This Loan Agreement (“Agreement”) is a contract between (i) the authorized individual acting on behalf of the business at the merchant address identified above, as such address may be updated from time to time in accordance with the terms of this Agreement, as the Merchant (as applicable, each individually or collectively, “Merchant,” “you,” or “your”), and (ii) Tango Hospitality, Inc (“Tango Capital”).
You must read, agree with, and accept all terms and conditions contained in this Agreement. In consideration of the promises and the respective representations, warranties, covenants, agreements and conditions contained below and on the following pages, the Parties hereby enter into this Agreement and agree with the terms and conditions set forth herein.
I. Definitions
“Card Network” means any payment network used to route payment card transactions, including but not limited to Visa, MasterCard, Discover, and/or American Express.
“Existing Obligation Amount” is the amount that will be deducted from the Loan Amount under this Agreement to satisfy an existing or unsatisfied prior loan through the Tango Capital Program pursuant to Section 6.8 of this Agreement and specified in the summary box above.
“Linked Account(s)” means any valid Canadian Tango Capital or other transaction account you have linked to your Tango Hospitality Account for purposes of (i) receiving payment card processing proceeds through Tango Hospitality, Inc., (ii) processing the deposit of the Loan Amount; and/or (iii) repayment of your Loan through Tango Capital.
“Loan Amount” is the dollar amount of funds extended to you by Tango Capital, in the amount specified in the summary box above.
“Loan Balance” is the amount you are obligated to pay under Section 2.1.2 as specified in the summary box above.
“Loan Funds Available” means the net amount available and deposited to the Linked Account after deductions of the Existing Obligation Amount (if applicable) from your Loan Amount, pursuant to Section 6.8 of this Agreement, and specified in the summary box above.
“Merchant” has the meaning set forth in the first paragraph of this Agreement.
“Origination Date” means the date the Loan Funds Available are disbursed to the Linked Account.
“Receivables” means the total amount of receivables resulting from bona-fide sales using Canadian-issued or widely accepted non-Canadian issued credit, debit, prepaid, or gift cards with a Card Network logo which are acceptable to Tango Hospitality, Inc. (collectively, the “Accepted Cards”) or such other payment method deemed acceptable to Tango Hospitality, Inc.
“Repayment Rate” means the percentage of Receivables generated by Merchant and processed by Tango Hospitality, Inc., as set forth in the summary box above that will be debited from your gross payment card processing amount each day you process payments and will continue to be applied to your Loan Balance until such Loan Balance is paid in full.
“Repayment Start Date” means the date your repayment obligations begin, and is specified in the summary box above. “Tango Capital” has the meaning set forth in the first paragraph of this Agreement.
“Tango Capital” has the meaning set forth in the first paragraph of this Agreement.
“Tango Account” means all accounts with Tango Hospitality, Inc. that are identified with or used by the Merchant and through which proceeds from the Merchant’s payment card transactions are processed.
“Term” has the meaning set forth in Section 2.1.3 of this Agreement.
II. Information About Your Loan
2.1 Extension of Credit. Tango Capital is extending the Loan Amount specified in the summary box above. In exchange, you agree as follows:
2.1.1 Business Purpose. You acknowledge and agree that funds received under this Agreement are for business purposes only and any proceeds from this Agreement, including the Loan Amount, will not be used for personal, family or household purposes. You understand that you are not receiving a consumer loan, and that statutory and regulatory protections for consumers will not apply to your loan. You also understand that Tango Capital (and/or its agents and assignees) will not confirm whether the use of any funds provided conforms to this section. You agree that a breach of the provisions of this section will not affect the Tango Capital’s (and/or any of its agents or assignees) right to (i) enforce your promise to pay for all amounts owed under this Agreement, regardless of the purpose for which the funds are in fact obtained or (ii) use any remedy legally available to Tango Capital (and/or its agents and assignees), even if that remedy would not have been available had the funds been provided for consumer purposes.
2.1.2 Obligation to Repay. You agree to repay the Loan Amount (“Loan Balance”) and in order to satisfy the repayment obligation, you direct Tango Hospitality, Inc., to withhold the Repayment Rate from your gross Receivables generated during each day you process payments with Tango Hospitality, Inc. while you have an outstanding Loan Balance. Tango Hospitality, Inc. agrees to withhold the Repayment Rate from your gross Receivables balance. Your repayments shall be applied to and reduce the amount of your Loan Balance until such balance is paid in full. Your repayments begin on the Repayment Start Date.
2.1.3 Minimum Payment Obligations. You will (i) repay a minimum of 1/10th of the initial Loan Balance for each sixty (60) day period starting from the Origination Date and (ii) repay the Loan Balance in full within 10 months from the Origination Date (the “Term”).
2.1.4 Early Repayment. You may repay your outstanding Loan Balance in full or in part at any time.
2.1.5 Tango Capital Authorization. You authorize Tango Capital to make an initial credit to your Linked Account to fund your loan or where otherwise required under this Agreement. In the event you decide to prepay your Loan Balance, or need to make payment to satisfy your minimum payment obligations or other amounts due under the terms of this Agreement, you authorize Tango Capital (including its agents and assignees) to debit any Linked Account.
2.1.6 Cancellation Period. You may cancel this Agreement by contacting Tango Capital through Tango anytime prior to the Repayment Start Date. If you cancel, Tango Capital (including its agent and assignee) will debit the Loan Amount from your Linked Account. Your loan will not be deemed cancelled if the debit to your Linked Account is unsuccessful. You will return the Loan Amount to Tango Capital, less amounts used to satisfy any existing obligations pursuant to 6.8 that will be reinstated, even if you no longer have the funds in your Tango Capital account. In the event that you have any Existing Obligation Amounts pursuant to 6.8 and you elect to cancel this Loan Agreement (anytime prior to the Repayment Start Date), you hereby agree that any (i) Existing Obligation Amount remains due and payable, and (ii) terms, conditions, representations and covenants agreed to under any existing agreement will apply immediately upon cancellation of this Agreement.
IV. Merchant Covenants
4.1 Merchant Covenants. Merchant agrees to comply with the performance covenants set forth in this Section IV (the “Merchant Covenants”). In this regard, Merchant irrevocably agrees that during the Term, Merchant shall:
4.1.1 No Transfer. Not sell, transfer, assign or grant a security interest in the Receivables to another party;
4.1.2 Seller Agreement. Comply with the Tango Hospitality, Inc. General Terms of Service and any applicable Additional Terms governing Merchant’s use of Tango Hospitality, Inc.’s mobile and website applications, payment processing services, and hardware products;
4.1.3 Card Processing. Use Tango Hospitality, Inc. exclusively for the processing of all of your payment card transactions pursuant to the Tango Hospitality, Inc. General Terms of Service and any applicable Additional Terms and otherwise prevent the diversion of any of your Receivables to any processor other than Tango Hospitality, Inc.;
4.1.4 Card Acceptance. Not take any action to discourage use of Accepted Cards as payment for Merchant transactions or permit any event to occur that could have an adverse effect on the acceptance, authorization or use of Accepted Cards by purchasers of the Merchant’s products and/or services, with the exception that Merchant may impose any charge on credit card transactions permitted by the applicable card associations’ rules and regulations;
4.1.5 Purpose of Business. Maintain your business in substantially the same manner as it existed as of the date of this Agreement;
4.1.6 Business Conduct. Conduct your business in a manner consistent with past practice unless you provide prior written notification to Tango Capital;
4.1.7 Tango Account. Maintain your Tango Account in good standing pursuant to the Tango Hospitality, Inc. General Terms of Service and any applicable Additional Terms;
4.1.8 Card Network Compliance. Remain in full compliance with applicable Network Rules and not be classified as a “higher risk” or other similar designation by any Card Network;
4.1.9 Business Name. Conduct your business under the name provided herein and maintain any and all of your physical or virtual places of business, unless you provide prior written notification to Tango Capital;
4.1.10 Control of Business. Not allow another person or company, including without limitation a franchisor company (if Merchant is a franchisee), to assume or take over the operation and/or control of Merchant’s business or business location, whether physical or virtual;
4.1.11 Sale of Business. Not sell, dispose, convey or otherwise transfer any of Merchant’s business or assets (other than in the ordinary course of business), or grant any lien not in effect on the date of this Agreement on any Receivables, without Tango Capital’s prior written consent;
4.1.12 Requests from Tango Capital. Respond to Tango Capital within two (2) Business Days, or such longer period as determined solely in Tango Capital’s discretion, of receiving a reasonable request from Tango Capital for information and provide all such requested information;
4.1.13 Cooperation. Cooperate fully with Tango Capital (including its agents, assignees and service providers) to take all necessary actions to effectuate each of its obligations hereunder, including but not limited to signing any and all documents Tango Capital (including its agents, assignees and service providers) deems necessary and furnishing Tango Capital with such information as Tango Capital may reasonably request from time to time;
4.1.14 Taxes. Promptly pay all applicable federal, provincial and local taxes, including but not limited to employment, sales and use taxes;
4.1.15 Loan Default. Repay your Loan Balance as agreed in Section II, including satisfying the minimum repayment requirements of Section 2.1.3; and
4.1.16 Decline in Receivables. Not cause, either by direct action or inaction, the dollar amount of Receivables processed through your Tango Account in any thirty (30) day period to be fifty (50) percent or less of the monthly minimum dollar amount of Receivables processed through your Tango Account in the twelve (12) months prior to such period.
V. Merchant Representations and Warranties
5.1 Merchant represents and warrants that as of the Execution Date and during the Term:
5.1.1 Capacity. The individual executing this Agreement has the legal capacity to do so, is at least 18 years of age, and is authorized on behalf of the Merchant to do so, with all necessary power and authority to bind Merchant to this Agreement.
5.1.2 Encumbrance of Receivables. Merchant has not sold, will not sell, and is not subject to any other contract that provides for the sale, assignment or any other transfer of any interest in its Receivables. Merchant’s Receivables are not subject to any claims, charges, liens, restrictions, encumbrances or security interests and no holder of such interest in Merchant’s Receivables is currently exercising its remedies in connection with such interest. Receivables are and will be bona fide and existing obligations of the Merchant’s customers arising out of the sale of goods and/or services in the ordinary course of Merchant’s business.
5.1.3 Reliance on Information. Merchant acknowledges that the Tango Capital has and will continue to rely upon the validity, accuracy and completeness of all information provided by or on behalf of Merchant in connection with Tango Capital’s obligations hereunder.
5.1.4 Approvals. Merchant possesses and is in compliance with all permits, licenses, approvals, consents and any other authorizations necessary to conduct its business. Merchant is in compliance with, and the execution of this Agreement and consummation of the transaction contemplated herein will not conflict with, (i) any and all applicable federal, state and local laws and regulations, (ii) any agreements to which Merchant is a party, and (iii) Merchant’s articles or certificate of incorporation, bylaws, or other organizational documents. Merchant possesses all requisite permits, authorizations and licenses to own, operate and lease its properties and to conduct the business in which it is presently engaged.
5.1.5 Authorization. Merchant has the power and authority to enter into and perform Merchant’s duties and obligations under this Agreement and any documents required to facilitate the transactions contemplated by this Agreement. Merchant is not a party to any contract or aware of any existing situation that would prevent Merchant from entering into or performing its obligations under this Agreement. Merchant has taken all necessary action to authorize their respective execution and delivery of, and performance under, this Agreement.
5.1.6 Other Proceedings and Bankruptcy. There is no action, suit, claim, investigation or legal, administrative, or arbitration proceeding pending or currently threatened whether at law or in equity or before any federal, state, local, foreign or other court, governmental department, commission, board, bureau, agency or instrumentality (collectively, “Governmental Authorities”) against Merchant. Merchant has not declared bankruptcy within the past seven years and is not currently contemplating the filing of a bankruptcy proceeding or closing or materially modifying Merchant’s business. Merchant is solvent and financially capable of fulfilling its obligations under this Agreement.
5.1.7 Good Standing. Merchant is validly existing and in good standing under any applicable laws of its state of organization. Merchant has all requisite power and authority to own, lease, pledge and operate its properties and assets and to carry on its business as presently conducted.
5.1.8 Conflicts With Other Agreements. The execution and delivery of, the consummation of the transactions contemplated hereunder, and compliance with the provisions of this Agreement, do not and will not conflict with other agreements to which Merchant is a party or beneficiary, or result in any of the following: (i) violation or default of other agreements to which Merchant is a party; (ii) entitlement of any person or entity to receipt of notice or right of consent; (iii) a right of termination, cancellation or acceleration of any obligation or to loss of a benefit; (iv) any increased, additional, accelerated or guaranteed rights or entitlement of any person or entity; or (v) creation of any claim on the properties or assets of Merchant.
5.1.9 Compliance With Laws. Merchant is in compliance with all statutes, rules, regulations, orders or restrictions of all applicable Governmental Authorities and all Network Rules. All federal, provincial, local and foreign tax returns and tax reports, and all taxes due and payable arising there from required to be filed by Merchant have been or will be filed and paid, on a timely basis (including any extensions). All such returns and reports are and will be true, correct and complete. Merchant has no material liabilities and, to the best of its knowledge, knows of no material contingent liabilities, except current liabilities incurred in the ordinary course of business.
5.1.10 Loan Purpose. Merchant is applying for credit solely for business purposes and not for personal, family or household use. Any credit extended under this Agreement, including the Loan Amount, is solely for business purposes and not for personal, family or household use.
VI. Additional Terms
6.1 Processing and Other Fees. Your Repayment Rate will be calculated based on your gross Receivables processed through Tango Hospitality, Inc. Merchant shall be solely responsible for the payment of any processing fees and other charges imposed in accordance with the Tango Hospitality, Inc. General Terms of Service and any applicable Additional Terms or any other agreement between Merchant and Tango Hospitality, Inc.
6.2 Merchant’s Transactional Information. Merchant hereby agrees to provide to Tango Hospitality, Inc., from time to time upon request, transaction files maintained by Merchant, and any other information related to past payment processing volumes or the transactions contemplated by this Agreement, whether formed for the purpose of audit or otherwise.
6.3 Termination of Agreement. Except as otherwise stated herein, this Agreement shall remain in full force and effect until the entire Loan Balance has been repaid to Tango Capital or its agent or assignee.
6.4 Effect of Merchant Breach. If you breach any of your obligations in Section II, the covenants in Section IV or any of your representations, warranties or covenants found in this Agreement, Tango Capital or its agent or assignee shall be entitled, upon written notice to you, to (i) demand immediate repayment of the Loan Balance or (ii) increase your Repayment Rate to a rate determined by Tango Capital or its agent or assignee in its sole discretion. You agree to pay the outstanding Loan Balance within five (5) Business Days after receipt of such notice, or such longer period of time as requested by Tango Capital or its agent or assignee.
6.5 Effect of Multiple Tango Hospitality Accounts. Any attempt to receive your payment card processing proceeds through multiple Tango Hospitality Accounts shall entitle Tango Capital to consider any such Tango Accounts as part of your Tango Account for purposes of this Agreement. Tango Capital (including its agent or assignee) may, at its option, (i) provide you with notice that additional Tango Hospitality Accounts are now considered part of your Tango Hospitality Account under this Agreement and apply the Repayment Rate to such consolidated Tango Hospitality Account or (ii) exercise its other remedies under this Agreement.
The remedies provided hereunder are cumulative and not exclusive of any remedies provided by law or equity.
6.6 Satisfaction of Existing Obligation. In order to receive funds under this Agreement, you must fully satisfy any Existing Obligation Amount. Funds under this Agreement will not be made available until you have fully satisfied such Existing Obligation Amount. If you have an Existing Obligation Amount on a loan through the Tango Capital Program, in order to receive this loan you hereby agree to make full repayment on any such other loan. The Existing Obligation Amount due on your existing loan will be deducted from the Loan Amount for such repayment before any remaining loan proceeds are made available to you.
6.7 Effect of Breach. Tango Capital and its agents and/or assignees each have the right to enforce the repayment of your Loan Balance pursuant to the terms of this Agreement, and in the instance of nonpayment of your Loan Balance will enforce those rights solely against Merchant’s business assets, including but not limited to the property and interests described in Section 6.1.2 above. This does not limit your duties and performance obligations under this Agreement, including but not limited to your payment obligation in Section 2.1.2 and the Tango Capital’s enforcement rights.
6.8 Satisfaction of Existing Obligation. In order to receive funds under this Agreement, you must fully satisfy any Existing Obligation Amount. Funds under this Agreement will not be made available until you have fully satisfied such Existing Obligation Amount. If you have an Existing Obligation Amount on a loan through the Tango Capital Program, in order to receive this loan you hereby agree to make full repayment on any such other loan. The Existing Obligation Amount due on your existing loan will be deducted from the Loan Amount for such repayment before any remaining loan proceeds are made available to you.
6.9 Effect of Breach. Tango Capital and its agents and/or assignees each have the right to enforce the repayment of your Loan Balance pursuant to the terms of this Agreement, and in the instance of nonpayment of your Loan Balance will enforce those rights solely against Merchant’s business assets, including but not limited to the property and interests described in Section 6.1.2 above. This does not limit your duties and performance obligations under this Agreement, including but not limited to your payment obligation in Section 2.1.2 and the Tango Capital’s enforcement rights.
VII. Miscellaneous
7.1 Modifications; Amendments. Except as otherwise expressly provided in this Agreement, any provision of this Agreement may be modified or supplemented only by an instrument in writing signed by Tango Capital and Merchant.
7.2 Waiver. Tango Capital’s failure to assert, or delay in exercising, any right or provision under this Agreement shall not constitute a waiver of such right or provision. No waiver of any term of this Agreement shall be deemed a further or continuing waiver of such term or any other term.
7.5 Binding Effect. This Agreement shall be binding upon and inure to the benefit of Merchant, Tango Hospitality, Inc. and their respective successors and assigns, except that Merchant shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of Tango Capital, which consent may be withheld in Tango Capital’s sole discretion. Tango Capital (including its agents, assignees and service providers) reserves the right to sell, transfer or assign this Agreement and any obligation hereunder with or without prior notice to Merchant. Tango Capital may sell, transfer or assign its obligations as the service provider with or without prior notice to Merchant.
7.6 Costs to Enforce Payable by Merchant. Tango Hospitality, Inc. shall be entitled to receive from Merchant, and Merchant shall pay, all reasonable costs associated with a breach by Merchant of any of its obligations, covenants (including but not limited to the Merchant Covenants) or any of the representations and warranties of Merchant under this Agreement and the enforcement thereof, including but not limited to returned check fees, court costs and attorneys’ fees. For this purpose, “reasonable costs” shall include the costs, including attorneys’ fees, associated with defending, protecting, or enforcing Tango Capital’s rights under this Agreement including in any bankruptcy proceeding. If Merchant files an action or commences arbitration against Tango Hospitality, Inc. and the matter is dismissed, Tango Hospitality, Inc. prevails in the matter, Merchant agrees to pay other Party’s attorneys’ fees and costs incurred in the matter, whether in court or arbitration.
7.7 Indemnification. In addition to all rights and remedies available to the Parties hereto at law or in equity, Merchant shall indemnify Tango Hospitality, Inc. (and its respective employees, directors, agents, affiliates and representatives), and hold harmless from and against and pay on behalf of or reimburse each such Indemnified Person, as and when incurred, for any and all loss, liability, demand, claim, action, cause of action, cost, damage, deficiency, tax, penalty, fine or expense, whether or not arising out of any claims by or on behalf of such Indemnified Persons or any third party, including interest, penalties, reasonable attorneys’ fees and expenses and all amounts paid in investigation, defense or settlement of any of the foregoing (including all reasonable attorneys’ fees and expenses incurred in connection with the enforcement of this Section), that any such Indemnified Persons may suffer, sustain, incur or become subject to, as a result of, in connection with, relating or incidental to or by virtue of: (i) any misrepresentation or breach of warranty of Merchant under this Agreement; or (ii) any non fulfillment, default or breach of any covenant or agreement of Merchant in this Agreement.
7.8 Enforceability of Representations. All representations, warranties and covenants herein will be enforceable upon the execution and delivery of this Agreement and will continue in full force and effect until this Agreement has been terminated.
7.9 Severability. Should any provision of this Agreement be determined to be invalid or unenforceable under any law, rule, or regulation, including any Network Rule, such determination will not affect the validity or enforceability of any other provision of this Agreement. In the event that any provision of this Agreement is held to be invalid, illegal, prohibited or unenforceable for any reason in any jurisdiction, such provision, as to such jurisdiction, shall, to the fullest extent permitted by applicable law, be ineffective without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.
7.10 Complete Agreement. This Agreement, and any addendum and forms provided herewith, along with any other Tango Hospitality, Inc. agreements referenced herein, contains the complete agreement and understanding between Merchant and Tango Hospitality, Inc. and supersedes all prior contracts and understandings relating to the matter of this Agreement unless otherwise specifically reaffirmed or restated herein.
7.11 Governing Law. This Agreement and any dispute arising hereunder will be governed by Ontario law and/or applicable federal law as applied to agreements entered into and to be performed entirely within Ontario, without regard to its choice of law or conflicts of law principles that would require application of law of a different jurisdiction.
7.12 Survival. This Section and Sections 7.6 (Costs to Enforce Payable by Merchant), 7.7 (Indemnification), 7.9 (Severability), 7.10 (Complete Agreement), 7.11 (Governing Law), 7.13 (Limitation on Time to Initiate a Dispute) and 7.15 (Binding Individual Arbitration) shall survive after you repay your Loan Balance in full, including after the termination of this Agreement.
7.13 Limitation on Time to Initiate a Dispute. Unless otherwise required by law, an action or proceeding by Merchant relating to any dispute arising under this Agreement must commence within one year after the cause of action occurs or becomes enforceable.
7.14 Merchant’s Disputes. If Merchant has any dispute of any kind under this Agreement, Merchant agrees to promptly notify Tango Hospitality, Inc. in writing of the dispute and all related facts.
7.15 Register. You agree that Tango Hospitality, Inc., solely on your behalf, will be allowed to and will maintain a register, recording the owner and amount of your Loan Balance (including any assignee, participant or transferee, if any, who becomes the subsequent owner of any portion of your Loan Balance) (the “Register”). The Parties agree that the person whose name is recorded in the Register as the current owner of your Loan Balance is treated as the owner of your Loan Balance. The Register must be updated for any transfer of ownership of your Loan Balance to occur.
