May 7, 1996
South Seas Properties Company Limited Partnership
12800 University Drive
Ft. Myers, FL 33907
RE: First Union National Bank of Florida Loan No. 8385321361
Dear Sirs:
This letter, upon your acceptance hereof, will constitute a commitment
(herein "Commitment") that FIRST UNION NATIONAL BANK OF FLORIDA (herein
"Lender"), will enter into a Loan Modification Agreement with SOUTH SEAS
PROPERTIES COMPANY LIMITED PARTNERSHIP, an Ohio limited partnership,
(herein "Borrower"), which Loan Modification Agreement shall provide for
conversion of the existing Term Loan to a Revolving Credit Loan ("Loan")
subject to the following terms and conditions:
1. The Lender will advance principal to the Borrower from time to
time. However, the total of such advances of principal by Lender to
Borrower shall never exceed the amount of the present outstanding principal
balance of $6,985,998.92 reduced each month, commencing June 5, 1996 and
continuing on the Fifth (5th) day of each month thereafter until December
5, 1996, by the amount of each month's principal reduction in the amount of
$14,000.00. The outstanding principal balance may decrease or increase
from time to time as principal payments are made by Borrower or advances of
principal are made by Lender to Borrower, subject to the limitations as
contained herein.
2. No advances of principal by the Lender to the Borrower will be
permitted after January 1, 1997.
3. In consideration of Lender's agreement to modify the Loan,
Borrower shall pay to Lender a Fee in the amount of Five Thousand and
No/100 Dollars ($5,000.00) which shall be paid to Lender upon acceptance of
this Commitment Letter.
4. Requests for advances of principal by the Borrower shall be made
to the Lender in writing and the Borrower, in such written principal
advance request, shall warrant and represent to the Lender that there has
been no material change in the status or financial condition of the
Borrower. Such advance by the Lender to the Borrower shall be contingent
upon the Borrower not being in default of any of the monetary conditions of
any loan document. If there has been no event of default by the Borrower
and the advance request meets the other requirements for such advance as
contained herein, Lender shall make such advance to the Borrower within two
(2)business days.
5. Borrower, at its own cost, shall furnish an Endorsement to
the existing Title Insurance Policy, reflecting that no change has occurred
in the status of the Mortgaged Property as reflected in the original Title
Insurance Policy, with the exception that all real estate taxes on the
Mortgaged Property have been paid.
6. Documents for the Loan Modification shall be prepared by, and
be in form satisfactory to, Lender's counsel. Borrower shall be
responsible for paying all of the expenses incurred with regard to the Loan
Extension Closing, which expenses shall include, but not be limited to,
recording fees, Lender's attorneys'' fees estimated to be Two Thousand Six
Hundred and No/100 Dollars ($2,600.00) and any other reasonable costs
incurred with regard thereto.
7. This Commitment shall be null and void if it has not been
accepted and returned to Lender within fourteen (14) days of the date of
this letter. If this Commitment is timely accepted, and the Loan
Modification Closing does not occur within forty-five (45) days of
acceptance, this Commitment shall terminate without further notice to
Borrower, and thereafter, Lander shall have no further obligation under
this Commitment.
8. This Commitment may not be assigned to or relied upon by
any third party, and shall constitute, if accepted, a legally binding
contract.
9. Time is of the essence with respect to this Commitment and
the performance of each and every term and condition contained herein.
10. Notwithstanding anything to the contrary herein contained or
implied, Lender, by this Commitment 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 attorneys'' fees and costs) from any and all claims or
damages resulting from such a construction of the parties' relationship.
11. WAIVER OF RIGHT TO JURY TRIAL AND VENUE. BORROWER AND
INFERIOR LIEN HOLDERS HEREBY WAIVE THEIR RIGHTS TO A TRIAL BY JURY IN ANY
ACTION HEREINAFTER BROUGHT BY OR AGAINST THEM PURSUANT TO OR IN ANY WAY
RELATING TO THIS COMMITMENT OR ANY OF BORROWER'S OR INFERIOR LIEN HOLDERS'
OBLIGATIONS ARISING THEREFROM, AND THE LOAN EXTENSION DOCUMENTS WILL
CONTAIN A SIMILAR WAIVER REGARDING THE LOAN EXTENSION, IF CLOSED.
BORROWER, INFERIOR LIEN HOLDERS, AND LENDER HEREBY AGREE THAT VENUE FOR ANY
SUCH ACTION SHALL BE IN LEE COUNTY, FLORIDA, OR THE FEDERAL COURT, OR THE
UNITED STATES DISTRICT COURT IN AND FOR THE MIDDLE DISTRICT OF FLORIDA.
THE PREVAILING PARTY IN ANY SUCH ACTION SHALL BE ENTITLED TO RECOVER FROM
THE OTHER REASONABLE ATTORNEYS' FEES AND COSTS OF SUIT.
Respectfully submitted,
FIRST UNION NATIONAL BANK OF FLORIDA
By:
Kevin R. Kinahan
Vice President
APPROVAL AND ACCEPTANCE
The undersigned hereby acknowledge receipt of the foregoing
Commitment, and by execution hereof acknowledge that such Commitment is
offered by Lender in reliance upon the information and documentation
previously provided by or on behalf of Borrower to Lender; accepts such
Commitment; and agrees to the terms and conditions set forth herein; and
returns this Commitment.
The undersigned's acceptance of this Commitment constitutes an
unconditional agreement to pay all fees, commissions, costs, charges,
taxes, and other expenses incurred in connection with this Commitment,
whether or not the Loan Modification closes, but not limited to, the
Commitment Fees, fees of Lender's counsel, examination of title to the
Land, and mortgage title insurance thereon, and all recording fees and
charges.
APPROVED AND ACCEPTED THIS 13th day of May, 1996.
SOUTH SEAS PROPERTIES COMPANY LIMITED
PARTNERSHIP, an Ohio limited partnership
Print Name: By Rober M. Taylor, Manager and Chairman
T & T RESORTS, L.C.,
General Partner
Prepared By:
Bruce G. Fedor, Esquire
800 Laurel Oak Drive, Suite 400
Naples, Florida 33963-2738
(941) 598-4444
LOAN MODIFICATION AGREEMENT
THIS AGREEMENT, is entered into as of this 13th day of May, 1996, between
FIRST UNION NATIONAL BANK OF FLORIDA ("Lender") and SOUTH SEAS PROPERTIES
COMPANY LIMITED PARTNERSHIP, an Ohio limited partnership, ("Borrower").
WITNESSETH:
WHEREAS, FIRST UNION NATIONAL BANK OF FLORIDA, Successor by Merger
to BANCFLORIDA, a Federal Savings Bank, ("Lender"), loaned to SANIBEL
RESORT HOTEL LIMITED PARTNERSHIP, a Delaware limited partnership,
("Sanibel"), the sum of Seven Million Five Hundred Thousand and No/100
Dollars ($7,500,000.00), evidenced by Mortgage Note, Mortgage, Security
Agreement and Assignment of Rents dated October 28, 1988 and recorded in 0.
R. Book 2026, Page 2156 of the Public Records of Lee County, Florida; and
WHEREAS, effective January 1, 1995, Borrower assumed and agreed to
pay said indebtedness and perform all the obligations under said Mortgage
Note ("Note"), Mortgage, Security Agreement and Assignment of Rents
referenced above pursuant to an Assumption Agreement that was recorded in
0. R. Book 2606, Page 2948 of the Public Records of Lee County, Florida;
and
WHEREAS, the Note, Mortgage, Security Agreement and Assignment of
Rents were modified by a certain Loan Modification Agreement dated December
19, 1995 and recorded at 0. R. Book 2667 commencing at Page 2634 of the
Public Records of Collier County, Florida; and
WHEREAS, the Note and Mortgage were in default but were reinstated
pursuant to a certain Loan Reinstatement and Modification Agreement
executed on March 27, 1992 and recorded at 0. R. Book 2287, Page 3828 of
the Public Records of Lee County, Florida; and which Mortgage, Assumption
Agreement and Loan Modification Agreement, by and between Under and
Borrower, encumber the real property described in EXHIBIT A attached hereto
and made a part hereof (the "Premises"), and which Mortgage, Assumption
Agreement, Loan Modification Agreement and other loan documents executed in
connection therewith and specified therein shall be hereinafter referred to
collectively as the "Mortgage;" and
WHEREAS, Borrower and Lender have agreed to modify the Note and
Mortgage as hereinbelow set forth.
NOW, THEREFORE, in consideration of TEN AND NO/100 DOLLARS
($10.00) paid by Borrower and other good and valuable consideration,
receipt of which is hereby acknowledged, the parties agree as follows:
1 . Recitals. The above recitals are true and correct and are
incorporated herein by reference.
2. Outstanding Balance.Borrower and @Lender agree that the
present outstanding principal balance due under the Note as of this date is
Six Million Nine Hundred Eighty Five Thousand Nine Hundred Ninety Eight and
75/100 Dollars ($6,985,998.92).
3. The Lender will advance principal to the Borrower from time
to time. However, the total of such advances of principal by Lender to
Borrower shall never exceed the amount of the present outstanding principal
balance of $6,985,998.92 reduced each month, commencing June 5, 1996 and
continuing on the Fifth (5th) day of each month thereafter until December
5, 1996, by the amount of each month's principal reduction in the amount of
$14,000.00. The outstanding principal balance may decrease or increase from
time to time as principal payments are made by Borrower or advances of
principal are made by Lender to Borrower, subject to the limitations as
contained herein.
4. No advances of principal by the Lender to the Borrower will
be permitted after January 1, 1997.
5. Requests for advances of principal by the Borrower shall be
made to the Lender in writing and the Borrower, in such written principal
advance request, shall, warrant and represent to the Lender that there has
been no material change in the status or financial condition of the
Borrower. Such advance by the Lender to the Borrower shall be contingent
upon the Borrower not being in default of any of the monetary ttermsand
conditions of any loan document. If there has been no event of default by
the Borrower and the advance request meets the other requirements for such
advance as contained herein, Lender shall make such advance to the Borrower
within two (2) business days.
On Maturity, January 31, 1997, all unpaid principal and all
accrued but unpaid interest shall be due and payable in full.
6. Consideration. In consideration of the modifications
contained herein, Borrower has paid to LLendera Modification Fee of Five
Thousand Hundred and no/100 ($5,000.00) Dollars.
7. Reaffirmation of Security Interest. The parties herein
agree that the Premises,as defined in the Mortgage, shall continue to serve
as security and collateral for the repayment of any and all indebtedness
due by Borrower to Lender under the Loan and Note, and for the performance
by Borrower of each and every of the covenants and agreements in the Loan
Documents, and that upon the occurrence of an Event of Default under the
Loan Documents, the Lender may exercise any and all remedies available to
it as to all of the Premises described in the Mortgage.
8. Warranties and Representations. Borrower hereby affirms,
warrants, and represents that all of the warranties and representations
made in the Mortgage and other documents or instruments recited herein or
executed with respect thereto, directly or indirectly, are true and correct
as of the date hereof, and that Borrower is not in default of any of the
foregoing or aware of any default with respect thereto.
9.Modification and Ratification. Except as herein modified, the terms and
conditions of the Mortgage, Note, and other Loan Documents are hereby
ratified and affirmed, and shall remain in full force and effect.
10. No Novation. It is the intent and agreement of the parties
that this instrument shall not constitute a novation and shall in no way
adversely affect the lien priority of the Mortgage. In the event that this
Agreement, or any part hereof, shall be construed by a court of competent
jurisdiction as operating to affect the lien priority of the Mortgage over
the claims which would otherwise be subordinate thereto, then to the extent
that third persons acquiring an interest in such property between the time
of execution of the Mortgage and the execution hereof are prejudiced
thereby, this Agreement, or such portion hereof as shall be so construed,
shall be void and of no force and effect, and said Mortgage then shall be
enforced pursuant to the terms therein contained, independent of this
Agreement; provided, however, that notwithstanding the foregoing, the
parties hereto, as between themselves, shall be bound by all terms and
conditions hereof until all indebtedness owing under the Mortgage, and
notes secured thereby, shall have been paid in full.
11. Lien. Borrower warrants and represents that the Mortgage as
amended by this Agreement is a valid lien and security interest on the
Premises with a first priority position as stated therein. If at any time
Lender shall determine that the lien priority of its Mortgage as stated
therein is invalid or in jeopardy, or if at any time, Lender is unable to
obtain title insurance insuring such lien as a valid lien with the priority
stated therein on the Premises, then Under shall have the option declaring
this to be a default under the Mortgage and this Agreement.
12. Defenses, Setoffs, and Counterclaims. Borrower warrants,
represents, and acknowledges that it has no defenses, claims, or offsets
against the obligations evidenced by the Note, Mortgage, and other Loan
Documents.
13. Entire Agreement; Amendments. This Agreement, the
Commitment Letter dated May 7, 1996, 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 and
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.
14. Miscellaneous.
(a) Paragraph headings as used herein are for convenience only and
shall not be construed as controlling the scope of any provisions hereof;
(b) This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida,
(c) Time is of the essence of this Agreement;
(d) As used herein, the neuter gender shall include the masculine
and feminine genders, and vice versa, and the singular, the plural, and
vice versa, as the context demands; and
(e) This Agreement shall inure to the benefit and be binding upon
the parties as well as their successors and assigns, heirs, and personal
representatives.
15. Waiver of Jury Trial. BORROWER HEREBY WAIVES THE RIGHT TO
JURY TRIAL IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION
WITH, OR' ARISING OUT OF THIS AGREEMENT, THE COMMITMENT, NOTE, MORTGAGE, OR
OTHER LOAN DOCUMENTS, OR THE VALIDITY, PROTECTION, INTERPRETATION,
COLLECTION, OR ENFORCEMENT THEREOF, OR ANY OTHER CLAIM OR DISPUTE HOWEVER
ARISING BETWEEN BORROWER AND LENDER.
IN WITNESS WHEREOF, the undersigned have signed and sealed this
Agreement the day and year first above written.
BORROWER:
WITNESSES: SOUTH SEAS PROPERTIES COMPANY
LIMITED PARTNERSHIP,
an Ohio limited partnership
Print Name: By:
Robert M. Taylor, Manager
& Chairman
Print Name: T&T Resorts, L.C.
General Partner
Print Name:
LENDER
FIRST UNION NATIONAL
BANK OF FLORIDA
By:
Kevin R. Kinahan,
Vice President
FIRST UNION RENEWAL REAL ESTATE PROMISSORY NOTE #2
$6,985,998.92 May 3, 1996
LENDER: FIRST UNION NATIONAL BANK OF FLORIDA (hereinafter termed
"LENDER")
BORROWER(S):
SOUTH SEAS PROPERTIES COMPANY LIMITED PARTNERSHIP, an Ohio limited
partnership
12800 University Drive, Fort Myers, Lee County, FL 33907
BORROWER(S) REPRESENT HEREWITH THAT THE LOAN EVIDENCED HEREBY IS BEING
OBTAINED FOR THE FOLLOWING PRIMARY PURPOSE: X BUSINESS - PERSONAL- FAMILY
OR HOUSEHOLD- AGRICULTURAL
FOR VALUE RECEIVED: to wit, money loaned, the above named; the
undersigned BORROWER, promises to pay to the order of LENDER at its office
in the above city, or wherever else LENDER may specify, the sum of Six
Million Nine Hundred Eighty-five Thousand Nine Hundred Ninety-eight and
92/100 Dollars ($6,985,998.92), with interest until paid.
CONTRACT RATE OF INTEREST: At the rate of LENDER'S PRIME RATE Plus
three-quarters percent (.75%) as that rate may change from time to time
with changes to occur on the date the LENDER'S PRIME RATE changes; payable
in full on January 31, 1997 ("Maturity").
TERMS OF PAYMENT: payable in consecutive equal monthly payments of
principal and interest, commencing on June 5, 1996, and continuing on the
5th day of each month thereof until Maturity, with a principal amount
sufficient to fully amortize the principal balance in seventeen (17), years
plus an irregular payment of all remaining principal and accrued interest
on January 31, 1997.
The undersigned agrees to pay a late charge equal to 5 % of each payment of
principal and/or interest which is not paid within IO days of the date on
which it is due. At LENDER'S option, the contract rate shall become the
highest rate allowed by the law of the state of LENDER'S office as set
forth herein commencing with and continuing for so long as the loan or any
portion thereof is in Default (as hereinafter defined). Further, upon
BORROWER'S Default and where LENDER deems it necessary or proper to employ
an attorney to enforce collection of any unpaid balance or to otherwise
protect its interests hereunder, the BORROWER agrees to pay LENDER'S
reasonable attorneys fees (including appellate costs, if any) and
collection costs. Liability for reasonable attorneys fees and costs shall
exist whether or not any suit or proceeding is commenced.
This Renewal Real Estate Promissory Note #2 shall constitute a Loan
Agreement whereby the Lender will advance principal to the Borrower from
time to time. However, the total of such advances of principal by Lender
to Borrower shall never exceed the amount of the present outstanding
principal balance of $6,985,998.92 reduced each month, commencing June 5,
1996 and continuing on the Fifth (5th) day of each month thereafter until
December 5, 1996, by the amount of each month's principal reduction in the
amount of $14,000.00. The outstanding principal balance may decrease or
increase from time to time as principal payments are made by Borrower or
advances of principal are made by Lender to Borrower, subject to the
limitations as contained herein.
No advances of principal by the Lender to the Borrower will be permitted
after January 1, 1997.
Requests for advances of principal by the Borrower shall be made to the
Lender in writing and the Borrower in such written principal advance
request, shall warrant and represent to the Lender that there has been no
material change in the status or financial condition of the Borrower. Such
advance by the Lender to the Borrower shall be contingent upon the Borrower
not being in default of any of the monetary terms and conditions of any
loan document. If there has been no event of default by the Borrower and
the advance request meets the other requirements for such advance as
contained herein, Lender shall make such advance to the Borrower within two
(2) business days.
Interest is computed on the basis of a 360 day year for the actual number
of days in the interest period (Actual/360 Computation) unless indicated
below.
DEFINITIONS OF LENDER'S PRIME RATE AND COMPUTATION FORMULAE APPEAR BELOW IN
ADDITIONAL PROVISIONS
All payments received during normal banking hours after 2:00 p.m. shall be
deemed received at the opening of the next banking day.
If the scheduled payment amount is insufficient to pay accrued interest,
BORROWER shall make an additional payment of the amount of the accrued
interest in excess of the scheduled payment.
Each of the undersigned, whether BORROWER, sureties, or endorsers, and all
others who may become liable for all or any part of the OBLIGATIONS
evidenced hereby, do hereby, joint and severally, waive presentment,
demand, protest, notice of protest and/or of dishonor, and also notice of
acceleration of maturity on Default or otherwise. Further, they agree that
Lender may, from time to time, extend, modify, amend or renew this Note for
any period (whether or not longer than the original period of the Note) and
grant any releases, compromises of indulgences with respect to the Note or
any extensions, modifications, amendments or renewals thereof or any
security therefor, or to any party liable thereunder or hereunder, all
without notice to or consent of any of the undersigned and without
affecting the liability of the undersigned hereunder.
PAYMENT of this Note and all obligations of the undersigned
BORROWER hereunder ("OBLIGATIONS") to LENDER, its successors and assigns,
is secured inter alia (and includes the terms and obligations set forth
therein), by a valid, subsisting Mortgage and Security Agreement (the
"Mortgage") recorded or to be recorded in the county in which the real
property described in the Mortgage (the "Property') is located, and by this
reference is incorporated herein. If this Note is issued pursuant to a
loan agreement of even date herewith, made by and between Borrower and
Lender (the Loan Agreement"), which term shall be deemed to include any
construction loan agreement or development loan agreement, then by this
reference, the Loan Agreement is specifically incorporated herein;
If default be made in the payment of any installment under this
Note or if the Borrower violates any of the terms or breaches any of the
conditions of the Mortgage or the Loan Agreement, if applicable, the entire
principal sum and accrued interest shall become due and payable without
notice unless otherwise provided herein or therein at the option of the
Lender. Failure to exercise this option shall not constitute a waiver of
the right to exercise the same at any other time. Upon such default, the
principal of the Note and any part thereof, and accrued unpaid interest, if
any, shall bear interest at the rate of either eighteen percent (18%)
simple interest per annum after default until paid or at the then highest
legal rate permissible by law. All parties liable for the payment of this
Note agree to pay the Lender reasonable attomey's fees for the services and
expenses of counsel employed after maturity or default to collect this Note
(including any appeals relating to such enforcement proceedings) or to
protect or enforce the security hereto, whether or not suit be brought.
The remedies of Lender as provided herein, in the Mortgage and
Loan Agreement shall be cumulative and concurrent, and may be pursued
singly, successively or together at the sole discretion of Lender and may
be exercised as often as occasion therefore shall arise. No act of
omission or commission of Lender, including specifically any failure to
exercise any right, remedy or recourse, shall be effective as a waiver
thereof unless it is set forth in a written document executed by Lender and
then only to the extent specifically recited therein. A waiver or release
with reference to one event shall not be construed as continuing as a bar
to, or as a waiver or release of, any subsequent right, remedy or recourse
as to any subsequent event.
Borrower and all sureties, endorsers and guarantors of this Note
hereby (a) waive demand, presentment for payment, notice of nonpayment,
protest, notice of protest and all other notice, filing of suit and
diligence in collecting this Note, in enforcing any of the security rights
or in proceeding against the Property, (b) agree to any substitution,
exchange, addition or release of any of the Property or the addition of
release of any party or person primarily or secondarily liable hereon, (c)
agree that Lender shall not be required first to institute any suit, or to
exhaust his, their or its remedies against Borrower or any other person or
party to become liable hereunder or against the Property in order to
enforce payment of this Note, (d) consent to any extension, rearrangement,
renewal or postponement of time of payment of this Note and to any other
indulgency with respect hereto without notice, consent or consideration to
any of the foregoing (except the express written release by Lender of any
such person), they shall be and remain jointly and severally, directly and
primarily, liable for all sums due under this Note, the Mortgage and the
Loan Agreement.
As used herein, the words, "Borrower" and "Under" shall be deemed
to include Borrower and Lender as defined herein and their respective
heirs, personal representatives, successors and assigns.
This Note is executed and delivered at the Place of Execution and
shall be construed and enforced in accordance with the laws of the State of
Florida.
BORROWER hereby further warrants, covenants and agrees as follows:
Anything contained herein to the contrary notwithstanding, if
for any reason the effective rate of interest on this Note should exceed
the maximum lawful rate, the effective rate shall be deemed reduced to and
shall be such maximum lawful rate, and any sums of interest which have been
collected in access of such maximum lawful rate shall be applied as a
credit against the unpaid balance due hereunder.
If the interest provision contained herein refers to "LENDER'S
PRIME RATE," the LENDER'S PRIME RATE shall be that ate announced by LENDER
from time to time as its prime rate both above and below LENDER'S PRIME
RATE, and BORROWER acknowledges the LENDER'S PRIME RATE is not represented
or intended to be the lowest or most favorable rate of interest offered by
LENDER.
LENDER'S Actual/360 or 365/360 computation determines the annual
effective interest yield by taking the stated (nominal) interest rate for a
year's period and then dividing said rate by 360 to determine the daily
periodic rate to be applied for each day in the interest period.
Application of such computation produces an annualized effective interest
rate exceeding that of the nominal rate.
At LENDER'S option, any repayments of this Note, other than by
U.S. currency, will not be credited to the outstanding loan balance until
LENDER receives collected funds.
In the event any provision(s) of this instrument shall be left
blank or incomplete, BORROWER hereby authorizes and empowers LENDER to
supply and complete the necessary information as a ministerial task
consistent with the understanding between the parties.
BORROWER warrants that BORROWER does not have either a "record" or
reputation for violating Laws of the United States or of any State relating
to liquor (as referred to in 18 U.S.C.A. 3617, (et seq.) Or narcotics
and/or any commercial crimes.
The COLLATERAL SHALL, AT ALL TIMES, BE AT BORROWER'S risk. The
loss, injury to or destruction of COLLATERAL shall not release BORROWER
from payment or other performance hereof. BORROWER agrees to obtain and
keep in force Physical Damage and/or Property Damage Insurance on said
COLLATERAL, and any other insurance required by LENDER. Such insurance is
to be in form and amounts satisfactory to LENDER, with the same payable to
LENDER. All such policies shall provide for thirty (30) days written
minimum cancellation notice to LENDER. BORROWER shall furnish to LENDER
the original policies or certificate or other evidence satisfactory to
LENDER of compliance with the foregoing provisions. LENDER is authorized,
but not obligated, to purchase any or all of said insurance or "single
interest insurance' protecting only its security interest, all at
BORROWER'S expense. In such event, BORROWER agrees to reimburse LENDER for
the cost of such insurance to the extent that the same is not included in
the principal amount of the Note.
BORROWER hereby assigns to LENDER the proceeds of all such
insurance to the extent of the unpaid balance hereunder, and directs any
insurer to make payments directly to LENDER. BORROWER further hereby
grants to LENDER his Power of Attorney, which shall be irrevocable for so
long as any amount is unpaid hereunder. Said Power of Attorney gives
LENDER the sole right to file Proof of Loss and/or any other forms required
to collect from any insurer any amount due from any loss, damage or
destruction of the COLLATERAL; to agree to and bind BORROWER as to the
amount of said recovery; to designate Payee(s) of such recovery; to grant
releases to payor-insurers for their liability; to grant subrogation rights
to any such payor-insurer, to endorse any settlement check or draft.
BORROWER further agrees not to exercise any of the foregoing Powers granted
to LENDER, without the latter's written consent. In the event of any
default hereunder, LENDER is authorized in its sole discretion to cancel
any insurance and credit any premium refund against the unpaid balance due
on BORROWER'S OBLIGATIONS.
If, with respect to any security pledged hereunder, a stock
dividend is declared or any stock split-up made or right to subscribe is
issued, all certificates for the shares representing such stock dividend or
stock split-up right to subscribe will be immediately delivered, duly
endorsed to the LENDER as additional COLLATERAL security.
If, at any time, the COLLATERAL shall be deemed unsatisfactory to
and by LENDER, or in the event LENDER shall otherwise deem itself, its
security interests, its COLLATERAL or said debt unsafe or insecure, then
and on demand of LENDER, BORROWER shall immediately furnish such further
COLLATERAL or make such payment on said account as will be satisfactory to
LENDER to be held by said LENDER as if originally pledged hereunder.
At its option, LENDER may discharge taxes, liens, security
interests or other encumbrances at any time levied or placed on said
COLLATERAL, may pay for insurance and for the maintenance and preservation
of same. BORROWER agrees to reimburse LENDER, on demand, for any such
payment made, or any such expense incurred by LENDER pursuant to the
foregoing authorization. Until Default, as hereinafter defined, BORROWER
shall have the right to retain possession of the COLLATERAL, unless
otherwise agreed by the parties hereto, and to use in any lawful manner not
inconsistent with the AGREEMENT and with any policy of insurance thereon.
BORROWER shall be liable for all documentary and intangible taxes assessed
at closing or from time to time during the life of the transaction.
LENDER may, to the extent permitted by law, with or without
notice, before or after maturity of this Note, transfer or register in the
name of its nominee(s) all or any party of the COLLATERAL, and also
exercise any or all rights of collection, conversion or exchange and other
similar rights, privileges and options pertaining to the COLLATERAL; but
shall have no duty to exercise any such rights, privilege or options or to
sell or otherwise realize upon any of the COLLATERAL as herein authorized
or to preserve the same and shall not be responsible for any failure to do
so or delay in so doing. As to any COLLATERAL consisting of instruments or
chattel paper, it is agreed that LENDER shall not be required to take any
steps whatever to preserve any rights against prior Parties.
LENDER shall have no custodial or ministerial duties to perform
with regard to COLLATERAL pledged except for its safekeeping; and by way of
explanation and not by way of limitation thereof, LENDER shall incur no
liability for any of the following: loss or depreciation of the COLLATERAL,
unless caused by its willful misconduct, failure to present any paper for
payment or to protest or give notice of non-payment or any other notice
with respect to any paper or COLLATERAL; or its failure to present or
surrender for redemption, conversion or exchange any bond, stock, paper or
other Security whether in connection with any merger, consolidation,
recapitalization, reorganization or arising out of the intendment or
refunding of the original Security or its failure to notify any party
hereto that the COLLATERAL should be so presented or surrendered.
Upon any transfer of this Note, the LENDER may deliver the
property held as security or any part thereof, to the transferee, as well
as any subsequent holder hereof who shall thereupon become vested with all
the powers and rights herein given to the LENDER in respect to the property
so transferred and delivered, and the LENDER shall thereafter be forever
relieved and fully discharged from any liability or responsibility with
respect to such property so transferred but with respect to any property
not so transferred, the LENDER shall retain all rights and powers hereby
given.
With prior written consent of LENDER, other COLLATERAL may be
substituted for the original COLLATERAL herein, in which event all rights,
duties, obligations, remedies and security interests provided for, created
or granted shall apply fully to such substitute COLLATERAL.
Upon the occurrence of any of the "EVENTS OF DEFAULT", as
hereinafter defined, LENDER is herewith expressly authorized to exercise
its right of Set-Off or Bank Lien as to any monies deposited in demand,
checking, time, savings or other accounts of any nature maintained in and
with it by any of the undersigned, without advance notice. Said right of
Set-Off shall also be exercised and applicable where LENDER is indebted to
any signer hereof by reason of any Certificate of Deposit, Note or
otherwise.
WAIVER OF JURY TRIAL. BY THE EXECUTION HEREOF, BORROWER HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY AGREES, THAT:
(A) NEITHER THE BORROWER NOR ANY ASSIGNEE, SUCCESSOR, HEIR, OR
LEGAL REPRESENTATIVE OF ANY OF THE SAME SHALL SEEK A JURY TRIAL IN ANY
LAWSUIT, PROCEEDING, COUNTERCLAIM, OR ANY OTHER LITIGATION PROCEDURE
ARISING FROM OR BASED UPON THIS PROMISSORY NOTE, ANY OTHER LOAN AGREEMENT
OR ANY LOAN DOCUMENT EVIDENCING, SECURING OR RELATING TO THE OBLIGATIONS OR
TO THE DEALINGS OR RELATIONSHIP BETWEEN OR AMONG THE PARTIES THERETO;
(B) NEITHER THE BORROWER NOR LENDER SHALL SEEK TO CONSOLIDATE ANY
SUCH ACTION, IN WHICH A JURY TRIAL HAS BEEN WAIVED, WITH ANY OTHER ACTION
IN WHICH A JURY TRIAL HAS NOT BEEN OR CANNOT BE WAIVED;
(C) THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY NEGOTIATED BY
THE PARTIES HERETO, AND THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS;
(D) NEITHER THE BORROWER, NOR LENDER HAS IN ANY WAY AGREED WITH
OR REPRESENTED TO ANY OTHER PERSON OR PARTY THAT THE PROVISIONS OF THIS
PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES; AND
(E) THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER TO
ENTER INTO THIS TRANSACTION.
EVENTS OF DEFAULT
BORROWER shall be in default under this AGREEMENT upon the
happening of any of the following events, circumstances or conditions;
namely:
(1) Default in the payment or performance of any of
theOBLIGATIONS provided hereunder or in connection herewith or any other
OBLIGATIONS of BORROWER or any affiliate (as defined in 1 1 U. S. C. 10 1
(2); hereinafter affiliate) or BORROWER or any endorser, guarantor or
surety for BORROWER to LENDER or any affiliate of LENDER howsoever created,
primary or secondary, whether direct or indirect, absolute or contingent,
now or hereafter existing, due or to become due, or of any other covenant,
warranty, or undertaking expressed herein, therein, or in any other
document establishing said endorsement, guaranty or surety; or any other
document executed by BORROWER in conjunction herewith;
(2) Any warranty, representation or statement made or furnished
to LENDER by or on behalf of BORROWER, or any guarantor, endorser, or
surety for BORROWER in connection with the Note or to induce LENDER to make
a loan to BORROWER which was false in any material respect when made or
furnished or has become materially false, if such warranty of BORROWER or
guarantor, endorser or surety for BORROWER was ongoing in nature; or
(3) Death, dissolution, termination of existence, insolvency,
business failure, appointment of a receiver, custodian, or trustee for any
part of the property of, assignment for the benefit of creditors by, or the
commencement of any proceeding under any bankruptcy or insolvency laws by
or against BORROWER or any endorser, guarantor, or surety for BORROWER; or
(4) BORROWER or any guarantor, endorser, or surety for BORROWER
shall allow the acquisition of substantially all of the business or assets
of BORROWER or guarantor or surety for BORROWER or a material portion of
such business assets if such a sale is outside BORROWER'S or guarantor's,
endorser's or surety's ordinary course of business or more than 50% of the
outstanding stock or voting power of BORROWER in a single transaction or a
series of transactions, or acquire substantially all of the business or
assets or more than 50% of the outstanding stock or voting power of any
other entity, or enter into any transaction of merger or consolidation
without prior written consent of LENDER; or
(5) Failure of a corporate BORROWER or endorser, guarantor or
surety for said BORROWER to maintain its corporate existence in good
standing; or
(6) Upon the entry of any monetary judgment or the assessment
and/or filing of any tax lien against BORROWER or any endorser, surety, or
guarantor, or upon the issuance of any writ of garnishment, judicial
seizure of, or BORROWER be generally not paying BORROWER'S debts as such
debts become due; or
(7) The BORROWER or any endorser, guarantor, or surety for said
BORROWER shall be a debtor, either voluntarily or involuntarily , under (as
as the term debtor is defined in) the Bankruptcy Code or should the
BORROWER be generally not paying BORROWER's debts as such debts become due;
or
(8) Failure of said BORROWER, endorsers, guarantors or sureties
to furnish financial statements or other financial information reasonably
requested by LENDER; or
(9) Loss, theft, substantial damage, destruction, sale or encumbrance to
or of any COLLATERAL or the assertion or making of any levy, seizure,
mechanic's or materialman's lien or attachment thereof or thereon; or
(10) If LENDER should otherwise deem itself or the debt created
hereunder unsafe or insecure; or should LENDER, in good faith, believe that
the prospect of payment or other performance is impaired.
REMEDIES ON DEFAULT (including Powers of Sale)
Upon the occurrence of any of the foregoing events, circumstances
or conditions of Default, all of the OBLIGATIONS evidenced herein and
secured hereby shall at the option of the LENDER, immediately be due and
payable without notice. Further, LENDER shall then have all the rights and
remedies of a SECURED PARTY under the Uniform Commercial Code AS adopted by
the state LENDER'S office as set forth herein.
Without limitation thereto, LENDER shall have the
following specific rights and remedies:
(1) To take immediate possession of the COLLATERAL without notice or
resort to legal process; and for such purpose, to enter upon any premises
on which the COLLATERAL or any part thereof may be situated and remove the
same therefrom; or at its option, to render the COLLATERAL unusable.
Further, also at its option, to depose of said COLLATERAL on BORROWER'S
premises.
(2) To require BORROWER to assemble the COLLATERAL and make it
available to LENDER at a place to then be designated by said LENDER, which
is reasonably convenient to both parties.
(3) To exercise its rights of Set-Off by applying any monies of
BORROWER on deposit with LENDER toward payment of the OBLIGATIONS evidenced
or referred to herein or secured hereby, without notice. If any process is
issued or ordered to be served on LENDER, seeking to seize BORROWER'S
rights and/or interest in any bank account maintained with LENDER; the
balance in any said account shall immediately be deemed to have been and
shall be set-off against any and all OBLIGATIONS of BORROWER to LENDER, as
of the time of issuance of any such writ or process; whether or not
BORROWER and/or LENDER shall then have been served therewith.
(4) To dispose of COLLATERAL as allowed by the Uniform Commercial
Code, as adopted by the State of LENDER'S office as set forth herein, in
any County or place selected by LENDER, at either Private or Public Sale
(at which Public Sale LENDER may be the purchaser) with or without having
the COLLATERAL physically present at said site.
(5) To make or have made any repairs deemed necessary or desirable
at time of repossession, possession or sale, the cost of which is to be
charged against BORROWER.
(6) To apply to proceeds realized from disposition of the
COLLATERAL to satisfy the following terms, in the order here listed:
(a) The cost of reimbursing any person whose interest in the
premises is physically damaged by the entry and removal of the COLLATERAL,
upon BORROWER'S failure to do so; next to
(b) The expenses of taking, removing, holding for sale, repairing
or otherwise preparing for sale and selling of said COLLATERAL specifically
including the LENDER'S reasonable Attomey's fees (including appellate
costs, if any) and both legal and collection expenses; next to
(c) The expense of liquidating any liens, security interests,
attachments or encumbrances superior to the security interests herein
created; and finally to
(d) The unpaid principal and all accumulated interest hereunder
and to any other debt owed to LENDER by any signer hereof.
Any surplus, after the satisfaction of the foregoing items (a)
through (d) shall be paid to BORROWER or to any other PARTY lawfully
entitled thereto and known to this LENDER. Further, if proceeds realized
from disposition of the COLLATERAL shall fail to satisfy any of the
foregoing items (a) through (d), BORROWER shall forthwith pay deficiency
balance to LENDER.
No waiver, amendments or modifications shall be valid unless in
writing. Further, this Note shall be governed by and construed under the
laws of the State of the LENDER'S office as set forth herein. All terms
and expressions contained herein which are defined in Articles 1, 3 or 9 of
the Uniform Commercial Code of the State of LENDER'S office set forth
herein shall have the same meaning herein as in said Articles of Said Code.
No waiver by LENDER of any default(s) shall operate as a waiver of any
other default or the same default on a future occasion. All rights of
LENDER hereunder shall inure to the benefit of its successors and assigns;
and all obligations of BORROWER shall bind his heirs, executors,
administrators, successors and/or assigns.
If more than one person has signed this instrument, such parties
are jointly and severally obligated hereunder. Further, use of the
masculine pronoun herein shall include the feminine and neuter and also the
plural. If any provision of this instrument shall be prohibited or invalid
under applicable law, such provision shall be ineffective but only to the
extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of the Agreement.
"Agreement" refers to the entire PROMISSORY NOTE herein. In the case of
conflict between the terms of this Agreement and the Mortgage, Loan
Agreement and/or Commitment Letter issued in connection herewith, the
priority of controlling terms shall be first this Agreement, then the
Mortgage, the Loan Agreement, then the Commitment Letter.
IN WITNESS WHEREOF, the Borrower, on the day and year first written above,
has caused this Note to be executed under seal
by (I) if a corporation, adoption of the facsimile seal printed hereon for
such special occasion and purpose (or if an impression seal appears herein
by affixing such impression seal) by its duly authorized officer(s) or,
(ii) if by individuals, hereunto setting their hands and seals.
SOUTH SEAS PROPERTIES COMPANY LIMITED PARTNERSHIP,
an Ohio limited partnership
By: ______________________
Robert M. Taylor, Manager and Chairman,
T&T RESORTS, L.C.
General Partner