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Exhibit No. 9
IBF VI - Participating Income Corporation
Form SB-2, Amend. No. 2
File No. 333-71091
LOAN AGREEMENT
THIS LOAN AGREEMENT (hereinafter referred to as "this
Agreement"), made and entered into as of the 23rd day of June,
1999, by and between INTERBANK FUNDING CORPORATION, a Delaware
corporation (hereinafter referred to as "Lender"), 0000
Xxxxxxxxxxx Xxxxxx, XX, Xxxxxxxxxx, XX 00000, and GANESH
HOSPITALITY, INC., a Florida corporation, and GRANJAC RESORTS,
INC. (hereinafter together referred to as "Borrower"), 0000 Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxx 00000.
WITNESSETH:
WHEREAS, Borrower has applied to Lender for a loan in the
amount of NINE HUNDRED FIFTY THOUSAND DOLLARS ($950,000.00)
(hereinafter sometimes referred to as the "Loan") and Lender
desires to make the Loan upon the terms and subject to the
conditions hereinafter set forth; and
NOW, THEREFORE, for good and valuable consideration,
receipt of which is hereby acknowledged, and intending to be
legally bound hereby the parties covenant and agree as follows:
ARTICLE I
DEFINITIONS
As used herein and in the Exhibits and Consents attach
hereto, the following terms shall have the following meanings:
"Borrower's Application for Loan" shall mean the application
for the Loan, submitted by Borrower to Lender, including, without
limitation, all information, warranties, and representations,
either oral or in writing, regarding the Purchase supporting said
application.
"Closing Date" shall mean the date when this Agreement, and
the Note, Shareholder Agreement, Security Agreement, and the Loan
Documents are fully executed and delivered by all parties.
"Governmental Requirements" shall mean all laws, ordinances,
orders, rules, or regulations with respect to securities, public
disclosures, zoning, subdivision, building, safety, fire
protection, or environmental matters.
"Hazardous Materials" shall mean jointly and severally any
hazardous wastes, hazardous substances, hazardous materials,
toxic substances, hazardous air pollutants, or toxic pollutants,
as those terms are used in the Resource Conservation and Recovery
Act, the Comprehensive Environmental Response, Compensation and
Liability Act, the Hazardous Materials Transportation Act, the
Toxic Substances Control Act, the Clean Air Act, and the Clean
Water Act, or in any regulations promulgated pursuant thereto, or
in any applicable state or local law, regulation, or ordinance.
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"Improvements" shall mean the improvements presently located
or to be constructed on the Land, which shall include all
landscaping, drives, approaches, sidewalks, curbs, parking and
chattels, furniture, furnishings, and equipment described in the
Plans.
"Land" shall mean, the real property described in attached
Exhibit "A".
"Loan" shall mean, collectively, all sums advanced by Lender
to or for the account of Borrower, as provided in this Agreement,
and the other Documents, including, without limitation, sums
evidenced by the Note, as well as costs and expenses incurred or
advanced by Lender, for which Borrower is liable pursuant to the
Loan Documents.
"Loan Documents" shall mean this Agreement, the Note, the
Shareholder Agreement, the Security Agreement, and all other
documents or instruments executed and delivered by or on behalf
of Borrower, or third parties, in connection with the Loan and
the transactions contemplated hereby, as the same may be
supplemented or amended from time to time.
"Mortgage" shall mean the Mortgage, Security Agreement, and
Assignment of Rents made by Ganesh Hospitality, Inc.
(individually, "Ganesh") to Citrus Bank ("Citrus") as security
for the obligations of Ganesh to Citrus, creating a first lien
on, and security interest in , the Mortgaged Property, as the
same may be supplemented or amended from time to time.
"Mortgaged Property" shall mean all real and personal
property and rights in property described in, and encumbered by,
the Mortgage, including, without limitation, the Land and the
Improvements.
"Note" shall mean that certain Commercial Note of even date
herewith made by Borrower to Lender in the principal sum of Nine
Hundred Fifty Thousand Dollars ($950,000.00), or so much thereof
as may be disbursed pursuant to this Agreement, as the same may
be supplemented or amended from time to time and which shall
evidence the Loan.
"Purchase" shall mean Borrower's purchase of all of the
stock of Ganesh Hospitality, Inc., and the financing thereof by
or on behalf of Borrower.
"Security Agreement" shall mean the Security Agreement for
Certified Stock made by Xxxxxxx X. Xxxxxx in favor of Lender as
security for the Note.
"Shareholder Agreement" shall mean an agreement among
Borrower, Xxxxxxx X. Xxxxxx, Xxxxx X. Xxxxxx, and Xxxxx X.
Xxxxxxx governing the shares of Ganesh Hospitality, Inc., and the
rights and responsibilities of its shareholders.
"Shares" shall mean the common stock of Ganesh Hospitality,
Inc., a Florida subchapter S corporation.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender that:
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SECTION 2.01. BORROWER'S ORGANIZATIONAL DOCUMENTS AND
RESOLUTIONS. If Borrower is an entity other than an individual.
Borrower has provided Lender with true and correct copies of
Borrower's organizational documents and resolutions, and all such
documents remain in full force and effect.
SECTION 2.02. ORGANIZATIONAL DOCUMENTS. If Borrower is a
partnership, Borrower certifies that the following documents
delivered to Lender, including any and all amendments thereto,
are true and correct copies of the originals and remain in full
force and effect:
(a) Partnership agreement;
(b) Recorded certificate of partnership;
(c) Fictitious name certificate; and
(d) Partnership resolution authorizing the loan transaction and
document signatories.
If Borrower is a corporation, or if any of Borrower's
general partners is a corporation, Borrower certifies that the
following documents delivered to Lender, including any and all
amendments thereto, are true and correct copies of the originals
and remain in full force and effect:
(a) Articles of Incorporation certified by the proper official
of the state of incorporation;
(b) Evidence of good standing certified by the proper official
of the state of incorporation;
(c) If incorporated in a state other than Florida, than evidence
of authority to transact business in the State of Florida
certified by the Secretary of State;
(d) Bylaws certified by the corporation's secretary; and
(e) Resolution authorizing the loan transaction and document
signatories, complete with incumbency certificate, certified by
the corporation's secretary.
SECTION 2.03. AUTHORITY. The execution and performance of
this Agreement, the borrowings hereunder, and the execution and
delivery of the Note, the Shareholder Agreement, the Security
Agreement and all supporting documents have been duly authorized
by all necessary action of Borrower, and will note violate any
provision of law or result in the breach of, or constitute a
default or require any consent under, or result in the creation
of any lien, charge, or encumbrance upon any property or assets
of Borrower pursuant to any indenture or other agreements or
instrument to which Borrower is a party or by which Borrower or
its property may be bound or affected.
SECTION 2.04. LITIGATION. There are no actions, suits, or
proceedings pending, or to the knowledge or Borrower threatened,
against or affecting Borrower, or the Mortgaged Property, at law
or in equity, or before or by any Governmental Authority except
actions, suits, and proceedings fully covered by insurance or
which, if adversely determined, would not substantially impair
the ability of Borrower to perform any of its obligations under
the Loan Documents.
SECTION 2.05. PAYMENT OF TAXES. Borrower has filed or has
caused to be filed all federal, state, and local tax returns of
which are required to be filed, and have paid or has caused to be
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paid all taxes as shown on said returns, or on any assessment
received, to the extent that such taxes have become due, except
as otherwise permitted by the provisions hereof.
SECTION 2.06. TRADEMARKS, PATENTS, ETC. Borrower possesses
all the trademarks, trade names, copyrights, patents, licenses,
or rights in any thereof, adequate for the conduct of its
business, as now conducted and presently proposed to be
conducted, without conflict with the rights or claimed rights of
others.
SECTION 2.07. AGREEMENTS. Borrower is not a party to any
agreement or instrument or subject to any charter or other
restriction materially or adversely affecting their business,
properties, assets, operations, or conditions (financial or
otherwise), and Borrower is not in default in the performance,
observance, or fulfillment of any of the obligations, covenants,
or conditions contained in any agreement or instrument to which
each is a party.
SECTION 2.08. THIRD-PARTY APPROVAL. The execution,
delivery, and performance of the Loan Documents do not require
the consent or approval of any other person or entity.
SECTION 2.09. PRIOR MATERIALS OR WORK. To Borrower's best
information and belief no materials of any kind have been placed
on the Land by anyone, and no work or labor has been performed
thereon within ninety (90) days prior to the Closing Date that
has not been paid for; there are no unpaid bills for labor,
materials, supplies, furnished upon the Land; and no Notice of
Commencement or claim of lien affecting the Land or the
Improvements has been filed in the public records of the county
in which the Land is located, or in the Office of the Secretary
of State for the State of Florida, and no such Notice of
Commencement or claim of lien was filed prior to the recording of
the Mortgage.
SECTION 2.10. UTILITIES. To Borrower's best information
and belief, all utility services in sufficient capacity necessary
for the operation and sale of the Mortgaged Property for its
present and/or intended purpose, are or will be available for the
use of Borrower at the boundaries of the Land, including water
supply, storm and sanitary sewer facilities, electric, gas, and
telephone services.
SECTION 2.11. ACCESS TO LAND. To Borrower's best
information and belief, adequate vehicular, pedestrian, and
utility access (minimum width of fifty (50) feet) for reasonably
direct ingress and egress and service to and from the Land, from
publicly owned and maintained paved roadways are and will be
available when needed at the Land.
SECTION 2.12. FINANCIAL CONDITION; NO MATERIAL ADVERSE
CHANGE. The financial condition of Borrower is fairly presented
in accordance with generally accepted accounting principles
consistently applied in the financial statements of Borrower
heretofore presented to Lender. Since the date of said financial
statements, there has been no material adverse change in the
financial condition of Borrower.
SECTION 2.13. USE OF MORTGAGED PROPERTY. To borrower's
best information and belief, the present use of the Mortgaged
Property complies with all applicable zoning ordinances,
regulations, and restrictive covenants affecting the Land and all
other Governmental Requirements for such use have been satisfied.
Such Governmental Requirements do not impose any setbacks or
other requirements which would make the construction or operation
of the Improvements upon the Land economically unfeasible; and
Borrower is not aware of any problem or requirement which would
jeopardize the issuance of, or validity of issued building
permits for the construction of the Improvements.
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SECTION 2.14. CONDITION OF LAND, ETC. To Borrower's best
information and belief, the Land and any improvements or other
property presently located thereon are not now damaged or injured
as a result of any fire, explosion, accidents, flood, or other
casualty.
SECTION 2.15. TITLE TO COLLATERAL. To Borrower's best
information and belief, Ganesh has good and marketable title to
the Mortgaged Property, free and clear of any liens, claims,
encumbrances, or security interests except a first Mortgage to
Citrus, and except for taxes and assessments not yet due and
payable, and Borrower will defend such title against the claims
and demands of all persons except as above stated.
SECTION 2.16. DEFAULTS. No Event of Default and no
condition, event, act or omission which, with the giving of
notice or the lapse of time or both, would constitute an Event of
Default, has occurred and is continuing or exists.
SECTION 2.17. FLOOD AREA; FILLED LAND; HAZARDOUS WASTE. To
Borrower's best information and belief, the Land is not in an
"area of special flood hazard", as that term is defined in the
National Flood Insurance Act of 1968. To borrower's best
information and belief, no portion of the Land consists of and no
portion of the Improvements are located on filled-in land. To
Borrower's best information and belief, the Mortgaged Property
does not contain any Hazardous Materials. All pollution and
environmental control laws and regulations which are applicable
to the Land, and the use thereof, have been satisfied. Borrower
has provided Lender all environmental audits, studies, surveys,
boring logs, soil reports, percolation tests, and other
engineering information which has been performed on the Mortgaged
Property. No Hazardous Materials have been generated, stored,
buried, or disposed of on or in a location that will adversely
affect the Mortgaged Property, and no federal, state, or local
government department, agency, or entity has issued any
environmental citations, warning notice, notice of violation,
consent order, final order, or any other notice of violation of
law, ordinance, or regulation, which affect the Mortgaged
Property.
SECTION 2.18. OFFSET AND DEFENSES. Borrower has no offsets
or defenses with respect to payment of Loan.
SECTION 2.19. SALE OF SECURITIES. Borrower has not
instituted, caused to be instituted, or have not been a party to,
and to the best of Borrower's knowledge, there has not been any
public offering with respect to the Land and/or Improvements
within the meaning of the Securities Act of 1933, and the
Securities Exchange Act of 1934. Borrower has not received any
notice of commencement of any proceeding or investigation by any
Governmental Authority with respect to any such offerings.
SECTION 2.20. TITLE TO SHARES. Borrower has good and
marketable title to the Shares, free and clear of any liens,
claims, encumbrances, or security interests, and Borrower will
defend such title against the claims and demands of all persons.
SECTION 2.21. GENERAL WARRANTY. No representation or
warranty by Borrower contained herein or in any other Loan
Document, or in Borrower's Application for Loan, furnished by
Borrower contains or will contain any untrue statement of
material fact or omits or will omit any material fact necessary
to make such representation or warranty not misleading in light
of the circumstances under which it was made.
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SECTION 2.22. FURTHER CERTIFICATIONS. If any disbursement
of Loan funds are made subsequent to the Closing Date, each
request for a disbursement made by Borrower and each receipt
thereof by Borrower shall constitute a certification by Borrower
that the representations and warranties contained in Section 2.01
through 2.21, inclusive, or elsewhere in the Loan Documents, are
true and correct on the date of such request for disbursement or
such receipt, as the case may be, and such representations and
warranties shall be deemed to be made continuously until the Loan
shall have been paid in full.
ARTICLE III
THE LOAN
Subject to the terms and conditions of this Agreement,
Lender shall make the Loan to Borrower as described in this
Article III.
SECTION 3.01. THE LOAN. Upon the satisfaction by Borrower
of all the conditions specified in this Agreement, Lender shall
lend to Borrower the principal amount of NINE HUNDRED FIFTY
THOUSAND DOLLARS ($950,000.00) in accordance with the terms and
conditions of this Agreement.
SECTION 3.02. LOAN PURPOSE. The Loan, upon its
disbursement to Borrower, shall be used to purchase all of the
outstanding shares of Ganesh Hospitality, Inc. The use of the
loan funds by Borrower, its employees, agents, or
representatives, for purposes other than those set forth above,
and without Lender's prior written approval is prohibited, except
as set forth in the Closing Statement.
SECTION 3.03. LOAN DISBURSEMENTS. On the Closing Date, the
Loan funds shall be disbursed to or for the account of Borrower
to the used solely for the purposes set forth in Section 3.02
above. An election by Lender to disburse a portion of the Loan
funds prior to Borrower's satisfaction of all conditions
precedent to disburse the Loan funds pursuant to the Loan
Documents shall not constitute a waiver by Lender of any such
condition precedents as to the remaining Loan funds, and Lender
shall have no obligation to make any disbursements of the Loan
funds until Borrower has complied with all conditions precedent
thereto to Lender's satisfaction. All Loan funds will be
considered to have been advanced to and received by Borrower, and
interest on such funds shall accrue, and shall be payable, as
provided in the Loan Documents, by Borrower upon their
disbursement. Lender shall be under no obligation or duty to
advance or disburse any of the proceeds of the Loan to Borrower
while any Event of Default exists under the Loan Documents.
SECTION 3.04. THE NOTE. The Loan shall be evidenced by the
Note, in a form acceptable to Lender. The Loan shall bear
interest on the principal amount from time to time outstanding at
the rate set forth in the Note; and the amounts due thereunder
shall be payable by Borrower, as provided in the Note.
ARTICLE IV
SECURITY FOR THE LOAN
Payment of the Loan and the performance of all other present
and future obligations of Borrower to Lender pursuant to the
terms and conditions of the Loan Documents shall be secured as
follows:
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SECTION 4.01. SECURITY DOCUMENTS. As security for the
Note, Borrower shall deliver to Lender, on or before the Closing
Date:
(a) The Shareholder Agreement, which shall contain such terms
and conditions as are reasonably satisfactory to Lender;
(b) The Security Agreement, pledging to Lender a 5.1% interest
in the common stock of Ganesh, all of the stock of Granjac
Resorts, Inc., and containing such terms and conditions as are
reasonably satisfactory to Lender;
(c) A Collateral Assignment of Management Agreement between
Ganesh Hospitality, Inc., as owner, and Granjac Resorts, Inc., as
manager;
(d) An Agreement not to Further Encumber the Mortgaged Property;
and
(e) Any and all other security as may be reasonably required by
Lender or its counsel in order to assure that the Note, and
Borrower's obligation to perform or comply with the terms and
conditions of the Loan Documents, are adequately secured, and
further, to assure the priority and validity of its lien rights
as to the stock pledged, and the quality of the collateral
serving as security for Borrower's performance of its obligations
under the Loan Documents. All security instruments shall be in
form and substance acceptable to Lender and Lender's counsel, and
consistent with the terms and conditions of this Agreement.
SECTION 4.02. ADDITIONAL SECURITY. As additional security
for Borrower's obligations under the Loan Documents:
(a) Borrower irrevocably assigns to Lender, and grants to
Lender a security interest in, its interest in all Loan funds
held by Lender, whether or not disbursed. In addition, Borrower
hereby assigns to Lender all of Borrower's rights under the Loan
Documents, which rights Lender may, at its option, exercise upon
the occurrence of an Event of Default and after applicable grace
periods, if any. Such assignment is made for collateral purposes
only and imposes no obligations upon Lender.
(b) Borrower grants Lender a continuing lien upon any and
all moneys, securities, and other property of Borrower not
encumbered by the Mortgage and the proceeds thereof, now or
hereafter held or received by or in transit to Lender, from or
for Borrower, whether for safekeeping, custody, pledge,
transmission, collections, or otherwise, and also upon any and
all deposits (general or special) and credits of Borrower with,
and any and all claims of Borrower's against Lender, at any time
existing. Upon the occurrence of any Event of Default, Lender,
without notice to Borrower, is authorized to set off,
appropriate, and apply any or all items hereinabove referred to
against all indebtedness of Borrower to Lender under the Loan
Documents.
ARTICLE V
LOAN DISBURSEMENT
SECTION 5.01. CONDITIONAL PRECEDENT FOR DISBURSEMENTS OF
LOAN FUNDS. Lender will not be obligated to disburse any of the
Loan funds until Borrower has fulfilled to Lender's
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satisfaction
all the terms and conditions of Lender's customary and reasonable
loan opening conditions for loans, which include, without
limitation, the following:
(a) Borrower shall have executed and delivered, or, where
applicable, caused to have been executed and delivered to Lender
this Agreement, the Note, the Shareholder Agreement, the Security
Agreement, any other security instruments, and all other Loan
Documents, each in the form and substance satisfactory to Lender;
and all Loan Documents and security instruments required by
Lender which are to be recorded shall have been recorded.
(b) Lender shall have been furnished satisfactory evidence
that the Land is not located in an area designated by the
Secretary of Housing and Urban Development as having special
flood hazards, and if the Land is so located, then, Lender shall
be furnished, at Borrower's expense, with a Certificate of
Insurance and original insurance policy on the Mortgaged Property
for loss due to flood, and such other hazards for which coverage
is available.
(c ) Lender shall have been provided with satisfactory
evidence that all utility services necessary for the operation of
the Improvements for the purposes intended by Borrower have been
extended to and are operational at the boundary of the Land,
which evidence may include commitment letters from applicable
utilities stating the above, and that there are no restrictions
on the time for the use of such facilities; that not fees,
charges, or assessments for their use exists; that sufficient
plant capacity is available to adequately service the
improvements; and that all of said rights as deemed necessary by
Lender shall be assignable to Lender.
(d) Lender's Origination Fee of Forty-Seven Thousand Five
Hundred Dollars ($47,500.00) shall have been received by Lender,
and a Project Advisory Fee of Forty Thousand Dollars ($40,000.00)
shall have been received by InterBank/Xxxxxx Brokerage Services.
In addition to the foregoing, the parties acknowledge and agree
to payments of management fees to Granjac Resorts, Inc. of 4% of
gross revenues, and to InterBank/Xxxxxx Hospitality of 1% of
gross revenues, the agreements for which shall not be changed
without unanimous approval of the Shareholders.
(e) Lender shall have received satisfactory evidence that
the Loan funds are being applied in accordance with Section 3.02
above.
(f) There shall not have occurred an Event of Default under
the Loan Documents.
(g) Lender shall have received originals or certified
copies of all executed leases, including any amendments, of the
Mortgaged Property or any portion thereof.
(h) Unless Lender hereafter waives any of the following
requirements in writing. Lender shall have received and approved
each of the following:
(i) Environmental Report: Borrower shall provide a
current "Phase One" environmental report regarding hazardous
wastes, toxic materials and other environmental hazards on
the Property, which report shall be certified by an
environmental consultant acceptable to Lender. If warranted
by the Phase One environmental report, borrower shall
provide a detailed audit of the same matters. Such
consultant must appear on Lender's list of approved
environmental consultants or be specifically approved in
writing by Lender.
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(ii) Zoning: Borrower shall provide evidence that
the Property is zoned to permit the development,
construction, use and operation of the Improvements, that
the referendum or appeal period has expired for any
ordinance, resolution, variance or special permit
establishing the zoning and that there is no pending action,
either administrative, legislative or judicial, which could
adversely affect the zoning of the Property or the
development, construction, use or operation of the
Improvements.
(iii) Utilities: Borrower shall provide letters
from the appropriate provider that public water, sanitary
sewer, storm sewer, electricity, gas and other required
utilities are available to the Property in quantities
sufficient for the successful use and operation of the
Improvements. Each such letter shall clearly identify the
Property and describe the location at which each such
utility is available to the Property. If any utility
easement, then Borrower shall provide evidence of the
easement through the adjoining private land for such utility
line.
(iv) Survey: Borrower shall provide a current
survey of the Property, which survey shall be certified by a
licensed surveyor and shall conform in all respects with
Lender's "Survey Requirements." Such surveyor must appear
on Lender's list of approved surveyors or be specifically
approved in writing by Lender.
(v) Tax Parcel: Borrower shall provide evidence
that the Property comprises one or more separate tax
parcels.
(vi) Title Insurance Commitment: Borrower shall
provide a current ALTA title issuance commitment for the
Property and all appurtenant easements, with such
reinsurance as Lender may require, which commitment shall be
issued by an agent and underwriter acceptable to Lender and
shall conform in all respects with Lender's "Title Insurance
Requirements."
(vii) Restrictive Covenants: In the event that
the title insurance commitment shows restrictive covenants
affecting the Property, Borrower shall provide evidence that
such restrictive covenants are not now being violated.
(viii) Preliminary chattel Search: Borrower shall
provide UCC-11 search reports from each office in which
Lender's financing statement will be filed.
(ix) Other Agreements and Contracts: Borrower shall
provide copies of all management agreements, leasing
agreements, operating agreements, franchise agreements and
other agreements and contracts affecting the Mortgaged
Property and entered into prior to loan closing.
(x) Insurance: Borrower shall provide evidence of
casualty and liability insurance for the Improvements and
the Property, which insurance shall be issued by
underwriters acceptable to Lender and shall conform in all
respects with Lender's "Insurance Requirements."
(xi) Equity: Borrower shall provide evidence that
funds aggregating not less than the required equity
contribution are available for timely contribution.
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(xii) Acquisition Documents: Borrower shall
provide a certified copy of the agreement for the
acquisition of the Shares and, if the Shares are acquired
prior to loan closing, original share certificates and
certified copies of the stock transfer, and closing
statement.
(xiii) Appraisal: Lender must be able to procure
from an independent appraiser selected by Lender an
appraisal of the Property and the Improvements evidencing a
value of not less than $4,150,000.00 and from its review
appraiser, a confirmation of such value. In the event such
appraisal or confirmation cannot be procured, this
requirement shall be deemed unsatisfied and Lender shall not
be obligated to attempt procurement from a second appraiser.
The appraisal shall be procured at Borrower's expense.
(xiv) Title to Shares: Lender must be able to
confirm that the Shares are owned free and clear of any
liens, encumbrances, hypothecations, or pledges.
Notwithstanding anything to the contrary herein, where
Borrower can demonstrate that any of the foregoing items have
been required, reviewed and accepted by Citrus, such items shall
be deemed acceptable to Lender upon their receipt by Lender. The
foregoing conditions precedent to making the Initial Disbursement
hereunder must have been completely fulfilled to Lender's
satisfaction on or before the Closing Date, unless waived by
Lender in writing. The failure of Borrower to meet this
requirement shall constitute an Event of Default under this
Agreement and Lender shall have no further obligations under this
Agreement and Lender may exercise its rights and remedies under
the Loan Documents. Lender shall not be obligated to make any
Disbursement if an Event of Default under the Loan Documents has
occurred.
SECTION 5.02. APPROVAL OF DOCUMENTS, ETC. All documents,
instruments, or other evidence of compliance with the terms and
conditions set forth in this Article V shall be subject to the
review and approval of Lender, its Inspector, or counsel, where
applicable, as to the sufficiency of the form and content of the
documents, instruments, or other evidence provided.
SECTION 5.03. NO WAIVER. Any waiver by Lender of any
condition of disbursement must be made in writing. The making of
a disbursement prior to fulfillment of one or more conditions
thereof shall not be construed as a waiver of such conditions,
and Lender reserves the right to require the fulfillment of each
and every condition prior to the making of any further
disbursement.
ARTICLE VI
COVENANTS
Until payment in full of Loan and performance of all of
Borrower's other obligations under the Loan Documents held by
Lender, and unless otherwise agreed by Lender in writing,
Borrower covenants as follows:
SECTION 6.01. GOVERNMENTAL REQUIREMENTS. Borrower shall
comply with all Governmental Requirements applicable to the
operation and rental of the Improvements, except where contested
in good faith and by appropriate proceedings, and with all
agreements, or instruments to which it is a party, or by which
its properties or assets may be bound, a breach of which would
materially adversely affect its financial condition or
operations, or to perform its other obligations under the Loan
Documents.
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SECTION 6.02 ACCESS TO BOOKS AND INSPECTION. Borrower
shall give any representative of Lender access to, and permit
such representative to examine, copy, or make extracts from, any
and all books, records, and documents in the possession of
Borrower relating to the Mortgaged Property, and to inspect the
Mortgaged Property, all at such times and as often as Lender may
reasonably request; provided, however, that Lender shall have no
obligation to make any such inspections.
SECTION 6.03. ASSIGNMENT OF LOAN DOCUMENTS; LOAN FUNDS.
Borrower shall not assign its rights in the Loan Documents,
including, without limitations, its right to receive any
disbursement, or allow the conveyance or transfer of Loan funds
hereunder.
SECTION 6.04 RESTRICTIVE COVENANTS AND DUE-ON CONVEYANCE.
Without the prior written consent of Lender (which consent may,
at Lender's sole option and discretion, be conditioned on (a)
modifications to the terms of payment of Loan; (b) modifications
of any terms of any instrument evidencing or securing Loan; and
(c) such other matters as Lender may reasonably require, Borrower
shall not:
(a) create or permit the creation of any security interests
in any furniture, furnishings, fixtures, or equipment by Borrower
and intended to be affixed to, incorporated in, or placed in the
Mortgaged Property or the appurtenances thereto, other than in
favor of Lender or acquire less than unconditional ownership and
title to any of such furniture, furnishings, fixtures, or
equipment, free from encumbrances other than in favor of Lender,
on delivery to the Mortgaged Property;
(b ) further mortgage, encumber, hypothecate, grant a
security interest in, or sell, xxxxx, transfer, or assign
ownership or control of all or any party of the Mortgaged
Property (whether voluntary or involuntary, by outright
conveyance, deed, mortgage or deed of trust, lease, stock
transfer, sale of partnership (or any interest therein), land
installment contract, merge, or otherwise);
(c ) Consent to or permit any sale, conveyance, or other
disposition of any rents or other funds arising from the Land;
and
(d ) grant any other interest whatsoever, legal or
equitable, in the Mortgaged Property of any party thereof,
including a transfer of any interest in any entity holding such
title.
SECTION 6.05. ACCOUNTING: CHANGES IN THE CONDITION.
Borrower shall promptly supply Lender with any financial
statements or other information concerning its affairs and
properties as Lender may reasonably request, and shall promptly
notify Lender of any material adverse change in its financial
condition or in the physical condition of the Land or
Improvements. Updated financials on all Guarantors on proper
forms shall be submitted to Lender within thirty (30) days of
closing.
SECTION 6.06. INSURANCE. Borrower shall purchase or cause
to be purchased from insurers licensed to do business in Florida,
and acceptable to Lender, the Insurance coverages listed below
and such other or additional insurance coverage as Lender shall
require, and insuring Borrower and Lender, as their interests
shall appear, and Borrower shall cause such coverages to be
maintained throughout the term of the Loan.
Type of Insurance Minimum Limits of
Liability
FIRE AND EXTENDED COVERAGE The maximum loan amount
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Or the full insurable value of the
Mortgaged Property whichever is greater.
GENERAL LIABILITY $1,000.000.00 per occurrence and aggregate
Comprehensive form covering
Premises-operations, explosion and
Collapse hazard, underground hazard,
Contractual insurance, broad-form
Property damage, independent
Contractors, and personal injury
Each policy of insurance shall provide that it may not be
canceled by insurer without at least fifteen (15) days prior
written notice to Lender. Existence of the insurance coverages
required hereby shall be evidenced by Certificate(s) of Insurance
issued to Lender by the insurer(s) or its authorized agent, or
delivery of the original policies and endorsements to Lender.
SECTION 6.07. PAYMENT OF STAMP OR EXCISE TAX. Borrower
will pay documentary stamp taxes and intangible property taxes
applicable to the full fact amount of the Note and, if applicable
the Shareholder Agreement. If any stamp or excise tax shall
become applicable with respect to this agreement, the Note, any
loan or credit extended hereunder, the Shareholder Agreement, or
otherwise, Borrower will promptly pay such tax in full (including
interest and penalties, if any) and will indemnify and hold
Lender harmless with respect thereto.
SECTION 6.08. PAYMENT OF EXPENSES. Borrower will pay
Lender's out-of-pocket costs and expenses incurred in connection
with the making or disbursement of the Loan or in the exercise of
any of its rights or remedies under this Agreement, including,
but not limited to, title insurance and escrow charges, recording
charges, reasonable legal fees and costs, inspection fees, and
any other reasonable fees and costs for services which are not
customarily performed by Lender's salaried employees and are not
specifically covered by Lender's Loan Fees for the Loan. In lieu
of direct payment by Borrower, Lender is hereby authorized but
not obligated to advance the amounts due hereunder, and any sums
so advanced shall constitute a portion of the Loan evidenced and
secured by the Loan Documents.
SECTION 6.09. BUSINESS OPERATING ACCOUNTS. Borrower
shall maintain its principal operating account with Citrus Bank.
SECTION 6.10. NOTICE OF MATERIAL EVENTS. Borrower shall
promptly give Lender notice of (a) any Event of Default or any
event which, with notice or lapse of time or both, would
constitute such an Event of Default after the same becomes known
to Borrower, together with a written statement of the action
being taken by Borrower to remedy the same; (b) all litigation or
proceedings before any court of Governmental Authority affecting
Borrower or the Mortgaged Property, except litigation or
proceedings, which, if adversely determined, would not have a
material adverse effect on the financial condition or operations
of borrower or of the Mortgaged Property or any party thereof or
to perform any of its other obligations under the Loan Documents.
SECTION 6.11. LEASES; SUBORDINATION AGREEMENT. Borrower
shall deliver copies of all leases affecting the Mortgaged
Property entered into before or after the Closing Date, along
with a lease subordination agreement executed by each tenant in
form acceptable to Lender. Each lease shall
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contain a
requirement that the tenant, upon Lender's request, shall execute
and deliver an estoppel certificate stating that the lease is not
in default and that no defenses or set offs exist with regard
thereto.
SECTION 6.12. FURTHER DOCUMENTS. To the end that the
agreements of Borrower set forth in the Loan Documents shall be
effectively and fully performed and the intent and purpose of the
Loan Documents be fulfilled, Borrower agrees to execute such
additional instruments as may reasonably be required by Lender
from time to time in order to carry out the provisions of the
Loan Documents, or for the purpose of protecting, maintaining, or
enforcing Lender's security for Loan.
SECTION 6.13. LEGAL EXISTENCE, PROPERTIES, ETC. Borrower
will do or cause to be done substantially all things necessary to
preserve and keep in full force and effect its existence, rights,
and franchises, and comply with all laws applicable thereto; at
all times maintain, preserve, and protect all franchises and
trade names and preserve all of the remainder of its properties
used or useful in the conduct of its business, and keep the same
in good repair, working order, and condition, and from time to
time make, or cause to be made, all needful and proper repairs,
renewals, replacements, and improvements thereto so that the
business carried on in connection therewith may be properly and
advantageously conducted at all times; and at all times keep its
insurable properties adequately insured and maintain such other
insurance as may be required by law or as may be reasonably
required in writing by Lender.
SECTION 6.14. CONDUCT OF BUSINESS. Borrower will continue
to conduct, in the ordinary course, the business in which it is
presently engaged, and in conduct of such business, to comply
with all applicable laws and regulations of the United States or
any state or states thereof, or of any political subdivision
thereof, and of any governmental authority. As long as Borrower
owes all or any part of its obligation to Lender, all "Major
Decisions" with respect to Borrower must receive the prior
written approval of Lender. For purposes of this Section 6.14,
"Major Decisions" shall mean and consist of the following:
(a) Increasing Borrower's line of credit above the amount of the
line that exists on the date of this Agreement or otherwise
obtaining credit for Borrower or refinancing existing
indebtedness;
(b) Relocating Borrower or opening a new location;
(c) Acquiring or entering into a new business or businesses,
merging with or into any other corporation, entering into a joint
venture, partnership or similar arrangement or conducting or
carrying on the business of Borrower through any business entity
other than Borrower;
(d) Making distributions to Shareholders;
(e) Selling, leasing, exchanging, mortgaging, pledging, or other
transfer of assets of Borrower, other than inventory sold in the
ordinary course of business;
(f) Approving all capital expenditures or individual
transactions, including any related series of transactions, in
excess of $10,000.
(g) Granting any mortgage, lien, or other encumbrance on any of
Borrower's property or giving any Company guarantee;
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(h) Approving all transactions between Borrower and a
Shareholder or related person of a Shareholder (except as
provided below);
(i) Changing any underwriter, broker, accountant, consultant, or
legal counsel for Borrower;
(j) Making any loans or extending any credit on behalf of
Borrower, except to customers in the ordinary course of business;
(k) Taking any action by Borrower to commence any case,
proceeding, or other action (a) under any existing or future law
of any jurisdiction relating to bankruptcy, insolvency,
reorganization, or relief of debtors seeking to have an order for
relief entered with respect to Borrower, or seeking to adjudicate
Borrower a bankrupt or insolvent, or seeking reorganization,
winding-up, liquidation, dissolution, or other relief with
respect to Borrower or Borrower's debts, or (b) seeking
appointment of a receiver, trustee, custodian, or other similar
official for Borrower or for all or any substantial part of
Borrower's assets, or making a general assignment for the benefit
of Borrower's creditors.
(l) Taking any action which would alter Borrower's status as a
Subchapter "S" corporation;
(m) Increasing the compensation of Granjac Resorts, Inc. above
the amount stated in any existing Management Agreement or
approving any amendment to or cancellation of the Management
Agreement on behalf of Borrower; and
(n) Taking any other action outside the normal and ordinary
course of business that has a material effect on Borrower's
business operation or financial position.
In addition, any action by Borrower to materially amend,
modify, or supplement any document, instrument, transaction, or
other matter described above as a Major Decision shall require
the approval of Lender of the same as so amended, modified, or
supplemented, if it would be inconsistent with the terms
previously approved with respect thereto. Notwithstanding
anything to the contrary contained herein, the parties
acknowledge and agree to payments of management fees to Granjac
Resorts, Inc. of 4% of gross revenues, and to InterBank/Xxxxxx
Hospitality of 1% of gross revenues, the agreements for which
shall not be changed without Lender' prior written approval.
Xxxxxxx X. Xxxxxx shall have complete discretion over
matters involving Borrower's employees; provided, however, that
no family member of an officer or employee of Borrower may be
hired by Borrower without the prior approval of Lender, except
Xxxxx X. Xxxxxx, Secretary of Borrower, will be employed by
Borrower and his compensation shall be determined with the
approval of Lender. Notwithstanding the previous sentence, such
family members may be hired by Borrower without Lender's approval
at nominal compensation to assist with promotions, such as grand
openings.
SECTION 6.15. PAYMENT OF INDEBTEDNESS, TAXES, ETC.
Borrower shall (a) pay all of their indebtedness and obligations
promptly and in accordance with normal terms; and (b) pay and
discharge, or cause to be paid and discharged, promptly all
taxes, assessments, and governmental charges or levies imposed
upon either of them, or upon their income and profits, upon any
of their property, real personal, or mixed, and upon any part
thereof, before the same shall become in default, as well as all
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lawful claims for labor, materials, and supplies, or otherwise
which, if unpaid, might become a lien or a charge upon such
properties or any part thereof.
SECTION 6.16. OTHER INDEBTEDNESS. Borrower shall not
create, incur, or assume any indebtedness for borrowed money, the
deferred purchase price of property, or obligations pursuant to
lease agreements, except: (a) indebtedness represented by the
Note; (b) indebtedness subordinated to Lender in form and
substance satisfactory to Lender and its legal counsel; (c) short-
term indebtedness to Lender; and (d) unsecured indebtedness in
the ordinary course of business.
SECTION 6.17. GUARANTEES. Borrower shall not guarantee,
endorse, become a surety, or an accommodation party, or
otherwise, in any way, extend credit or become responsible for an
indebtedness or other liability of any other individual,
partnership, corporation, or other organization, except
guarantees and endorsements made in connection with the deposit
of items for collection or credit in the ordinary course of
business.
SECTION 6.18. CHANGES IN GOVERNING DOCUMENTS OR ACCOUNTING
METHODS. Borrower shall not amend in any respect its Partnership
Agreement, Articles of Incorporation, or Bylaws, or change its
accounting methods or practices or its depreciation or
amortization policies or rates, except as required to comply with
generally accepted accounting principles, which would adversely
affect Borrower's ability to perform the obligations under the
Loan Documents. Notwithstanding the foregoing, to the extent
economically feasible, Borrower agrees to cooperate with Lender's
reasonable requests in connection with Lender's efforts to
qualify the Loan for inclusion in a Real Estate Investment Trust
being established by Lender pursuant to the provisions of the
Internal Revenue Code. Borrower's cooperation may require, for
example but not by way of limitation, that Lender's interest in
the Loan be recast as a lessor's interest in a lease t Borrower,
or some other form of interest in real property.
SECTION 6.19. FINANCIAL STATEMENTS. Borrower will provide
Lender with current financial statements on a monthly basis on or
before the 15th day of each month and will provide complied
statements annually within 90 days of year end, with the
statements of income, retained earnings, and changes in financial
conditions of Borrower, all in reasonable detail and stating in
comparative form the corresponding figures for the previous
fiscal year. Guarantors shall provide personal financial
statements on Lender's form within 120 days of year end, and
copies of Federal Income Tax Returns within 30 days after filing.
Financial statements delivered shall be prepared on the basis of
Generally Accepted Accounting Principles, consistently applied.
SECTION 6.20. SALES OF ASSETS, CONSOLIDATION, MERGER, ETC.
Borrower will not (a) sell, lease, transfer, or otherwise dispose
of all or a substantial portion of its properties or assets to
any person or entity; or (b) consolidate with or merge into any
corporation; or (c) invest in, transfer any assets to, or do
business through any subsidiary; or (d) acquire all or
substantially all of the properties or assets of any other
person, enter into any arrangement, directly or indirectly, with
any person whereby Borrower shall sell or transfer any property,
real or personal, used or useful in its business, whether now
owned or hereafter acquired, and thereafter rent or lease such
property which Borrower intends to use for substantially the same
purposes as property being sold or transferred.
SECTION 6.21. HAZARDOUS MATERIALS; ENVIRONMENTAL LAWS.
Borrower shall keep and maintain the Mortgaged Property in
compliance with, and shall not cause or permit the Mortgaged
Property to be in violation of any federal, state or local laws,
ordinances or regulations relating to environmental conditions
on, under or about the Mortgaged Property, including but not
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limited to, soil and ground water conditions. Borrower shall
immediately advise Lender in writing of: (a) any and all
enforcement, cleanup, removal, or other governmental or
regulatory actions instituted, completed, or threatened pursuant
to any applicable federal, state or local laws, ordinances, or
regulations relating to any Hazardous Material affecting and
Mortgaged Property ("Hazardous Materials Laws"); (b) all claims
made or threatened by any third party against Borrower or the
Mortgaged Property relating to damage, contribution, cost
recovery compensation, loss or injury resulting from any
Hazardous Materials (the matters set forth in clauses (a) and (b)
above are hereinafter referred to as "Hazardous Materials
Claims"); and (c) Borrower's discovery of any occurrence or
condition on any real property adjoining or in the vicinity of
the Property, which if any such occurrence or condition had
occurred on Borrower's property would have been an event
described as a Hazardous Materials Claim.
Without Lender's prior written consent, which shall not be
unreasonably withheld, Borrower shall not take any remedial
action in response to the presence of any Hazardous Materials on,
under, or about the Mortgaged Property, nor enter into any
settlement agreement, consent, decree or other compromise in
respect to any Hazardous Material Claims which remedial action,
settlement, consent or compromise might, in Lender's reasonable
judgement, impair the value of Lender's security hereunder,
provided, however, that Lender's prior consent shall not be
necessary in the event that the presence of Hazardous Materials
on, under, or about the Mortgaged Property either poses an
immediate threat to the health, safety, or welfare of any
individual or is of such a nature that immediate remedial
response is necessary and it is not possible to obtain Lender's
consent before taking such action, provided that in such event
Borrower shall notify Lender as soon as practicable of any action
so taken. Lender agrees not to withhold its consent, where such
consent is required hereunder, if either (a) a particular
remedial action is ordered by a court of competent jurisdiction;
or (b) Borrower establishes to the reasonable satisfaction of
Lender that there is no reasonable alternative to such remedial
action which would result in less impairment of Lender's security
hereunder.
SECTION 6.22. INDEMNIFICATION FOR HAZARDOUS MATERIAL
CLAIMS. Borrower hereby agrees to indemnify and hold harmless
Lender, its directors, officers, employees, agents, successors
and assigns from and against any and all claims, losses, damages,
liabilities, fines, penalties, charges, administrative and
judicial proceedings and orders, judgments, remedial action
requirements, enforcement actions or any kind and all costs and
expenses incurred in connection therewith (including but not
limited to attorneys' fees and expenses), arising directly or
indirectly, in whole or in part, out of, or attributable to:
(a) the presence on or under the Mortgaged Property of any
Hazardous Materials (as defined by applicable laws) or any
releases or discharges of any Hazardous Materials on, under, or
from the Mortgaged Property; or
(b) any activity on or undertaken on or off the Mortgaged
Property, whether prior to or during the term of this Loan, and
whether by Borrower or any predecessor in title or any employees,
agents, contractors or subcontractors of Borrower or any
predecessor in title, or any third persons at any time occupying
or present on the Mortgaged Property, in connection with the
handling, treatment, removal, storage, use, generation, release,
threatened release, discharge, or presence of any Hazardous
Materials at any time located or present on or under the
Mortgaged Property; and including, without limitation:
(c) all foreseeable consequential damages resulting from the
events described in (a) and (b);
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(d) the costs of any required or necessary repair, cleanup,
decontamination, detoxification of the Mortgaged Property,
transport, or disposal of any Hazardous Materials, and the
preparation and implementation of any closure, remedial, or other
required plans; and
(e) all reasonable costs and expenses incurred by Lender in
connection with clauses (a), (b), (c), or (d), including, but not
limited to, reasonable attorneys' fees.
The foregoing indemnity shall further apply to any residual
contamination on or under the Mortgaged Property, or affecting
any natural resources, and to any contamination of any property
or natural resources arising in connection with the generation,
use, handling, storage, transport, or disposal of any such
Hazardous Materials, and irrespective of whether any of such
activities were or will be undertaken in accordance with
applicable laws, regulations, codes, and ordinances.
ARTICLE VII
EVENTS OF DEFAULT: NOTICE: REMEDIES
SECTION 7.01. EVENTS OF DEFAULT. An "Event of Default"
shall exist if any one or more of the following events or
conditions shall occur and be continuing:
(a) A default or an "Event of Default", as defined in the
Shareholder Agreement, the Security Agreement, Note, or any other
Loan Documents, shall occur and be continuing for any period of
time in excess of the grace period, if any, applicable to that
default.
(b) Any representation or warranty made by or on behalf of
Borrower in, or relating to, the Loan Documents, or in any
certificate, financial statement, or other document furnished to
Lender pursuant to the provisions hereof, shall prove to have
been raise or misleading in any material respect when made.
(c) Borrower shall fail to perform or observe any covenant,
condition, or provision contained in this Agreement, or other
Loan Documents, and such failure shall not be remedied within any
period of time, if any, that Lender may elect to grant, in
writing, to Borrower to cure this failure.
(d) An order or decree is issued by any court of competent
jurisdiction or any Governmental Authority enjoining or
prohibiting the carrying out of the terms and conditions hereof
or of any other Loan Documents, and such proceedings are not
discontinued or such order or decree is not vacated within thirty
(30) days.
(e) Borrower shall (i ) apply for or consent to the
appointment of a receiver, trustee, or liquidator of itself, or
of all or of a substantial party of its assets; (ii) to be unable
or admit in writing its inability to pay its debts as they come
due; (iii) make a general assignment for the benefit of
creditors; (iv) be adjudicated a bankrupt or insolvent; or (v)
file a voluntary petition in bankruptcy or a petition or an
answer seeking reorganization or an arrangement with creditors or
seeking to take advantage of any insolvency law.
(f) An attachment or any other lien against the Mortgaged
Property shall be issued or entered and shall remain undischarged
or unbonded for more than ten (10) days after filing thereof.
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(g) Levy is made under any process on, or a receiver be
appointed for the Mortgaged Property.
(h) Lender determines that a material adverse change has
occurred in the financial condition of Borrower or Guarantors.
(i) A default by Borrower in the performance or observance
of any provision of any lease, contract, agreement, mortgage,
promissory note, instrument, or other obligation, running in
favor of, or to which Lender is a party, or any default under any
other note, mortgage or other document, evidencing or securing
indebtedness of Borrower, in favor of the Lender or any affiliate
of the Lender.
SECTION 7.02 NOTICE OF DEFAULT. Notwithstanding any of the
provisions in the Loan Documents, Lender shall provide Borrower
by United States mail, prepaid postage, written notice of any
nonmonetary Event of Default under the Loan Documents, and
Borrower shall have twenty (20) days from receipt thereof to cure
said Event of Default. If Borrower fails to so cure the Event of
Default, Lender may then proceed, without further notice to
Borrower, to exercise any and all remedies available to it.
Borrower shall be deemed to have received said written notice
three (3) days after it is deposited in the United States mail
unless it is actually received earlier. Lender, however, shall
have no obligation to provide notice of an occurrence of any
monetary Event of Default to Borrower. Lender may, upon the
occurrence of any monetary Event of Default, proceed to exercise
any remedy it has under the Loan Documents or applicable law
without giving notice thereof to Borrower.
SECTION 7.03. REMEDIES. If an Event of Default shall
occur, Lender may, at its option:
(a) Terminate any obligation of Lender to make any further
Disbursements.
(b) Declare all amounts previously disbursed to or for the
account of Borrower under the Loan Documents, and all accrued and
unpaid interest thereon, and all other amounts due under the Loan
Documents to be immediately due and payable without presentment,
demand, protest, or further notice of any kind (all of which are
expressly waived.)
(c) Exercise its rights and remedies under the Loan
Documents in accordance with the respective terms contained
therein.
(d) Apply for the appointment of a receiver for the purpose
of preserving the Mortgaged Property and/or Borrower's business.
Borrower shall be entitled to the appointment of said receiver as
a matter of right, and without regard to the value of any
collateral or other security held by Lender, and Borrower hereby
waives and relinquishes the right to prior notice of the
appointment of such receiver.
(e) Employ security watchmen in order to protect and
preserve the Mortgaged Property.
(f) Cumulatively, exercise any other remedy specifically
granted hereunder or now or hereafter existing in equity at law,
by virtue of statute or otherwise.
The failure by Lender to exercise the remedies herein
provided shall not preclude the resort to any other remedy or
remedies, nor shall the exercise of the remedies herein provided
prevent the subsequent or concurrent resort to any other remedy
or remedies which by law or equity shall be vested in Lender for
the recovery of damages or otherwise upon the Event of a Default.
No delay or omission by Lender in exercising any right or remedy
accruing upon the happening of an Event of Default shall
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impair
any such right or remedy or shall be construed as a waiver of any
such default, and every right and remedy hereby conferred upon
Lender may be exercised from time to time and as often as shall
be deemed expedient by Lender. No waiver of any Event of Default
shall extend to or affect any other Event of Default.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. JOINT AND SEVERAL LIABILITY. If Borrower
consists of more than one person or entity, each will be jointly
and severally liable to Lender for the faithful performance of
the Loan Documents.
SECTION 8.02. AUTHORITY TO FILE NOTICES. Borrower
Irrevocably appoints Lender as its attorney-in-fact, with full
power of substitution, to file for record, at Borrower's cost and
expense, and in Borrower's name, any notices of abandonment or
any other notices that Lender considers necessary or desirable to
protect its security.
SECTION 8.03. ACTIONS. Lender shall have the right, but
not the obligation, to commence, appear in, and defend any action
or proceeding which might affect its security or its rights,
duties, or liabilities relating to Loan, the Mortgaged Property,
or this Agreement. Borrower will pay promptly on demand all of
Lender's reasonable out-of-pocket costs, expenses, legal fees,
and disbursements incurred in those actions or proceedings.
SECTION 8.04. SUCCESSORS AND ASSIGNS; PARTICIPATIONS. This
Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns;
provided, however, that Borrower may not assign this Agreement or
any Loan funds, or assign or delegate any of its rights or
obligations under this Agreement or the Loan Documents, without
the prior written consent of Lender. Lender shall have the right
to sell participations in Loan to any other persons or entities
without the consent of or notice to Borrower; provided that no
such action by Lender shall relieve Lender of its obligations to
make disbursements of Loan funds when required by this Agreement.
Lender may disclose to any participants or prospective
participants any information or other data or material in
Lender's possession relating to Borrower, Loan, and the Mortgaged
Property, without the consent of, or notice to, Borrower. Lender
may also assign all or a portion of its rights under this
Agreement and the Loan Documents to another person or entity. In
such event, Borrower agrees to attorn to such assignees and to
execute such modifications thereto, or other documentation as may
be required to facilitate such assignment, providing such
modifications do not materially add to the obligations of
Borrower.
SECTION 8.05. PAYMENTS, ETC. All payments and prepayments
of principal, interest, and other amounts payable to Lender
hereunder or under any other Loan Document shall be made and in
such coin or currency of the United States of America, as of the
time of that payment is legal tender for the payment of public
and private debt, and in immediately available funds at Lender's
principal offices at 0000 Xxxxxxxxxxx Xxxxxx, XX, Xxxxxxxxxx, XX
00000, at not later than 2:00 p.m., Eastern Standard Time, on the
date on which such payment shall become due. If any principal or
interest on Loan or any other amount payable by Borrower
hereunder falls due on a Saturday, Sunday, or public holiday at
the place of payment, then such due date shall be extended to the
next succeeding full business day at such place, and interest
shall be payable in respect of each such extension of principal.
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SECTION 8.06. NO WAIVER; CONSENT. Any waiver by Lender
must be in writing and will not be construed as a continuing
waiver. No waiver will be implied from any course of conduct, or
any delay or failure by Lender to take action on account of any
Event of Default. Consent by Lender to any act or omission by
Borrower will not be construed to be a consent to any other
subsequent act or omission.
SECTION 8.07. RECEIPT OF MONIES. The receipt by Lender of
any sum of money pursuant to this Agreement with knowledge of the
breach of any term, covenant, or provision of this agreement
shall not be deemed a waiver of such breach. No payment by
Borrower or receipt by Lender of a lesser amount of any sum of
money herein stipulated shall be deemed to be other than on
account of the next due payment under the Loan or this Agreement,
nor shall any endorsement or statement on any check, or any
letter accompanying any check, be deemed an accord and
satisfaction, and Lender may accept such payment or check without
prejudice to Lender's right to recover the balance of any payment
or other monies under this Agreement, or pursue any of the
remedies in this Agreement or the Loan Documents provided.
SECTION 8.08. ENTIRE AGREEMENT; AMENDMENTS. This Agreement
and the other Loan Documents represent and constitute the entire
understanding and agreement between the parties hereto with
respect to the subject matter hereof, superseding all prior oral
or written negotiations or understandings between the parties.
Neither this Agreement nor the other Loan Documents, nor any
provisions thereof, may be changed, waived, discharged, or
terminated, except by an instrument in writing signed by the
party against whom enforcement of the change, waiver, discharge,
or termination is sought.
SECTION 8.09. NO THIRD-PARTY RIGHTS. This Agreement is
intended for the sole and exclusive benefit of the parties
hereto, and nothing in this Agreement whether expressed or
implied, shall be construed to give to any person, other than the
parties hereto, any legal or equitable right, remedy, or claim in
respect to this Agreement or the loan funds to be disbursed
hereunder.
SECTION 8.10. INDEMNIFICATION. Borrower agrees to
protect, indemnify, defend, and save harmless, Lender and its
directors, officers, agents, and employees from and against any
and all liabilities, expense, damage of any kind or nature, and
from any suits, claims, or demands, including, without
limitation, reasonable legal fees and expenses on account of or
resulting from (a) the development, ownership, condition, sale,
financing, management, or operation of the Improvements and the
Mortgaged Property; or (b) this Agreement (Including expenses and
costs that Borrower is obligated to pay hereunder) or other Loan
Documents, unless said suit, claim, or demands are caused by
negligence or willful malfeasance of Lender. Upon demand by
Lender, Borrower will defend any action or proceeding brought
against Lender alleging a claim covered by this section, or
Lender may elect to conduct its own defense at the expense of
Borrower. The provisions of this section will survive the
termination of this Agreement and the repayment of loan.
SECTION 8.11. ATTORNEYS' FEES. If any lawsuit is commenced
to enforce any of the terms of the Loan Documents, the prevailing
party will have the right to recover its reasonable attorneys'
fees and costs of suit, both at the trail and appellate level,
from the other party.
SECTION 8.12. SEVERABILITY. The invalidity or
unenforceability of any one or more of the provisions of this
Agreement will in no way affect any other provisions.
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SECTION 8.13. INTERPRETATION; CONFLICTS. Whenever the
context requires, all words used in the singular will be
construed as having been used in the plural, and vice versa, and
each gender will include any other gender. The captions of the
sections of this Agreement are for convenience only and do not
define or limit any terms or provisions. Nothing herein shall be
construed to waive or diminish any right or security of Lender
under the other Loan Documents. It is the purpose and intent
hereof to provide safeguards, protections, and rights for Lender
in addition to those provided in the other Loan Documents and to
better secure Loan. This Agreement shall not be construed more
strongly against any party regardless of who was more responsible
for its preparation. In the event of a conflict between
provisions in the Loan Documents, the more specific provision
shall prevail.
SECTION 8.14. COUNTERPARTS. This Agreement and any other
agreement executed pursuant to it may be executed in any number
of counterparts, each of which shall be deemed to be an original,
all of which taken together shall constitute one and the same
instrument, and shall become effective when one or more
counterparts have been signed by each party hereto and delivered
to Lender.
SECTION 8.15 TIME IS OF THE ESSENCE. Time is of the essence
of this Agreement.
SECTION 8.16. INTEREST. Anything in this Agreement or the
Loan Documents to the contrary notwithstanding, it is understood
and agreed by the parties that in no event shall interest
(including any charge or fee held to be interest by a court of
competent jurisdiction ) accrue or be payable under Loan in
excess of the highest contract rate allowed by law for the time
such indebtedness shall be outstanding and unpaid, and if by
reason of the acceleration of maturity of such indebtedness, or
for any other reason, interest in excess of the highest legal
rate shall be due or paid, any such excess shall constitute and
be treated as a payment on the principal thereof, and shall
operate to reduce such principal by the amount of such excess, or
if in excess of the principal indebtedness, such excess shall be
waived or refunded to Borrower, as appropriate, provided such
credit will not cure any Even of Default.
SECTION 8.17 ADDITIONAL TAXATION. If in the future, the
interest payable to Lender under the Loan Documents, or any other
amount received by lender from Borrower under Loan, shall be
taxable, in whole or in part, pursuant to the laws of the United
States of American, State of Florida, or any subdivision thereof
(excluding federal or state income tax), Borrower shall pay the
same. In the even such payment, when added to interest, shall
exceed the lawful interest rate under the laws of Florida,
Lender, or its assigns, may at Lender's option, require full
payment of Loan, including principal and accrued interest thereon
upon sixty (60) days prior written notice.
SECTION 8.18. RELIANCE O COVENANTS. All covenants,
agreements, representations, and warranties made herein or in any
other documents delivered by or on behalf of borrower pursuant to
or in connection herewith are material and shall be deemed to
have been relied upon by Lender, notwithstanding any
investigation heretofore or hereafter made by Lender, and, except
as may otherwise be exclusively set forth herein, all such
covenants, agreements, warranties, and representations shall
survive the making of Loan herein contemplated, and shall remain
in effect until payment in full of Loan.
SECTION 8.19. NO AGENCY. Lender is not the agent or
representative of Borrower, and Borrower is not the agent or
representative of Lender, and nothing in this Agreement shall be
construed to make Lender liable to anyone for goods delivered or
services performed by them upon the Land or for debts or claims
accruing to them against Borrower. Nothing herein shall be
construed to create a contractual relationship between Lender and
anyone supplying labor or Materials to the Land. The Lender's
obligations are not for the benefit of or enforceable by any
successor to or assignee of Borrower except as specifically
provided otherwise herein.
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SECTION 8.20. LENDER NOT PARTNER OF BORROWER.
Notwithstanding anything to contrary herein contained or implied,
Lender by this Agreement or by any action pursuant thereto, shall
not be deemed a partner of or a joint venturer with Borrower, and
Borrower hereby indemnifies and agrees to hold Lender harmless
(including payment of all reasonable attorneys' fees) from any
and all claims or damages resulting from such a construction of
the parties' relationship.
SECTION 8.21. BORROWER'S ESTOPPEL CERTIFICATE. At Lender's
request at any time or times after Closing Date, borrower shall
execute an estoppel certificate stating the unpaid amount of Loan
and that no defense or setoffs exist with respect thereto.
SECTION 8.22. CHOICE OF LAW; VENUE. The validity,
interpretation, and enforcement of the Loan documents, and all
other instruments and documents executed and delivered in
connection with this transaction shall be governed by the laws of
Florida, excluding those laws relating to resolution of conflict
between laws of different jurisdictions. The parties agree that
in the even of the institution of a legal or equitable proceeding
arising out of the Loan Documents that the venue for any such
proceeding or action shall be in Xxxxxxx County, Florida.
SECTION 8.23. COMMUNICATIONS. Any notice, request, demand,
consent, approval, or other communication provided or permitted
hereunder shall be in writing and be sent by United States first
class mail or registered mail return receipt requested, postage
prepaid, addressed to the party for whom it is intended at the
following addresses:
If to Borrower:
GANESH HOSPITALITY, INC.
GRANJAC RESORTS, INC.
Attention: Xxxxxxx X. Xxxxxx
0000 Xxxxx Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000
If to Lender:
INTERBANK FUNDING CORPORATION
0000 Xxxxxxxxxxx Xxxxxx XX
Xxxxxxxxxx, XX 00000
providing, however, that either party may change its address or
specify additional copy recipients for purposes of receipt of any
such communication by giving at least ten (10) days written
notice of such change to the other party in the manner above
prescribed.
SECTION 8.24. FREE AND VOLUNTARY ACT OF BORROWER. This
Agreement is freely and voluntarily entered into by Borrower upon
advice of legal counsel or following reasonable opportunity to
consult legal counsel, and following negotiations with Lender
and/or Lender's counsel concerning various provisions hereof.
SECTION 8.25 WAIVER OF JURY TRIAL. FOR AND IN CONSIDERATION
OF LENDER'S ADVANCEMENT OF THE PRINCIPAL SUM, HEREUNDER IN THE
AMOUNT OF $950,000.00, THE UNDERSIGNED, BEING AN EXPERIENCED
PARTICIPANT IN
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SOPHISTICATED LOAN TRANSACTIONS, AND HAVING
CONSULTED WITH COUNSEL OF ITS CHOOSING, HEREBY WAIVES ANY RIGHT
TO TRIAL BY JURY WITH RESPECT TO ANY ACTION OR PROCEEDING (1)
BROUGHT BY THE UNDERSIGNED, THE HOLDER OR ANY OTHER PERSONS
RELATING TO (A) THE LOAN OR (B) THE SECURITY DOCUMENTS OR (2) TO
WHICH THE HOLDER IS A PARTY. THE UNDERSIGNED HEREBY AGREES THAT
THIS NOTE CONSTITUTES A WRITTEN CONSENT TO WAIVER OF TRAIL BY
JURY, AND THE UNDERSIGNED DOES HEREBY CONSTITUTE AND APPOINT THE
HOLDER ITS TRUE AND LAWFUL ATTORNEY IN FACT, WHICH APPOINTMENT IS
COUPLES WITH AN INTEREST, AND THE UNDERSIGNED DOES HEREBY
AUTHORIZE AND EMPOWER THE HOLDER, IN THE NAME, PLACE, AND STEAD
OF THE UNDERSIGNED, TO FILE THIS NOTE WITH THE CLERK OR JUDGE OF
ANY COURT OF COMPETENT JURISDICTION AS A WRITTEN CONSENT TO
WAIVER OF TRIAL BY JURY. THE UNDERSIGNED ACKNOWLEDGES THAT ITS
WAIVER OF TRIAL BY JURY HAS BEEN MADE KNOWINGLY, INTENTIONALLY
AND WILLINGLY BY THE UNDERSIGNED AS PART OF A BARGAINED FOR LOAN
TRANSACTION.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement the day and year first above written.
"LENDER"
INTERBANK FUNDING CORPORATION
A Delaware Corporation
By:
"BORROWER"
GANESH HOSPITALITY, INC.
A Florida Corporation
By:
AND
GRANJAC RESORTS, INC.
A Florida Corporation
By:
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INTERBANK FUNDING CORPORATION
COMMERICAL LOAN NOTE
Business Purpose
$950,000.00 Sarasota
Florida
June 23, 1999
FOR VALUE RECEIVED, the undersigned ("Borrower"), jointly
and severally if more than one, promise to pay to the order of
INTERBANK FUNDING CORPORATION (hereinafter called the "Lender")
which term shall include any holder hereof) at such place as the
Lender may designate or, in the absence of such designation, at
any of the Lender's offices, the sum of Nine Hundred Fifty
Thousand and No/100 Dollars ($950,000.00) (hereinafter called the
"Principal Sum"), together with interest as hereinafter provided.
The undersigned promise to pay the Principal Sum and the interest
thereon at the time(s) and in the manner(s) hereinafter provided
in this note (this "Note").
This Note is executed and the advances contemplated
hereunder are to be made pursuant to a Loan Agreement
(hereinafter called the "Loan Agreement") of even date herewith,
and all the covenants, representations, agreements, terms and
conditions therein, including but not limited to additional
conditions of default, are incorporated herein as if fully
rewritten.
INTEREST
Interest will accrue on the unpaid balance of the Principal Sum
until paid at a rate of twelve percent (12%) per annum, which
interest shall be paid monthly by Borrower as a preferred return
to Lender after payment of operating cost and fixed expenses, all
reserves, taxes and debt service on the first mortgage
encumbering real property owned by Ganesh Hospitality, Inc., but
excluding management fees (the "Preferred Returned").
Upon default, whether by acceleration or otherwise, interest will
accrue on the unpaid balance of the Principal Sum and unpaid
interest if any, until paid at a rate of interest per annum,
equal to the highest interest rate permitted by law.
All interest shall be calculated on the basis of a 360 day year
for the actual number of days the Principal Sum of any part
thereof remains unpaid. There shall be no penalty for
prepayment.
GAURANTEED RATE OF RETURN AND EQUITY PARTICIPATION
After payment to lender of the Preferred Return and payment of
management fees, Borrower will pay to Lender fifty percent (50%)
of remaining cash flow from operations of Ganesh Hospitality,
Inc., until Lender has received a twenty percent (20%) internal
rate of return ("IRR") on its capital (including in IRR all fees
paid to Lender in connection with the Loan). Notwithstanding
anything to the contrary herein, following any fiscal year (June
23 to June 22) prior to the maturity date of extended maturity
date in which Lender does not receive and IRR of 20%, the
shortfall will be accrued and all cash flow of Ganesh
Hospitality, Inc. shall be paid to Lender until Lender's IRR for
the term of the Loan through the applicable date of payment
equals 20%.
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After an IRR of 20% has been achieved, and continuing until a
Final Disposition, the cash flow of Ganesh Hospitality, Inc.
shall be distributed forty percent (40%) to Lender, and sixty
percent (60%) to Xxxxxxx X. Xxxxxx and Xxxxx X. Xxxxxx, as their
interests may appear. For purposes of this provision, "the cash
flow of Ganesh Hospitality, Inc." shall mean Ganesh Hospitality,
Inc.'s total receipts from operations, including any proceeds of
refinance of sale, less payment of all operating costs and fixed
expenses, including management fees, taxes all reserves, debt
service on the fist mortgage encumbering the real property owned
by Ganesh Hospitality, Inc., the Preferred Return and Lender's
IRR. "Final Disposition" shall mean conveyance of the real
property of Ganesh Hospitality, Inc. to an unrelated third party
for consideration equal to or greater than the fair market value
of the property. A sale to a related party shall not constitute
a Final Disposition.
MANNER OF PAYMENT
Interest on the unpaid principal balance of the Note shall be
paid monthly, commencing on the first day of August 1999, and on
the first day of each month thereafter. The Principal Sum and
any accrued interest shall be due and payable on or before June
22, 2002; provided however, that Borrower is not then in default.
Borrower shall have the option to extend the maturity date for an
additional year, upon the approval of the Lender, which approval
shall not be unreasonably withheld.
LATE CHARGE
Any installment of other payment not made within 10 days of the
date such payment or installment is due shall be subject to a
late charge equal to 5% of the amount of the installment or
payment.
SECURITY
As security for the payment of the obligations evidenced hereby,
and of all other obligations and liabilities of the undersigned,
and each of them, to the Lender, whether now existing or
hereafter arising, the undersigned hereby grant the Lender a
security interest or mortgage in the following property,
including all substitutions and additions thereto, and the
proceeds thereof (all, together with any other property in which
the Lender shall at any time be given a security interest,
hereinafter referred to as the "Collateral"):
25% of the outstanding shares of Ganesh Hospitality,
Inc., by pledge or transfer; and all of the shares of
Granjac Resorts, Inc., by pledge, and an assignment of
the Management Contract between the undersigned and
Granjac Resorts, Inc.
If, at the time of payment and discharge hereof, any of the
undersigned shall be then directly or contingently liable to the
Lender as maker, endorser, surety or guarantor of any other note,
xxxx of exchange, or other instrument, then the Lender may
continue to hold any of the Collateral as security therefor, even
though this Note shall have been surrendered to the undersigned.
The Lender shall not be bound to take any steps necessary to
preserve any rights in the Collateral against prior parties. If
any obligation evidenced by this Note is not paid when due, the
Lender may, at its option, demand, xxx for, collect or make any
compromise or settlement it deems desirable with reference to the
Collateral, and shall have the rights of a secured party under
the laws of the State of Florida, and the undersigned shall be
liable for any deficiency.
DEFAULT
-E-138-
Upon the occurrence of any of the following events:
(a) the undersigned fail to make any payment of principal on any
note executed in connection with the Loan Agreement on or before
the date such payment is due;
(b) the undersigned fail to make any payment of interest on any
note executed in connection with the Loan Agreement on or before
five days after the date such payment is due;
(c) the undersigned fail to perform or observe any covenant
contained in the Loan Agreement;
(d) the undersigned fail to comply with any other provision of
the Loan Agreement, and such failure continues for more than 30
days after such failure shall first become known to any officer
of the undersigned;
(e) any warranty; representation or other statement by or on
behalf of the undersigned contained in the Loan Agreement or in
any instrument furnished in compliance with or in reference to
the Loan Agreement is false or misleading in any material
respect;
(f) the undersigned become insolvent or bankrupt, or make an
assignment for the benefit of creditors, or consent to the
appointment of a trustee, receiver or liquidator;
(g) bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings are instituted by or against the
undersigned and, in the case of any such proceedings being
instituted against the undersigned, remain undismissed for a
period of 60 days;
(h) a final judgment or judgments, from which no further right
of appeal exists, for the payment of money aggregating in excess
of $50,000.00 is or are outstanding against the undersigned and
any one of such judgments has been outstanding for more than 30
days from the date of its entry and has not been discharged in
full or stayed;
(i) the undersigned fail to make any payment or to perform or
observe any covenant owing to the Lender or to any third party
pursuant to any agreement (other than in connection with accounts
payable arising in the ordinary course of business), and any
applicable grace period has expired; or
(j) the property furnished as security declines in value, and
the undersigned do not immediately, upon demand, furnish
additional security satisfactory to the Lender; or
then the Lender may, at its option, without notice or demand,
accelerate the maturity of the obligations evidenced hereby,
which obligations shall become immediately due and payable. In
the event the Lender shall institute any action for the
enforcement or collection of the obligations evidenced hereby;
the undersigned agree to pay all costs and expenses of such
action, including reasonable attorneys' fees, to the extent
permitted by law.
GENERAL PROVISIONS
All of the parties hereto, including the undersigned, and
any indorser, surety, or guarantor, hereby severally waive
presentment, notice of dishonor, protest, notice of protest and
diligence in
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bringing suit against any party hereto, and consent
that, without discharging any of them, the time of payment may be
extended an unlimited number of times before or after maturity
without notice. The Lender shall not be required to pursue any
party hereto, including any guarantor, or to exercise any rights
against any Collateral herefor before exercising any other such
rights.
The obligations evidenced hereby may from time to time be
evidenced by another note or notes given in substitution, renewal
or extension hereof. Any security interest or mortgage which
secures the obligations evidenced hereby shall remain in full
force and effect notwithstanding any such substitutions, renewal
or extension.
The captions used herein are for reference only and shall
not be deemed a part of this Note. If any of the terms or
provisions of this Note shall be deemed unenforceable, the
enforceability of the remaining terms and provisions shall not be
affected. This Note shall be governed by and construed in
accordance with the law of the State of Florida.
WAIVER OF JURY TRIAL
FOR AND IN CONSIDERATION OF LENDER'S ADVANCEMENT OF THE PRINCIPAL
SUM HEREUNDER IN THE AMOUNT OF $950,000.00, THE UNDERSIGNED,
BEING AN EXPERIENCED PARTICIPANT IN SOPHISTICATED REAL ESTATE
VENTURES, AND HAVING CONSULTED WITH COUNSEL OF ITS CHOOSING,
HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY
ACTION OR PROCEEDING (1) BROUGHT BY THE UNDERSIGNED, THE HOLDER
OR ANY OTHER PERSONS RELATING TO (A) THE LOAN OR (B) THE SECURITY
DOCUMENTS OR (2) TO WHICH THE HOLDER IS A PARTY. THE UNDERSIGNED
HEREBY AGREES THAT THIS NOTE CONSTITUTES A WRITTEN CONSENT TO
WAIVER OF TRIAL BY JURY, AND THE UNDERSIGNED DOES HEREBY
CONSTITUTE AND APPOINT THE HOLDER ITS TRUE AND LAWFUL ATTORNEY IN
FACT, WHICH APPOINTMENT IS COUPLED WITH AN INTEREST, AND THE
UNDERSIGNED DOES HEREBY AUTHORIZE AND EMPOWER THE HOLDER, IN THE
NAME, PLACE, AND STEAD OF THE UNDERSIGNED, TO FILE THIS NOTE WITH
THE CLERK OR JUDGE OF ANY COURT OF COMPETENT JURISDICTIONAS A
WRITTEN CONSENT TO WAIVER OF TRIAL BY JURY. THE UNDERSIGNED
ACKNOWLEDGES THAT ITS WAIVER OF TRIAL BY JURY HAS BEEN MADE
KNOWINGLY, INTENTIONALLY AND WILLINGLY BY THE UNDERSUGBED AS PART
OF A BARGAINED FOR LOAN TRANSACTION.
BORROWER
GANESH HOSPITALITY, INC
A Florida corporation
By: _______________________
Xxxxxxx X. Xxxxxx, President
AND
GRANJAC RESORTS, INC.,
A Florida corporation
By: _____________________
Xxxxxxx X. Xxxxxx, President
-E-140-
AGREEMENT NOT TO FURTHER ENCUMBER
THIS AGREEMENT (hereinafter referred to as "this
Agreement"), made and entered into as of the 23 day of June,
1999, by and between INTERBANK FUNDING CORPORATION, a Delaware
corporation (hereinafter referred to as "InterBank"), 0000
Xxxxxxxxxxx Xxxxxx, XX, Xxxxxxxxxx, XX 00000, and GANESH
HOSPITALITY, INC., a Florida corporation, (hereinafter referred
to as "Owner"), 0000 Xxxxx Xxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxx 00000
WITNESSETH
WHEREAS, Owner has requested InterBank to participate in the
purchase of its corporate stock, and InterBank desires to
participate upon the terms and subject to the conditions set
forth in a certain Agreement between the parties of even date
herewith; and
WHEREAS, the principal asset of Owner, a hotel property, is
encumbered by a Mortgage, Security Agreement, and Assignment of
Rents made by Owner to Citrus Bank as security for the
obligations of Owner to Citrus (the "Mortgage"), creating a first
lien on, and security interest in, the property described
therein, as the same may be supplemented or amended from time to
time; and
WHEREAS, InterBank desires certain assurances with respect
to title to the real and personal property and rights in property
described in, and encumbered by the Mortgage (the "Mortgaged
Property"), the real property being more particularly described
in Exhibit A attached hereto and incorporated herein: and
NOW, THEREFORE, for good and valuable consideration, receipt
of which is hereby acknowledged, and intending to be legally
bound hereby the parties covenant and agree as follows:
1. Owner shall not, without the prior written consent of
InterBank, which consent
may be withheld in InterBank's sole discretion, grant or permit
to be created any lien, security interest or other encumbrance,
other than encumbrances existing and of record on the date
hereof, covering any of the Mortgaged.
2. Owner agrees to provide to InterBank Funding Corporation,
Attention: Xxxxx X. Xxxxxxx,
0000 Xxxxxxxxxxx Xxxxxx, XX, Xxxxxxxxxx, XX 00000 ("InterBank"),
copies of all notices to Borrower received by Owner pursuant to
the Mortgage, within 3 business days after receipt of same by
Owner.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement the day and year first written.
"INTERBANK"
INTERBANK FUNDING CORPORATION,
A Delaware corporation
__________________________
Print Witness Name:______________
_____________________________
By:__________________________________________
Xxxxx X. Xxxxxxx, CEO
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Print Witness Name:_______________
________________________________
"OWNER"
GANESH HOSPITALITY, INC.
A Florida corporation
__________________________
Print Witness Name:______________
_______________________________ By:
______________________________________
Xxxxxxx X. Xxxxxx,
President
Print Witness Name:______________
STATE OF District of Columbia
COUNTY OF ________________
The foregoing instrument was acknowledged before me this
13th day of July, 1999, by Xxxxx X. Xxxxxxx as Ceo of INTERBANK
FUNDING CORPORATION, a Delaware corporation, on behalf of the
corporation. He is / X / personally known to me or /____/ has
produced _______________________ as identification and did (did
not) take and oath.
My Commission Expires: 2-14-01
______________________________
NOTARY PUBLIC
______________________________
(Type or Print Name)
(NOTARY SEAL)
STATE OF FLORIDA
COUNTY OF ____________
The foregoing instrument was acknowledged before me
this 23 day of June, 1999, by Xxxxxxx X. Xxxxxx as President
of GANESH HOSPITALITY, INC., a Florida corporation. He is
/___/ personally known to me or /___/ has produced
______________ as identification and did (did not) take an
oath.
My Commission Expires:
______________________________
NOTARY PUBLIC
______________________________
(Type or Print Name)
(NOTARY SEAL)
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EXHIBIT A
Legal Description
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GUARANTY OF PAYMENT AND PERFORMANCE
FOR VALUE RECEIVED and for the purpose of inducing INTERBANK
FUNDING CORPORATION, a Delaware corporation (hereinafter referred
to as "Lender"), 0000 Xxxxxxxxxxx Xxxxxx, XX, Xxxxxxxxxx, XX
00000, to make and/or renew loans in the amount of Nine Hundred
Fifty Thousand Dollars ($950,000.00) to GANESH HOSPITALITY, INC.
and GRANJAC RESORTS, INC., (hereinafter together called
"Borrower"), 0000 Xxxxx Xxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxx 00000,
from which the undersigned, XXXXXXX X. XXXXXX, ("Guarantor")
expects to derive direct monetary benefit, agrees for the benefit
of IFC as follows:
1. Guarantor hereby guarantees to IFC the full and prompt
payment, whether ate stated or accelerated maturity or otherwise,
of any and all principal, interest, damages, losses, costs,
charges, expenses and liabilities, whether fixed or contingent
(collectively the "Indebtedness") and the complete, faithful and
punctual performance of any and all other obligations
(collectively) the "Obligations") of Borrower to IFC under the
terms and conditions of (a) the Loan Agreement, of even date
herewith, by and between Borrower and IFC (the "Loan Agreement")
pertaining to such loan; (b) the Note, of even date herewith,
made by Borrower to IFC, in the principal amount of Nine Hundred
Fifty Thousand Dollars (950,000.00) and any and all renewals,
amendments, modifications, reductions and extensions thereof, and
substitutions therefor (the "Note") evidencing such loan; (c) the
Security Agreement, of even date herewith, granted by Borrower to
IFC (the "Security Agreement") securing such loan; and (d) any
other instrument, document, certificate or affidavit heretofore,
now or hereafter given by Borrower evidencing or securing all or
any part of the foregoing ( the same, together with the Loan
Agreement and the Note collectively the "Loan Documents"),
provided Borrower's nonpayment or nonperformance arises from any
of the following acts of Borrower, or any agent, employee,
officer, director or principal of Borrower:
(a) Any loss, damages, or costs (including attorneys' fees and
litigation
expenses) caused by fraud or intentional material
misrepresentation by any of said parties; or
(b) The intentional misappropriation by Borrower of
any condemnation or insurance proceeds, or other
similar funds or payments attributable to Borrower's
real property which may be paid to Borrower and which
under the terms of the Mortgage (as defined in the Loan
Agreement) or any other Loan Documents should be paid
to Lender; or
(c) The intentional misapplication by Borrower of any
rentals from Borrower's real property received by or on
behalf of Borrower and not used in connection with said
property or as otherwise required by and Loan Document
subsequent to the date on which Lender gives Borrower
written notice of an Event of Default; or
(d) Borrower's intentional failure to pay any
Preferred Return or Internal Rate of Return
attributable to funds received by or on behalf of
Borrower relating to transactions giving rise to
lender's entitlement thereto.
2. Guarantor agrees that, if any of the Indebtedness shall not
be paid or any of the Obligations shall not be performed by
Borrower in accordance with the terms and conditions of the
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Loan
Documents due to any of the foregoing acts, Guarantor shall
immediately so pay such Indebtedness and so perform such
Obligations and the same shall become the direct and primary
indebtedness and obligation of Guarantor.
3. The liability of Guarantor under this Guaranty of Payment
and Performance (the "Guaranty") is independent of the
Indebtedness and Obligations of Borrower, and a separate action
or actions may be brought and prosecuted against Guarantor
regardless of whether any action is brought against Borrower or
whether Borrower be joined in any such action or actions. There
shall be no duty or obligation of IFC to exhaust any remedy in
law or in equity against Borrower or any security before bringing
suit or instituting proceedings of any kind against Guarantor.
4. Guarantor represents that, at the time of the execution and
delivery of the Guaranty, nothing exists to impair the liability
of Guarantor hereunder or the immediate effectiveness of the
Guaranty.
5. The liability of Guarantor hereunder shall continue until
full payment of the Indebtedness and full performance of the
Obligations, it being the intention hereof that Guarantor shall
remain liable for the payment of the Indebtedness and for the
performance of the Obligation notwithstanding any act, omission
or event which might, but for the provisions hereof, otherwise
operate as a legal or equitable discharge of Guarantor. Without
limiting the generality of the foregoing, the liability of
Guarantor hereunder shall not be affected or impaired on account
of the following events:
(a) any execution of any guaranty by any other Guarantors,
whether now or hereafter, or any invalidity or unenforceability
of any such guaranty;
(b) any impairment, modification, release, discharge or
limitation of liability of Borrower or any other Guarantors, or
any stay of lien enforcement proceedings against any of the same
or their respective property, resulting from any receivership,
insolvency, bankruptcy, dissolution, merger, reorganization or
other similar proceeding under any present or future provision of
the United States Bankruptcy Code or any other similar federal or
state law or under the decision of any court;
(c) any voluntary or involuntary liquidation, sale or other
disposition of all or substantially all of the assets of
Borrower;
(d) any determination the Borrower is not liable for the payment
of the Indebtedness or the performance of the Obligations because
the act creating the Indebtedness or obligations is ultra xxxxx,
because the officers or persons creating the Indebtedness or
Obligations acted in excess of their authority, because of any
exculpatory provision in the Loan Documents, because of any
federal or state law or decision of any court, because of any
illegality, irregularity, invalidity or unenforceability, in
whole or in part, of the Loan Documents or otherwise; or
(e) any failure of IFC to accelerate the maturity of the
Indebtedness or the Obligations upon default thereon, to preserve
the liability of any person for payment of the Indebtedness or
performance of the Obligations, to take security therefor, to
perfect its interest in any security taken or to exercise or
enforce, by legal proceedings or otherwise, its rights against
Borrower, any other person or any security taken;
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whether or not Guarantor shall have any notice or knowledge
of any of the foregoing. Further, no delay in exercising
any right, power or privilege under this Guaranty or the
Loan Documents shall operate as a waiver of such right,
power or privilege.
6. Guarantor authorizes IFC to deal in any manner with the
Indebtedness and the Obligations and with the security of
every kind and character given to secure the payment and
performance thereof, provided that the principal portion of
the Indebtedness shall not be increased above the amount
aforesaid without the written consent of Guarantor, and
consents to each action or omission of IFC pursuant to such
authority. Without limiting the generality of the
foregoing, Guarantor authorizes IFC, form time to time and
whether one or more times. To amend, modify or supplement
any or all of the Loan Documents or any right, remedy or
power thereunder, including without limitation, any
condition precedent to loan advances or any right with
respect to requiring additional security; accept additional
or replacement security; or release or surrender security.
7. The liability of Guarantor hereunder and the rights of
IFC hereunder shall be reinstated and revived with respect
to any amount at any time paid against the Indebtedness that
thereafter is required to be resorted or returned by IFC as
a result of insolvency, bankruptcy, reorganization or other
similar proceedings affecting Borrower, Guarantor, any other
Guarantors or any other person, or any of the assets of the
same, or as a result of any other fact or circumstances, all
as though such amount had not been paid.
8. Guarantor waives:
(a) notice of acceptance of the Guaranty by IFC, of loan
advances by IFC and of presentment for payment, nonpayment or
dishonor or protest of any of the Indebtedness of any person or
entity pledged to IFC as security for the Indebtedness or the
Obligations;
(b) any and all defenses, offsets and counterclaims of Borrower
to liability under the Loan Documents or of Guarantor under this
Guaranty, whether now existing or hereafter arising;
(c) any duty on the part of IFC to disclose to Guarantor any
fact or facts it may now of hereafter know about Borrower,
regardless of whether IFC has reason to believe that any such
facts materially increase the risk beyond that which Guarantor
intends to assume, has reason to believe that such facts are
unknown to Guarantor or has a reasonable opportunity to
communicate such facts to Guarantor, it being understood and
agreed that Guarantor is fully responsible for being and
remaining informed of the financial condition of Borrower and of
all circumstances bearing on the risk of nonpayment of the
Indebtedness or nonperformance of the Obligations; and
(d) any and all rights of subrogation, contribution,
reimbursement, indemnity, exoneration, implied contract, recourse
to security or any other claim, as that term is defined in the
United States Bankruptcy Code and any amendments, which Guarantor
may now have or later acquire against Borrower, against any other
entity directly or contingently liable for the payment of the
indebtedness or performance of the Obligations or against the
security for the Indebtedness or the Obligations, arising from
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the existence or payment of the Indebtedness or existence or
performance of the Obligations under this Guaranty.
9. Whether or not due IFC from Borrower, Guarantor agrees to
pay to IFC all damages, losses, cost, charges, expenses, and
liabilities of every kind, nature and description suffered or
incurred by IFC, including without limitation attorneys' fee,
arising in any manner out of, growing out of or connected in any
way with the enforcement of this Guaranty.
10. Guarantor subordinates any and all indebtedness of Borrower
now or hereafter owed to Guarantor to the Indebtedness and agrees
that Guarantor shall not demand or accept any payment of
principal or interest from Borrower, shall not claim any offset
or other reduction of Guarantor's liability hereunder because of
any such indebtedness and shall not take any action to obtain any
of the security for the Indebtedness or the Obligations.
11. Guarantor warrants and represents to IFC that all financial
statements heretofore delivered by Guarantor to IFC are true and
correct and that there have been no material adverse changes as
of the date hereof. Guarantor shall deliver to IFC then current
balance sheets, income and expenses statements and such other
financial information as IFC may require, within ninety (90) days
after the end of each fiscal year of Guarantor and when otherwise
requested by IFC, and tax returns, within thirty (30) days after
the last date that the same can be filed without imposition of a
penalty for late filing. All financial statements shall be
prepared in accordance with generally accepted accounting
principles or otherwise in form acceptable to IFC. IFC reserves
the right to require not more often than annually audited or
certified financial information by a certified public accountant
acceptable to IFC.
12. Nothing herein contained, nor contained in any of the other
Loan Documents, shall be construed or so operate as to require
Guarantor to pay interest in an amount or at a rate greater than
higher rate permissible under applicable law. Should any
interest or other charges paid by Guarantor result in the
computation or earning of interest in excess of the highest rate
permissible under applicable law, then any and all such excess
shall be and the same is waived IFC, and all such excess shall be
automatically credited against and in reduction of the principal
sum, and any portion of said excess which exceeds the principal
sum shall be paid by IFC to Guarantor, it being the intent of the
parties hereto that under no circumstances shall Guarantor be
required to pay interest in excess of the highest rate
permissible under applicable law. All interest paid or agreed to
be paid to IFC shall, to the extent permitted under applicable
law, be amortized, prorated, allocated and spread throughout the
full period until payment in full of the indebtedness, including
the period of any renewal or extensions thereof, so that interest
thereon for such full period shall not exceed the maximum amount
permitted by applicable law. Notwithstanding anything to the
contrary herein contained, in the event that the interest rate to
be charged hereunder ever exceeds the highest rate permissible
under applicable law, thereby causing the interest accruing to be
limited to such rate, then any subsequent reduction in the
interest rate to which Guarantor would otherwise be entitled
shall be held in abeyance until the total amount of interest
accrued equals the amount of interest which would have accrued
had the interest rate not been limited to the highest rate
permissible under applicable law.
13. Any notice required or permitted to be given hereunder shall
be writing. If mailed by fist class United States mail, postage
prepaid, registered or certified with return receipt requested
then such notice shall be effective upon its deposit in the
mails. Notice given in any other
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manner shall be effective only
if and when received by the addressee. For purposes of notice,
the addresses of Guarantor of IFC shall be set forth below;
provided however, that wither party shall have the right to
change such party's address for notice hereunder to any other
location within the continental United States by the giving of
thirty (30) days' written notice to the other party.
If to Guarantor: XXXXXXX X. XXXXXX
GANESH HOSPITALITY, INC.
0000 Xxxxx Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
If to IFC: XXXXX X. XXXXXXX
INTERBANK FUNDING CORPORATION
0000 Xxxxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, XX 00000
14. Whenever any amount is payable to IFC hereunder, IFC
shall have the right to set off such amount against amounts
owing to Guarantor by IFC, whether or not then due and
payable, and against all other funds or property of such
Guarantor on deposit with or otherwise held in the custody
of IFC, all without notice to or demand on Guarantor, such
notice and demand being waived.
15. All rights and remedies of IFC are cumulative and not
alternative. If any provision or any part of any provision
contained in the Guaranty shall for any reason be held or
deemed to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability
shall not affect any other provision or remaining part of
the affected provision of the Guaranty, and this Guaranty
shall be construed as if such invalid, illegal or
unenforceable provision or part thereof had never been
contained herein, and the remaining provisions of this
Guaranty shall remain in full force and effect.
16. Guarantor agrees that this Guaranty shall inure to the
benefit of and may be enforced by IFC or its endorses,
transferees, successors and assigns, and shall be binding
upon and enforceable against Guarantor and Guarantor's legal
representatives, heirs, successors, and assigns. This
Guaranty may be assigned by IFC in whole or in part.
17. This Guaranty is executed by Guarantor at Sarasota,
Sarasota County, Florida. This Guaranty is delivered in the
State of Florida and is to be governed by and construed in
accordance with the laws of the State of Florida. Guarantor
consents to, and by execution of this Guaranty submits to,
the personal jurisdiction of the Court of Xxxxxxx County,
Florida and United States District Court for the purposes of
any judicial proceedings which are instituted for the
enforcement of this Guaranty. Guarantor agrees that venue
is proper in either of said courts.
18. This is the entire agreement and there are no other
oral or written agreements and no understandings affecting
the terms hereof. This Guaranty may be modified only by
subsequent written agreement executed by Guarantor and IFC
IFC, BY ACCEPTANCE OF THIS GUARANTY, AND GUARANTOR HEREBY
MUTUALLY, VOLUNTARILY, IRREVOCABLY AND UNCONDITIONALLY WAIVE
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FOR THE BENEFIT OF THE OTHER ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOULDING IN
CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, IN CONNECTION
WITH, RELATED TO, OR INCIDENTAL TO THIS GUARANTY OR THE LOAN
DOCUMENTS, THE TRANSACTIONS RELATED THERETO OR THE
RELATIONSHIP ESTABLISHED THEREBY. THIS PROVISION IS A
MATERIAL INDUCEMENT TO IFC AND GUARANTOR TO ENTER INTO THIS
TRANSACTION. IT SHALL NOT IN ANY WAY AFFECT, WAIVE, LIMIT,
AMEND, OR MODIFY IFC'S ABILITY TO PURSUE ITES REMEDIES.
IN WITNESS WHEREOF, Guarantor has caused this Guaranty
to be executed this 23 day of June, 1999.
__________________________________
XXXXXXX X. XXXXXX
STATE OF ____________
COUNTY OF ____________
The foregoing instrument was acknowledged before me
this 23 day of June, 1999, by XXXXXXX X. XXXXXX
NOTARY PUBLIC
Commission
Expiration________________
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COLLATERAL ASSIGNMENT OF MANAAGEMENT CONTRACT
THIS COLLATERAL ASSIGNMENT OF MANAGEMENT CONTRACT (the
"Assignment"), made and entered into as of the 15th day of May,
1998, by and between INTERBANK FUNDING CORPORATION, a Delaware
corporation (hereinafter referred to as "Lender," such term to
include subsequent holders, if any, of the Note which this
Assignment secures), 0000 Xxxxxxxxxxx Xxxxxx, XX Xxxxxxxxxx, XX
00000, and GANESH HOSPITALITY, INC., a Florida corporation and
GRANJAC RESORTS, INC., (hereinafter together referred to as
"Borrower"), 0000 Xxxxx Xxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxx 00000.
Recitals of Fact
A. Borrower is obtaining financing from Lender on
this date and, in connection therewith, has executed (i) a Loan
Agreement evidencing the loan ("Loan Agreement") this same date,
between Lender and Borrower (ii) a Commercial Loan Note ("Note")
this same date, payable to the order of Lender, in the principal
amount of Nine Hundred Fifty Thousand Dollars ($950,000.00),
bearing interest at the rate per annum specified therein; (iii) a
Security Agreement and Financing Statements ("Security
Agreement") encumbering all of the corporate shares of Borrower;
and (iv) certain other documents creating liens, granting
security interest, or otherwise evidencing or securing the loan
("Loan") by Lender to borrower (all of which such documents,
whether or not listed in the preceding sentence, are hereinafter
collectively referred to as the "Loan Documents").
C. In order to induce Lender to make the Loan, Borrower
has agreed to make the assignment herein as primary and not as
secondary security for the Note.
Agreement
In order to induce Lender to make the Loan, and as a
condition to the making of the Loan and in consideration thereof,
Borrower hereby covenants, warrants and agrees that the foregoing
recitals are true and correct, and incorporated herein by this
reference, and further agrees as follows:
1. Assignment. Borrower, as assignor, hereby
unconditionally assigns, transfers and sets over into Lender, as
assignee, all of Borrower's right, title and interest, whether
now or hereafter acquired, in and to that certain Management and
Operating Agreement by and between Granjac Resorts, Inc.
("Granjac") and Borrower, dated June 10,1999 (the "Contract").
2. Term of Assignment. This Assignment shall remain in
affect until (a) the Note is paid in full and all other
obligations contained in any of the Loan Documents are fully and
completely satisfied or (b) this Assignment is voluntarily
released by Lender (without thereby implying any obligation on
the part of Lender to do so). If at any time payment of any
amounts paid under any of the Loan Documents is rescinded or must
otherwise be restored or returned by Lender upon the insolvency,
bankruptcy or reorganization of Borrower or under any other
circumstances, this Assignment shall continue to be effective or
shall (if previously terminated) be reinstated, as the case may
be, as if such payment had not been made, notwithstanding the
release of this Assignment of public record. No judgement or
decree which may be entered on any debt secured or intended to be
secured by the Security Agreement or any other Loan Documents
shall lessen the effect of this instrument. This Assignment
shall remain in full effect during the pendency of any
foreclosure proceedings under the Security Agreement or any of
the other Loan Documents, both before and after sale, until the
issuance of a deed to the foreclosure sale purchaser.
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3. Rights of Borrower Prior to Default. As of execution
of this Assignment and until Lender notifies Borrower or other
parties as provided below, and further provided that no Event of
Default (as defined in the Loan Documents) has occurred which
remains uncured, Lender elects not to exercise any rights under
the Contract. Rather, Lender agrees that Borrower may exercise
all such rights. However, if a default occurs in the making of
any payments due under the Note or such other Event of Default
(as that term is defined in the Note of the Security Agreement)
occurs, the Lender shall have the rights specified below.
4. Borrower's Covenants. Borrower covenants and agrees as
follows:
4.1 Lender shall not in any way be responsible to
Borrower for the performance of any obligations of Borrower under
the Contract, or for any failure to do any or all of the actions
for which rights, interests, power and authority are herein
granted. Borrower will make no claim against Lender respecting
the Contract and shall defend and indemnify Lender against any
claims by third parties against Lender alleging any liability of
Lender for any of the matters described in this Section 4.1. The
failure of Lender to take any of the actions or exercise any of
the rights, interest, powers and/or authority granted to Lender
hereunder, shall not be construed to be a waiver of any of the
rights, interest, powers, or authority granted to Lender
hereunder.
4.2 Borrower will execute upon the request of Lender
any and all further documents, assignments or instruments which
Lender deems appropriate or necessary to evidence or effectuate
this Assignment or grant or confirm the right and authority
assigned to Lender hereunder.
4.3 During the term of this Assignment, Borrower will
not cancel or terminate the Contract, amend or modify any terms
of the Contract, other than in the reasonable and ordinary course
of business, without the written consent of Lender, which consent
shall only be required for amendments in excess of $1,000.00.
However, Borrower shall notify Lender of any cancellation of or
amendments or modifications to the Contract.
4.4 After an Event of Default as defined in the Loan
Documents has occurred which remains uncured, Borrower
specifically gives its consent and authorization to any court of
competent jurisdiction to issue, by ex-parte hearing, such order
or orders as may be appropriate or necessary to enforce there
terms of this Assignment, granting to Lender such powers, orders
or authority as Lender shall need or desire to enforce this
Assignment. Any such court is directed not to require any bond
of Lender, the parties agreeing that time is of the essence to
protect the interests of Lender and Borrower.
4.5 Borrower will, at Borrower's sole cost and
expense, appear in and defend any action growing out of or in any
manner connected with the Contract or any of the obligations or
liabilities of the Borrower or any persons in connection
therewith. Borrower will, at least 20 days prior to the filing
of any litigation or responsive pleading, first notify Lender, in
writing, of such intended action, reserving unto Lender the right
to take any such action as Lender may deem reasonably necessary
under the circumstances.
4.6 Borrower will fulfill and perform each and every
obligation which is incumbent upon Borrower under the Contract.
4.7 In the ordinary course of business Borrower will
enforce, at its sole cost and
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expense, short of termination of the Contract, the performance
and observance of each and every covenant and condition required
of the other contracting party under the Contract
5. Representations and Warranties: Additional Covenants.
Borrower makes the following representations and warranties to
Lender, and enters into the following additional covenants, with
the intention and expectation that Lender will rely upon the same
in entering into this Assignment:
5.1 Borrower knows of no present defaults in the
performance of any of the terms and conditions contained in the
Contract, which would substantially affect the operation of the
Property.
5.2 Borrower has not executed any prior assignments of
the Contract, and will not in the future execute any assignments
of the same, other than this Assignment.
5.3 Borrower has not performed any acts or executed
any other documents, and will not take any action or execute any
other documents, which might prevent, limit or restrict Lender
from enforcing any of the terms or conditions of this Assignment,
exercising any of its rights or remedies hereunder, or
functioning as the successor to Borrower under the Contract.
5.4 Borrower will take all steps necessary to ensure that all
contracting parties and all
other parties and all other parties affected by the Contract will
look to, and accept Lender in substitution of Borrower if Lender
elects to exercise its rights hereunder.
5.5 No oral agreements or contracts shall be binding upon Lender
unless otherwise
agreed to and accepted by Lender.
6. Events of Default. An event of default shall exist
under this Assignment upon the happening of any one or more of
the following events (each an "Event of Default"):
6.1 Failure of Borrower to pay any principal of,
interest on or other amount due under the Note within no later
than five days from when the same is due, whether at maturity by
acceleration or otherwise.
6.2 An Event of Default, as defined in the Note or the
Security Agreement, occurs.
6.3 Borrower's breech of any covenant, agreement or obligation
under this
Assignment.
7. Lender's Remedies Upon Default.
7.1 Upon the occurrence of an Event of Default as
defined above, Borrower's right to enjoy the privileges under the
Contract shall immediately terminate, and Lender's right under
the assignments created by this Assignment shall become fully
effective. Lender will have the rights at its option, to enforce
and to exercise any or all of its rights under this Assignment or
otherwise, but Borrower expressly agrees that Lender's exercise
of any rights hereunder shall not be prerequisite or precondition
to the full effectiveness and enforceability, of Lender's rights
hereunder.
7.2 In such event, and upon Lender's election,
Borrower shall deliver to Lender the Contract. Any oral
contracts shall be described in a writing delivered by Borrower
to Lender.
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7.3 Lender, at its option, and without any notice
whatsoever to Borrower, shall have the right and is hereby
authorized to: (a) notify the other party to the Contract that
Lender is exercising its rights under this Assignment; (b) take
such further action as may be appropriate or necessary to take
its position as the assignee of Borrower's rights under the
Contract; (c) xxx to enforce the performance of the Contract in
the name of Borrower or Lender: (d) delegate any and all rights
and powers given to Lender by this assignment; (e) have a
receiver appointed; and (f) use such measures, legal or
equitable, as in its sole discretion may carry out and effectuate
the provisions of this Assignment. All such actions shall be
taken at the sole expense of the Borrower, who agrees to
reimburse Lender for all amounts expended, together with interest
thereon from the date of expenditure at the Default Rate stated
in the Note, upon demand.
8. Instructions to Other Contracting Parties. This
Assignment constitutes an express direction and full authority to
any other party to the Contract to render any performance
directly to Lender, upon Lender's request. No proof of default
shall be required. Any such other contracting party is hereby
irrevocable authorized to rely upon and comply with any notice or
demand by the Lender for the rendering of any performance to the
Lender under the Contract. The other contracting party shall not
be liable to Borrower, or any person claiming under Borrower, for
rendering any performance to Lender. The other contracting party
shall have no obligation or right to inquire whether any default
has actually occurred or is then existing. By its execution of
this Assignment, Borrower irrevocably joins in, consents to, and
makes and delivers the above instructions to all of the other
parties under the Contract.
9. Lender as Agent. Lender is and will be acting solely
as an agent of Borrower in taking any actions in connection with
the Contract. Lender assumes no responsibility or liability in
any other capacity. Lender shall not be obligated to perform any
obligation or duty, or discharge any liability under the
Contract, or under or by reason of this Assignment.
10. Remedies Cumulative. The remedies provided in this
Assignment and in the other Loan Documents are cumulative and not
mutually exclusive. The remedies can be exercised successively
or concurrently, as many times as and whenever the occasion may
arise, and the exercise of any one or more remedies shall not be
a waiver of or preclude the exercise of any one or more remedies
at the same or any later time for the same or any later default.
11. Liability of Lender.
11.1 In Lender's exercise of the powers granted Lender
by this Assignment, no liability shall be asserted or enforced
against Lender, and Borrower expressly waives and releases Lender
from all such liability.
11.2 Lender shall not be responsible for any failure to
perform any covenants in the Contract, either before or after the
exercise of any assignments or remedies contained in this
Assignment.
11.3 In accepting the assignments herein described, and
in exercising any of the remedies provided herein or taking any
of the actions which are authorized herein, Lender will be acting
solely and exclusively as agent for Borrower in attempting to
obtain payment to Lender of the amounts which Lender is to
receive pursuant to the Note. The parties acknowledge that in so
doing, Lender will not be or be deemed to be an "owner" or
"operator" of the Property under any environmental statute, law,
regulation or ordinance, or for any other purpose and will not be
assuming any obligations of Borrower to fully comply with all
such statutes, laws, regulations, or ordinances, as more
particularly
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described I the Security Agreement. Borrower will
specifically defend and indemnify Lender against any such
liability, cost, loss, or expense.
12. Indemnity.
12.1 Borrower agrees to defend and indemnify the Lender
from and against any and all liability, loss, damage, and expense
(including all attorneys' fees and expenses through litigation
and all appeals) which Lender may or might incur under the
Contract, or under or by reason of this Assignment, from any
violation of law for which Borrower is responsible, and from any
and all claims and demands whatsoever which may be asserted
against the Lender in connection with the Property or respecting
any alleged obligations or undertakings to perform or discharge
any terms, covenants or agreements contained in the Contract,
except for losses or demands resulting from willful or negligent
actions of Lender. This indemnity shall include specifically,
but without limitation, any indemnity against any of the matters
described in Section 11 above.
12.2 Should Lender incur any such liability, loss or
damage, the payment and amount thereof, including costs, expenses
and attorneys' fees, with interest at the Default Rate stated in
the Note, from the date the cost or loss is incurred, shall be
secured by this Assignment and by the other Loan Documents.
Borrower shall pay all such amounts immediately upon demand.
13. Bankruptcy
13.1 The parties agree that Borrower has substantial duties of
performance apart from
its mere financial obligations under this Assignments, the Note,
and other Loan Documents, and that parties other than the
Borrower could not adequately and fully perform the covenants to
be performed by Borrower in this Assignment. The parties also
agree that this Assignment is an agreement for the making of
loans and for the extending of debt financing or financial
accommodations. No assumption of or assignment of this
Assignment shall be allowed in bankruptcy. Should an assumption
of or assignment of this Assignment be permitted in violation of
this covenant, the parties agree that Lender will not have
adequate assurance of performance unless and until Lender is
allowed access to adequate financial and other information to
satisfy itself that the trustee or proposed assignee is fully
able to assume the financial and personal covenants of Borrower
under this Assignment, in full accordance with its terms, and
that sufficient collateral is pledged and sufficient bonds or
letters of credit are posted by the bankruptcy trustee or
proposed assignee to guarantee performance of such obligations.
The parties further agree that the definition of the term
"adequate assurance" as set forth in section 365 9b) (3) of the
Bankruptcy Code of 1978, as amended, shall be applicable directly
or by analogy to any determination of adequate assurance in
connection with this Assignment.
13.2 In the event of Borrower's bankruptcy, the debtor in
possession or trustee shall
not be permitted to use, sell or assign the Contract, whether or
not in the ordinary course of business, without providing
adequate protection to Lender. The parties agree that the
language in Section 361 of the Bankruptcy Code of 1978, as
amended, shall be the exclusive definition of the term "adequate
protection" in connection with any use or enforcement of the
Contract. The cash payment referred to in that section shall
mean liens on property the actual market value of which is equal
to or greater than the replacement cost of the Contract, and the
term "indubitable equivalent" as used in that section shall mean
protection afforded by either grants of administrative expense
priority, grants to Lender of ownership interests in a continuing
business surviving the bankruptcy or grants to Lender of
protected securities issued by a continuing business surviving
the bankruptcy, which completely compensate Lender for the loss
of the present value (computed at the then market rate of
interest for commercial loans) of its
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interest in the Contract.
For purposes of computation, the value of the Contract is deemed
to be the replacement cost.
13.3 The parties agree that because of the extreme
financial importance to Lender of this transaction, and because
of the nature of the Contract, and the likelihood that its value
will quickly decrease over time, Lender will be irreparable
harmed by any stay of its collection efforts or the exercise of
its remedies under this Assignment.
13.4 The parties agree that in the event a plan of
reorganization is proposed under Chapter 11 of the Bankruptcy
Code of 1978, as amended, the plan will be fair and equitable to
Lender, as a secured creditor, only if Lender realizes under the
plan the indubitable equivalent of its interests in the Contract.
The term "indubitable equivalent" in such context shall have the
same meaning as that given in Section 13.2 of this Assignment.
14. Waiver of Jury Trial. Borrower hereby irrevocably
waives all rights to trial by Jury in an action, proceeding or
counterclaim arising out of or relating to this assignment, any
course of dealings, or any of the Loan Documents or the
transactions contemplated thereby.
15. Notice. The notice provisions of the Security
Agreement shall be in force and effect for this Assignment and
incorporated herein by this reference as though the express terms
were stated in this Assignment.
16. Miscellaneous. This Assignment shall be binding upon
Borrower and its successors and assigns and shall inure to the
benefit of Lender and its successors, transferee and assigns, and
all parties who may become holders of the Note. This assignment
is made and executed under and shall in all respects be governed
and enforced by and construed in accordance with the laws of the
State of Florida, including without limitation matters of
construction, validity and performance. Each party acknowledges
that it has reviewed this Assignment, and the parties hereby
agree that the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of this Assignment. In the
event any terms or provisions of this Assignment are held invalid
or unenforceable, the remaining terms and conditions of this
Assignment shall continue to be fully enforceable without change,
and this Assignment shall be interpreted as if the invalid or
unenforceable provision had not been a part hereof.
17. Acknowledgement by Granjac. Granjac hereby
acknowledges this Collateral Assignment, and individually joins
herein for the purpose of consenting to same as the manager under
the Contract, and to further agree that in the event Lender
exercises its rights hereunder, the Contract may be terminated by
Lender upon thirty (30) days written notice to Granjac, anything
to the contrary in the Contract notwithstanding.
IN WITNESS WHEREOF, Borrower has executed or caused this
Assignment to be executed by its duly authorized agents as of the
date first set forth above.
"BORROWER"
GANESH HOSPITALITY, INC.
A Florida Corporation
-E-155-
By:
GRANJAC RESORTS, INC.
A Florida Corporation
By:
"LENDER"
INTERBANK FUNDING CORPORATION
A Delaware Corporation
By:
"GRANJAC as manager"
GRANJAC RESORTS, INC.,
A Florida Corporation
By:
-E-156-
