing Loan matured on July 22, 2000, without payment in full
by Borrower. On April 19, 2001, the Borrower filed a voluntary petition for
protection under Chapter 11 of the United States Bankruptcy Code in the
United States Bankruptcy Court for the Southern District of Mississippi
(Southern Division) (the "Bankruptcy Court"), commencing that case styled as
In re President Xxxxxxxxxx Hotel, L.L.C., Case No. 01-52168-SEG (the
"Bankruptcy Case"). On October 16, 2002, Borrower filed a Debtor's Plan of
Reorganization in the Bankruptcy Case (the "Original Plan") and
subsequently, on February 28, 2003, filed in the Bankruptcy Case its
Modification to Debtor's Plan of Reorganization (the "Plan Modification";
and the Original Plan as modified by the Plan Modification being herein the
"Plan"). On May 14, 2003, the Bankruptcy Court entered its Confirmation
Order (the "Confirmation Order") in the Bankruptcy Case confirming the Plan
and pursuant to which, among other terms and provisions of the Confirmation
Order, the Existing Loan will be amended and restated (as amended and
restated, the "Restated Loan") by the execution and delivery of that certain
Amended and Restated Promissory Note, dated as of the date hereof executed
by Borrower payable to the order of Lender in the original principal amount
of $45,429,479.12 (the "Restated Note") and the execution and delivery of
documents and instruments amending and restating the other Existing Loan
Documents (including, without limitation, this Restated Lockbox Agreement
which amends and restated the Existing Lockbox Agreement), and certain other
documents, all in accordance with the Plan and Confirmation Order (the
Restated Note, this Restated Lockbox Agreement, together with any and all
other instruments and agreements now or hereafter evidencing, securing,
guarantying, or otherwise relating to the Restated Loan, and all renewals,
extensions, consolidations, restatements, and other modifications of the
foregoing are herein collectively occasionally referred to as the "Restated
Loan Documents").
Accordingly, this Restated Lockbox Agreement is and shall constitute
the amendment and restatement of the Existing Lockbox Agreement required by
and to be executed and delivered in accordance with the Plan and
Confirmation Order.
NOW, THEREFORE, in consideration of Ten ($10.00) Dollars, the mutual
premises herein contained and other good and valuable consideration, the
receipt and legal sufficiency of which are hereby acknowledged, Borrower,
Lender and Servicer agree as follows:
1. Establishment of the Accounts.
(a) Cash Management. As additional security for the Restated Loan and
for Borrower's obligations in respect of the Restated Loan and the Property,
Lender has required that Borrower enter into certain continuing cash
management arrangements with Servicer, pursuant to which all income and
proceeds generated or otherwise received from the Property shall be
delivered by Borrower or by the tenants at the Property to Servicer for
deposit into a cash collateral account (as such account may be renumbered or
retitled, the "Lockbox Account") to be maintained in the name of Lender, by
Servicer as Lender's agent, at the depository institution approved by
Lender, which funds shall be pledged and assigned to Lender as additional
collateral for the Loan. As more particularly provided herein, Servicer, as
Lender's agent, shall make periodic withdrawals from the Lockbox Account and
shall disburse the funds so withdrawn as provided in Section 8, below.
(b) Lockbox Account; Reserve Account; Revenue Account. Borrower hereby
directs, consents to and acknowledges that Servicer has established the
Lockbox Account as a separate account in the name of Lender or Lender's
designee with Wachovia Bank, N.A., located in Atlanta, Georgia (the "Lockbox
Bank"), which account shall be entitled "President Xxxxxxxxxx Hotel, L.L.C.,
Pledged Collection Account for the benefit of Xxxxxx Brothers Holdings Inc.,
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TriMont Real Estate Advisors, Inc., f/k/a Xxxxxxxx Philips, Inc., as Agent",
Account No. 2000140402281. Borrower hereby further directs, consents to and
acknowledges that Servicer also has established a reserve account at the
Lockbox Bank (as such account may be renumbered or retitled, the "Reserve
Account") as a separate account in the name of Lender or Lender's designee,
which account shall be entitled "President Xxxxxxxxxx Hotel, L.L.C., Pledged
Master Reserve Account for the benefit of Xxxxxx Brothers Holdings Inc.,
TriMont Real Estate Advisors, Inc., f/k/a Xxxxxxxx Philips, Inc., as Agent",
Account No. 2000015362061. Borrower hereby further directs, consents to and
acknowledges that Servicer also has established a reserve account at The
Peoples Bank, Biloxi, Mississippi (the "Borrower Account Bank") (as such
account may be renumbered or retitled, the "Revenue Account"; the Lockbox
Account, the Reserve Account, and the Revenue Account are collectively
referred to as the "Lender Accounts") as a separate account in the name of
Lender or Lender's designee, which account shall be entitled "President
Xxxxxxxxxx Hotel, L.L.C., Pledged Revenue Account for the benefit of Xxxxxx
Brothers Holdings Inc., TriMont Real Estate Advisors, Inc., F/K/A Xxxxxxxx
Philips, Inc., as Agent", Account No. 155-7511. The Servicer, as Lender's
agent and in accordance with the terms of this Agreement, shall have the
sole and exclusive dominion and control over the Lockbox Account, the
Reserve Account, and the Revenue Account and shall hold amounts deposited in
the Lockbox Account, the Reserve Account, and the Revenue Account. Servicer
as Lender's designee shall have sole signature authority over the Lockbox
Account, the Reserve Account (and the Subaccounts (as defined below)
thereunder), and the Revenue Account, and at all times until the Restated
Loan is paid in full shall have the sole authority to make withdrawals from
the Lockbox Account, the Reserve Account (including the Subaccounts
thereunder), and the Revenue Account, subject to the terms and conditions of
this Agreement and the other Restated Loan Documents. Neither Borrower nor
any other person claiming on behalf of or through Borrower shall, at any
time, have any signature authority over the Lockbox Account, the Reserve
Account, any of the Subaccounts thereunder, or the Revenue Account, or have
any right or authority, whether express or implied, to close or to make use
of, or withdraw any amounts at any time and from time to time in the Lockbox
Account, the Reserve Account, any of the Subaccounts thereunder, or the
Revenue Account. The Lender Accounts shall be assigned Borrower's Federal
Tax Identification Number (i.e.,00-0000000).
(c) Subaccounts. Servicer shall establish and maintain with respect to
the Reserve Account separate ledger entry subaccounts (individually, a
"Subaccount" and collectively, the "Subaccounts"; the "Lockbox Account, the
Reserve Account, and the Subaccounts are collectively referred to as the
"Lender Accounts"), allocating funds in the Reserve Account among the
following Subaccounts:
(i) Real Estate Taxes Reserve Subaccount (the "Tax Subaccount");
(ii) Insurance Premiums Reserve Subaccount (the "Insurance
Subaccount");
(iii) Monthly Interest Payment Subaccount (the "Interest Payments
Subaccount");
(iv) Interim Principal Payments Subaccount (the "Principal
Payments Subaccount");
(v) Capital Expenditures and FF&E Reserve Subaccount (the "Capital
Expense Subaccount");
(vi) Supplemental Cash Reserve Subaccount (the "Supplemental
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Reserve Subaccount"); and
(vii) Tenant Security Deposit and Group Reservation Security
Deposit Subaccount (the "Security Deposit Subaccount");
(viii) Bankruptcy Allowed General Unsecured Class 7 Claims
Subaccount (the "Unsecured Claims Subaccount");
(ix) Bankruptcy Priority Claims Subaccount (the "Priority Claims
Subacount"); and
(x) Bankruptcy Administrative Claims Subaccount (the
"Administrative Claims Subaccount").
Servicer may elect in Servicer's sole discretion to combine any one or
more Lender Accounts into a single Account.
(d) Disbursement Account.
(i) INTENTIONALLY OMITTED.
(ii) Disbursement Account. Borrower has established and shall
maintain at the Borrower Account Bank an operating expense disbursement
account in the name "President Xxxxxxxxxx Hotel, LLC, Disbursement Account",
Account No. 000-000-0 (the "Disbursement Account"; the Lender Accounts and
the Disbursement Account are collectively referred to as the "Accounts"),
which account shall be used by Borrower for the payment of its Operating
Expenses (as defined hereinbelow).
So long as no Event of Default shall have occurred, Borrower and
Servicer shall both have signature authority over the Disbursement Account,
but Borrower shall have operational control (but not "control" within the
meaning of Section 9-104 of Revised Article 9 of the UCC) over the
Disbursement Account and Servicer shall not withdraw funds from the
Disbursement Account. Upon the occurrence of an Event of Default, however,
all signature authority of Borrower over the Disbursement Account and all
rights and authority, whether express or implied, to close or to make use
of, or withdraw any amounts at any time and from time to time in the
Disbursement Account shall, as between Lender and Servicer, on the one hand,
and Borrower, on the other, automatically cease without any necessity of any
notice, demand, or other communication from or action by Lender or Servicer.
The Disbursement Account shall be assigned Borrower's Federal Tax
Identification Number (i.e.,00-0000000).
2. Operating Budget.
(a) Attached hereto as Exhibit A and made a part hereof, is a budget
with respect to the anticipated income and expenses relating to the
operation of the Property detailed on a monthly basis through February 29,
2004 (such budget, and any approved revisions, modifications, additions,
replacements and substitutions thereof, and any future approved operating
budgets for the Property for periods when any sums in respect of the
Restated Loan remain outstanding, is herein referred to as the "Operating
Budget"). Lender has approved the Operating Budget attached hereto as
Exhibit A.
(b) On or before January 15 of each year during the term of the
Restated Loan, Borrower shall submit to Servicer and Lender a proposed
operating budget for the next succeeding fiscal year of Borrower, which
consists of the twelve (12) month period beginning on March 1 and ending on
the last day of February of each year (such twelve month period is
hereinafter
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referred to as a "Fiscal Year," and each such proposed operating budget is
herein referred to as a "Proposed Operating Budget"). Lender shall not
unreasonably withhold its approval of any Proposed Operating Budget. If
Lender objects to any item(s) included in a Proposed Operating Budget, then
Lender shall, within 15 days following receipt of such Proposed Operating
Budget, furnish Borrower with a written statement identifying the items to
which it objects and the reasons therefor and the Proposed Operating Budget
shall be modified accordingly before becoming the Operating Budget.
(c) Lender and Borrower agree that all reasonable, ordinary and
necessary costs and expenses of owning, operating and managing the Property
(the "Operating Expenses") which are anticipated by Borrower to be incurred
shall be set forth in each Operating Budget on a monthly basis, and shall
include, without limitation, the following costs and expenses: (i) salaries,
wages, fringe benefits, payroll taxes and other costs related to employees
of Borrower (ii) administrative and general costs and expenses related to
the Property, including accounting, legal and other professional fees
related to the Property; (iii) repairs, maintenance and alterations,
including janitorial and other cleaning expenses; (iv) costs and fees
hereunder and accounting, legal and other professional fees of persons who
perform services required in connection with the Property (provided,
however, if such persons are affiliated with Borrower, such costs and fees
shall not exceed market rates); (v) all license fees and advertising costs
incurred in respect of the operation of the Property; (vi) insurance costs
and expenses in connection with the operation of the Property (except to the
extent that the same are to be paid by disbursements from the Insurance
Account pursuant to this Agreement); (vii) real and personal property taxes
and assessments related to the Property (except to the extent that the same
are to be paid by disbursements from the Tax Subaccount pursuant to this
Agreement); (viii) charges for utilities servicing the Property; (ix)
charges for elevator and HVAC maintenance; (x) water and sewer assessments
and charges relating to the Property; (xi) operating expenses in connection
with the operation, maintenance and marketing of the hotels located on the
Property including consumable items (such as food and beverages, soap,
cleaning materials, stationery and other similar items) used in the
operation of the hotels which are properly chargeable against income under
the Uniform System of Accounts for Hotels as published by the American Hotel
Association of the United States and Canada; (xii) any other operating
expenses of the Property not specified above but which are included within
the calculation of operating expenses (or increases thereto) payable by
tenants of the Property under the terms of their leases on a pass-through
basis; (xiii) leasing commissions relating to the Property which are not
paid pursuant to the "Capital Expense Budget" (as hereinafter defined);
(xiv) obligations payable under leases of personal property assumed by
Borrower in connection with the acquisition of the Property, with the
approval of Lender, or otherwise approved by Lender, not to exceed amounts
for such purpose set forth in the Operating Budget; (xv) such other costs
and expenses as Lender may approve.
(d) The foregoing notwithstanding, Lender acknowledges that certain
Operating Expenses may arise which are not set forth in the Operating Budget
due to factors such as emergencies, the occurrence of events which were not
anticipated at the time the Operating Budget was prepared by Borrower and
approved by Lender, increases in Operating Expenses caused by changes in
labor rates, utility rates, real estate taxes or other similar matters
("Unbudgeted Expenses"). If Borrower desires to pay any Unbudgeted Expenses,
the Borrower shall give a written notice to Lender and Servicer setting
forth, in reasonable detail, the nature and amount of such Unbudgeted
Expenses. If Lender approves the payment of such Unbudgeted Expenses, which
approval shall not be unreasonably withheld, and there are insufficient
funds available in the Disbursement Account to pay the same, then Servicer
shall disburse
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sufficient additional funds to pay such Unbudgeted Expenses to the
Disbursement Account, provided there are, on the "Monthly Funding Day" (as
hereinafter defined), sufficient funds in the Lockbox Account to make such
disbursement in addition to disbursements having priority under Section 8,
below.
3. Capital Expense Budget. Attached hereto as Exhibit B and made a part
hereof, is a budget with respect to the anticipated capital expenses
relating to the renovation of the Property detailed on a monthly basis
through February 28, 2004 (such budget, and any approved revisions,
modifications, additions, replacements and substitutions thereof, and any
future approved capital expense budgets for the Property for periods when
any sums in respect of the Restated Loan remain outstanding being herein
referred to as, the "Capital Expense Budget"). Lender has approved the
Capital Expense Budget attached hereto as Exhibit B. At least forty-five
(45) days prior to the expiration of each Fiscal Year during the term of the
Restated Loan, Borrower shall submit to Servicer and Lender a proposed
capital expense budget for the next succeeding Fiscal Year (each such
proposed capital expense budget being herein referred to as a "Proposed
Capital Expense Budget"). Lender shall not unreasonably withhold its
approval of any Proposed Capital Expense Budget. If Lender objects to any
item(s) included in a Proposed Capital Expense Budget, then Lender shall,
within 15 days following receipt of such Proposed Capital Expense Budget,
furnish Borrower with a written statement identifying the items to which it
objects and the reasons therefor and the Proposed Capital Expense Budget
shall be modified accordingly before becoming the Capital Expense Budget.
4. Reporting Requirements. Borrower and Servicer shall periodically share
information concerning income and expenses such that, within fifteen (15)
days after the end of each calendar month, a cash basis operating statement
for the Property may be produced by Borrower detailing all income from or in
respect of the Property, including, without limitation, rental revenues,
CAM, operating expense escalation reimbursements, tax refunds and insurance
recoveries (such amounts being herein collectively referred to as "Gross
Income"), and all Operating Expenses, for the preceding calendar month.
Servicer shall direct duplicate copies of all monthly statements of account
received from the depository institutions in which the Lender Accounts are
maintained to be contemporaneously sent to Borrower and shall provide or
shall cause the depository institution maintaining the Lockbox Account to
provide Borrower with a record of deposits into and withdrawals from the
Lockbox Account no less frequently than weekly. Each monthly statement
detailing Gross Income and Operating Expenses shall be certified by Borrower
on-site property manager as being true, correct and complete in all material
respects. The reporting requirements set forth in this Section shall be in
addition to any reporting requirements set forth elsewhere in the Restated
Loan Documents. In the event that aggregate Operating Expenses actually
incurred, as shown on any such monthly operating statement, are less than
the aggregate Operating Expenses shown on the Operating Budget for the
calendar month in question and such decrease in Expenses is not attributable
to a deferral or delay of such Expense, Servicer shall upon written
instruction from Lender, who shall act reasonably in this regard, reduce the
next monthly disbursement from the Lockbox Account into the Disbursement
Account by the amount by which such budgeted Operating Expenses exceed such
actual Operating Expenses.
5. Notices to Tenants. Contemporaneously with the execution and delivery
hereof, Borrower and any manager of the Property are executing and
delivering notices to each of the tenants at the Property directing the
tenants to make rent payments payable to Servicer as agent for Lender and to
deliver rent payments to the post office box specified as the Lockbox
Address on Exhibit C hereto for deposit into the Lockbox Account, which
notices shall be in the
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form annexed hereto as Exhibit D (the "Tenant Letters"). Rental invoices and
other correspondence from Borrower or the manager of the Property to tenants
shall direct the tenants to pay rent and other charges as specified in the
Tenant Letters. All leases entered into after the date hereof shall provide
for the payment of rent in accordance with this Section. The instructions to
tenants at the Property to pay all rent and other charges as specified in
the Tenant Letters shall be irrevocable, except by written direction of
Lender, which written direction shall be provided by Lender upon payment of
the Restated Loan in full.
6. Gross Income Deposits to the Lockbox Account. For so long as any sums in
respect of the Restated Loan remain outstanding, any Gross Income received
by Borrower or any manager of the Property and which is not remitted by
third parties directly into the Lockbox Account shall be deposited by
Borrower, no later than the first business day after receipt by Borrower,
into the Revenue Account. Lender shall periodically transfer funds from the
Revenue Account (in excess of any minimum balance required by the Borrower
Account Bank to be maintained in the Revenue Account) into the Lockbox
Account, on a daily basis or on such other frequency as Lender, from time to
time, may select. In addition, Borrower shall execute letters in the form of
that attached hereto as Exhibit E in order to cause any and all entities
that sponsor and/or process credit card payments for Borrower to pay any and
all amounts (otherwise payable to Borrower) directly to the Lockbox Account.
Borrower may elect to deposit additional sums into the Lockbox Account at
any time, which additional deposits shall be treated as Gross Income for all
purposes under this Restated Lockbox Agreement; provided, however, prior to
making any such additional deposit, Borrower shall notify Lender and
Servicer of its intention to make such deposit, the amount thereof and the
date on which such deposit shall be made.
7. Initial Deposits to Accounts. On the date hereof, Borrower, pursuant to
the Plan and the Confirmation Order, will cause to be delivered to Servicer
for deposit into the Accounts by federal wire transfer of funds the
aggregate amount of $1,530,590.00 (the "Initial Deposit") for allocation
among the Lender Accounts as follows: (a) $ -0- to be used for the minimum
account balance to be maintained in the Lockbox Account (the "Lockbox
Account Minimum Balance"); (b) $-0- to be used for the minimum account
balance to be maintained in the Reserve Account (the "Reserve Account
Minimum Balance"); (c) $611,429.00 to the Unsecured Claims Reserve; (d)
$53,906.00 to the Priority Claims Reserve; (e) $350,000.00 to the
Administrative Claims Reserve; (f) INTENTIONALLY OMITTED; (g) $41,583.00 to
the Insurance Reserve as one-twelfth of Borrower's annual insurance
premiums; (h) $200,000.00 to the Capital Expense Reserve; (i) $88,454.00 to
the Security Deposit Reserve; and (j) $185,218.00 to the Tax Subaccount. In
addition, on the date hereof, Borrower, pursuant to the Plan and to the
Confirmation Order, shall have caused to be deposited into its Disbursement
Account the sum of $885,000.00 (the "Operating Expense Reserve") which shall
be used by Borrower for the payment of Operating Expenses. Unless otherwise
agreed to by Lender in its sole and absolute discretion, in no event shall
the balance in the Lockbox Account at any time be less than the Lockbox
Account Minimum Balance, in no event shall the balance in the Reserve
Account at any time be less than the Reserve Account Minimum Balance, and
neither Lender nor Servicer shall have any obligation to cause the Deposit
Bank to disburse any funds in the Lockbox Account, if after such
disbursement, the balance in the Lockbox Account would be less than the
Minimum Balance. If Lender permits sums in the Lockbox Account to be used so
as to reduce the balance in the Lockbox Account below the Minimum Balance
(which Lender shall have no obligation to do), Borrower shall restore the
balance in the Lockbox Account to at least the Minimum Balance within one
Business Day of written demand therefor by Lender.
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8. Monthly Disbursements from the Lockbox Account.
(a) For so long as any sums in respect of the Restated Loan remain
outstanding, Servicer, as Lender's agent, shall have sole and exclusive
dominion and control over the Lockbox Account, all funds held therein and
all proceeds thereof for the purposes herein provided, until disbursed in
accordance with this Section. Until Lender notifies Servicer that a default
exists under the Loan Documents for which no right of cure was provided or
which was not cured within the applicable cure period (an "Uncured
Default"), on the fifteenth (15th) day of June, 2003, and thereafter on the
fifteenth (15th) calendar day of each calendar month (or, if any such
fifteenth (15th) calendar day is not a business day, the first business day
thereafter; each such day, as applicable, being herein referred to as a
"Monthly Funding Day"), Servicer shall make disbursements based upon the
entire balance in the Lockbox Account (less the greater of $2,000.00 or any
minimum account balance then required by the Lockbox Bank to be maintained
in the Lockbox Account) in the following manner and order of priority:
(i) First, the balance, if any, to Lender, to the extent of any
unpaid reimbursable costs and expenses incurred by Lender on Borrower's
behalf or in the enforcement of Lender's rights under the Restated Loan
Documents following a default thereunder and the expiration of any
applicable notice or cure period, with respect to which costs and expenses
Lender shall advise Borrower no later than five (5) business days prior to
the last business day of any given month (and, to the extent any such notice
is given after such day, such amount shall be payable in the following
month);
(ii) next, the balance, if any, to fund the Disbursement Account
to be maintained by Borrower pursuant to Section 9, below, in accordance
with the Operating Budget, subject to adjustment as provided in the last
sentence of Section 4, above, provided, however, that no disbursement shall
be made to the Disbursement Account until Borrower has depleted the
Operating Expense Reserve to the lesser of $5,000.00 or the minimum balance
which Borrower is required to maintain in the Disbursement Account under the
terms of its account agreement with the Borrower Account Bank;
(iii) next, to fund the real estate tax impound account (i.e., the
Tax Subaccount) established pursuant to Section 1.6 of that certain Amended
and Restated Deed of Trust, Security Agreement and Fixture Filing, dated as
of the date hereof, executed by Borrower in favor of Xxxxxxx X. Xxxxxxxxxx,
Esq., as Trustee, for the benefit of Lender and to be recorded on or about
the date hereof in the Office of the Chancery Clerk, Second Judicial
District, Xxxxxxxx County, Mississippi (the "Restated Deed of Trust") from
which amounts shall be disbursed by Servicer in accordance with the terms of
the Restated Deed of Trust;
(iv) next, to fund the Security Deposit Account to the extent that
Borrower has received in the immediately preceding calendar month security
deposits from space tenants under commercial leases or from lessees of boat
slips in the Xxxxxxxxxx Beach Resort Marina or group reservation security
deposits;
(v) next, to fund the insurance impound account (i.e., the
Insurance Subaccount) established pursuant to Section 1.6 of the Restated
Deed of Trust, from which amounts shall be disbursed by Servicer in
accordance with the terms of the Restated Deed of Trust;
(vi) next, if the balance on deposit in the Capital Expense
Subaccount on such Monthly Funding Date is less than $200,000.00, then the
balance, if any, to fund the Capital Expense Subaccount in the amount
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necessary to restore the balance in such Capital Expense Subaccount to an
amount equal to $200,000.00;
(vii) next, to fund the Interest Payments Subaccount in an amount
equal to the amount of any interest payment which is then due and payable
with respect to the Restated Note;
(viii) next, to fund the Principal Payments Subaccount in an
amount equal to the amount of any Priority Expense Reduction Principal
Payment (as defined in Section 2.02(b) of the Restated Note, which
definition is incorporated herein by this reference) which is then due and
payable with respect to the Restated Note;
(ix) next, to fund the Principal Payments Subaccount in an amount
equal to the amount of any Administrative Expense Reduction Principal
Payment (as defined in Section 2.02(c) of the Restated Note, which
definition is incorporated herein by this reference) which is then due and
payable with respect to the Restated Note;
(x) next, if the balance on deposit in the Supplemental Reserve
Subaccount on such Monthly Funding Date is less than $1,000,000.00, then the
balance, if any, to fund the Supplemental Reserve Subaccount in the amount
necessary to increase the balance in such Supplemental Reserve Subaccount up
to but not in excess of $1,000,000.00; and
(xi) lastly, any funds then remaining in the Lockbox Account and
not required to be disbursed pursuant to any of Sections 8(a)(i) through
8(a)(x), above, shall be disbursed to Borrower for use by Borrower in
connection with Borrower's development of the Property under the Destination
Xxxxxxxxxx Project (as referenced in Section 2.5 of the Plan) or for any
other purpose related to the Property, Borrower hereby covenanting and
agreeing that Borrower shall not under any circumstances, either directly or
indirectly fund distributions to any of its members from any sum received by
Borrower pursuant to this Section 8(l), that any breach of this covenant and
agreement by Borrower shall constitute a material breach and default by
Borrower under this Restated Lockbox Agreement as to which Borrower shall
not be entitled to any grace period or to any notice and cure period, and
that such default hereunder shall constitute an Event of Default under the
Restated Deed of Trust and under the other Restated Loan Documents.
(b) Notwithstanding the foregoing Section 8(a), all proceeds of a sale
or refinancing of the Property shall be applied first to reduction of the
Restated Loan, all casualty or condemnation proceeds shall be applied as
provided in the Restated Deed of Trust, and any other extraordinary income
shall be applied first as provided in the Restated Loan Documents other than
this Restated Lockbox Agreement, if specific provision therefor is made.
(c) Borrower acknowledges and agrees that, if Borrower is required by
the Bankruptcy Court to deposit any funds ("Adequate Assurance Funds") with
Lender, Servicer, the Bankruptcy Court, or otherwise, in order to provide
adequate assurance in compliance with Section 6.4(a) of the Plan, such
Adequate Assurance Funds shall be excluded in determining for purposes of
Section 8(a)(x), above, the amount of undisbursed funds then allocated to
the Supplemental Reserve Subaccount at any time regardless of who may hold
such Adequate Assurance Funds and regardless of whether such Adequate
Assurance Funds are actually held in the Reserve Account and/or are
allocated to the Supplemental Reserve Subaccount.
(d) If on any Monthly Funding Date there are insufficient funds in the
Lockbox Account to fully fund all of the amounts described in Section
8(a)(i)
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through 8(a)(ix), then Servicer shall apply funds then held by it in the
Supplemental Reserve Subaccount as and to the extent necessary to fully fund
all of the amounts described in Section 8(a)(i) through 8(a)(ix), provided,
however, that Borrower hereby acknowledges and agrees that, in the event of
any insufficiency of funds in the Lockbox Account and/or in the Supplemental
Reserve Subaccount such that Servicer is not able to fully fund all of the
amounts described in Section 8(a)(i) through 8(a)(ix), neither Lender nor
Servicer shall have any obligation to advance any of their own funds as an
additional loan advance or as a protective advance, or otherwise.
(e) If Borrower fails to so pay any of the Operating Expense which are
Essential Costs (defined as utility costs, ground lease payments or any
other costs which Lender determines in the exercise of its sole and absolute
discretion are necessary for the operation of the Property or for the
protection of the value thereof), Servicer may, at any time, pay the same
out of funds in the Lockbox Account or the Reserve Account or any Subaccount
therein, and Borrower shall immediately upon notice thereof from Lender or
Servicer deposit such amount into the Lockbox Account, or pay directly to
the Servicer for allocation to an Account designated by Borrower. Any amount
advanced by Lender pursuant to the immediately preceding sentence and/or
other advance permitted to be made or authorized by the Restated Loan
Documents for the maintenance or preservation of the Property, until repaid
in full, shall be deemed a protective advance (collectively, "Protective
Advances") and shall be secured by the Loan Documents. Immediately upon
Servicer's request therefor, Borrower shall provide Servicer all such
supporting information (including copies of actual bills) required by
Servicer to make such Protective Advances.
(f) Notwithstanding anything set forth in this Restated Lockbox
Agreement to the contrary, upon the occurrence of any Event of Default (as
defined in the Restated Deed of Trust, which definition is incorporated
herein by this reference) Lender or Servicer may apply sums then present in
the Lockbox Account, or any other Account and all sums thereafter deposited
into or otherwise credited to the Lockbox Account or any Account to the
payment of the Obligations or any other sums payable pursuant to this
Restated Lockbox Agreement or the other Restated Loan Documents in such
order, proportion and priority as Lender may determine in its sole and
absolute discretion. Lender's right to withdraw and apply amounts in the
Lockbox Account or any other Account shall be in addition to all other
rights and remedies provided to Lender under this Agreement, the other
Restated Loan Documents, and at law or in equity. Neither Lender nor
Servicer has any obligation to use any such amounts to pay Operating
Expenses (other than the obligation to fund Operating Expenses in accordance
with this Restated Lockbox Agreement).
9. Disbursement Account. Borrower has established, and shall maintain until
such time as the Restated Loan has been repaid in full, the Disbursement
Account at the Borrower Account Bank. Borrower shall utilize funds deposited
into the Disbursement Account pursuant to Section 8(a)(ii), above, for the
payment of Operating Expenses; provided, however, except for approved
Unbudgeted Expenses, Borrower shall not make disbursements from the
Disbursement Account for the payment of Operating Expenses which are in
excess of the aggregate amounts specified in the Operating Budget or more
than 10% in excess of the aggregate amount specified in the Operating Budget
without the prior written authorization of Lender or Servicer, not to be
unreasonably withheld. Contemporaneously herewith, Borrower is causing to be
deposited into its Disbursement Account the sum of $885,000.00 (i.e., the
Operating Expense Reserve) as the initial deposit into the Disbursement
Account. Further deposits into such Account shall be made in accordance with
Section 8(a)(ii), above.
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10. Capital Expense Subaccount. Contemporaneously with the execution and
delivery of this Restated Lockbox Agreement, Servicer shall establish the
Capital Expense Subaccount as a ledger entry Subaccount under the Reserve
Account at the Lockbox Bank, as an Account for the payment of the capital
expenditures and related expenses (including, without limitation, as shown
on the Capital Expense Budget (collectively, "Capital Expense Items").
Contemporaneously herewith, Borrower is causing to be delivered to Servicer
the sum of $200,000.00 as the initial deposit into the Capital Expense
Subaccount Account. Further deposits into such account shall be made in
accordance with Section 8(a)(vi), above. So long as no Uncured Default
exists under the Restated Loan Documents, all sums in the Capital Expense
Subaccount shall be held in the Capital Expense Subaccount to pay the
Capital Expense Items as set forth in the Capital Expense Budget, and shall
be disbursed by Servicer in accordance with the conditions, procedures, and
provisions set forth in Section D-2 of the Restated Deed of Trust.
11. Security Deposit Subaccount.
(a) Contemporaneously herewith, Borrower is delivering to Servicer the
sum of $88,454.00 representing the aggregate liability of Borrower on the
date hereof for security deposits made by tenants at the Property in
accordance with the terms of their leases. Contemporaneously with the
execution and delivery of this Agreement, Servicer shall establish the
Security Deposit Subaccount as a ledger entry Subaccount under the Reserve
Account at the Lockbox Bank, as an Account into which Servicer shall deposit
such sum delivered by Borrower. So long as no Uncured Default exists under
the Loan Documents, all sums in the Security Deposit Subaccount shall be
held by Lender in such Security Deposit Subaccount to pay Borrower's
liability for the refund of tenant security deposits which have been
deposited in the Security Deposit Subaccount or to pay Borrower to the
extent Borrower is then entitled to retain any portion of such tenant
security deposits pursuant to the terms of the tenant leases. Servicer shall
disburse to Borrower, within ten (10) business days after receipt by
Servicer of a written request for disbursement of sums on deposit in the
Security Deposit Subaccount, together with such other documentation and
supporting information as shall be necessary or appropriate to evaluate such
request for disbursement or as may reasonably be requested by Lender or
Servicer, the amount requested, or such lesser amount as Lender or Servicer
shall reasonably approve.
(b) In making any payment from the Security Deposit Subaccount,
Servicer shall be entitled to rely on the request for disbursement and upon
the other supporting information provided with the request without any
inquiry into the accuracy thereof; provided, however, if Lender or Servicer
determines in its sole discretion that there is a dispute between Borrower
and any tenant or group regarding the proper application of the requested
disbursement from the Security Deposit Subaccount, Servicer may decline to
make such disbursement until the dispute has been resolved to the
satisfaction of Lender. Borrower shall deliver any and all additional
security deposits received with respect to any tenancy or any group
reservation at the Property promptly to Servicer for deposit directly into
the Reserve Account (no security deposit identified as such by Borrower to
Servicer shall be required to be deposited first into the Lockbox Account)
and allocation to the Security Deposit Subaccount.
12. Other Subaccounts. Contemporaneously with the execution and delivery of
this Restated Lockbox Agreement, Servicer shall establish the Unsecured
Claims Subaccount, the Priority Claims Subaccount, the Administrative Claims
Subaccount, the Supplemental Reserve Subaccount, the Interest Payment
Subaccount, and the Principal Payments Subaccount each as a ledger entry
Subaccount under the Reserve Account at the Lockbox Bank. No more frequently
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than once a week, Borrower may deliver to Servicer written request for
Servicer to pay any claims ("Priority Claims") of any claimants identified
on Exhibit F attached hereto in amounts not in excess of the amounts set
forth on said Exhibit F, any claims ("Administrative Claims") of claimants
set forth on Exhibit G attached hereto in amounts not in excess of the
amounts set forth on said Exhibit G, and/or claims ("Unsecured Claims") of
claimants set forth on Exhibit H attached hereto in amounts not in excess of
the amounts set forth on said Exhibit H. Any such request shall include for
each Priority Claim, each Administrative Claim, and each Unsecured Claim a
copy of an order of the Bankruptcy Court approving such claim, the name,
address, and payment amount for each claimant for whom payment is requested.
Servicer, within five (5) business days after receipt of any such request
for such disbursement from the Priority Claims Subaccount, the
Administrative Claims Subaccount, and/or the Unsecured Claims Subaccount
shall remit payment directly to the subject claimants.
13. Supplemental Reserve Subaccount. Contemporaneously with the execution
and delivery of this Restated Lockbox Agreement, Servicer shall establish
the Supplemental Reserve Subaccount as a ledger entry Subaccount under the
Reserve Account at the Lockbox Bank. The Supplemental Reserve Subaccount
shall be funded pursuant to Section 8(a)(x), and funds in the Supplemental
Reserve Subaccount shall be used for the purposes set forth in Section 8(d),
above.
14. Interest Payment Subaccount/ Principal Payments Subaccount.
Contemporaneously with the execution and delivery of this Restated Lockbox
Agreement, Servicer shall establish the Interest Payment Subaccount and the
Principal Payments Subaccount each as a ledger entry Subaccount under the
Reserve Account at the Lockbox Bank. The Interest Payment Subaccount and the
Principal Payments Subaccount shall be funded pursuant to Section 8(a)(vii)
and (viii), above, and funds in the Interest Payment Subaccount and the
Principal Payments Subaccount shall be remitted to Lender (if any interest
payment or any interim principal payment (i.e., any Priority Expense
Reduction Principal Payment or any Administrative Expense Reduction
Principal Payment, as said two terms are defined in the Restated Note) is
then due and payable under the Restated Note, as the case may be).
15. Interest on Lender Accounts.
(a) Notwithstanding anything to the contrary in this Restated Lockbox
Agreement or the other Restated Loan Documents, so long as Uncured Default
exists under the Restated Loan Documents, the Lockbox Account, the Reserve
Account, and the Revenue Account shall be interest-bearing accounts. The
type of interest bearing account and/or the investments into which such
funds are placed shall be as determined by Lender, in Lender's sole
discretion. Borrower acknowledges, however, that the Lockbox Account may
consist of two related accounts, one non-interest bearing account for
receipt of deposits and one interest bearing account into which the deposit
account is periodically swept. Borrower shall be entitled to receive the
benefit of interest income on such funds, in that such interest income shall
be added to and shall become part of each such Account, provided that all
such interest income shall be reported for federal and, if applicable, state
income tax purposes as income of, and taxable to, Borrower.
(b) Borrower hereby authorizes Lender and Servicer to provide
Borrower's federal taxpayer identification number (00-0000000) to the
Lockbox Bank which holds the Lockbox Account and the Reserve Account, to the
Borrower Account Bank which holds the Revenue Account, and to the
appropriate federal and state agencies, and Borrower agrees that it will
execute, promptly after request from time to time by Lender or Servicer,
such instruments as may be necessary to facilitate the reporting of such
interest income consistent with
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the foregoing provisions. Servicer will prepare or cause to be prepared all
such federal and state forms as may be necessary to properly report such
interest, for federal and, if applicable, state income tax purposes, as
income of Borrower, when Lender Accounts are established in the name of
Lender by Servicer as Lender's agent. Lender and Servicer shall have no
liability to Borrower for any losses which may be incurred as a result of
the investment of any of the deposits in any of the foregoing Lender
Accounts.
(c) The powers conferred on Lender and Servicer hereunder with respect
to such Lender Accounts are solely to protect Lender's interest in the funds
in such Lender Accounts. Except for disbursement of funds as and when
required under this Restated Lockbox Agreement, the safe custody of any such
funds in its possession and the accounting for monies actually received by
Lender or Servicer, Lender shall be deemed to have exercised reasonable care
in the custody and preservation of such funds in its possession if Lender
and Servicer accord such funds treatments substantially equal to that which
Lender and Servicer accord other collateral of the same type in their
possession, it being understood that Lender or Servicer, by way of
illustration only, shall have no responsibility or liability for (a) taking
any steps necessary to preserve rights against other parties with respect to
such funds, or (b) the collection of any such funds, or (c) any invalidity,
lack of value or uncollectability of any of such investments.
16. Lender's Rights With Respect to Accounts.
(a) The Lender Accounts maintained on Lender's behalf by Servicer
shall not, unless otherwise explicitly required by applicable law, be deemed
to be trust funds and at Lender's option and in Lender's sole discretion may
either be maintained on Lender's behalf by Servicer in separate accounts or
be commingled. Interest shall accrue to the benefit of Borrower on the funds
contained in the Lender Accounts maintained on Lender's behalf by Servicer
in accordance with and subject to the provisions of Section 15, above. The
Lender Accounts are solely for the protection of Lender and entail no
responsibility on Lender's or Servicer's part beyond the making of
disbursements in accordance with the terms hereof and beyond the allowing of
due credit for the sums actually received. Upon assignment of the Restated
Loan Documents by Lender, any funds in the Lender Accounts maintained on
Lender's behalf by Servicer shall, at the election of Lender, be turned over
to the assignee to be handled in accordance with the provisions of this
Restated Lockbox Agreement, and any responsibility of Lender, as assignor,
or Servicer with respect thereto shall terminate.
(b) If there is an Uncured Default under the Restated Loan Documents,
Lender may, but shall not be obligated to, apply at any time the balance
then remaining in the Accounts against the indebtedness secured hereby in
whatever order Lender shall subjectively determine; provided, however, the
balance in the Security Deposit Subaccount shall not be applied against such
indebtedness, except to the extent, if any, that Borrower would otherwise be
entitled to retain any portion of any tenant security deposit or any group
reservation security deposit pursuant to the terms of the tenant leases or
the group reservation agreement, as applicable. No such application of the
Accounts shall be deemed to cure any default hereunder. The existence of the
Accounts shall not, under any circumstances, relieve Borrower from any of
its obligations under the Loan Documents, including any obligation to make
any payment for which funds in the Accounts (which are available under the
terms hereof) are insufficient. Upon full payment of the Restated Loan and
all other amounts due under the Restated Loan Documents or at such earlier
time as Lender may elect, the balance of the Accounts then in Lender's
possession shall be paid over to Borrower and no other party shall have any
right or claim thereto.
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17. Security Interest.
(a) As additional security for the Restated Loan and the other
indebtedness evidenced and secured by the Restated Loan Documents, Borrower
hereby pledges, assigns and grants to Lender a lien and security interest in
and to all of Borrower's right, title and interest in and to the Lockbox
Account, the Reserve Account (and the Subaccounts thereunder), the Revenue
Account, and the Disbursement Account and all funds on deposit or held
therein from time to time and all proceeds thereof, provided, however, that
the Lender's security interest in the Security Deposit Subaccount is subject
to the rights of tenants with respect to tenant security deposits and to the
rights of prospective guests of the Property with respect to group
reservation security deposits.
(b) Borrower acknowledges that Servicer, as bailee for Lender, has
possession of the Lender Accounts, and that Lender's security interest in
the Lender Accounts (other than the Revenue Account) is perfected by
Lender's control (as such term is used in Section 9-102 of Revised Article 9
of the UCC) of such Accounts pursuant to that certain Deposit Account
Control Agreement, dated as of the date hereof, executed by Borrower,
Servicer, the Lockbox Bank, and Lender related to such Lender Accounts, that
Lender's security interest in the Revenue Account and the Disbursement
Account is perfected by Lender's control (as such term is used in Section
9-102 of Revised Article 9 of the UCC) of such Accounts pursuant to that
certain Deposit Account Control Agreement, dated as of the date hereof,
executed by Borrower, Servicer, the Borrower Account Bank, and Lender
related to such Accounts.
(c) Borrower and Servicer agree to execute and deliver on demand any
and all documentation requested by Lender to further evidence or further
perfect Lender's security interests in the Accounts, including, without
limitation, uniform commercial code financing statements and bailee
agreements. Borrower hereby irrevocably constitutes and appoints Lender as
its attorney-in-fact, with full power of substitution and transfer, to
execute and deliver any and all such documentation. The power of attorney
hereby granted shall be coupled with an interest and irrevocable. This
Agreement shall constitute a security agreement under the Uniform Commercial
Code (the "UCC") as enacted in the State of Mississippi and in each state
where the Accounts are located, and upon a default under the Restated Loan
Documents which is not cured within any applicable grace or cure period,
Lender may exercise any or all of the remedies available at law or in
equity, including, without limitation, the remedies specified in this
Restated Lockbox Agreement and the remedies available to a secured party
following default as specified in the UCC as enacted in the State of
Mississippi and in each state where any of the Accounts is located.
18. Remedies Not Exclusive. The rights and remedies herein conferred upon or
reserved to Lender are not intended to be exclusive of any other right or
remedy which Lender may be entitled to exercise against Borrower, and each
and every such right and remedy shall be cumulative, and shall be in
addition to every other right or remedy now or hereafter existing under the
Restated Loan Documents, at law or in equity. No delay or omission of Lender
to exercise any right or power it may have shall impair such right or power,
or shall be construed to be a waiver of such right or power. The resort to
any remedy hereunder shall not prevent the concurrent or subsequent exercise
of any other appropriate remedy Lender may have.
19. Power of Attorney. Borrower hereby irrevocably constitutes and appoints
Servicer, on behalf of Lender, as Borrower's attorney-in-fact, with full
power of substitution and transfer, to demand and receive any and all
proceeds of
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the Accounts, and to endorse in the name of Borrower any and all checks or
other documents or instruments constituting Gross Income made payable to
Borrower. The power of attorney hereby granted shall be coupled with an
interest and shall be irrevocable until repayment of the Restated Loan and
all other amounts due under the Restated Loan Documents in full.
20. Risk of Loss. Any misapplication, conversion or loss of funds by
Servicer in any of the Lender Accounts maintained by Servicer shall be for
the account of Lender, and Lender shall bear the risk of any such loss
including, without limitation, any such loss occasioned by reason of
Servicer's bankruptcy or insolvency.
21. Governing Law. Borrower and Lender hereby agree that this Restated
Lockbox Agreement shall be interpreted, construed and enforced according to
the substantive laws of the State of Mississippi without giving effect to
its principles of choice of law or conflicts of law, except that the laws of
the states where the Accounts are located shall govern to the minimum extent
required by the laws of such states as to the creation, priority and
enforcement of security interests in Accounts located in such states. Should
any obligation or remedy under this Restated Lockbox Agreement be invalid or
unenforceable pursuant to the laws provided herein to govern, the laws of
the other state referred to hereinabove or of another state whose laws can
validate and apply thereto shall govern.
22. Successors and Assigns. This Restated Lockbox Agreement shall be binding
upon, and shall inure to the benefit of, the parties' respective successors
and assigns, except that Servicer shall not transfer, assign, encumber or
pledge any sums in Servicer's custody hereunder, and any such purported
transfer, assignment, encumbrance or pledge shall be void ab initio, except
that Servicer may transfer any such sums to a wholly-owned subsidiary of or
successor by merger to Servicer, or to an entity controlling, controlled by
or under common control with Servicer.
23. Amendments in Writing. This Restated Lockbox Agreement, and any
provisions hereof, may not be modified, amended, waived, extended, changed,
discharged or terminated orally or by any act or failure to act on the part
of Borrower or Lender, but only by an agreement in writing signed by the
party against whom enforcement of any modification, amendment, waiver,
extension, change, discharge or termination is sought.
24. Termination. This Restated Lockbox Agreement may be terminated by Lender
at any time upon thirty (30) days prior notice to Servicer and Borrower.
Upon termination of this Agreement, the funds on deposit in the Tax and
Insurance Account shall be retained by Lender for the purposes specified in
Section 1.6 of the Restated Deed of Trust and the funds on deposit in the
remaining Lender Accounts maintained by Servicer shall, at Lender's
election, either be delivered to a successor-servicer selected by Lender
(which shall hold and disburse such funds in accordance with the terms of
this Restated Lockbox Agreement) or shall be delivered to Borrower.
25. Personal Liability. Notwithstanding anything to the contrary contained
in this Restated Lockbox Agreement, the liability of Borrower and its
general partners for the performance of the agreements, covenants and other
obligations contained herein and in the Restated Loan Documents shall be
limited as set forth in Section 2.07 of the Restated Note.
26. Counterparts. This Restated Lockbox Agreement may be executed in
multiple counterparts, each of which shall be deemed an original, and all
such counterparts together shall constitute one and the same instrument.
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27. Amendment and Restatement. This Restated Lockbox Agreement constitutes
an amendment and restatement of the Existing Lockbox agreement in its
entirety. This Restated Lockbox Agreement is executed and delivered pursuant
to the Plan and the Confirmation Order, and the Plan and the Confirmation
Order are incorporated into this Restated Lockbox Agreement with the same
force and effect as if the provisions of the Plan and the Confirmation Order
were set forth verbatim herein, including, without limitation, all terms and
provisions of the Plan and the Confirmation Order pursuant to which Borrower
waives future rights under the United States Bankruptcy Code.
28. Servicer.
(a) Borrower acknowledges and agrees that Servicer is acting solely as
Lender's agent and Servicer owes no duties or obligations to Borrower of any
kind (except for Servicer's obligations under this Agreement, so long as
Servicer is acting as Lender's agent). Lender may replace or remove Servicer
at any time in Lender's sole discretion by written notice to Borrower, and
Lender may also elect in Lender's sole discretion to act as its own servicer
by written notice to Borrower, in which case all references to "Servicer"
shall be deemed to be references to "Lender."
(b) Borrower acknowledges and agrees that Lender may delegate all or
any portion of Lender's rights and responsibilities under this Restated
Lockbox Agreement and the Restated Loan Documents to the Servicer. Unless
and until notified to the contrary in writing by Lender, Borrower shall be
entitled to assume that Servicer is authorized to act on behalf of Lender
pursuant to this Restated Lockbox Agreement and Borrower may rely on all
action or inaction taken by the Servicer pursuant to this Restated Lockbox
Agreement and the other Restated Loan Documents, and such action or inaction
shall be binding on Borrower and Lender to the same extent as if taken by
Lender. Lender reserves the absolute right, in Lender's sole discretion, to
restrict or eliminate the authority of Servicer to act on behalf of Lender
pursuant this Restated Lockbox Agreement and/or to remove the Servicer at
any time from time to time and replace the Servicer with any person Lender
deems appropriate in Lender's sole discretion; provided, however, Lender
shall have no obligation to replace the Servicer upon such removal.
[BALANCE OF PAGE IS INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, Borrower, Lender and Servicer have executed this
Agreement under seal as of the day and year first above written.
BORROWER:
PRESIDENT XXXXXXXXXX HOTEL, L.L.C.,
a Mississippi limited liability company
By: Xxxxxxxxxx Hotel, Inc., a Mississippi
corporation, as manager
By: /s/ Xxxx X. Xxxxxxxxx
Name: Xxxx X. Xxxxxxxxx
(CORPORATE SEAL)
LENDER:
XXXXXX BROTHERS HOLDINGS INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Authorized Signatory
(CORPORATE SEAL)
SERVICER:
TRIMONT REAL ESTATE ADVISORS, INC.,
a Georgia corporation
Name: /s/ Xxxxx Xxxxxxx
Title: Authorized Signatory
(CORPORATE SEAL)
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