EXHIBIT 10.40
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AMENDED AND RESTATED LOAN AGREEMENT
Dated as of November 5, 1999
Between
THE PARTIES LISTED ON EXHIBIT A ATTACHED HERETO,
as Borrower
and
BEAR, ▇▇▇▇▇▇▇ FUNDING, INC.,
as Lender
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AMENDED AND RESTATED LOAN AGREEMENT
THIS AMENDED AND RESTATED LOAN AGREEMENT, dated as of November 5,
1999 (subject to Section 10.26 hereof) (as amended, restated, replaced,
supplemented or otherwise modified from time to time, this "Agreement"), between
Bear, ▇▇▇▇▇▇▇ Funding, Inc., a Delaware corporation having an address at ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Lender") and the Parties Listed on
Exhibit A attached hereto, each having an address in care of Wyndham
International, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
(each, an "Individual Borrower" and collectively, "Borrower").
W I T N E S S E T H:
WHEREAS, Lender has made the Loan (as hereinafter defined) to
Borrower pursuant to that certain Loan Agreement dated as of June 29, 1999
between the parties listed on Exhibit A-1 attached hereto (collectively, the
"Original Borrowers") and Lender, as amended by that certain Loan Modification
Agreement (as defined herein) (such Loan Agreement, as so amended, being
hereinafter referred to as the "Original Loan Agreement");
WHEREAS, Borrower and Lender have agreed to incorporate the terms
and provisions of the Loan Agreement and the Loan Modification Agreement into
this Agreement which is effective as of June 29, 1999 with respect to all of the
Individual Properties (as defined herein) other than the Bel Age Property (as
defined herein) and is effective as of August 17, 1999 with respect to the Bel
Age Property.
NOW THEREFORE, in consideration of the covenants, agreements,
representations and warranties set forth in this Agreement and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree and confirm that the terms and provisions
of the Original Loan Agreement are hereby amended and restated in their entirety
to hereinafter read and provide as follows:
I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION
Section 1.1 Definitions.
For all purposes of this Agreement, except as otherwise expressly
required or unless the context clearly indicates a contrary intent:
"Adjusted Release Amount" shall mean, for each Individual Property,
the sum of (i) the Pro-Rata Release Amount for such Individual Property and (ii)
twenty-five percent (25%) of the Release Amount for such Individual Property.
"Affiliate" shall mean, as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by or is under common
control with such Person or is a director or executive officer of such Person or
of an Affiliate of such Person.
"Agent" shall mean LaSalle Bank, National Association or any
successor Eligible Institution acting as Agent under the Cash Management
Agreement.
"ALTA" shall mean American Land Title Association, or any successor
thereto.
"Annual Budget" shall mean the operating budget, including all
planned capital expenditures, for the Properties prepared by Borrower for the
applicable Fiscal Year or other period.
"Applicable Interest Rate" shall mean the rate at which the
outstanding principal amount of each of the Components comprising the Note bears
interest from time to time in accordance with the provisions of Section 2.2.3
hereof.
"Approved Annual Budget" shall have the meaning set forth in Section
5.1.11(d).
"Assignment of Leases" shall mean, with respect to each Individual
Property, that certain first priority Assignment of Leases and Rents, dated as
of the date hereof, from the related Individual Borrower, as assignor, to
Lender, as assignee, assigning to Lender all of such Individual Borrower's
interest in and to the Leases and Rents of such Individual Property as security
for the Loan, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.
"Assignment of Management Agreement" shall mean, with respect to
each Individual Property, that certain Assignment of Management Agreement and
Subordination of Management Fees dated the date hereof among Lender, Borrower
and the applicable Manager, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
"Award" shall mean any compensation paid by any Governmental
Authority in connection with a Condemnation in respect of all or any part of any
Individual Property.
"Basic Carrying Costs" shall mean, with respect to each Individual
Property, the sum of the following costs associated with such Individual
Property for the relevant Fiscal Year or payment period: (i) Taxes, (ii)
Insurance Premiums, (iii) if such Individual Property is subject to a Ground
Lease, the ground rents payable thereunder and (iv) if such Individual Property
is subject to a Condominium, the condominium charges payable by the related
Individual Borrower pursuant to the Condominium and the Condominium Documents.
"Bear ▇▇▇▇▇▇▇ Group" shall have the meaning set forth in Section
9.2(b) hereof.
"Bel Age Borrower" shall mean that certain Individual Borrower known
as W-Bel Age, LLC, a Delaware limited liability company.
"Bel Age Closing Date" shall mean August 17, 1999.
"Bel Age Property" shall mean that certain Individual Property known
as the Wyndham Bel Age.
"Borrower" shall have the meaning set forth in the initial paragraph
of this Agreement.
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"Breakage Costs" shall have the meaning set forth in Section
2.2.3(h) hereof.
"BS & Co." shall have the meaning set forth in Section 9.2(b)
hereof.
"BSCM" shall have the meaning set forth in Section 9.2(b) hereof.
"BSIL" shall have the meaning set forth in Section 9.2(b) hereof.
"BSREG" shall have the meaning set forth in Section 9.2 (b) hereof.
"Business Day" shall mean any day other than a Saturday, Sunday or
any other day on which national banks in New York, New York or Dallas, Texas,
the city in which servicing offices of the Servicer are located or the city in
which the corporate trust office of any trustee appointed in connection with a
securitization of the Loan are not open for business hereof.
"Buttes Parking Facilities" shall have the meaning set forth in
Section 7.6 hereof.
"Buttes Reclaim Parcel" shall have the meaning set forth in Section
2.4.3 hereof.
"Cap Assignment" shall mean collectively, one or more Collateral
Assignments of Interest Rate Protection Agreement dated as of November 5, 1999
made by Borrower to Lender with respect to the Interest Rate Protection
Agreement.
"Capital Expenditures" shall mean for any period, the amount
expended for items capitalized under GAAP and the Uniform System of Accounts
(including expenditures for building improvements or major repairs, leasing
commissions, tenant improvements and the acquisition of fixtures, furniture and
equipment).
"Cash Collateral Account" shall have the meaning set forth in the
Cash Management Agreement.
"Cash Management Agreement" shall mean that certain Cash Management
Agreement by and among Borrower, Manager, Agent and Lender, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time, relating to funds deposited in the Lockbox Account.
"Casualty" shall have the meaning specified in Section 6.2 hereof.
"Casualty Consultant" shall have the meaning set forth in Section
6.4(b)(iii) hereof.
"Casualty Retainage" shall have the meaning set forth in Section
6.4(b)(iv) hereof.
"Closing Date" shall mean the date of the funding of the Loan.
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"Code" shall mean the Internal Revenue Code of 1986, as amended, as
it may be further amended from time to time, and any successor statutes thereto,
and applicable U.S. Department of Treasury regulations issued pursuant thereto
in temporary or final form.
"Commerce Borrower" shall mean that certain individual borrower
under the Original Loan Agreement known as W-Commerce, LLC, a Delaware limited
liability company.
"Commerce Property" shall mean that certain individual property
under the Original Loan Agreement known as the Wyndham Garden LA Commerce.
"Component" shall mean, individually, any one of Component A,
Component B, Component C, Component D or Component E.
"Component A" shall mean that certain Component of the Note
corresponding to the Securities designated as Class A.
"Component B" shall mean that certain Component of the Note
corresponding to the Securities designated as Class B.
"Component C" shall mean that certain Component of the Note
corresponding to the Securities designated as Class C.
"Component D" shall mean that certain Component of the Note
corresponding to the Securities designated as Class D.
"Component E" shall mean that certain Component of the Note
corresponding to the Securities designated as Class E.
"Components" shall mean, collectively, Component A, Component B,
Component C, Component D and Component E.
"Condemnation" shall mean a temporary or permanent taking by any
Governmental Authority as the result or in lieu or in anticipation of the
exercise of the right of condemnation or eminent domain, of all or any part of
any Individual Property, or any interest therein or right accruing thereto,
including any right of access thereto or any change of grade affecting such
Individual Property or any part thereof.
"Condemnation Proceeds" shall have the meaning set forth in Section
6.4(b) hereof.
"Condominium" shall mean, collectively, the condominium regimes
established with respect to the Individual Properties known as Wyndham Emerald
Plaza and Hilton Newark Gateway, pursuant to the Condominium Documents.
"Condominium Documents" shall mean the documentation governing the
condominium regimes constituting the Condominium as described on Schedule IX
hereto.
"Condominium Law" shall have the meaning set forth in Section 5.1.23
hereof.
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"Consent Letter" shall have the meaning set forth in Section 11.5
hereof.
"Contribution Agreement" shall mean that certain Contribution
Agreement dated as of the date hereof among each of the Individual Borrowers, as
the same may be amended, restated, replaced, supplemented or otherwise modified
from time to time.
"Debt" shall mean the outstanding principal amount set forth in, and
evidenced by, this Agreement and the Note together with all interest accrued and
unpaid thereon and all other sums due to Lender in respect of the Loan under the
Note, this Agreement, the Mortgages or any other Loan Document.
"Debt Service" shall mean, with respect to any particular period of
time, scheduled principal and/or interest payments under the Note.
"Debt Service Coverage Ratio" shall mean a ratio for the applicable
period in which:
(a) the numerator is the Net Operating Income (including interest
on credit accounts) for such period as set forth in the
statements required hereunder, without deduction for (i)
actual management fees incurred in connection with the
operation of the Properties, (ii) actual franchise fees
incurred in connection with the operation of the Properties,
or (iii) amounts paid to the Reserve Funds, less (A)
management and franchise fees equal to the greater of (1)
assumed management and franchise fees for each of the
Individual Properties as set forth on Schedule VIII hereto or
(2) the actual management and franchise fees incurred, and (B)
Replacement Reserve Fund contributions equal to the greater of
(1) assumed Replacement Reserve Fund contributions equal to
four percent (4%) of Gross Income from Operations and (2) the
actual Replacement Reserve Fund contributions made by
Borrower; and
(b) the denominator is the product of (i) the sum of the
outstanding principal balances of all Components comprising
the Note and (ii) eleven percent (11 %).
"Default" shall mean the occurrence of any event hereunder or under
any other Loan Document which, but for the giving of notice or passage of time,
or both, would be an Event of Default.
"Default Rate" shall mean, with respect to the Loan, a rate per
annum equal to the lesser of (a) the maximum rate permitted by applicable law,
or (b) five percent (5%) above the Applicable Interest Rate. The Default Rate
with respect to Component A shall be determined without any limitation on the
Applicable Interest Rate for Component A to the Maximum Interest Rate.
"Determination Date" shall mean, with respect to any Interest
Period, the date that is two (2) London Banking Days prior to the beginning of
such Interest Period; provided, however, that (a) with respect to the Interest
Period commencing on November 1, 1999 and
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ending on November 9, 1999, the Determination Date shall be October 28, 1999 and
(b) with respect to the Interest Period commencing on November 10, 1999 and
ending on December 2, 1999, the Determination Date for such Interest Period
shall be November 8, 1999.
"Disapproved Budget Category" shall have the meaning set forth in
Section 5.1.11(d) hereof.
"Disclosure Document" shall have the meaning set forth in Section
9.2(a) hereof.
"Eligible Account" shall mean a separate and identifiable account
from all other funds held by the holding institution that is either (a) an
account or accounts maintained with a federal or state-chartered depository
institution or trust company which complies with the definition of Eligible
Institution or (b) a segregated trust account or accounts maintained with a
federal or state chartered depository institution or trust company acting in its
fiduciary capacity which, in the case of a state chartered depository
institution or trust company, is subject to regulations substantially similar to
12 C.F.R. Section 9.10(b), having in either case a combined capital and surplus
of at least $50,000,000 and subject to supervision or examination by federal and
state authority. An Eligible Account will not be evidenced by a certificate of
deposit, passbook or other instrument.
"Eligible Institution" shall mean a depository institution or trust
company insured by the Federal Deposit Insurance Corporation the short term
unsecured debt obligations or commercial paper of which are rated at least A-1
by S&P and P-1 by ▇▇▇▇▇'▇ in the case of accounts in which funds are held for 30
days or less (or, in the case of accounts in which funds are held for more than
30 days, the long term unsecured debt obligations of which are rated at least
"AA" by S&P and "Aa2" by ▇▇▇▇▇'▇); provided, however, that (i) if such
depository institution or trust company is the holder of the Cash Collateral
Account, the short term debt obligations or commercial paper thereof are rated
at least "A-1+" by S&P and "P-1" by ▇▇▇▇▇'▇ and the long term unsecured
obligations of which are rated at least "A" by S&P and "A2" by ▇▇▇▇▇'▇ and (ii)
if such depository institution or trust company is the holder of any account
comprising the Lockbox Account, the short term debt obligations or commercial
paper thereof are rated at least "A-1" by S&P and "P-1" by ▇▇▇▇▇'▇ and the long
term unsecured obligations thereof are rated at least "A" by S&P and "A2" by
▇▇▇▇▇'▇.
"Emerald Parking Facilities" shall have the meaning set forth in
Section 7.6 hereof.
"Emergency Expenditures" shall have the meaning set forth in Section
5.1.11(d) hereof.
"Environmental Indemnity" shall mean collectively, those certain
Environmental and Hazardous Substance Indemnification Agreements dated the date
hereof executed by each Individual Borrower with respect to each Individual
Property and in connection with the Loan for the benefit of Lender, as the same
may be amended, restated, replaced, supplemented or otherwise modified from time
to time.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
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"Event of Default" shall have the meaning set forth in Section
8.1(a) hereof.
"Exchange Act" shall have the meaning set forth in Section 9.2(a)
hereof.
"Extraordinary Expense" shall have the meaning set forth in Section
5.1.11(e) hereof.
"Fiscal Year" shall mean each twelve (12) month period commencing on
January 1 and ending on December 31 during each year of the term of the Loan.
"Foreign Taxes" shall have the meaning set forth in Section 2.2.3(e)
hereof.
"Franchise Agreement" shall mean, with respect to any Individual
Property, that certain franchise agreement more specifically identified on
Schedule IV hereto.
"Franchisor" shall mean, with respect to any Individual Property
which is subject to a Franchise Agreement, the franchisor with respect thereto,
as same is identified on Schedule IV hereto.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as of the date of the applicable financial report.
"Governmental Authority" shall mean any court, board, agency,
commission, office or other authority of any nature whatsoever for any
governmental ▇▇▇▇ (▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ or
otherwise) whether now or hereafter in existence.
"Gross Income from Operations" shall mean all income, computed in
accordance with GAAP and the Uniform System of Accounts, derived from the
ownership and operation of the Properties from whatever source, including, but
not limited to, Rents, utility charges, escalations, service fees or charges,
license fees, parking fees, rent concessions or credits, other required
pass-throughs and interest on Reserve Funds but excluding sales, use and
occupancy or other taxes on receipts required to be accounted for by Borrower to
any Governmental Authority, refunds and uncollectible accounts, sales of
furniture, fixtures and equipment, Insurance Proceeds (other than business
interruption or other loss of income insurance), Awards, unforfeited security
deposits, utility and other similar deposits and any disbursements to Borrower
from the Reserve Funds. Gross income shall not be diminished as a result of the
Mortgages or the creation of any intervening estate or interest in the
Properties or any part thereof.
"Gross Revenues Percentage Increase" shall have the meaning set
forth in Section 5.1.11(d) hereof.
"Ground Leases" shall mean, collectively, those certain leases
described on Schedule V hereto.
"Ground Lease Escrow Fund" shall have the meaning set forth in
Section 7.4 hereof.
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"Improvements" shall have the meaning set forth in the granting
clause of the related Mortgage with respect to each Individual Property.
"Indebtedness" of a Person, at a particular date, means the sum
(without duplication) at such date of (a) indebtedness or liability for borrowed
money; (b) obligations evidenced by bonds, debentures, notes, or other similar
instruments; (c) obligations for the deferred purchase price of property or
services (including trade obligations); (d) obligations under letters of credit;
(e) obligations under acceptance facilities; (f) all guaranties, endorsements
(other than for collection or deposit in the ordinary course of business) and
other contingent obligations to purchase, to provide funds for payment, to
supply funds, to invest in any Person or entity, or otherwise to assure a
creditor against loss; and (g) obligations secured by any Liens, whether or not
the obligations have been assumed.
"Indemnified Person" shall have the meaning set forth in Section 9.2
hereof.
"Indemnitor" shall mean Wyndham International, Inc., together with
its successors and assigns.
"Indemnity Agreement" shall mean that certain Indemnity Agreement,
dated as of the date hereof, between Indemnitor and Lender, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.
"Independent Director" shall mean a director of the Principal who is
not at the time of initial appointment, or at any time while serving as a
director of the Principal, and has not been at any time during the preceding
five (5) years: (a) a stockholder, director (with the exception of serving as
the Independent Director of the Principal or of any bankruptcy remote special
purpose entity which is an Affiliate of the Principal or the Borrower), officer,
employee, partner, attorney or counsel of the Principal, the Borrower or any
Affiliate of either of them; (b) a customer, supplier or other Person who
derives any of its purchases or revenues from its activities with the Principal,
the Borrower or any Affiliate of either of them; (c) a Person controlling or
under common control with any such stockholder, director, officer, employee,
partner, customer, supplier or other Person; or (d) a member of the immediate
family of any such stockholder, director, officer, employee, partner, customer,
supplier or other Person. As used in this definition, the term "control" means
the possession, directly or indirectly, of the power to direct or cause the
direction of management, policies or activities of a Person, whether through
ownership of voting securities, by contract or otherwise.
"Individual Borrower" shall have the meaning set forth in the
initial paragraph of this Agreement.
"Individual Property" shall mean each parcel of real property, the
Improvements thereon and all personal property owned by Borrower and encumbered
by a Mortgage, together with all rights pertaining to such property and
Improvements, as more particularly described in the Granting Clauses of each
Mortgage and referred to therein as the "Property".
"Insolvency Opinion" shall mean that certain non-consolidation
opinion letter dated the date hereof delivered by Akin, Gump, Strauss, ▇▇▇▇▇ &
▇▇▇▇, L.L.P. in connection with the Loan.
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"Institutional Lender" shall mean any insurance company, bank, trust
company, savings and loan association, savings bank, merchant bank, investment
banking or securities company or similar financial institution, provided that
such entity shall have a net worth, as reasonably determined by Lender, of
$500,000,000 or more.
"Insurance Premiums" shall have the meaning set forth in Section
6.1(b) hereof.
"Insurance Proceeds" shall have the meaning set forth in Section
6.4(b) hereof.
"Interest Period" shall mean (a) the period commencing on the date
hereof and ending on June 30, 1999 for the first period hereunder, (b) the
period commencing on July 1, 1999 and ending on July 31, 1999 for the second
period hereunder, (c) the period commencing on August 1, 1999 and ending on
August 31, 1999 for the third period hereunder, (d) the period commencing on
September 1, 1999 and ending on September 30, 1999 for the fourth period
hereunder, (e) the period commencing on October 1, 1999 and ending on October
31, 1999 for the fifth period hereunder, (f) the period commencing on November
1, 1999 and ending on November 9, 1999 for the sixth period hereunder, (g) the
period commencing on November 10, 1999 and ending on December 2, 1999 for the
seventh period hereunder and (h) for each period thereafter, the period
commencing on the Interest Period Commencement Date occurring in the applicable
calendar month and ending on the calendar day immediately prior to the Interest
Period Commencement Date occurring in the following calendar month.
"Interest Period Commencement Date" shall mean the third (3rd) day
of each calendar month during the term of the Loan or, if such day is not a
Business Day, the immediately succeeding Business Day.
"Interest Rate Protection Agreement" shall mean, collectively, one
or more interest rate protection agreements issued by a cap provider having a
long-term unsecured debt rating of no less than "AA" (or its equivalent) from
S&P and "Aa2" from ▇▇▇▇▇'▇ and otherwise satisfactory in form and substance to
Lender (which shall include any customary officer's certification and opinions)
purchased by Borrower in accordance with Section 5.1.24 hereof, as the same may
be amended, restated, replaced, supplemented or otherwise modified from time to
time.
"Lease" shall mean any lease, sublease or subsublease, letting,
license, concession or other agreement (whether written or oral and whether now
or hereafter in effect) pursuant to which any Person is granted a possessory
interest in, or right to use or occupy all or any portion of any space in any
Individual Property of Borrower, and every modification, amendment or other
agreement relating to such lease, sublease, subsublease, or other agreement
entered into in connection with such lease, sublease, subsublease, or other
agreement and every guarantee of the performance and observance of the
covenants, conditions and agreements to be performed and observed by the other
party thereto.
"Legal Requirements" shall mean, with respect to each Individual
Property, all federal, state, county, municipal and other governmental statutes,
laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions
of Governmental Authorities affecting such Individual Property or any part
thereof, or the construction, use, alteration or operation thereof,
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or any part thereof, whether now or hereafter enacted and in force, and all
permits, licenses and authorizations and regulations relating thereto, and all
material covenants, agreements, restrictions and encumbrances contained in any
instruments, either of record or known to Borrower, at any time in force
affecting such Individual Property or any part thereof, including, without
limitation, any which may (a) require repairs, modifications or alterations in
or to such Individual Property or any part thereof, or (b) in any way limit the
use and enjoyment thereof.
"Lender" shall mean Bear, ▇▇▇▇▇▇▇ Funding, Inc., together with its
successors and assigns.
"Liabilities" shall have the meaning set forth in Section 9.2(b)
hereof.
"LIBOR" shall mean, with respect to each Interest Period and each
Interest Period Commencement Date, the rate for deposits in U.S. dollars, for a
period of one month, which appears on the Telerate Page 3750 as of 11:00 a.m.,
London time, on the related Determination Date. If such rate does not appear on
Telerate Page 3750, the rate for that Interest Period and that Interest Period
Commencement Date shall be determined on the basis of the rates at which
deposits in U.S. dollars are offered by any four major reference banks in the
London interbank market selected by Lender to provide such bank's offered
quotation of such rates at approximately 11:00 a.m., London time, on the related
Determination Date to prime banks in the London interbank market for a period of
one month, commencing on the first day of such Interest Period and in an amount
that is representative for a single such transaction in the relevant market at
the relevant time. Lender shall request the principal London office of any four
major reference banks in the London interbank market selected by Lender to
provide a quotation of such rates, as offered by each such bank. If at least two
such quotations are provided, the rate for that Interest Period and Interest
Period Commencement Date shall be the arithmetic mean of the quotations. If
fewer than two quotations are provided as requested, the rate for that Interest
Period and Interest Period Commencement Date shall be the arithmetic mean of the
rates quoted by major banks in New York City selected by Lender, at
approximately 11:00 a.m., New York City time, on the first day of such Interest
Period for loans in U.S. dollars to leading European banks for a period of one
month, commencing on the first day of such Interest Period and in an amount that
is representative for a single such transaction in the relevant market at the
relevant time. Lender shall determine LIBOR for each Interest Period and
Interest Period Commencement Date; provided, however, that for so long as the
Interest Rate Protection Agreement is in effect, if Lender is required to obtain
quotations from any banks as set forth in this definition, Lender shall select
such banks after consulting with the cap provider under the Interest Rate
Protection Agreement; provided further, that in the event that Lender and the
cap provider under the Interest Rate Protection Agreement cannot agree on the
banks to be used, such banks shall be determined conclusively by the cap
provider under the Interest Rate Protection Agreement or its agent and the
determination of LIBOR by the cap provider under the Interest Rate Protection
Agreement shall be binding upon Borrower absent manifest error.
"LIBOR Loan" shall mean the Loan at such time as interest thereon
accrues at a rate of interest based upon LIBOR.
"Licenses" shall have the meaning set forth in Section 4.1.22
hereof.
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"Lien" shall mean, with respect to each Individual Property, any
mortgage, deed of trust, lien, pledge, hypothecation, assignment, security
interest, or any other encumbrance, charge or transfer of, on or affecting
Borrower, the related Individual Property, any portion thereof or any interest
therein, including, without limitation, any conditional sale or other title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, the filing of any financing statement, and
mechanic's, materialmen's and other similar liens and encumbrances.
"Loan" shall mean the Components comprising the loan made by Lender
to Borrower pursuant to this Agreement.
"Loan Documents" shall mean, collectively, this Agreement, the Note,
the Mortgages, the Assignments of Leases, the Environmental Indemnity, the O&M
Agreement, the Assignments of Management Agreement, the Cash Management
Agreement, the Indemnity Agreement, the Cap Assignment, the Contribution
Agreement, and all other documents executed and/or delivered in connection with
the Loan.
"Loan Modification Agreement" shall mean that certain Loan
Modification Agreement dated as of the Bel Age Closing Date among Borrower,
Commerce Borrower, Lender and Indemnitor.
"Lockbox Account" shall mean, collectively, the account or accounts
specified in the Cash Management Agreement for deposit of Rents and other
receipts from the Properties.
"London Banking Day" shall mean any day on which commercial banks in
London, England are open for business (including dealings in foreign exchange
and foreign currency deposits).
"Management Agreement" shall mean, with respect to any Individual
Property, the management agreement entered into by and between Borrower and the
applicable Manager, pursuant to which such Manager is to provide management and
other services with respect to such Individual Property as each is described on
Schedule XIV hereto.
"Management Agreement Escrow Fund" shall have the meaning set forth
in Section 7.5 hereof.
"Manager" shall mean, with respect to any Individual Property, the
manager under the applicable Management Agreement.
"Material Lease" shall mean any Lease demising in excess of 10,000
square feet.
"Maturity Date" shall mean July 1, 2004, or such other date on which
the final payment of principal of the Note becomes due and payable as therein or
herein provided, whether at such stated maturity date, by declaration of
acceleration, or otherwise.
"Maximum Interest Rate" shall mean a rate equal to eleven percent
(11 %) per annum.
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"Maximum Legal Rate" shall mean the maximum nonusurious interest
rate, if any, that at any time or from time to time may be contracted for,
taken, reserved, charged or received on the indebtedness evidenced by the Note
and as provided for herein or the other Loan Documents, under the laws of such
state or states whose laws are held by any court of competent jurisdiction to
govern the interest rate provisions of the Loan.
"Monetary Default Cure" shall have the meaning set forth in Section
7.5 hereof.
"Monthly Debt Service Payment Amount" means the regularly scheduled
monthly payments of interest payable under the Loan as set forth in Section
2.2.6 hereof.
"Monthly Tax and Insurance Deposit" shall have the meaning set forth
in Section 7.2 hereof.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Mortgage" shall mean, with respect to each Individual Property,
that certain first priority Mortgage (or Deed of Trust or Deed to Secure Debt),
Assignment of Leases and Rents and Security Agreement, dated the date hereof,
executed and delivered by the related Individual Borrower as security for the
Loan and encumbering such Individual Property, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.
"Net Cash Flow" for any period shall mean the amount obtained by
subtracting Operating Expenses, payments to the Reserve Funds (including,
without limitation, contributions for Capital Expenditures) and any Capital
Expenditures paid from sources other than a Reserve Fund for such period from
Gross Income from Operations for such period.
"Net Cash Flow After Debt Service" for any period shall mean the
amount obtained by subtracting Debt Service for such period from Net Cash Flow
for such period.
"Net Cash Flow Schedule" shall have the meaning set forth in Section
5.1.11(b) hereof.
"Net Operating Income" means the amount obtained by subtracting
Operating Expenses from Gross Income from Operations.
"Net Proceeds" shall have the meaning set forth in Section 6.4(b)
hereof.
"Net Proceeds Deficiency" shall have the meaning set forth in
Section 6.4(b)(vi) hereof.
"Note" shall mean, that certain Promissory Note dated the date
hereof and given by Borrower to Lender.
"O&M Agreement" shall mean, with respect to the Individual
Properties known as (i) Hilton Inn Cleveland, (ii) Radisson Suites Houston,
(iii) Doubletree Hotel Tallahassee, (iv) Doubletree Club Hotel Miami, (v) Hilton
Columbus, (vi) Hilton Newark Gateway, (vii) Embassy Suites Schaumburg, (viii)
Wyndham Garden Schaumburg and (ix) Doubletree Club Hotel
12
Chicago, that certain Operations and Maintenance Agreement dated the date hereof
between the Individual Borrowers owning such Individual Properties and Lender
with respect to each such Individual Property given in connection with the Loan,
as the same may be amended, restated, replaced, supplemented or otherwise
modified from time to time.
"Offering Materials" shall have the meaning set forth in Section
9.2(b).
"Officers' Certificate" shall mean a certificate delivered to Lender
by Borrower which is signed by an authorized senior officer of the general
partner or the managing member (as applicable) of each Individual Borrower.
"Operating Expenses" shall mean the total of all expenditures,
computed in accordance with GAAP and the Uniform System of Accounts, of whatever
kind relating to the operation, maintenance and management of the Properties
that are incurred on a regular monthly or other periodic basis, including
without limitation, utilities, ordinary repairs and maintenance, insurance,
license fees, property taxes and assessments, advertising expenses, management
fees, franchise fees, payroll and related taxes, computer processing charges,
operational equipment or other lease payments as approved by Lender, ground
rents payable under any Ground Lease, condominium charges payable with respect
to any Condominium, and other similar costs, but excluding depreciation and
similar non-cash items, Debt Service, Capital Expenditures and contributions to
the Reserve Funds.
"Original Loan Agreement" shall have the meaning set forth in the
recitals of this Agreement.
"Other Charges" shall mean all ground rents, maintenance charges,
condominium charges, impositions other than Taxes, and any other charges,
including, without limitation, vault charges and license fees for the use of
vaults, chutes and similar areas adjoining any Individual Property, now or
hereafter levied or assessed or imposed against such Individual Property or any
part thereof.
"PAH" shall mean Patriot American Hospitality, Inc., together with
its successors and assigns.
"Parking Escrow Fund" shall have the meaning set forth in Section
7.6 hereof.
"Payment Date" shall mean the first (1st) day of each calendar month
during the term of the Loan or, if such day is not a Business Day, the
immediately preceding Business Day.
"Permitted Encumbrances" shall mean, with respect to an Individual
Property, collectively, (a) the Liens and security interests created by the Loan
Documents, (b) all Liens, encumbrances and other matters disclosed in the title
insurance commitments delivered to Lender in connection with the closing of the
Loan and/or in the Title Insurance Policies, as applicable, or "insured over" or
"insured around" to the satisfaction of Lender, as each relate to such
Individual Property or any part thereof, (c) Liens, if any, for Taxes imposed by
any Governmental Authority or for Other Charges not yet delinquent or being
contested in good faith and by appropriate proceedings in accordance herewith,
or "insured over" or "insured around" to the satisfaction of Lender in the Title
Insurance Policies, (d) any and all easements, licenses,
13
covenants, restrictions or other agreements which may exist or which may
hereafter be granted by the respective Individual Borrower in accordance with
the terms and conditions hereof, (e) rights of existing and future tenants,
licensees and concessionaires, as tenants, licensees or concessionaires only,
pursuant to Leases in effect as of the date hereof or entered into in accordance
with the terms and conditions of this Agreement and the other Loan Documents,
and (f) such other title and survey exceptions as Lender has approved in writing
in Lender's sole discretion.
"Permitted Investments" shall mean any one or more of the following
obligations or securities acquired at a purchase price of not greater than par,
including those issued by Servicer, the trustee under any Securitization or any
of their respective Affiliates, payable on demand or having a maturity date not
later than the Business Day immediately prior to the first Monthly Payment Date
following the date of acquiring such investment (and in no event having
maturities of more than 365 days) and meeting one of the appropriate standards
set forth below:
(i) obligations of, or obligations fully guaranteed as to payment of
principal and interest by, the United States or any agency or
instrumentality thereof provided such obligations are backed by the full
faith and credit of the United States of America including, without
limitation, obligations of: the U.S. Treasury (all direct or fully
guaranteed obligations), the Farmers Home Administration (certificates of
beneficial ownership), the General Services Administration (participation
certificates), the U.S. Maritime Administration (guaranteed Title XI
financing), the Small Business Administration (guaranteed participation
certificates and guaranteed pool certificates), the U.S. Department of
Housing and Urban Development (local authority bonds) and the Washington
Metropolitan Area Transit Authority (guaranteed transit bonds); provided,
however, that the investments described in this clause must (A) have a
predetermined fixed dollar of principal due at maturity that cannot vary
or change, (B) if rated by S&P, must not have an "r" highlighter affixed
to their rating, (C) if such investments have a variable rate of interest,
such interest rate must be tied to a single interest rate index plus a
fixed spread (if any) and must move proportionately with that index, and
(D) such investments must not be subject to liquidation prior to their
maturity;
(ii) Federal Housing Administration debentures;
(iii) obligations of the following United States government
sponsored agencies: Federal Home Loan Mortgage Corp. (debt obligations),
the Farm Credit System (consolidated systemwide bonds and notes), the
Federal Home Loan Banks (consolidated debt obligations), the Federal
National Mortgage Association (debt obligations), the Student Loan
Marketing Association (debt obligations), the Financing Corp. (debt
obligations), and the Resolution Funding Corp. (debt obligations);
provided, however, that the investments described in this clause must (A)
have a predetermined fixed dollar of principal due at maturity that cannot
vary or change, (B) if rated by S&P, must not have an "r" highlighter
affixed to their rating, (C) if such investments have a variable rate of
interest, such interest rate must be tied to a single interest rate index
plus a fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to liquidation prior
to their maturity;
14
(iv) federal funds, unsecured certificates of deposit, time
deposits, bankers' acceptances and repurchase agreements with maturities
of not more than 365 days of any bank, the short term obligations of which
at all times are rated in the highest short term rating category by each
Rating Agency (or, if not rated by all Rating Agencies, rated by at least
one Rating Agency in the highest short term rating category and otherwise
acceptable to each other Rating Agency, as confirmed in writing that such
investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the initial, or, if higher, then current
ratings assigned to the Securities or any class thereof); provided,
however, that the investments described in this clause must (A) have a
predetermined fixed dollar of principal due at maturity that cannot vary
or change, (B) if rated by S&P, must not have an "r" highlighter affixed
to their rating, (C) if such investments have a variable rate of interest,
such interest rate must be tied to a single interest rate index plus a
fixed spread (if any) and must move proportionately with that index, and
(D) such investments must not be subject to liquidation prior to their
maturity;
(v) fully Federal Deposit Insurance Corporation-insured demand and
time deposits in, or certificates of deposit of, or bankers' acceptances
issued by, any bank or trust company, savings and loan association or
savings bank, the short term obligations of which at all times are rated
in the highest short term rating category by each Rating Agency (or, if
not rated by all Rating Agencies, rated by at least one Rating Agency in
the highest short term rating category and otherwise acceptable to each
other Rating Agency, as confirmed in writing that such investment would
not, in and of itself, result in a downgrade, qualification or withdrawal
of the initial, or, if higher, then current ratings assigned to the
Securities or any class thereof); provided, however, that the investments
described in this clause must (A) have a predetermined fixed dollar of
principal due at maturity that cannot vary or change, (B) if rated by S&P,
must not have an "r" highlighter affixed to their rating, (C) if such
investments have a variable rate of interest, such interest rate must be
tied to a single interest rate index plus a fixed spread (if any) and must
move proportionately with that index, and (D) such investments must not be
subject to liquidation prior to their maturity;
(vi) debt obligations with maturities of not more than 365 days and
at all times rated by each Rating Agency (or, if not rated by all Rating
Agencies, rated by at least one Rating Agency and otherwise acceptable to
each other Rating Agency, as confirmed in writing that such investment
would not, in and of itself, result in a downgrade, qualification or
withdrawal of the initial, or, if higher, then current ratings assigned to
the Securities or any class thereof) in its highest long-term unsecured
rating category; provided, however, that the investments described in this
clause must (A) have a predetermined fixed dollar amount of principal due
at maturity that cannot vary or change, (B) if rated by S&P, must not have
an "r" highlighter affixed to their rating, (C) if such investments have a
variable rate of interest, such interest rate must be tied to a single
interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) such investments must not be
subject to liquidation prior to their maturity;
(vii) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not
15
more than one year after the date of issuance thereof) with maturities of
not more than 365 days and that at all times is rated by each Rating
Agency (or, if not rated by all Rating Agencies, rated by at least one
Rating Agency and otherwise acceptable to each other Rating Agency, as
confirmed in writing that such investment would not, in and of itself,
result in a downgrade, qualification or withdrawal of the initial, or, if
higher, then current ratings assigned to the Securities or any class
thereof) in its highest short-term unsecured debt rating; provided,
however, that the investments described in this clause must (A) have a
predetermined fixed dollar of principal due at maturity that cannot vary
or change, (B) if rated by S&P, must not have an "r" highlighter affixed
to their rating, (C) if such investments have a variable rate of interest,
such interest rate must be tied to a single interest rate index plus a
fixed spread (if any) and must move proportionately with that index, and
(D) such investments must not be subject to liquidation prior to their
maturity;
(viii) units of taxable money market funds or mutual funds, which
funds are regulated investment companies, seek to maintain a constant net
asset value per share and invest solely in obligations backed by the full
faith and credit of the United States, which funds have the highest rating
available from each Rating Agency (or, if not rated by all Rating
Agencies, rated by at least one Rating Agency and otherwise acceptable to
each other Rating Agency, as confirmed in writing that such investment
would not, in and of itself, result in a downgrade, qualification or
withdrawal of the initial, or, if higher, then current ratings assigned to
the Securities or any class thereof) for money market funds or mutual
funds; and
(ix) any other security, obligation or investment which has been
approved as a Permitted Investment in writing by (a) Lender and (b) each
Rating Agency, as evidenced by a written confirmation that the designation
of such security, obligation or investment as a Permitted Investment will
not, in and of itself, result in a downgrade, qualification or withdrawal
of the initial, or, if higher, then current ratings assigned to the
Securities, or any class thereof, by such Rating Agency;
provided, however, that no obligation or security shall be a Permitted
Investment if (A) such obligation or security evidences a right to receive only
interest payments or (B) the right to receive principal and interest payments on
such obligation or security are derived from an underlying investment that
provides a yield to maturity in excess of one hundred twenty percent (120%) of
the yield to maturity at par of such underlying investment.
"Person" shall mean any individual, corporation, partnership, joint
venture, limited liability company, estate, trust, unincorporated association,
any federal, state, county or municipal government or any bureau, department or
agency thereof and any fiduciary acting in such capacity on behalf of any of the
foregoing.
"Personal Property" shall have the meaning set forth in the granting
clause of the Mortgage with respect to each Individual Property.
"Phoenix Property" shall mean that certain Individual Property known
as Embassy Suites North Phoenix.
16
"Pledge Agreements" shall mean the pledge or similar agreements
executed and delivered in connection with a loan to Wyndham International, Inc.
or any of its Affiliates (other than any Individual Borrower, any member or
partner of any Individual Borrower, or any shareholder of any manager or general
partner of any Individual Borrower), which pledge or similar agreements create a
first priority security interest in the Pledged Interests.
"Pledge Entities" shall have the meaning set forth in Section
5.2.13(c).
"Pledge Transferee" shall have the meaning set forth in Section
5.2.13(c).
"Pledged Interest Acquisition" shall have the meaning set forth in
Section 5.2.13(c).
"Pledged Interests" shall have the meaning set forth in Section
5.2.13(c).
"Pledgors' Creditor" shall mean (A) The Chase Manhattan Bank, as
collateral agent for syndicate lenders or (B) an Institutional Lender, which
Institutional Lender shall be any current holder of a note evidencing a loan to
Wyndham International, Inc. or any of its Affiliates (other than any Individual
Borrower, or the respective partners or members of any Individual Borrower or
any holders of any direct equity interest in any general partner, managing
member or manager of any Individual Borrower), or the then collateral agent for
syndicate lenders entitled to the benefits of such a loan, as applicable.
"Policies" shall have the meaning specified in Section 6.1(b)
hereof.
"Prime Rate" shall mean the annual rate of interest publicly
announced by Citibank, N.A. in New York, New York, as its base rate, as such
rate shall change from time to time. If Citibank, N.A. ceases to announce a base
rate, Prime Rate shall mean the rate of interest published in The Wall Street
Journal from time to time as the "Prime Rate". If more than one "Prime Rate" is
published in The Wall Street Journal for a day, the average of such "Prime
Rates" shall be used, and such average shall be rounded up to the nearest
one-eighth of one percent (0.125%). If The Wall Street Journal ceases to publish
the "Prime Rate", the Lender shall select an equivalent publication that
publishes such "Prime Rate", and if such "Prime Rates" are no longer generally
published or are limited, regulated or administered by a governmental or
quasigovernmental body, then Lender shall select a comparable interest rate
index.
"Prime Rate Loan" shall mean the Loan at such time as interest
thereon accrues at a rate of interest based upon the Prime Rate.
"Prime Rate Spread" shall mean, with respect to each Component
comprising the Note, the difference (expressed as the number of basis points)
between (a) LIBOR plus the Spread for such Component on the date LIBOR was last
applicable to the Loan and (b) the Prime Rate on the date that LIBOR was last
applicable to the Loan.
"Principal" shall mean, with respect to each Individual Borrower,
the Special Purpose Entity corporation which is the managing member of such
Individual Borrower.
17
"Properties" shall mean, collectively, each and every Individual
Property which is subject to the terms of this Agreement.
"Property Condition Reports" shall have the meaning set forth in
Section 4.1.10 hereof.
"Pro-Rata Release Amount" shall mean, for each Individual Property,
the Release Amount with respect to such Individual Property as such Release
Amount may have been reduced from time to time by (a) the applicable portion of
any Adjusted Release Amount with respect to any other Individual Property paid
to Lender in connection with the release of the Lien of the applicable Mortgage
and applied to the reduction of such Release Amount pursuant to Section
2.4.1(e), (b) by the amount of any prepayment made pursuant to Section 2.3.2(b)
with respect to such Individual Property, (c) by the applicable portion of any
voluntary prepayment applied to the reduction of such Release Amount pursuant to
Section 2.3.1 or (d) by any portion of Net Proceeds that Lender has applied to
the reduction of such Release Amount pursuant to Section 6.4(c).
"Provided Information" shall have the meaning set forth in Section
9.1(a) hereof.
"Qualified Franchisor" shall mean a Person reasonably acceptable to
Lender, which Person is a nationally recognized and experienced franchisor or
licensor of hotels similar in size and value of the Properties, provided that
Borrower shall have obtained prior written confirmation from the applicable
Rating Agencies that such franchisor will not cause a downgrading, withdrawal or
qualification of the then current rating of the securities issued pursuant to a
Securitization or any class thereof.
"Qualified Manager" shall mean a reputable and experienced
management organization reasonably satisfactory to Lender possessing experience
in managing properties similar in size, scope and value of the Properties,
provided that Borrower shall have obtained prior written confirmation from the
applicable Rating Agencies that management of the Properties by such Person will
not cause a downgrading, withdrawal or qualification of the then current rating
of the securities issued pursuant to the Securitization or any class thereof.
"Rating Agencies" shall mean each of Standard & Poor's Ratings
Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. and ▇▇▇▇▇'▇ Investors
Service, Inc.
"Registration Statement" shall have the meaning set forth in Section
9.2(b) hereof.
"Release Amount" shall mean for an Individual Property the amount
set forth on Schedule I hereto.
"REMIC Trust" shall mean a "real estate mortgage investment conduit"
within the meaning of Section 860D of the Code that holds the Note.
"Rents" shall mean, with respect to each Individual Property, all
rents, rent equivalents, moneys payable as damages or in lieu of rent or rent
equivalents, royalties
18
(including, without limitation, all oil and gas or other mineral royalties and
bonuses), income, receivables, receipts, revenues, deposits (including, without
limitation, security, utility and other deposits when forfeited or applied),
accounts, cash, issues, profits, charges for services rendered, and other
consideration of whatever form or nature received by or paid to or for the
account of or benefit of Borrower or its agents or employees from any and all
sources arising from or attributable to the Individual Property, including,
without limitation, all hotel receipts, revenues and credit card receipts
collected from guest rooms, restaurants, bars, meeting rooms, banquet rooms and
recreational facilities, all receivables, customer obligations, installment
payment obligations and other obligations now existing or hereafter arising or
created out of the sale, lease, sublease, license, concession or other grant of
the right of the use and occupancy of property or rendering of services by
Borrower or any operator or manager of the hotel or the commercial space located
in the Improvements or acquired from others (including, without limitation, from
the rental of any office space, retail space, guest rooms or other space, halls,
stores, and offices, and deposits securing reservations of such space), license,
lease, sublease and concession fees and rentals, health club membership fees,
food and beverage wholesale and retail sales, service charges, vending machine
sales and proceeds, if any, from business interruption or other loss of income
insurance.
"Replacement Franchise Agreement" shall mean a franchise agreement
with a Qualified Franchisor, which franchise agreement shall be acceptable to
Lender in form and substance in its reasonable discretion, provided that
Borrower shall have obtained prior written confirmation from the applicable
Rating Agencies that such franchise agreement will not cause a downgrading,
withdrawal or qualification of the then current rating of the securities issued
pursuant to the Securitization.
"Replacement Management Agreement" shall mean (a) a management
agreement with a Qualified Manager, which management agreement shall be
acceptable to Lender in form and substance in its reasonable discretion,
provided that a Borrower shall have obtained confirmation from the applicable
Rating Agencies that such management agreement will not cause a downgrading,
withdrawal or qualification of the then current rating of the securities issued
pursuant to a Securitization and (b) Borrower and such Qualified Manager shall
execute and deliver to Lender a Consent of Manager and Subordination of
Management Fees in Lender's then current form or if such Qualified Manager is
not willing to execute and deliver such form, then in form and substance
acceptable to Lender in its reasonable discretion, which shall not be
inconsistent with the forms of Assignment of Management Agreement and
Subordination of Management Fees executed and delivered in connection with the
closing of the Loan with respect to comparable non-Affiliate Managers or
comparable Affiliate Managers, as applicable.
"Replacement Reserve Account" shall have the meaning set forth in
Section 7.3.1 hereof.
"Replacement Reserve Fund" shall have the meaning set forth in
Section 7.3.1 hereof.
"Replacement Reserve Monthly Deposit" shall have the meaning set
forth in Section 7.3.1 hereof.
19
"Replacements" shall have the meaning set forth in Section 7.3.1(a)
hereof.
"Required Repair Account" shall have the meaning set forth in
Section 7.1.1 hereof.
"Required Repair Fund" shall have the meaning set forth in Section
7.1.1 hereof.
"Required Repairs" shall have the meaning set forth in Section 7.1.1
hereof.
"Reserve Funds" shall mean the Tax and Insurance Escrow Fund, the
Replacement Reserve Fund, the Required Repair Fund, the Ground Lease Escrow
Fund, the Management Agreement Escrow Fund, the Parking Escrow Fund and any
other escrow fund established pursuant to the Loan Documents.
"Restoration" shall have the meaning set forth in Section 6.2
hereof.
"S&P" shall mean Standard & Poor's Ratings Services, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"Securities" shall have the meaning set forth in Section 9.1 hereof.
"Securities Act" shall have the meaning set forth in Section 9.2(a)
hereof.
"Securitization" shall have the meaning set forth in Section 9.1
hereof.
"Servicer" shall have the meaning set forth in Section 9.5 hereof.
"Servicing Agreement" shall have the meaning set forth in Section
9.5 hereof.
"Severed Loan Documents" shall have the meaning set forth in Section
8.2(c) hereof.
"Schaumburg Property" shall mean that certain Individual Property
known as Embassy Suites Schaumburg.
"Special Purpose Entity" shall mean a corporation, limited
partnership or limited liability company which at all times on and after the
date hereof.
(i) is organized solely for the purpose of (A) acquiring,
developing, owning, holding, selling, leasing, transferring, exchanging,
managing and operating one or more Individual Properties, entering into
this Agreement with the Lender, refinancing one or more Individual
Properties in connection with a permitted repayment of the Loan, and
transacting lawful business that is incident, necessary and appropriate to
accomplish the foregoing; or (B) acting as a (1) general partner of the
limited partnership that owns one or more Individual Properties or (2)
member or manager of the limited liability company that owns one or more
Individual Properties, and, in the case of (1) or (2), transacting lawful
business that is incident, necessary and appropriate to accomplish the
foregoing.
20
(ii) is not engaged and will not engage in any business unrelated to
(A) the acquisition, development, ownership, management or operation of
one or more Individual Properties and any lawful business that is
incident, necessary and appropriate to accomplish the foregoing, (B)
acting as general partner of the limited partnership that owns one or more
Individual Properties or (C) acting as a member or manager of the limited
liability company that owns one or more Individual Properties, as
applicable, and in the case of (B) and (C), transacting lawful business
that is incident, necessary and appropriate to accomplish the foregoing;
(iii) does not have and will not have any assets other than those
related to one or more Individual Properties or its partnership interest
in the limited partnership or the member interest in the limited liability
company that owns one or more Individual Properties or acts as the general
partner, managing member or manager thereof, as applicable;
(iv) has not engaged, sought or consented to and will not engage in,
seek or consent to any dissolution, winding up, liquidation,
consolidation, merger, sale of all or substantially all of its assets,
transfer of partnership or membership interests (if such entity is a
general partner in a limited partnership or a member in a limited
liability company) or amendment of its limited partnership agreement,
articles of incorporation, articles of organization, certificate of
formation or operating agreement (as applicable) with respect to the
matters set forth in this definition, except as expressly permitted by the
terms and conditions of the Loan Documents;
(v) if such entity is a limited partnership, has, as its only
general partners, Special Purpose Entities that are corporations, limited
partnerships or limited liability companies, which corporations shall each
satisfy the requirements set forth in clauses (vi) and (viii) below and
which limited partnerships or limited liability companies shall each
satisfy the requirements set forth in clauses (vii)-(ix) below;
(vi) if such entity is a corporation, has at least two Independent
Directors, and has not caused or allowed and will not cause or allow the
board of directors of such entity to take any action requiring the
unanimous affirmative vote of 100% of the members of its board of
directors unless at least two Independent Directors shall have
participated in such vote;
(vii) if such entity is (a) a limited liability company with more
than one member, has at least one member that is a Special Purpose Entity
that is a corporation that has at least two Independent Directors and that
owns at least 0.5% of the equity of the limited liability company or (b) a
Delaware limited liability company with only one member, has a manager
that is a Special Purpose Entity that is a corporation that has at least
two Independent Directors;
(viii) if such entity is (a) a limited liability company, has
articles of organization, a certificate of formation and/or an operating
agreement, as applicable, (b) a limited partnership, has a limited
partnership agreement, or (c) a corporation, has a certificate or articles
of incorporation that, in each case, provide that such entity will not:
21
(1) dissolve, merge, liquidate, consolidate; (2) except as expressly
permitted by the Loan Documents, sell all or substantially all of its
assets or the assets of the Borrower (as applicable); (3) except as
expressly permitted by the Loan Documents, engage in any other business
activity or amend its organizational documents with respect to the matters
set forth in this definition without the consent of the Lender and the
written confirmation of each of the Rating Agencies that such other
business activity or amendment will not, in and of itself, result in a
downgrade, qualification or withdrawal of the initial, or, if higher, then
current ratings assigned to the Securities, or any class thereof; or (4)
without the affirmative vote of at least two Independent Directors and of
all other directors of the corporation (that is such entity or the general
partner or managing or co-managing member of such entity), file a
bankruptcy or insolvency petition or otherwise institute insolvency
proceedings with respect to itself or to any other entity in which it has
a direct or indirect legal or beneficial ownership interest;
(ix) if such entity is a limited partnership or a limited liability
company that is (a) the general partner of a limited partnership or the
member of a limited liability company (with more than one member) that is
an Individual Borrower, has a corporation that has at least two
independent directors and that owns at least 0.5% of the equity of such
entity as its general partner or managing member, as applicable, that is a
Special Purpose Entity or (b) the member of a limited liability company
(with only one member) that is an Individual Borrower, has a corporation
that has at least two independent directors as its manager, that is a
Special Purpose Entity;
(x) is and will remain solvent and pay its debts and liabilities
(including, as applicable, shared personnel and overhead expenses) from
its assets prior to delinquency (except for debts and liabilities being
contested by Borrower in good faith in accordance with the terms hereof)
and is maintaining and will maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size and character
and in light of its contemplated business operations;
(xi) has not failed and will not fail to correct any known
misunderstanding regarding the separate identity of such entity;
(xii) has maintained and will maintain its accounts, books and
records separate from any other Person and will file its own tax returns,
except to the extent that it is required to file consolidated tax returns
by law;
(xiii) has maintained and will maintain its own records, books,
resolutions and agreements;
(xiv) other than as provided in the Cash Management Agreement, (a)
has not commingled and will not commingle its funds or assets with those
of any other Person and (b) has not participated and will not participate
in any cash management system with any outer Person;
(xv) has held and will hold its assets in its own name;
22
(xvi) has conducted and will conduct its business in its name or in
a name franchised or licensed to it by an entity other than an Affiliate
of Borrower, except for services rendered under a business management
services agreement with an Affiliate that complies with the terms
contained in Section 9.4 herein, so long as the manager, or equivalent
thereof, under such business management services agreement holds itself
out as an agent of the Borrower;
(xvii) has maintained and will maintain its financial statements,
accounting records and other entity documents separate from any other
Person and has not permitted and will not permit its assets to be listed
as assets on the financial statement of any other entity except as
required by GAAP; provided, however, that any such consolidated financial
statement shall contain a note indicating that its separate assets and
liabilities are neither available to pay the debts of the consolidated
entity nor constitute obligations of the consolidated entity;
(xviii) has paid and will pay its own liabilities and expenses,
including the salaries of its own employees, out of its own funds and
assets, and has maintained and will maintain a sufficient number of
employees in light of its contemplated business operations;
(xix) has observed and will observe all partnership, corporate or
limited liability company formalities, as applicable;
(xx) has and will have no Indebtedness other than (i) the Loan, (ii)
advance deposits made for guest rooms, banquet and meeting facilities and
other hotel services, (iii) trade payables (including, without limitation,
deferred compensation for hotel employees) incurred in the ordinary course
of business relating to the ownership and operation of one or more
Individual Properties and the routine administration of Borrower, in
amounts not to exceed (A) with respect to each Individual Borrower, an
amount equal to eight percent (8%) of the Release Amount for the related
Individual Property, and (B) with respect to all of the Individual
Borrowers, in the aggregate, an amount equal to five percent (5%) of the
total Release Amounts for the Properties, which trade payables (other than
deferred compensation for hotel employees in the form of bonuses or other
incentive compensation) are not more than sixty (60) days past the date
incurred (unless being contested in good faith pursuant to the terms of
the Loan Documents), are not evidenced by a note and are paid prior to
delinquency, and which amounts are normal and reasonable under the
circumstances, (iii) debt incurred in the ordinary course of business for
the purpose of financing fixtures and equipment at the Properties
(including obligations pursuant to equipment leases) in amounts that are
normal and reasonable under the circumstances, provided, however, that (A)
such debt shall be fully amortizing over a term not to exceed five (5)
years (or the term of the related equipment lease shall not exceed five
(5) years), (B) such debt (which, with respect to an equipment lease shall
be the annual rents payable thereunder for the then current calendar year)
shall not in the aggregate exceed an amount equal to one and one-half
percent (1.5%) of the total Release Amounts for the Properties, and (C)
such debt shall be secured only by a pledge of such fixtures or equipment
or an assignment of
23
equipment lease, and (iv) such other liabilities that are permitted
pursuant to this Agreement;
(xxi) has not and will not assume or guarantee or become obligated
for the debts of any other Person or hold out its credit as being
available to satisfy the obligations of any other Person except as
permitted pursuant to this Agreement;
(xxii) has not and will not acquire obligations or securities of its
partners, members or shareholders or any other Affiliate;
(xxiii) has allocated and will allocate fairly and reasonably any
overhead expenses that are shared with any Affiliate, including, but not
limited to, paying for shared office space and services performed by any
employee of an Affiliate;
(xxiv) maintains and uses and will maintain and use separate
stationery, invoices and checks bearing its name. The stationery,
invoices, and checks utilized by the Special Purpose Entity or utilized to
collect its funds or pay its expenses shall bear its own name and shall
not bear the name of any other entity unless such entity is clearly
designated as being the Special Purpose Entity's agent;
(xxv) has not pledged and will not pledge its assets for the benefit
of any other Person, except pursuant to or as permitted by the Loan
Documents;
(xxvi) has held itself out and identified itself and will hold
itself out and identify itself as a separate and distinct entity under its
own name or in a name franchised or licensed to it by an entity other than
an Affiliate of Borrower and not as a division or part of any other
Person, except for services rendered under the Management Agreement if the
Manager is an Affiliate, so long as the manager, or equivalent thereof,
under such Management Agreement holds itself out as an agent of the
Borrower;
(xxvii) has maintained and will maintain its assets in such a manner
that it will not be costly or difficult to segregate, ascertain or
identify its individual assets from those of any other Person;
(xxviii) has not made and will not make loans to any Person or hold
evidence of indebtedness issued by any other Person (other than cash and
investment-grade securities issued by an entity that is not an Affiliate
of or subject to common ownership with such entity);
(xxix) has not identified and will not identify its partners,
members or shareholders, or any Affiliate of any of them, as a division or
part of it, and has not identified itself and shall not identify itself as
a division of any other Person;
(xxx) has not entered into or been a party to, and will not enter
into or be a party to, any transaction with its partners, members,
shareholders or Affiliates except (A) in the ordinary course of its
business and on terms which are intrinsically fair, commercially
reasonable and are no less favorable to it than would be obtained in a
comparable arm's-length transaction with an unrelated third party and (B)
in connection with this
24
Agreement; provided, however, that the Management Agreements will not
trigger an Event of Default hereunder;
(xxxi) has not and will not have any obligation to, and will not,
indemnify its partners, officers, directors or members, as the case may
be, unless such an obligation is fully subordinated to the Debt and will
not constitute a claim against it in the event that cash flow in excess of
the amount required to pay the Debt is insufficient to pay such
obligation;
(xxxii) if such entity is a corporation, it shall consider the
interests of its creditors in connection with all corporate actions to the
extent permitted by applicable law;
(xxxiii) except pursuant to the Loan Documents, does not and will
not have any of its obligations guaranteed by any Affiliate with the
exception of the Affiliates listed on Schedule XIII attached hereto, which
Affiliates guaranty only the Management Agreements and/or Franchise
Agreements more particularly described on Schedule XIII attached hereto;
(xxxiv) has complied and will comply with all of the terms and
provisions contained in its organizational documents. The statement of
facts contained in its organizational documents are true and correct and
will remain true and correct.
"Spread" shall mean, effective as of November 10, 1999, (a) with
respect to Component A, eighty-two (82) basis points, (b) with respect to
Component B, one hundred thirty (130) basis points, (c) with respect to
Component C, two hundred ninety (290) basis points, (d) with respect to
Component D, three hundred ninety (390) basis points and (e) with respect to
Component E, four hundred fifty (450) basis points; provided, however that prior
to November 10, 1999, the term "Spread" shall have the meaning set forth in the
Original Loan Agreement.
"State" shall mean, with respect to an Individual Property, the
State or Commonwealth in which such Individual Property or any part thereof is
located.
"Survey" shall mean a survey of the Individual Property in question
prepared by a surveyor licensed in the State and satisfactory to Lender and the
company or companies issuing the Title Insurance Policies, and containing a
certification of such surveyor satisfactory to Lender.
"Tax and Insurance Escrow Fund" shall have the meaning set forth in
Section 7.2.1 hereof.
"Taxes" shall mean all real estate and personal property taxes,
assessments, water rates or sewer rents, now or hereafter levied or assessed or
imposed against any Individual Property or part thereof.
"Threshold Amount" shall have the meaning set forth in Section
5.1.21 hereof.
"Title Insurance Policy" shall mean, with respect to each Individual
Property, an ALTA mortgagee title insurance policy in the form (reasonably
acceptable to Lender) (or, if an
25
Individual Property is in a State which does not permit the issuance of such
ALTA policy, such form as shall be permitted in such State and reasonably
acceptable to Lender) issued with respect to such Individual Property and
insuring the lien of the Mortgage encumbering such Individual Property and
otherwise reasonably acceptable to Lender.
"▇▇▇▇ Property" shall mean that certain Individual Property known as
the ▇▇▇▇ Marriott.
"UCC" or "Uniform Commercial Code" shall mean the Uniform Commercial
Code as in effect in the applicable State in which an Individual Property is
located.
"Uncontrollable Expenses" shall have the meaning set forth in
Section 5.1.11(d) hereof.
"Underwriter Group" shall have the meaning set forth in Section
9.2(b) hereof.
"Uniform System of Accounts" shall mean the Uniform System of
Accounts for Hotels, current edition.
"U.S. Obligations" shall mean direct non-callable obligations of the
United States of America.
"Variable Expenses" shall have the meaning set forth in Section
5.1.11(d) hereof.
"Year 2000" shall have the meaning set forth in Section 5.1.26
hereof.
Section 1.2 Principles of Construction. All references to sections
and schedules are to sections and schedules in or to this Agreement unless
otherwise specified. All uses of the word "including" shall mean "including,
without limitation" unless the context shall indicate otherwise. Unless
otherwise specified, the words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement. Unless otherwise
specified, all meanings attributed to defined terms herein shall be equally
applicable to both the singular and plural forms of the terms so defined.
II. GENERAL TERMS
Section 2.1 Loan Commitment; Disbursement to Borrower.
2.1.1 The Loan. Subject to and upon the terms and conditions set
forth herein, Lender hereby agrees to make and Borrower hereby agrees to accept
the Loan on the Closing Date.
2.1.2 Components of the Loan. For the purpose of computing interest
payable from time to time on the principal amount of the Loan and certain other
computations set forth herein, the principal balance of the Loan shall be
divided into Components A through E. The principal amount of the Components
shall be as follows:
26
COMPONENT PRINCIPAL AMOUNT
--------- ----------------
A $ 213,810,000
B $ 42,760,000
C $ 42,760,000
D $ 27,680,000
E $ 18,990,000
2.1.3 Disbursement to Borrower. Borrower may request and receive
only one borrowing hereunder in respect of the Loan and any amount borrowed and
repaid hereunder in respect of the Loan may not be reborrowed.
2.1.4 The Note, Mortgages and Loan Documents. The Loan shall be
evidenced by the Note and secured by the Mortgages, the Assignments of Leases
and the other Loan Documents.
2.1.5 Use of Proceeds. Borrower shall use the proceeds of the Loan
to (a) repay and discharge any existing loans in respect of the Properties, (b)
pay all past-due Basic Carrying Costs, if any, in respect of the Properties, (c)
make deposits into the Reserve Funds on the Closing Date in the amounts provided
herein, (d) pay costs and expenses incurred in connection with the Closing of
the Loan, (e) fund any working capital requirements of the Properties, and (f)
distribute the balance, if any, to Borrower for such use or distribution as
Borrower may determine.
Section 2.2 Interest; Loan Payments; Late Payment Charge.
2.2.1 Interest Generally. Interest on the outstanding principal
balance of the Loan shall accrue from the Closing Date to but excluding the
Maturity Date at the Applicable Interest Rate under each Component comprising
the Note as applied to the outstanding principal balance of the related
Component.
2.2.2 Interest Calculation. Interest on the outstanding principal
balance of the Loan shall be calculated by multiplying (a) the actual number of
days elapsed in the period for which the calculation is being made by (b) a
daily rate based on a three hundred sixty (360) day year by (c) the outstanding
principal balance.
2.2.3 Determination of Interest Rate.
(a) The Applicable Interest Rate with respect to the Loan shall be:
(i) for a LIBOR Loan, LIBOR plus the Spread applicable to each Component
comprising the Note with respect to the applicable Interest Period or (ii) for a
Prime Rate Loan, the Prime Rate plus the Prime Rate Spread applicable to each
Component comprising the Note if the Loan is converted to a Prime Rate Loan
pursuant to the provisions of Section 2.2.3(c) or (f); provided, however that in
no event shall the Applicable Interest Rate with respect to Component A exceed
the Maximum Interest Rate other than during any period with respect to which the
Default Rate may be applicable.
27
(b) Subject to the terms and conditions of this Section 2.2.3, the
Loan shall be a LIBOR Loan and Borrower shall pay interest on the outstanding
principal amount of the Loan evidenced by each of the Components comprising the
Note at LIBOR plus the Spread applicable to each such Component for the
applicable Interest Period. Any change in the rate of interest hereunder due to
a change in the Applicable Interest Rate shall become effective as of the
opening of business on the first day on which such change in the Applicable
Interest Rate shall become effective. Each determination by Lender of the
Applicable Interest Rate shall be conclusive and binding for all purposes,
absent manifest error and Lender shall notify Borrower and the cap provider
under the Interest Rate Protection Agreement of the Applicable Interest Rate for
each Interest Period.
(c) In the event that Lender shall have determined (which
determination shall be conclusive and binding upon Borrower absent manifest
error) that by reason of circumstances affecting the interbank eurodollar
market, adequate and reasonable means do not exist for ascertaining LIBOR, then
Lender shall forthwith give notice by telephone of such determination, confirmed
in writing, to Borrower at least one (1) day prior to the last day of the
related Interest Period. If such notice is given, the related outstanding LIBOR
Loan shall be converted, on the first day of the next succeeding Interest
Period, to a Prime Rate Loan.
(d) If, pursuant to the terms of this Agreement, any portion of the
Loan has been converted to a Prime Rate Loan and Lender shall determine (which
determination shall be conclusive and binding upon Borrower absent manifest
error) that the event(s) or circumstance(s) which resulted in such conversion
shall no longer be applicable, Lender shall give notice thereof to Borrower, and
Borrower may elect to convert the Prime Rate Loan to a LIBOR Loan effective on
the first day of the next succeeding interest period by delivering to Lender
written notice of such election no later than 12:00 p.m. (New York City Time),
three (3) Business Days prior to the desired conversion date, which notice shall
be irrevocable. Notwithstanding any provision of this Agreement to the contrary,
in no event shall Borrower have the right to elect to convert a LIBOR Loan to a
Prime Rate Loan.
(e) With respect to a LIBOR Loan, all payments made by Borrower
hereunder shall be made free and clear of, and without reduction for or on
account of, income, stamp or other taxes, levies, imposts, duties, charges,
fees, deductions, reserves or withholdings imposed, levied, collected, withheld
or assessed by any Governmental Authority, which are imposed, enacted or become
effective after the date hereof (such non-excluded taxes being referred to
collectively as "Foreign Taxes"), excluding income and franchise taxes of the
United States of America or any political subdivision or taxing authority
thereof or therein (including Puerto Rico). If any Foreign Taxes are required to
be withheld from any amounts payable to Lender hereunder, the amounts so payable
to Lender shall be increased to the extent necessary to yield to Lender (after
payment of all Foreign Taxes) interest or any such other amounts payable
hereunder at the rate or in the amounts specified hereunder. Whenever any
Foreign Tax is payable pursuant to applicable law by Borrower, as promptly as
possible thereafter, Borrower shall send to Lender an original official receipt,
if available, or certified copy thereof showing payment of such Foreign Tax.
Borrower hereby indemnifies Lender for any incremental taxes, interest or
penalties that may become payable by Lender which may result from any failure by
28
Borrower to pay any such Foreign Tax when due to the appropriate taxing
authority of which Lender shall have provided Borrower with prior written
notice, if possible, or any failure by Borrower to remit to Lender the required
receipts or other required documentary evidence. Lender's inability to notify
Borrower of any such Foreign Tax in accordance with the immediately preceding
sentence shall in no way relieve Borrower of its obligations under this Section
2.2.3(e).
(f) If any requirement of law or any change therein or in the
interpretation or application thereof, shall hereafter make it unlawful for
Lender to make or maintain a LIBOR Loan as contemplated hereunder, (i) the
obligation of Lender hereunder to make a LIBOR Loan or to convert a Prime Rate
Loan to a LIBOR Loan shall be canceled forthwith and (ii) any outstanding LIBOR
Loan shall be converted automatically to a Prime Rate Loan on the next
succeeding Payment Date or within such earlier period as required by law.
Borrower hereby agrees promptly to pay Lender, upon demand, any additional
amounts necessary to compensate Lender for any costs incurred by Lender in
making any conversion in accordance with this Agreement, including, without
limitation, any interest or fees payable by Lender to lenders of funds obtained
by it in order to make or maintain the LIBOR Loan hereunder. Lender's notice of
such costs, as certified to Borrower, shall be conclusive absent manifest error.
(g) In the event that any change in any requirement of law or in the
interpretation or application thereof, or compliance by Lender with any request
or directive (whether or not having the force of law) hereafter issued from any
central bank or other Governmental Authority:
(i) shall hereafter impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, or deposits or other liabilities in or for the account of,
advances or loans by, or other credit extended by, or any other
acquisition of funds by, any office of Lender which is not otherwise
included in the determination of LIBOR hereunder;
(ii) shall hereafter have the effect of reducing the rate of return
on Lender's capital as a consequence of its obligations hereunder to a
level below that which Lender could have achieved but for such adoption,
change or compliance (taking into consideration Lender's policies with
respect to capital adequacy) by any amount deemed by Lender to be
material; or
(iii) shall hereafter impose on Lender any other condition and the
result of any of the foregoing is to increase the cost to Lender of
making, renewing or maintaining loans or extensions of credit or to reduce
any amount receivable hereunder;
then, in any such case, Borrower shall promptly pay Lender, upon demand, any
additional amounts necessary to compensate Lender for such additional cost or
reduced amount receivable which Lender deems to be material as determined by
Lender. If Lender becomes entitled to claim any additional amounts pursuant to
this Section 2.2.3(g), Lender shall provide Borrower with not less than ninety
(90) days written notice specifying in reasonable detail the event by reason of
which it has become so entitled and the additional amount required to fully
compensate Lender for such additional cost or reduced amount. A certificate as
to any additional costs or amounts payable pursuant to the foregoing sentence
submitted by Lender to Borrower shall be conclusive in the absence of manifest
error. This provision shall survive payment of the Note
29
and the satisfaction of all other obligations of Borrower under this Agreement
and the Loan Documents.
(h) Borrower agrees to indemnify Lender and to hold Lender harmless
from any loss or expense which Lender sustains or incurs as a consequence of (i)
any default by Borrower in payment of the principal of or interest on a LIBOR
Loan, including, without limitation, any such loss or expense arising from
interest or fees payable by Lender to lenders of funds obtained by it in order
to maintain a LIBOR Loan hereunder, (ii) any prepayment (whether voluntary or
mandatory) of the LIBOR Loan on a day that (A) is not the Payment Date
immediately following the last day of an Interest Period with respect thereto or
(B) is the Payment Date immediately following the last day of an Interest Period
with respect thereto if Borrower did not give the prior written notice of such
prepayment required pursuant to the terms of this Agreement, including, without
limitation, such loss or expense arising from interest or fees payable by Lender
to lenders of funds obtained by it in order to maintain the LIBOR Loan hereunder
and (iii) the conversion (for any reason whatsoever, whether voluntary or
involuntary) of the Applicable Interest Rate from LIBOR plus the Spread to the
Prime Rate plus the Prime Rate Spread with respect to any portion of the
outstanding principal amount of the Loan then bearing interest at LIBOR plus the
Spread on a date other than the Payment Date immediately following the last day
of an Interest Period, including, without limitation, such loss or expenses
arising from interest or fees payable by Lender to lenders of funds obtained by
it in order to maintain a LIBOR Loan hereunder (the amounts referred to in
clauses (i), (ii) and (iii) are herein referred to collectively as the "Breakage
Costs"). This provision shall survive payment of the Note in full and the
satisfaction of all other obligations of Borrower under this Agreement and the
other Loan Documents.
(i) Lender shall not be entitled to claim compensation pursuant to
this Section 2.2.3 for any Foreign Taxes, increased cost or reduction in amounts
received or receivable hereunder, or any reduced rate of return, which was
incurred or which accrued more than the earlier of (i) ninety (90) days before
the date Lender notified Borrower of the change in law or other circumstance on
which such claim of compensation is based and delivered to Borrower a written
statement setting forth in reasonable detail the basis for calculating the
additional amounts owed to Lender under this Section 2.2.3, which statement
shall be conclusive and binding upon all parties hereto absent manifest error,
or (ii) any earlier date provided that Lender notified Borrower of such change
in law or circumstance and delivered the written statement referenced in clause
(i) within ninety (90) days after Lender received written notice of such change
in law or circumstance.
2.2.4 Additional Costs. Lender will use reasonable efforts
(consistent with legal and regulatory restrictions) to maintain the availability
of the LIBOR Loan and to avoid or reduce any increased or additional costs
payable by Borrower under Section 2.2.3, including, if requested by Borrower, a
transfer or assignment of the Loan to a branch, office or Affiliate of Lender in
another jurisdiction, or a redesignation of its lending office with respect to
the Loan, in order to maintain the availability of the LIBOR Loan or to avoid or
reduce such increased or additional costs, provided that the transfer or
assignment or redesignation (a) would not result in any additional costs,
expenses or risk to Lender that are not reimbursed by Borrower and (b) would not
be disadvantageous in any other respect to Lender as determined by Lender in its
sole but good faith discretion.
30
2.2.5 Intentionally Deleted.
2.2.6 Payments. On each Payment Date throughout the term of the
Loan, Borrower shall pay to Lender monthly installments of interest on the Loan
in arrears at the Applicable Interest Rate in accordance with Section 2.2.2 and
Section 2.2.3 hereof. Unless otherwise elected by Lender, such payments shall be
applied (i) first, to the payment of interest then due and owing under Component
A; (ii) second, to the payment of interest then due and owing under Component B;
(iii) third, to interest then due and owing under Component C; (iv) fourth, to
interest then due and owing under Component D; and (v) fifth, to interest then
due and owing under Component E.
2.2.7 Payment on Maturity Date. Borrower shall pay to Lender on the
Maturity Date the outstanding principal balance of the Loan, all accrued and
unpaid interest and all other amounts due hereunder and under the Note, the
Mortgages and other the Loan Documents.
2.2.8 Payments after Default. Subject to Section 2.5.3 hereof, upon
the occurrence and during the continuance of a Default that is susceptible to
being cured by the payment of money or of an Event of Default, interest on the
outstanding principal balance of the Loan and, to the extent permitted by law,
overdue interest and other amounts due in respect of the Loan, shall accrue at
the Default Rate, calculated from the date such monetary Default or Event of
Default occurred until the actual receipt and collection of the Debt (or that
portion thereof that is then due). To the extent permitted by applicable law,
interest at the Default Rate shall be added to the Debt, shall itself accrue
interest at the weighted average of the Applicable Interest Rate with respect to
each of the Components and shall be secured by the Mortgages and the other Loan
Documents. This Section 2.2.8 shall not be construed as an agreement or
privilege to extend the date of the payment of the Debt, nor as a waiver of any
other right or remedy accruing to Lender by reason of the occurrence of any
Event of Default and Lender retains its rights under the Note to accelerate and
to continue to demand payment of the Debt upon the happening of any Event of
Default, despite any payment of interest at the Default Rate.
2.2.9 Late Payment Charge. Subject to Section 2.5.3 hereof, if any
Monthly Debt Service Payment Amount due under the Loan Documents is not paid by
Borrower on the date on which it is due, Borrower shall pay to Lender upon
demand an amount equal to the lesser of five percent (5%) of such unpaid sum or
the maximum amount permitted by applicable law in order to defray the expense
incurred by Lender in handling and processing such delinquent payment and to
compensate Lender for the loss of the use of such delinquent payment. Any such
amount shall be secured by the Mortgages and the other Loan Documents to the
extent permitted by applicable law.
2.2.10 Usury Savings. This Agreement and the Note are subject to the
express condition that at no time shall Borrower be obligated or required to pay
interest on the principal balance of the Loan at a rate which could subject
Lender to either civil or criminal liability as a result of being in excess of
the Maximum Legal Rate. If, by the terms of this Agreement or the other Loan
Documents, Borrower is at any time required or obligated to pay interest on the
principal balance due hereunder at a rate in excess of the Maximum Legal Rate,
the Applicable Interest Rate or the Default Rate, as the case may be, shall be
deemed to be immediately reduced
31
to the Maximum Legal Rate and all previous payments in excess of the Maximum
Legal Rate shall be deemed to have been payments in reduction of principal and
not on account of the interest due hereunder. All sums paid or agreed to be paid
to Lender for the use, forbearance, or detention of the sums due under the Loan,
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term of the Loan until payment
in full so that the rate or amount of interest on account of the Loan does not
exceed the Maximum Legal Rate of interest from time to time in effect and
applicable to the Loan for so long as the Loan is outstanding.
Section 2.3 Prepayments.
2.3.1 Voluntary Prepayments. Upon no less than two (2) Business Days
prior written notice, Borrower shall have the right to prepay the Loan in whole
or in part on any Payment Date without premium or penalty. If for any reason
Lender, in its sole discretion, accepts a prepayment on a date which is not a
Payment Date (including any prepayment following an Event of Default), such
prepayment shall be accompanied by a payment of all interest that would have
accrued on the Loan through the next Payment Date. Any voluntary prepayment made
pursuant to this Section 2.3.1 and not made in connection with the release of an
Individual Property pursuant to Section 2.4 hereof, shall be applied pro-rata to
reduce the Pro-Rata Release Amounts of each Individual Property.
2.3.2 Mandatory Prepayments.
(a) On the next occurring Payment Date following the date on which
Borrower actually receives any Net Proceeds, if Lender is not obligated to make
such Net Proceeds available to Borrower for the restoration of any Individual
Property, Borrower shall prepay the outstanding principal balance of the Note in
an amount equal to one hundred percent (100%) of such Net Proceeds. No premium
or penalty shall be due in connection with any prepayment made pursuant to this
Section 2.3.2. Any partial prepayment under this Section shall be applied to the
last payments of principal due under the Loan.
(b) In the event that any management fees due and payable pursuant
to the related Management Agreement are increased pursuant to the terms of that
certain Termination Provisions Agreement dated as of June 10, 1999 by and
between Wyndham International Operating Partnership, L.P. and Interstate Hotels,
LLC, then Borrower shall, on the next occurring Payment Date, prepay the
outstanding principal balance of the Note in an amount necessary to increase the
Debt Service Coverage Ratio with respect to each Individual Property to which
such increase would be applicable for the twelve (12) calendar months
immediately preceding such increase (but calculated assuming such increase had
been in effect during such twelve (12) month period) to equal or exceed the
greater of (i) the Debt Service Coverage Ratio with respect to each such
Individual Property as of the Bel Age Closing Date, as set forth on Schedule I
hereto and (ii) the Debt Service Coverage Ratio with respect to such Individual
Property for the twelve (12) calendar months immediately preceding such increase
prior to giving effect to such increase. If Borrower shall fail to so prepay the
outstanding principal balance of the Note, Lender may, at its option, withdraw
amounts necessary to make such prepayment from the Lockbox Account or the Cash
Collateral Account and apply such amounts in accordance with this Section
2.3.2(b) and, if the amounts on deposit therein shall not be
32
sufficient to make such prepayment, no Net Cash Flow After Debt Service shall be
released from the Cash Collateral Account to Borrower until sufficient amounts
to make such prepayment have accumulated in the Cash Collateral Account and have
been applied by Lender to such prepayment. Any such prepayment shall be applied
to reduce the Release Amount of the Individual Property with respect to which
such prepayment was made.
2.3.3 Proceeds of Interest Rate Protection Agreements. The net
proceeds of the liquidation of any Interest Rate Protection Agreement in
connection with any prepayment of all or any portion of the Loan shall be
distributed to Borrower, provided that no Event of Default has occurred and is
continuing.
2.3.4 Application of Prepayments to Components. Any prepayment of
the principal of the Loan, in whole or in part, shall be applied (i) first, to
the reduction of the outstanding principal balance of Component A until reduced
to zero, (ii) second, to the reduction of the outstanding principal balance of
Component B until reduced to zero, (iii) third, to the reduction of the
outstanding principal balance of Component C until reduced to zero, (iv) fourth,
the reduction of the outstanding principal balance of Component D until reduced
to zero and (v) fifth, the reduction of the outstanding principal balance of
Component E.
Section 2.4 Release of Properties.
2.4.1 Release of Individual Properties. Provided no Event of Default
has occurred and is continuing (other than an Event of Default that arises
solely in connection with the Individual Property to be released, provided that
such release cures such Event of Default), Borrower shall have the right to
prepay the Loan in part on any Payment Date (and on no other date) and receive
release(s) of the Mortgage(s) and the related Loan Documents with respect to one
or more Individual Properties and the release of funds on deposit in the Lockbox
Account, the Cash Collateral Account and any of the Reserve Funds relating to
each such Individual Property and the release of any security delivered to
Lender pursuant to Section 5.1.21 in connection with alterations at each such
Individual Property upon payment to Lender of the Adjusted Release Amount for
each Individual Property so released, together with all amounts then due and
payable under the Loan and the Loan Documents and upon the satisfaction of each
of the following conditions:
(a) Borrower shall submit to Lender, not less than fifteen (15) days
prior to the date of such release, a release of Lien (and related Loan
Documents) for such Individual Property or a release of the Individual Borrower
and the Individual Property from the applicable Loan Documents, as applicable,
for execution by Lender. Such release shall be in a form appropriate in each
jurisdiction in which the Individual Property to be released is located and
reasonably satisfactory to Lender in form and substance. In addition, Borrower
shall provide all other documentation Lender reasonably requires to be delivered
by Borrower in connection with such release, together with an Officer's
Certificate certifying that such documentation (i) is in compliance with all
Legal Requirements, (ii) will effect such release in accordance with the terms
of this Agreement, and (iii) will not impair or otherwise adversely affect the
Liens, security interests and other rights of Lender under the Loan Documents
not being released (or as to the parties to the Loan Documents and Properties
subject to the Loan Documents not being released).
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(b) After giving effect to such release, the Debt Service Coverage
Ratio for all of the Properties then remaining subject to the Liens of the
Mortgages for the twelve (12) full calendar months immediately preceding the
release of the Individual Property shall be not less than the greater of (i)
1.98x, and (ii) the Debt Service Coverage Ratio for all of the Properties then
securing the Loan (including any Individual Property to be released) for the
twelve (12) full calendar months immediately preceding the release of the
Individual Property.
(c) The Individual Property to be released shall be conveyed to a
person other than any Individual Borrower prior to or simultaneously with the
release of the Individual Property or, at Borrower's request, the Individual
Borrower owning the Individual Property together with such Individual Property
will be released from the applicable Loan Documents, provided that, if the
Individual Borrower is to be released, Borrower shall deliver to Lender evidence
satisfactory to Lender that the single purpose nature and bankruptcy remoteness
of the Individual Borrowers remaining subject to the Loan Documents following
such release are not adversely affected by the release (which requirement may
include a non-consolidation opinion or a reaffirmation of the Insolvency Opinion
satisfactory to Lender and the Rating Agencies).
(d) Borrower shall pay all costs and expenses of Lender incurred in
connection with the prepayment of the Loan, including any Breakage Costs and any
costs and expenses associated with a release of the Lien of the Mortgages as
provided in this Section 2.4.1, as well as reasonable attorneys' fees and
expenses.
(e) The Adjusted Release Amount paid to Lender in connection with
any such release shall be applied (i) first, to reduce the Pro-Rata Release
Amount of the Individual Property being released to zero and (ii) second,
pro-rata to reduce the Pro-Rata Release Amounts of each Individual Property
remaining subject to the Lien of a Mortgage immediately following such release.
2.4.2 Release on Payment in Full. Lender shall, upon the written
request and at the expense of Borrower, upon payment in full of all principal
and interest due on the Loan and all other amounts due and payable under the
Loan Documents in accordance with the terms and provisions of the Note and this
Loan Agreement, release the Lien of the Mortgage on each Individual Property not
theretofore released.
2.4.3 Release of Wyndham Buttes Parcel. If the ground lessor under
the Ground Lease with respect to the Individual Property known as Wyndham Buttes
shall, in accordance with such Ground Lease, notify the applicable Individual
Borrower that it intends to exercise, or has exercised, its right to reclaim the
portion of such Individual Property which is described as "Parcel A-2" in such
Ground Lease ("the "Buttes Reclaim Parcel") and such Individual Borrower shall
notify Lender that it shall be necessary to release any Lien of the applicable
Mortgage with respect to the Buttes Reclaim Parcel in order for such Individual
Borrower to comply with the related Ground Lease, then Lender shall release the
Lien of the applicable Mortgage upon the satisfaction of each of the following
conditions:
(a) Borrower shall submit to Lender (within a time period prior to
such release that is reasonably sufficient for Lender's review thereof) a
release of Lien (and related Loan Documents) for the Buttes Reclaim Parcel for
execution by Lender. Such release shall be
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in a form appropriate for each jurisdiction in which the Individual Property to
be released is located. In addition, Borrower shall provide Lender with an
Officer's Certificate certifying that such documentation (i) is in compliance
with all Legal Requirements, (ii) will effect such release in accordance with
the terms of this Agreement, and (iii) will not impair or otherwise adversely
affect the Liens, security interests and other rights of Lender under the Loan
Documents with respect to the Individual Properties not being released (or as to
the parties to the Loan Documents and Properties subject to the Loan Documents
not being released).
(b) Borrower shall pay all costs and expenses of Lender incurred in
connection with the release of the Buttes Reclaim Parcel pursuant to this
Section 2.4.3 (including, without limitation, Lender's reasonable attorneys'
fees and expenses).
(c) Borrower shall submit to Lender evidence (through endorsements
to the Title Insurance Policy with respect to such Individual Property or
otherwise) that the portion of such Individual Property remaining subject to the
Lien of the applicable Mortgage after the release of the Buttes Reclaim Parcel
shall (i) continue to comply with all Legal Requirements and (ii) constitute one
or more parcels which constitute one or more separate tax lots and does not
constitute a portion of any other tax lot not a part of such Individual
Property.
(d) Borrower shall deliver to Lender an endorsement to the Title
Insurance Policy with respect to such Individual Property confirming that the
release of the Buttes Reclaim Parcel will not have an adverse effect on the
priority of the Lien of the Mortgage encumbering the remaining portion of such
Individual Property.
(e) If a Securitization shall have occurred, Borrower shall deliver
to Lender an opinion of counsel that the release of the Buttes Reclaim Parcel
will not constitute a "significant modification" of the Loan within the meaning
of Section 1.1001-3 of the regulations of the United States Department of
Treasury.
Section 2.5 Manner of Making Payments; Cash Management.
2.5.1 Deposits into Lockbox Account. Borrower shall cause all Rents
from the Properties to be deposited into the Lockbox Account in accordance with
the Cash Management Agreement. Borrower shall be responsible for all costs of
maintaining the Lockbox Account. Without limiting the foregoing, except in the
case of the ▇▇▇▇ Property, the Schaumburg Property and the Phoenix Property,
Borrower shall, and shall cause each Manager to, (a) deliver irrevocable written
instructions to all Tenants under Leases to deliver all Rents payable thereunder
directly to the Lockbox Account, and (b) deposit all amounts received by
Borrower or any Manager constituting Rents or other revenue of any kind from the
Properties into the Cash Collateral Account within one (1) Business Day of
receipt thereof. In the case of the ▇▇▇▇ Property, the Schaumburg Property and
the Phoenix Property, Borrower shall cause the applicable Manager to deposit
into the Cash Collateral Account any and all amounts to which Borrower is
entitled pursuant to the related Management Agreement. Disbursements from the
Lockbox Account and the Cash Collateral Account will be made in accordance with
the terms and conditions of this Agreement and the Cash Management Agreement.
Lender shall have sole dominion and control over the Lockbox Account, the Cash
Collateral Account and any other cash management account established pursuant to
the Cash Management Agreement and, except
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as set forth in the Cash Management Agreement, Borrower shall have no rights to
make withdrawals therefrom.
2.5.2 Making of Payments. Each payment by Borrower hereunder or
under the Note shall be made in funds settled through the New York Clearing
House Interbank Payments System or other funds immediately available to Lender
by 11:00 a.m., New York City time, on the date such payment is due, to Lender by
deposit to such account as Lender may designate by written notice to Borrower.
Whenever any payment hereunder or under the Note shall be stated to be due on a
day which is not a Business Day, such payment shall be made on the first
Business Day preceding such scheduled due date.
2.5.3 Payments Received in the Lockbox Account and Other Cash
Collateral Accounts. Notwithstanding anything to the contrary contained in this
Agreement or the other Loan Documents, in no event shall a Default or an Event
of Default arising solely from the failure of Borrower to make a timely payment
of any amount due and payable under the Loan be deemed to have occurred if such
failure has occurred solely due to the failure of Lender, Servicer or Agent (a)
to properly apply amounts on deposit in the Lockbox Account, the Cash Collateral
Account or any other cash collateral account established pursuant to the Cash
Management Agreement and under the exclusive control of Lender, Servicer and/or
Agent to the timely payment of such amount due and payable under the Loan in
accordance with the terms and provisions of the Cash Management Agreement or the
other Loan Documents or (b) to transfer, in a timely manner, amounts on deposit
in the Lockbox Account to the Cash Collateral Account or other account
established pursuant to the Cash Management Agreement.
2.5.4 No Deductions, etc. All payments made by Borrower hereunder or
under the Note or the other Loan Documents shall be made irrespective of, and
without any deduction for, any setoff, defense or counterclaims.
III. CONDITIONS PRECEDENT
Section 3.1 Conditions Precedent to Closing. The obligation of
Lender to make the Loan hereunder is subject to the fulfillment by Borrower or
waiver by Lender of the conditions precedent set forth in that certain
Commitment and Term Sheet dated June 10, 1999 between Lender and Patriot
American Hospitality, Inc., as such Commitment and Term Sheet may have been
amended by the parties thereto, prior to the Closing Date and each of the
representations and warranties set forth in Article IV hereof shall be true and
correct as of the Closing Date.
Section 3.2 Basic Carrying Costs. On or before the Closing Date,
Borrower shall have paid all Basic Carrying Costs relating to the Properties
which are in arrears, including without limitation, (a) accrued but unpaid
insurance premiums relating to the Properties, (b) currently due Taxes
(including any in arrears) relating to the Properties, and (c) currently due
Other Charges relating to the Properties, which amounts shall be funded with
proceeds of the Loan.
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IV. REPRESENTATIONS AND WARRANTIES
Section 4.1 Borrower Representations. Borrower represents and
warrants as of the date hereof and as of the Closing Date that:
4.1.1 Organization. Each Individual Borrower has been duly organized
and is validly existing and in good standing with requisite power and authority
to own its properties and to transact the businesses in which it is now engaged.
Each Individual Borrower is duly qualified to do business and is in good
standing in each jurisdiction where it is required to be so qualified in
connection with its properties, businesses and operations. Each Individual
Borrower possesses all material rights, licenses, permits and authorizations,
governmental or otherwise, necessary to entitle it to own its properties and to
transact the businesses in which it is now engaged, and the sole business of
each Individual Borrower is the ownership, management and operation of one or
more Individual Properties.
4.1.2 Proceedings. Each Individual Borrower has taken all necessary
action to authorize the execution, delivery and performance of this Agreement
and the other Loan Documents to which it is a party. This Agreement and such
other Loan Documents have been duly executed and delivered by or on behalf of
each Individual Borrower that is a party thereto and constitute legal, valid and
binding obligations of such Individual Borrower enforceable against such
Individual Borrower in accordance with their respective terms, subject only to
applicable bankruptcy, insolvency and similar laws affecting rights of creditors
generally, and subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).
4.1.3 No Conflicts. The execution, delivery and performance of this
Agreement and the other Loan Documents by each Individual Borrower will not
conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien,
charge or encumbrance (other than pursuant to the Loan Documents) upon any of
the property or assets of such Individual Borrower pursuant to the terms of any
indenture, mortgage, deed of trust, loan agreement, partnership agreement,
management agreement, franchise agreement, license or other material agreement
or instrument to which such Individual Borrower is a party or by which any of
such Individual Borrower's property or assets is subject, nor will such action
result in any violation of the provisions of any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
Borrower or any of Borrower's properties or assets, and any consent, approval,
authorization, order, registration or qualification of or with any court or any
such regulatory authority or other governmental agency or body required for the
execution, delivery and performance by such Individual Borrower of this
Agreement or any other Loan Documents has been obtained and is in full force and
effect.
4.1.4 Litigation. Except as disclosed on Schedule X attached hereto,
there are no actions, suits or proceedings at law or in equity by or before any
Governmental Authority or other agency now pending or threatened against or
affecting any Individual Borrower or any Individual Property, which actions,
suits or proceedings, if determined against any Individual Borrower or any
Individual Property, could reasonably be expected to materially adversely affect
37
the condition (financial or otherwise) or business of any Individual Borrower or
the condition or ownership of any Individual Property.
4.1.5 Agreements. No Individual Borrower is a party to any agreement
or instrument or subject to any restriction which could be reasonably expected
to materially and adversely affect any Individual Borrower or any Individual
Property, or any Individual Borrower's business, properties or assets,
operations or condition, financial or otherwise. Other than as set forth on
Schedule XII, no Individual Borrower is in default in any material respect in
the performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any agreement or instrument to which it is a party or
by which any Individual Borrower or any Individual Property is bound which could
reasonably be expected to materially and adversely affect any Individual
Borrower or any Individual Property. No Individual Borrower has any material
financial obligation under any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which any Individual Borrower is a
party or by which any Individual Borrower or any Individual Property is
otherwise bound, other than (a) trade payables incurred in the ordinary course
of the operation of the Properties as permitted pursuant to clause (xx) of the
definition of "Special Purpose Entity" set forth in Section 1.1 and (b)
obligations under or permitted under the Loan Documents.
4.1.6 Title. Each Individual Borrower has good, marketable and
insurable fee simple or leasehold title (as applicable) to the real property
comprising part of its Individual Property and good title to the balance of such
Individual Property, free and clear of all Liens whatsoever except the Permitted
Encumbrances, such other Liens as are permitted pursuant to the Loan Documents
and the Liens created by the Loan Documents. The Permitted Encumbrances in the
aggregate do not materially and adversely affect the value, operation or use of
the applicable Individual Property (as currently used) or Borrower's ability to
repay the Loan. Each Mortgage, when properly recorded in the appropriate
records, together with any Uniform Commercial Code financing statements required
to be filed in connection therewith, will create (a) a valid, perfected first
priority lien on the applicable Individual Property, subject only to Permitted
Encumbrances and the Liens created by the Loan Documents and (b) perfected
security interests in and to, and perfected collateral assignments of, all
personalty (including the Leases), all in accordance with the terms thereof, in
each case subject only to any applicable Permitted Encumbrances, such other
Liens as are permitted pursuant to the Loan Documents and the Liens created by
the Loan Documents. There are no claims for payment for work, labor or materials
affecting any of the Properties which are past due and are or may become a lien
prior to, or of equal priority with, the Liens created by the Loan Documents
unless such claims for payments are insured against pursuant to the applicable
Title Insurance Policy or are being contested in accordance with the terms and
conditions of the Mortgages.
4.1.7 No Bankruptcy Filing. No Individual Borrower or any
constituent Persons of any Individual Borrower are contemplating either the
filing of a petition by it under any state or federal bankruptcy or insolvency
laws or the liquidation of all or a major portion of any Individual Borrower's
assets or property, and Borrower has no knowledge of any Person contemplating
the filing of any such petition against it or such constituent Persons.
4.1.8 Full and Accurate Disclosure. No statement of fact made by
Borrower in this Agreement or in any of the other Loan Documents contains any
untrue statement of a
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material fact or omits to state any material fact necessary to make statements
contained herein or therein not misleading. There is no material fact presently
known to Borrower which has not been disclosed to Lender which materially
adversely affects, nor as far as Borrower can foresee, could reasonably be
expected to materially adversely affect, any Individual Property or the
business, operations or condition (financial or otherwise) of Borrower.
4.1.9 No Plan Assets. No Individual Borrower is an "employee benefit
plan," as defined in Section 3(3) of ERISA, subject to Title I of ERISA, and
none of the assets of any Individual Borrower constitutes or will constitute
"plan assets" of one or more such plans within the meaning of 29 C.F.R. Section
2510.3-101. In addition, (a) no Individual Borrower is a "governmental plan"
within the meaning of Section 3(32) of ERISA and (b) no transactions by or with
any Individual Borrower are subject to state statutes regulating investment of,
and fiduciary obligations with respect to, governmental plans similar to the
provisions of Section 406 of ERISA or Section 4975 of the Code currently in
effect, which prohibit or otherwise restrict the transactions contemplated by
this Loan Agreement.
4.1.10 Compliance. Except as expressly set forth in the property
condition, structural, entitlement and environmental reports (as supplemented or
amended, "Property Condition Reports") delivered to Lender in connection with
the Closing of the Loan, Borrower and the Properties and the use thereof comply
in all material respects with all applicable Legal Requirements, including,
without limitation, building and zoning ordinances and codes. Borrower is not,
in any material respect, in default or violation of any order, writ, injunction,
decree or demand of any Governmental Authority. There has not been committed by
Borrower or to the best of Borrower's knowledge, any other Person in occupancy
of or involved with the operation or use of the Properties any act or omission
affording the federal government or any other Governmental Authority the right
of forfeiture as against any Individual Property or any part thereof or any
monies paid in performance of Borrower's obligations under any of the Loan
Documents.
4.1.11 Financial Information. All financial data, including, without
limitation, the statements of cash flow and income and operating expense, that
have been delivered to Lender in respect of the Properties (i) are true,
complete and correct in all material respects, (ii) accurately represent the
financial condition of the Properties as of the date of such reports, in all
material respects, and (iii) to the extent prepared or audited by an independent
certified public accounting firm, have been prepared in accordance with GAAP
throughout the periods covered, except as disclosed therein. Except for
Permitted Encumbrances, Borrower does not have any contingent liabilities,
liabilities for taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments that are known to Borrower
and reasonably likely to have a materially adverse effect on any Individual
Property or the operation thereof as a hotel, except as referred to or reflected
in said financial statements. Since the date of such financial statements, there
has been no materially adverse change in the financial condition, operations or
business of Borrower from that set forth in said financial statements.
4.1.12 Condemnation. Except as set forth on Schedule XV, no
Condemnation or other proceeding has been commenced or, to Borrower's best
knowledge, is threatened or contemplated with respect to all or any portion of
any Individual Property or for the relocation of roadways providing access to
any Individual Property.
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4.1.13 Federal Reserve Regulations. No part of the proceeds of the
Loan will be used for the purpose of purchasing or acquiring any "margin stock"
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System or for any other purpose which would be inconsistent with such
Regulation U or any other Regulations of such Board of Governors, or for any
purposes prohibited by Legal Requirements or by the terms and conditions of this
Agreement or the other Loan Documents.
4.1.14 Utilities and Public Access. Each Individual Property has
rights of access to public ways or private recorded easements or rights of way
providing access to public ways which are insured by the Title Insurance
Policies and each Individual Property is served by water, sewer, sanitary sewer
and storm drain facilities adequate to service such Individual Property for its
respective intended uses. All public utilities necessary or convenient to the
full use and enjoyment of each Individual Property are located either in the
public right-of-way abutting such Individual Property (which are connected so as
to serve such Individual Property without passing over other property) or in
recorded easements serving such Individual Property and such easements are set
forth in the Title Insurance Policies. All roads necessary for the use of each
Individual Property for their current respective purposes have been completed
and dedicated to public use and accepted by all Governmental Authorities.
4.1.15 Not a Foreign Person. No Individual Borrower is a "foreign
person" within the meaning of Section 1445(f)(3) of the Code.
4.1.16 Separate Lots. Except as set forth on Schedule XVII hereto,
each Individual Property is comprised of one (1) or more parcels which
constitute a separate tax lot or lots and does not constitute a portion of any
other tax lot not a part of such Individual Property.
4.1.17 Assessments. Except as set forth on Schedule XI attached
hereto, there are no material pending or, to Borrower's knowledge, proposed
special or other assessments for public improvements or otherwise affecting any
Individual Property, nor to the best of the Borrower's knowledge, are there any
contemplated improvements to any Individual Property that may result in such
special or other assessments.
4.1.18 Enforceability. The Loan Documents are not subject to any
right of rescission, set-off, counterclaim or defense by Borrower, including the
defense of usury, nor would the operation of any of the terms of the Loan
Documents, or the exercise of any right thereunder, render the Loan Documents
unenforceable (subject to principles of equity and bankruptcy, insolvency and
other laws generally affecting creditors' rights and the enforcement of debtors'
obligations) and Borrower has not asserted any right of rescission, set-off,
counterclaim or defense with respect thereto.
4.1.19 No Prior Assignment. There are no prior assignments of the
Leases or any portion of the Rents due and payable or to become due and payable
which are presently outstanding.
4.1.20 Insurance. Borrower has obtained and has delivered to Lender
certified copies of all insurance policies reflecting the insurance coverages,
amounts and other requirements set forth in this Agreement. Except as described
on Schedule X hereto, no
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outstanding material claims are pending under any such policy with respect to or
related to the Properties and/or the Borrower and no Person, including Borrower,
has done, by act or omission, anything which would impair the coverage of any
such policy.
4.1.21 Use of Property. Each Individual Property is used exclusively
for hotel purposes and other appurtenant and related uses including, but not
limited to, restaurants and lounges.
4.1.22 Certificate of Occupancy; Licenses. Except as expressly set
forth in the Property Condition Reports, all material certifications, permits,
licenses and approvals, including without limitation, certificates of completion
and occupancy permits and any applicable liquor license required for the legal
use, occupancy and operation of each Individual Property as a hotel
(collectively, the "Licenses"), have been obtained and are in full force and
effect. Borrower shall keep and maintain or cause to be kept and maintained all
Licenses necessary for the operation of each Individual Property as a hotel. The
use being made of each Individual Property is in conformity with the certificate
of occupancy issued for such Individual Property.
4.1.23 Flood Zone. Except as shown on the Surveys, or expressly
disclosed in the Property Condition Reports, none of the Improvements on any
Individual Property are located in an area as identified by ,the Federal
Emergency Management Agency as an area having special flood hazards and, if so
located, the flood insurance required pursuant to Section 6.1(a)(i) is in full
force and effect with respect to each such Individual Property.
4.1.24 Physical Condition. Except as expressly set forth in the
Property Condition Reports, each Individual Property, including, without
limitation, all buildings, improvements, parking facilities, sidewalks, storm
drainage systems, roofs, plumbing systems, HVAC systems, fire protection
systems, electrical systems, equipment, elevators, exterior sidings and doors,
landscaping, irrigation systems and all structural components, are in good
condition, order and repair in all material respects; there exists no material
structural or other material defects or damages in any Individual Property,
whether latent or otherwise, and Borrower has not received notice from any
insurance company or bonding company of any defects or inadequacies in any
Individual Property, or any part thereof, which would adversely affect the
insurability of the same or cause the imposition of extraordinary premiums or
charges thereon or of any termination or threatened termination of any policy of
insurance or bond.
4.1.25 Boundaries. Except as expressly set forth in the Property
Condition Reports, the Surveys or the Title Insurance Policies, all of the
improvements at each Individual Property lie wholly within the boundaries and
building restriction lines of such Individual Property, and no improvements on
adjoining properties encroach upon such Individual Property, and no easements or
other encumbrances upon the applicable Individual Property encroach upon any of
the improvements, so as to materially affect the value or marketability of the
applicable Individual Property except those which are insured against by title
insurance.
4.1.26 Leases. The Properties are not subject to any Leases other
than the Leases described in Schedule II attached hereto and made a part hereof.
Borrower is the owner and lessor of landlord's interest in the Leases. No Person
has any material possessory interest in any Individual Property or right to
occupy the same except under and pursuant to the provisions of
41
the Management Agreement and the Leases. The current Leases are in full force
and effect and, except as disclosed on Schedule XVI, there are no defaults in
any material respect under any Material Lease by Borrower and, to the best of
Borrower's knowledge, any tenant, and, to the best of Borrower's knowledge,
there are no conditions that, with the passage of time or the giving of notice,
or both, would constitute defaults in any material respect under any Material
Lease. Except for advance payments in the nature of security deposits, no Rent
has been paid more than one (1) month in advance of its due date. Except as set
forth on Schedule XVI, all material work to be performed by the applicable
Individual Borrower under each Material Lease has been performed as required and
has been accepted by the applicable tenant, and any payments, free rent, partial
rent, rebate of rent or other payments, credits, allowances or abatements
required to be given by the applicable Individual Borrower to any tenant has
already been received by such tenant. There is no prior sale, transfer or
assignment, hypothecation or pledge of any Lease or of the Rents received
therein which is presently outstanding and has priority over the Loan Documents.
To the best of Borrower's knowledge, no tenant listed on Schedule II has
assigned its Lease or sublet all or any portion of the premises demised thereby,
nor does anyone except such tenant and its employees occupy such leased
premises. No tenant under any Lease has a right or option pursuant to such Lease
or otherwise to purchase all or any part of the leased premises or the building
of which the leased premises are a part. No tenant under any Lease has any right
or option for additional space in the Improvements.
4.1.27 Intentionally Deleted.
4.1.28 Intentionally Deleted.
4.1.29 Filing and Recording Taxes. All transfer taxes, deed stamps,
intangible taxes or other amounts in the nature of transfer taxes required to be
paid by any Person under applicable Legal Requirements currently in effect in
connection with the transfer of the Properties to each applicable Individual
Borrower have been or will be paid. All mortgage, mortgage recording, stamp,
intangible or other similar tax required to be paid by any Person under
applicable Legal Requirements currently in effect in connection with the
execution, delivery, recordation, filing, registration, perfection or
enforcement of any of the Loan Documents, including, without limitation, the
Mortgages, have been or will be paid, and, under current Legal Requirements,
each of the Mortgages is enforceable in accordance with their respective terms
by Lender (or any subsequent holder thereof), subject to principles of equity
and bankruptcy, insolvency and other laws generally applicable to creditors'
rights and the enforcement of debtors' obligations.
4.1.30 Special Purpose Entity/Separateness.
(a) Until the Debt has been paid in full, Borrower hereby
represents, warrants and covenants that each Individual Borrower is, shall be
and shall continue to be a Special Purpose Entity.
(b) The representations, warranties and covenants set forth in
Section 4.1.30(a) shall survive for so long as any amount remains payable to
Lender under this Agreement or any other Loan Document.
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(c) All of the assumptions made in the Insolvency Opinion,
including, but not limited to, any exhibits attached thereto, are true and
correct in all respects and any assumptions made in any subsequent
non-consolidation opinion delivered in connection with the Loan Documents (an
"Additional Insolvency Opinion"), including, but not limited to, any exhibits
attached thereto, will have been and shall be true and correct in all respects.
Borrower has complied and will comply with all of the assumptions made with
respect to it in the Insolvency Opinion. Borrower will have complied and will
comply with all of the assumptions made with respect to it in any Additional
Insolvency Opinion. Each entity other than Borrower with respect to which an
assumption shall be made in any Additional Insolvency Opinion will have complied
and will comply with all of the assumptions made with respect to it in any
Additional Insolvency Opinion.
4.1.31 Management Agreements. Each Management Agreement is in full
force and effect and there is no material default thereunder by the related
Individual Borrower or, to the best of Borrower's knowledge, any other party
thereto and no event has occurred that, with the passage of time and/or the
giving of notice would constitute a material default thereunder.
4.1.32 Franchise Agreements. The Franchise Agreement with respect to
each Individual Property is in full force and effect and, other than as set
forth on Schedule XII, there is no material default thereunder by the related
Individual Borrower or, to the best of the Borrower's knowledge, any other party
thereto and no event has occurred that, with the passage of time/or the giving
of notice would constitute a material default thereunder.
4.1.33 Ground Lease. Borrower hereby represents and warrants to
Lender the following with respect to each Ground Lease:
(a) Recording; Modification. A memorandum of the Ground Lease has
been duly recorded. The Ground Lease or estoppel letters received by Lender
permits the interest of Borrower to be encumbered by a mortgage or the ground
lessor has approved and consented to the encumbrance of the applicable
Individual Property by the respective Mortgage. There have not been amendments
or modifications to the terms of the Ground Lease since its recordation (or the
recordation of the memorandum thereof) with the exception of written amendments
or modifications, copies of which have been delivered to Lender. The Ground
Lease may not be cancelled, terminated, surrendered or amended without the prior
written consent of Lender. Borrower acknowledges that Lender will in no event
consent to any such cancellation, termination, surrender or amendment of the
Ground Lease without, among other things, receipt of the written confirmation of
each of the Rating Agencies that such cancellation, termination, surrender or
amendment will not, in and of itself, result in a downgrade, qualification or
withdrawal of the initial, or, if higher, then current ratings assigned to the
Securities, or any class thereof.
(b) No Liens. Except for the Permitted Encumbrances, Borrower's
interest in the Ground Lease is not subject to any Liens or encumbrances
superior to, or of equal priority with, the related Mortgage other than the
ground lessor's related fee interest, and the ground lessor thereunder cannot
subordinate the Ground Lease to a mortgage encumbering the fee interest of
ground lessor.
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(c) Ground Lease Assignable. Borrower's interest in the Ground Lease
is assignable by foreclosure upon notice to, but without the consent of, the
ground lessor.
(d) Default. As of the date hereof, the Ground Lease is in full
force and effect and there is no default under the Ground Lease and there is no
existing condition which, but for the passage of time or the giving of notice,
would result in a default under the terms of the Ground Lease.
(e) Notice. The Ground Lease requires the ground lessor to give
notice of any default by Borrower to Lender. The Ground Lease, or estoppel
letters received by Lender from the ground lessor, further provides that notice
of default given under the Ground Lease is not effective against Lender unless a
copy of the notice has been delivered to Lender in the manner described in the
Ground Lease.
(f) Cure. Lender is permitted the opportunity (including, where
necessary, sufficient time to gain possession of the interest of Borrower under
the Ground Lease) to cure any default under the Ground Lease, which is curable
after the receipt of notice of any default before the ground lessor thereunder
may terminate the Ground Lease.
(g) Term. The Ground Lease has a term which extends not less than
ten (10) years beyond the Maturity Date.
(h) New Lease. The Ground Lease requires the ground lessor to enter
into a new lease upon termination of the Ground Lease for any reason, including
rejection of the Ground Lease in a bankruptcy proceeding.
(i) Insurance Proceeds. Under the terms of the Ground Lease (or
estoppel letters received by Lender from the ground lessor) and the respective
Mortgage, taken together, any related insurance and condemnation proceeds will
be applied either to the repair or restoration of all or part of the applicable
Individual Property, with Lender having the right to hold and disburse the
proceeds as the repair or restoration progresses, or to the payment of the
outstanding principal balance of the Loan together with any accrued interest
thereon.
4.1.34 Illegal Activity. No portion of any Individual Property has
been or will be purchased with proceeds of any illegal activity.
4.1.35 No Change in Facts or Circumstances; Disclosure. All
information submitted by Borrower to Lender and in all financial statements,
rent rolls, reports, certificates and other documents submitted in connection
with the Loan or in satisfaction of the terms thereof and all statements of fact
made by Borrower in this Agreement or in any other Loan Document, are accurate,
complete and correct in all material respects. There has been no material
adverse change in any condition, fact, circumstance or event that would make any
such information inaccurate, incomplete or otherwise misleading in any material
respect or that otherwise materially and adversely affects or could reasonably
be expected to materially and adversely affect the use, operation or value of
the Properties or the business operations or the financial condition of
Borrower. Borrower has disclosed to Lender all material facts and has not failed
to disclose any material fact that could cause any Provided Information or
representation or warranty made herein to be materially misleading.
44
Section 4.2 Survival of Representations. Borrower agrees that all of
the representations and warranties of Borrower set forth in Section 4.1 and
elsewhere in this Agreement and in the other Loan Documents shall survive for so
long as any amount remains owing to Lender under this Agreement or any of the
other Loan Documents by Borrower. All representations, warranties, covenants and
agreements made in this Agreement or in the other Loan Documents by Borrower or
any Individual Borrower shall be deemed to have been relied upon by Lender
notwithstanding any investigation heretofore or hereafter made by Lender or on
its behalf.
V. BORROWER COVENANTS
Section 5.1 Affirmative Covenants. From the date hereof and until
payment and performance in full of all obligations of Borrower under the Loan
Documents or the earlier release of the Liens of all Mortgages encumbering the
Properties (and all related obligations) in accordance with the terms of this
Agreement and the other Loan Documents, Borrower hereby covenants and agrees
with Lender that:
5.1.1 Existence; Compliance with Legal Requirements; Insurance.
Borrower shall do or cause to be done all things necessary to preserve, renew
and keep in full force and effect its existence, rights, licenses, permits and
franchises and comply, in all material respects, with all Legal Requirements
applicable to it and the Properties. There shall never be committed by Borrower
or any other Person in occupancy of or involved with the operation or use of the
Properties any act or omission affording the federal government or any state or
local government the right of forfeiture as against any Individual Property or
any part thereof or any monies paid in performance of Borrower's obligations
under any of the Loan Documents. Borrower hereby covenants and agrees not to
commit, permit or suffer to exist any act or omission affording such right of
forfeiture. Borrower shall at all times maintain, preserve and protect all
material franchises and trade names and preserve all the remainder of its
property used or useful in the conduct of its business and shall keep the
Properties in good working order and repair, and from time to time make, or
cause to be made, all reasonably necessary repairs, renewals, replacements,
betterments and improvements thereto, all as more fully provided in the
Mortgages. Borrower shall keep the Properties insured at all times by
financially sound and reputable insurers, to such extent and against such risks,
and maintain liability and such other insurance, as is more fully provided in
this Agreement. Borrower shall operate the Individual Properties that are the
subject of the O&M Agreement in accordance with the terms and provisions thereof
in all material respects. After prior written notice to Lender, Borrower, at its
own expense, may contest any appropriate legal proceeding promptly initiated and
conducted in good faith and with due diligence, the validity of any Legal
Requirement, the applicability of any Legal Requirement to Borrower or any
Individual Property or any alleged violation of any Legal Requirement, provided
that (i) no Event of Default has occurred and remains uncured; (ii) such
proceeding shall be permitted under and be conducted in accordance with the
provisions of any applicable Ground Lease and any other material instrument to
which Borrower is subject and shall not constitute a default thereunder and such
proceeding shall be conducted in accordance with all applicable statutes, laws
and ordinances; (iii) no Individual Property nor any part thereof or interest
therein will be in danger of being sold, forfeited, terminated, cancelled or
lost; (iv) Borrower shall promptly upon final determination thereof comply with
any such Legal Requirement determined to be valid or applicable or cure any
violation of any Legal
45
Requirement; (v) such proceeding shall suspend the enforcement of the contested
Legal Requirement against Borrower or any Individual Property; and (vi) Borrower
shall furnish such security as may be required in the proceeding, or as may be
reasonably requested by Lender, to insure compliance with such Legal
Requirement, together with all interest and penalties payable in connection
therewith. Lender may apply any such security, as necessary to cause compliance
with such Legal Requirement at any time when, in the reasonable judgment of
Lender, the validity, applicability or violation of such Legal Requirement is
finally established or any Individual Property (or any part thereof or interest
therein) shall be in danger of being sold, forfeited, terminated, cancelled or
lost.
5.1.2 Taxes and Other Charges. Subject to Borrower's rights to
contest the same in accordance with the terms and conditions of this Section
5.1.2, Borrower shall pay all Taxes and Other Charges now or hereafter levied or
assessed or imposed against the Properties or any part thereof prior to the
delinquency thereof; provided, however, Borrower's obligation to directly pay
Taxes shall be suspended for so long as Borrower complies with the terms and
provisions of Section 7.2 hereof. Borrower will deliver to Lender receipts for
payment or other evidence satisfactory to Lender that the Taxes and Other
Charges have been so paid or are not then delinquent no later than ten (10) days
prior to the date on which the Taxes and/or Other Charges would otherwise be
delinquent if not paid. Borrower shall furnish to Lender receipts for the
payment of the Taxes and the Other Charges prior to the date the same shall
become delinquent (provided, however, that Borrower is not required to furnish
such receipts for payment of Taxes in the event that such Taxes have been paid
by Lender pursuant to Section 7.2 hereof). Borrower shall not suffer and shall
promptly cause to be paid and discharged any Lien or charge whatsoever which may
be or become a Lien or charge against the Properties, and shall promptly pay for
all utility services provided to the Properties. After prior written notice to
Lender, Borrower, at its own expense, may contest by appropriate legal
proceeding, promptly initiated and conducted in good faith and with due
diligence, the amount or validity or application in whole or in part of any
Taxes or Other Charges or any Lien or charge that may become a Lien or charge
against the Properties, provided that (i) no Event of Default has occurred and
remains uncured; (ii) such proceeding shall be permitted under and be conducted
in accordance with the provisions of any applicable Ground Lease and any other
instrument to which Borrower is subject and shall not constitute a default
thereunder and such proceeding shall be conducted in accordance with all
applicable statutes, laws and ordinances; (iii) no Individual Property nor any
part thereof or interest therein will be in danger of being sold, forfeited,
terminated, cancelled or lost; (iv) Borrower shall promptly upon final
determination thereof pay the amount of any such Taxes or Other Charges or the
amount necessary to discharge any Lien or satisfy any charge that may become a
Lien or charge against the Properties, together with all costs, interest and
penalties which may be payable in connection therewith; (v) such proceeding
shall suspend the collection of such contested Taxes or Other Charges from the
applicable Individual Property; and (vi) Borrower shall furnish such security as
may be required in the proceeding, or as may be reasonably requested by Lender,
to insure the payment of any such Taxes or Other Charges, or the amount
necessary to discharge any Lien or satisfy any charge that may become a Lien or
charge against the Properties, together with all interest and penalties thereon.
Lender may pay over any such cash deposit or part thereof held by Lender to the
claimant entitled thereto at any time when, in the reasonable judgment of
Lender, the entitlement of such claimant is finally established or any
Individual Property (or part thereof or interest
46
therein) shall be in danger of being sold, forfeited, terminated, cancelled or
lost or there shall be any danger of the Lien of any Mortgage being primed by
any related Lien.
5.1.3 Litigation. Borrower shall give prompt written notice to
Lender of any litigation or governmental proceedings pending or threatened
against any Individual Borrower which could reasonably be expected to materially
adversely affect such Individual Borrower's condition (financial or otherwise)
or business or any Individual Property.
5.1.4 Access to Properties. Borrower shall permit agents,
representatives and employees of Lender to inspect the Properties or any part
thereof at reasonable hours upon reasonable advance notice, subject to the
rights of tenants and patrons of the Properties.
5.1.5 Notice of Default. Borrower shall promptly advise Lender of
any material adverse change in Borrower's condition, financial or otherwise, or
of the occurrence of any Default or Event of Default of which Borrower has
knowledge.
5.1.6 Cooperate in Legal Proceedings. Borrower shall cooperate fully
with Lender with respect to any proceedings before any court, board or other
Governmental Authority which may in any way affect the rights of Lender
hereunder or any rights obtained by Lender under any of the other Loan Documents
and, in connection therewith, permit Lender, at its election, to participate in
any such proceedings.
5.1.7 Perform Loan Documents. Borrower shall observe, perform and
satisfy all the terms, provisions, covenants and conditions of, and shall pay
when due all costs, fees and expenses to the extent required under the Loan
Documents executed and delivered by, or applicable to, Borrower.
5.1.8 Insurance Benefits. Borrower shall cooperate with Lender in
obtaining for Lender the benefits of any Insurance Proceeds lawfully or
equitably payable in connection with any Individual Property, and Lender shall
be reimbursed for any expenses incurred in connection therewith (including
attorneys' fees and disbursements, and the payment by Borrower of the expense of
an appraisal on behalf of Lender in case of a fire or other casualty affecting
any Individual Property or any part thereof) out of such Insurance Proceeds.
5.1.9 Further Assurances. Borrower shall, at Borrower's sole cost
and expense:
(a) furnish to Lender all instruments, documents, boundary surveys,
footing or foundation surveys, certificates, plans and specifications,
appraisals, title and other insurance reports and agreements, and each and every
other document, certificate, agreement and instrument required to be furnished
by Borrower pursuant to the terms of the Loan Documents or reasonably requested
by Lender in connection therewith;
(b) execute and deliver to Lender such documents, instruments,
certificates, assignments and other writings, and do such other acts necessary
or desirable, to evidence, preserve and/or protect the collateral at any time
securing or intended to secure the obligations of Borrower under the Loan
Documents, as Lender may reasonably require including, without limitation, the
execution and delivery of all such writings necessary to transfer any liquor
47
licenses into the name of Lender or its designee after a foreclosure of the
applicable Individual Property or conveyance of such Individual Property in lieu
thereof; and
(c) do and execute all and such further lawful and reasonable acts,
conveyances and assurances for the better and more effective carrying out of the
intents and purposes of this Agreement and the other Loan Documents, as Lender
shall reasonably require from time to time.
5.1.10 Supplemental Mortgage Affidavits. As of the date hereof,
Borrower represents that it has paid, or will pay, all state, county and
municipal recording and all other taxes imposed upon the execution and
recordation of the Mortgages. If at any time Lender determines, based on
applicable law, that Lender is not being afforded the maximum amount of security
available from any one or more of the Properties as a direct or indirect result
of applicable taxes not having been paid with respect to any Individual
Property, Borrower agrees that Borrower will execute, acknowledge and deliver to
Lender, immediately upon Lender's request, supplemental affidavits increasing
the amount of the Debt attributable to any such Individual Property (as set
forth as the Release Amount on Schedule I annexed hereto) for which all
applicable taxes have been paid to an amount determined by Lender to be equal to
the lesser of (a) the greater of the fair market value of the applicable
Individual Property (i) as of the date hereof and (ii) as of the date such
supplemental affidavits are to be delivered to Lender, and (b) the amount of the
Debt attributable to any such Individual Property (as set forth as the Release
Amount on Schedule I annexed hereto), and Borrower shall, on demand, pay any
additional taxes.
5.1.11 Financial Reporting.
(a) Borrower will keep and maintain or will cause to be kept and
maintained on a Fiscal Year basis, in accordance with GAAP (or such other
accounting basis reasonably acceptable to Lender), proper and accurate books,
records and accounts reflecting all of the financial affairs of Borrower and all
items of income and expense in connection with the operation on an individual
basis of the Properties. Lender shall have the right from time to time at all
times during normal business hours upon reasonable notice to examine such books,
records and accounts at the office of Borrower or any other Person maintaining
such books, records and accounts and to make such copies or extracts thereof as
Lender shall desire. After the occurrence and during the continuance of an Event
of Default, Borrower shall pay any costs and expenses incurred by Lender to
examine Borrower's accounting records with respect to the Properties, as Lender
shall determine to be necessary or appropriate in the protection of Lender's
interest.
(b) Borrower will furnish to Lender annually, within one hundred
twenty (120) days following the end of each Fiscal Year of Borrower, (A) a
complete copy of Borrowers' consolidated financial statement audited by a
Certified Public Accountant acceptable to Lender in accordance with GAAP (or
such other accounting basis reasonably acceptable to Lender) and (B) a summary
schedule prepared in accordance with GAAP (or such other accounting basis
reasonably acceptable to Lender) by the Certified Public Accountant covering the
operation of each Individual Property for such Fiscal Year and containing a
statement of revenue and expenses for each Individual Property. Such statements
shall set forth the financial condition and the results of operations for the
Properties for such Fiscal Year, and shall include,
48
but not be limited to, amounts representing annual Net Cash Flow, Net Operating
Income, Gross Income from Operations and Operating Expenses. Borrower's annual
financial statements shall be accompanied by (i) a comparison of the budgeted
income and expenses and the actual income and expenses for the prior Fiscal
Year, (ii) a certificate executed by the chief financial officer of Borrower or
the general partners and managing members of Borrower, as applicable, stating
that each such annual financial statement presents fairly the financial
condition and the results of operations of Borrower and the Properties being
reported upon and has been prepared in accordance with GAAP, (iii) an
unqualified opinion of a "Big Five" accounting firm or other independent
certified public accountant reasonably acceptable to Lender, and (iv) a schedule
audited by such independent certified public accountant reconciling Net
Operating Income to Net Cash Flow (the "Net Cash Flow Schedule"), which shall
itemize all adjustments made to Net Operating Income to arrive at Net Cash Flow
deemed material by such independent certified public accountant. Together with
Borrower's annual financial statements, Borrower shall furnish to Lender an
Officer's Certificate certifying as of the date thereof whether, to the best of
Borrower's knowledge, there exists an event or circumstance which constitutes a
Default or Event of Default under the Loan Documents executed and delivered by,
or applicable to, Borrower, and if such Default or Event of Default exists, the
nature thereof, the period of time it has existed and the action then being
taken to remedy the same.
(c) Borrower will furnish, or cause to be furnished, to Lender on or
before twenty (20) days after the end of each calendar month the following
items, accompanied by a certificate of the chief financial officer of Borrower
or the general partners and managing members of Borrower, as applicable, stating
that, to the best of Borrower's knowledge, such items are true, correct,
accurate, and complete and in all material respects and fairly present the
financial condition and results of the operations of Borrower and the Properties
on a combined basis as well as each Individual Property (subject to normal
year-end adjustments) as applicable: (i) a report of occupancy for the subject
month (including an average daily rate, and any and all franchise inspection
reports received by Borrower during the subject month) accompanied by an
Officer's Certificate with respect thereto; (ii) monthly and year-to-date
operating statements (including Capital Expenditures) prepared for each calendar
month, noting Net Operating Income, Gross Income from Operations, and Operating
Expenses (not including any contributions to the Replacement Reserve Fund), and
other information necessary and sufficient to fairly represent the financial
position and results of operation of the Properties during such calendar month,
and containing a comparison of budgeted income and expenses and the actual
income and expenses together with a detailed explanation of any variances of
five percent (5%) or more between budgeted and actual amounts for such periods,
all in form reasonably satisfactory to Lender; (iii) a calculation reflecting
the annual Debt Service Coverage Ratio for the immediately preceding twelve (12)
month period as of the last day of such month accompanied by an Officer's
Certificate with respect thereto; and (iv) a Net Cash Flow Schedule. In
addition, such certificate shall also be accompanied by a certificate of the
chief financial officer of Borrower or the general partners and managing members
of Borrower stating that the representations and warranties of Borrower set
forth in Section 4.1.30 are true and correct as of the date of such certificate
and that there are no trade payables outstanding for more than sixty (60) days
except those being contested in accordance with the provisions of the Loan
Documents. All such monthly operating statements shall be prepared based on the
Uniform System of Accounts.
49
(d) For the partial year period commencing on the date hereof, and
for each Fiscal Year thereafter, Borrower shall submit to Lender an Annual
Budget not later than thirty (30) days prior to the commencement of such period
or Fiscal Year in form reasonably satisfactory to Lender. The Annual Budget
submitted for each Fiscal Year throughout the term of the Loan shall be subject
to Lender's written approval, which approval shall not be unreasonably withheld
or delayed (each such Annual Budget, an "Approved Annual Budget"). Lender
approval of a proposed Annual Budget shall be deemed to have been given if (i)
such proposed Annual Budget is submitted to Lender with a request for approval
and Lender does not respond by approving such proposed Annual Budget or stating
its objections to such proposed Annual Budget within ten (10) Business Days of
Lender's receipt thereof and (ii) after Lender's failure to respond to the
initial request for approval of such proposed Annual Budget within the time
period set forth in clause (i), Borrower shall re-submit such proposed Annual
Budget to Lender with a request for approval set forth in a written notice that
states clearly (in 14-point type or larger) that approval will deemed given if
Lender does not respond within five (5) Business Days and Lender does not
respond to such second submission of such proposed Annual Budget by approving
such proposed Annual Budget or stating its objection thereto within five (5)
Business Days of Lender's receipt of such second submission. Until such time
that Lender approves a proposed Annual Budget, the most recently Approved Annual
Budget shall apply; provided that such Approved Annual Budget shall be adjusted
to reflect (x) matters in the proposed Annual Budget approved by Lender and (y)
as to matters in the proposed Annual Budget not yet approved by Lender
("Disapproved Budget Category"), (i) increases for expenses actually incurred
which vary in relation to gross revenues ("Variable Expenses") in an amount
equal to the percentage increase of actual fiscal year to date gross revenues
over estimated fiscal year to date gross revenues for the period in question set
forth in the most recent Approved Annual Budget ("Gross Revenues Percentage
Increase") through the date of the applicable expenditure, (ii) expenditures
actually incurred which are beyond the reasonable control of Borrower such as
taxes, insurance, and utilities ("Uncontrollable Expenses"), and (iii)
Extraordinary Expenses incurred in order to prevent or ameliorate imminent
material harm or damage to an Individual Property or individuals or property in,
on or around an Individual Property (such Extraordinary Expenses being
hereinafter referred to as "Emergency Expenditures") actually incurred.
Notwithstanding anything in any Loan Documents to the contrary, expenditures
shall be deemed in compliance with and made pursuant to the Approved Annual
Budget even though such expenditures exceed the amount budgeted therefor in the
Approved Annual Budget if such expenditures are (i) for Uncontrollable Expenses,
(ii) Variable Expenses which exceed the amounts budgeted therefor by not more
than the Gross Revenues Percentage Increase, (iii) Emergency Expenditures, or
(iv) for expenses which do not exceed in the aggregate for all such expenses 3%
of the total amount of the Approved Annual Budget excluding Variable Expenses,
Uncontrollable Expenses and Emergency Expenditures.
(e) In the event that Borrower must incur an extraordinary operating
expense or capital expense not set forth in the Approved Annual Budget (each an
"Extraordinary Expense"), then Borrower shall promptly deliver to Lender a
reasonably detailed explanation of such proposed Extraordinary Expense for
Lender's approval which approval shall not be unreasonably withheld. In the
event that Lender objects to any proposed Extraordinary Expenses, Lender shall
advise Borrower of such objections within fifteen (15) Business Days after
receipt thereof (and deliver to Borrower a reasonably detailed description of
such objections) and Borrower shall within ten (10) Business Days after receipt
of notice of any such
50
objections revise such Extraordinary Expenses and resubmit the same to Lender.
Lender shall advise Borrower of any objections to such revised Extraordinary
Expenses within ten (10) days after receipt thereof (and deliver to Lender a
reasonably detailed description of such objections) and Borrower shall revise
the same in accordance with the process described in this subparagraph until
Lender reasonably approves such Extraordinary Expenses; provided, however, that
if Lender shall not advise Borrower of its objections to any proposed
Extraordinary Expenses within the applicable time period set forth in this
clause (e), then such proposed Extraordinary Expenses shall be deemed approved
by Lender. Notwithstanding anything set forth herein to the contrary, Borrower
may incur Emergency Expenditures without the prior approval of Lender, provided
that (i) such Emergency Expenditures are reasonable, and (ii) Borrower or
Manager notifies Lender in writing within two (2) business days after the
occurrence of the emergency situation necessitating such Emergency Expenditure
with a reasonably detailed explanation of such Emergency Expenditures.
(f) Borrower shall furnish to Lender, within ten (10) Business Days
after request (or as soon thereafter as may be reasonably possible), such
further detailed information with respect to the operation of any Individual
Property and the financial affairs of Borrower as may be reasonably requested by
Lender.
(g) Any reports, statements or other information required to be
delivered under this Agreement shall be delivered (i) in paper form, (ii) on a
diskette, and (iii) if requested by Lender and within the capabilities of
Borrower's data systems without change or modification thereto, in electronic
form and prepared using Microsoft Word for Windows or WordPerfect for Windows
files (which files may be prepared using a spreadsheet program and saved as word
processing files). Borrower agrees that Lender may disclose information
regarding the Properties and Borrower that is provided to Lender pursuant to
this Section in connection with the Securitization to such parties requesting
such information in connection with such Securitization.
5.1.12 Business and Operations. Borrower will continue to engage in
the businesses presently conducted by it as and to the extent the same are
necessary for the ownership, maintenance, management and operation of the
Properties. Borrower will qualify to do business and will remain in good
standing under the laws of each jurisdiction as and to the extent the same are
required for the ownership, maintenance, management and operation of the
Properties.
5.1.13 Title to the Properties. Borrower will warrant and defend (a)
the title to each Individual Property and every part thereof, subject only to
Liens permitted hereunder (including Permitted Encumbrances) and (b) the
validity and priority of the Liens of the Mortgages and the Assignments of
Leases on the Properties, subject only to Liens permitted hereunder (including
Permitted Encumbrances), in each case against the claims of all Persons
whomsoever. Borrower shall reimburse Lender for any losses, costs, damages or
expenses (including reasonable attorneys' fees and court costs) incurred by
Lender if an interest in any Individual Property, other than as permitted
hereunder, is claimed by another Person.
5.1.14 Costs of Enforcement. In the event (a) that any Mortgage
encumbering any Individual Property is foreclosed in whole or in part or that
any such Mortgage is put into the
51
hands of an attorney for collection, suit, action or foreclosure, (b) of the
foreclosure of any mortgage prior to or subsequent to any Mortgage encumbering
any Individual Property in which proceeding Lender is made a party, or (c) of
the bankruptcy, insolvency, rehabilitation or other similar proceeding in
respect of Borrower or any of its constituent Persons or an assignment by
Borrower or any of its constituent Persons for the benefit of its creditors,
Borrower, its successors or assigns, shall be chargeable with and agrees to pay
all reasonable costs of collection and defense, including reasonable attorneys'
fees and costs, incurred by Lender or Borrower in connection therewith and in
connection with any appellate proceeding or post-judgment action involved
therein, together with all required service or use taxes.
5.1.15 Estoppel Statement.
(a) After request by Lender, Borrower shall within ten (10) days
furnish Lender with a statement, duly acknowledged and certified, setting forth
(1) the amount of the original principal amount of each of the Components
comprising the Note, (ii) the unpaid principal amount of each of the Components
comprising the Note, (iii) the Applicable Interest Rate of each of the
Components comprising the Note, (iv) the date installments of interest were last
paid, (v) any then known offsets or defenses to the payment of the Debt, if any,
and (vi) that the Note, this Agreement, the Mortgages and the other Loan
Documents are valid, legal and binding obligations and have not been modified or
if modified, giving particulars of such modification.
(b) After request by Borrower, Lender shall within ten (10) days
furnish Borrower with a statement, duly acknowledged and certified, setting
forth (i) the amount of the original principal amount of each of the Components
comprising the Note, (ii) the unpaid principal amount of each of the Components
comprising the Note, (iii) the Applicable Interest Rate of each of the
Components comprising the Note, (iv) the date installments of interest were last
paid, (v) that the Note, this Agreement, the Mortgages and the other Loan
Documents have not been modified or if modified, giving the particulars of such
modification and (vi) whether any written notice of a Default is then
outstanding.
(c) Borrower shall use commercially reasonable efforts to deliver to
Lender upon request, tenant estoppel certificates from each commercial tenant
leasing space at the Properties in form and substance reasonably satisfactory to
Lender provided that Borrower shall not be required to deliver such certificates
more frequently than two (2) times in any calendar year.
5.1.16 Loan Proceeds. Borrower shall use the proceeds of the Loan
received by it on the Closing Date only for the purposes set forth in Section
2.1.5.
5.1.17 Performance by Borrower. Borrower shall in a timely manner
observe, perform and fulfill each and every covenant, term and provision of each
Loan Document executed and delivered by, or applicable to, Borrower, and shall
not enter into or otherwise suffer or permit any amendment, waiver, supplement,
termination or other modification of any Loan Document executed and delivered
by, or applicable to, Borrower without the prior written consent of Lender.
52
5.1.18 Intentionally Deleted.
5.1.19 No Joint Assessment. Borrower shall not suffer, permit or
initiate the joint assessment of any Individual Property (a) with any other real
property constituting a tax lot separate from such Individual Property, and (b)
which constitutes real property with any portion of such Individual Property
which may be deemed to constitute personal property, or any other procedure
whereby the lien of any taxes which may be levied against such personal property
shall be assessed or levied or charged to such real property portion of the
Individual Property.
5.1.20 Leasing Matters. Upon request, Borrower shall furnish Lender
with executed copies of all Leases. All renewals of Leases and all proposed
Leases shall be on commercially reasonable terms and shall not contain any terms
which would materially affect Lender's rights under the Loan Documents All
Leases executed after the date hereof shall provide that they are subordinate to
the Mortgage encumbering the applicable Individual Property and that the lessee
agrees to attorn to Lender or any purchaser at a sale by foreclosure or power of
sale; however, all Leases approved by Lender may also be subject to
non-disturbance or similar recognition agreement, and a material tenant's
attornment to Lender may be conditioned on Lender's agreeing to such
non-disturbance or recognition. None of the Leases shall contain any option to
purchase, any right of first refusal to purchase, any non-disturbance or similar
recognition agreement (except for Leases approved by Lender) or any other
similar provisions which adversely affect title to the Mortgaged Property or
which might materially and adversely impair the rights of Lender under the Loan
Documents without the prior written consent of Lender, which consent shall not
be unreasonably withheld, conditioned or delayed. All Material Leases shall be
subject to Lender's prior written approval. Lender shall not unreasonably
withhold, condition or delay approval of any Lease or the execution of any
subordination and non-disturbance or similar recognition agreement requested by
any tenant under a Lease approved by Lender. Lender approval of any Lease or
related subordination and non-disturbance agreement shall be deemed to have been
given if (i) request for such approval is given with a written notice, clearly
stated in 14-point type or larger, that approval will be deemed given if Lender
does not respond within fifteen (15) days of Lender's receipt of such request
for approval and (ii) if within fifteen (15) days after Lender's receipt of such
request for approval, accompanied by a copy of the proposed lease or
subordination and non-disturbance agreement, Lender does not approve or
disapprove the lease or subordination and non-disturbance agreement in writing,
specifying in reasonable detail its reasons for any disapproval. Borrower (i)
shall observe and perform the obligations imposed upon the lessor under the
Leases in a commercially reasonable manner; (ii) shall enforce and may amend or
terminate the terms, covenants and conditions contained in the Leases upon the
part of the lessee thereunder to be observed or performed in a commercially
reasonable manner and in a manner not to impair the value of the Individual
Property involved except that no termination by Borrower or acceptance of
surrender by a tenant of any Leases shall be permitted unless by reason of a
tenant default and then only in a commercially reasonable manner or unless such
termination or surrender is otherwise commercially reasonable; (iii) shall not
collect any of the rents more than one (1) month in advance (other than security
deposits); (iv) shall not execute any other assignment of lessor's interest in
the Leases or the Rents (except as contemplated by the Loan Documents); (v)
shall not alter, modify or change the terms of the Leases in a manner
inconsistent with the provisions of the Loan Documents; and (vi) shall execute
and deliver at the request of Lender all such further assurances, confirmations
and assignments in connection with the Leases as Lender shall from
53
time to time reasonably require. Notwithstanding anything to the contrary
contained herein, no Individual Borrower shall enter into a lease of all or
substantially all of any Individual Property without (a) Lender's prior written
consent and (b) written confirmation from each of the Rating Agencies that such
lease will not, in and of itself, result in a downgrade, qualification or
withdrawal of the initial, or, if higher, then current ratings assigned to the
Securities or any class thereof).
5.1.21 Alterations. Borrower shall obtain Lender's prior written
consent to any alterations to any Improvements, which consent shall not be
unreasonably withheld or delayed except with respect to alterations that could
be reasonably expected to have a material adverse effect on Borrower's financial
condition, the value of the applicable Individual Property or the Net Operating
Income of the applicable Individual Property. Notwithstanding the foregoing,
Lender's consent shall not be required in connection with any alterations (a)
that (together with the related cost of such alterations) have been provided for
in the Approved Annual Budget or (b) that will not have a material adverse
effect on Borrower's financial condition, the value of the applicable Individual
Property or the Net Operating Income, provided that (i) no Event of Default has
occurred and is continuing, (ii) such alterations are made in accordance with
all Legal Requirements, and (iii) the cost of such alterations does not exceed
an amount equal to five percent (5%) of the Release Amount of the applicable
Individual Property (such amount being hereinafter referred to as the "Threshold
Amount"). If the cost of any alterations to any Improvements shall exceed the
Threshold Amount and such cost will not be paid from amounts on deposit in the
Replacement Reserve Fund or the Required Repair Fund, then, prior to the
commencement of such alterations, Borrower shall deliver to Lender as security
for the payment of such amounts and as additional security for Borrower's
obligations under the Loan Documents any of the following: (A) cash, (B) U.S.
Obligations, (C) other securities having a rating that the applicable Rating
Agencies have confirmed in writing will not, in and of itself, result in a
downgrade, withdrawal or qualification of the initial, or, if higher, then
current ratings assigned in connection with any Securitization, or (D) a
completion and performance bond or an irrevocable letter of credit (payable on
sight draft only) issued by a financial institution having a rating by S&P of
not less than A-1+ if the term of such bond or letter of credit is no longer
than three (3) months or, if such term is in excess of three (3) months, issued
by a financial institution having a rating that the applicable Rating Agencies
have confirmed in writing will not, in and of itself, result in a downgrade,
withdrawal or qualification of the initial, or, if higher, then current ratings
assigned in connection with any Securitization, which completion bond or letter
of credit shall be otherwise acceptable in form and substance to Lender. Such
security shall be in an amount equal to the excess of the cost of such
alterations over the Threshold Amount, and applied from time to time to pay for
such alterations as the related work is performed (subject to Lender's
reasonable oversight and approval prior to any such application). Lender may, in
its sole discretion, from time to time permit Borrower to pay for the costs of
certain identified alterations to certain Improvements, which alterations have
been approved by Lender (pursuant to the Approved Annual Budget or otherwise),
from Net Cash Flow After Debt Service after any payments to any Reserve Funds or
other payments required under any of the Loan Documents then due and payable
have been made, without delivering additional security to Lender pursuant to
this Section, provided that (x) such alterations are completed in accordance
with a schedule approved by Lender, (y) no Event of Default has occurred and is
continuing and (z) such alterations are made in accordance with all Legal
Requirements. Borrower shall complete the capital improvements in accordance
with the 1999-2000 Capital Plan set forth on Schedule VI
54
hereto on a quarterly basis in accordance with the budgeted plans therefor
delivered to Lender in connection with the closing of the Loan and may pay for
the costs of such capital improvements from Net Cash Flow After Debt Service
after any payments to any Reserve Funds or other payments required under any of
the Loan Documents then due and payable have been made, without delivering any
additional security to Lender pursuant to this Section, provided that (1) such
capital improvements are completed in accordance, in all material respects, with
all Legal requirements and (2) no Event of Default has occurred and is
continuing. If Borrower shall fail to complete any such capital improvements in
the applicable quarter (subject to delay due to circumstances beyond Borrower's
reasonable control, provided that Borrower shall have submitted to Lender an
Officer's Certificate setting forth the circumstances resulting in such delay
and describing Borrower's past and intended efforts to minimize such delay),
Lender may, at its option, withdraw amounts necessary to pay for the completion
of such capital improvements and make such payments from the Lockbox Account or
Cash Collateral Account. If the amounts on deposit in the Lockbox Account and
the Cash Collateral Account are not sufficient to make such payments, no Net
Cash Flow After Debt Service shall be released from the Cash Collateral Account
to Borrower until sufficient amounts to make such payment have accumulated in
the Cash Collateral Account and have been applied by Lender to such payments.
5.1.22 Operation of Property.
(a) Borrower shall cause the hotel located on each Individual
Property to be operated, in all material respects, in accordance with the
related Franchise Agreement and/or the Management Agreement (or Replacement
Management Agreement or Replacement Franchise Agreement) as applicable. In the
event that any Franchise Agreement or Management Agreement expires or is
terminated (other than a termination by an Individual Borrower, and without
limiting any obligation of Borrower to obtain Lender's consent to any
termination or modification of any Franchise Agreement or Management Agreement
in accordance with the terms and provisions of this Loan Agreement), Borrower
shall promptly enter into a Replacement Franchise Agreement or a Replacement
Management Agreement with a Qualified Franchisor or a Qualified Manager, as
applicable.
(b) Borrower shall:
(i) promptly perform and/or observe, in all material respects, all
of the covenants and agreements required to be performed and observed by
it under each Franchise Agreement and Management Agreement and do al
things necessary to preserve and to keep unimpaired its material rights
thereunder;
(ii) promptly notify Lender of any material default under any
Franchise Agreement or any Management Agreement of which it is aware;
(iii) promptly deliver to Lender a copy of each financial statement,
business plan, capital expenditures plan, notice, report and estimate
received by it under any Franchise Agreement or any Management Agreement;
and
(iv) to the extent prudent in Borrower's commercially reasonable
judgment, enforce the performance and observance of all of the covenants
and agreements required
55
to be performed and/or observed by the Franchisor under each Franchise
Agreement and the manager under each Management Agreement, in a
commercially reasonable manner.
5.1.23 Condominium Provisions.
(a) Borrower hereby represents and warrants that, to the best of
Borrower's knowledge, the Condominium Documents are in full compliance with all
applicable local, state and federal laws, rules and regulations which effect the
establishment and maintenance of condominiums in the applicable State(s)
(collectively, the "Condominium Law") relating to condominiums. Borrower shall
comply with any such state, local or federal law, rule and regulation applicable
to the Condominium, including, but not limited to, the securities and
condominium laws of the applicable State(s) and the rules and regulations
pertaining thereto, if applicable.
(b) Borrower covenants and agrees that:
(i) it will not, without the Lender's prior written consent, amend,
modify or supplement, or consent to the amendment, modification or
supplementation of any of the Condominium Documents, which consent shall
not be unreasonably withheld or delayed.
(ii) it will pay all assessments for common charges and expenses
made against those condominium units then owned by the applicable
Individual Borrower pursuant to the Condominium Documents prior to
delinquency;
(iii) it will comply in all material respects with all of the terms,
covenants and conditions on the applicable Individual Borrower's part to
be complied with, pursuant to the Condominium Documents and any rules and
regulations that may be adopted for the Condominium, as the same shall be
in force and effect from time to time;
(iv) it will take all commercially reasonable actions as may be
necessary from time to time to preserve and maintain the Condominium in
accordance with the Condominium Law;
(v) it will not, without the prior written consent of Lender, take
(and hereby assigns to Lender any right it may have to take) any action to
terminate the Condominium, withdraw the Condominium from the Condominium
Law, or cause a partition of the Condominium;
(vi) it shall be an Event of Default If (A) any provision of the
Condominium Documents or any section, sentence, clause, phrase or word or
the application thereof in any circumstance is held invalid and such
invalidity shall materially and adversely affect the Lien of the related
Mortgage or Lender's rights under this Agreement or any other Loan
Documents, or (B) the Condominium shall become subject to any action for
partition by any condominium unit owner which could reasonably be expected
to result in partition and said action has been commenced and not
dismissed within sixty (60) days after commencement thereof, which
partition could be reasonably expected to materially and adversely affect
the Lien of the related Mortgage or Lender's rights under this
56
Agreement or any other Loan Documents, or (C) the Condominium is withdrawn
from the condominium regime established under the Condominium Law; and
(vii) it will not, without the Lender's prior written consent, which
shall not be unreasonably withheld, conditioned or delayed, exercise any
right it may have to vote for, (A) any additions or improvements to the
common elements of the Condominium, except as such additions or
improvements are completed in accordance with Section 5.1.21 hereof, (B)
any borrowing on behalf of the Condominium or (C) the expenditure of any
insurance proceeds or condemnation awards for the repair or restoration of
the related Improvements other than in accordance with Article VI hereof.
(c) The provisions of Article VI hereof shall apply to the entirety
of any Individual Property that is a Condominium as provided herein,
notwithstanding the submission of any portion of such Individual Property to the
Condominium Law. Without limiting the generality of the foregoing, Borrower, for
and on behalf of itself and its direct and indirect successors and assigns as
owner(s) of condominium units in the Condominium or any of them, (i) irrevocably
waives, to the extent permitted by law, any applicable law which grants to the
trustees of the Condominium and/or the owners of the condominium units rights in
the event of a casualty or a condemnation which are inconsistent with the
provisions of Article VI hereof and (ii) expressly agrees to the application of
the insurance proceeds and condemnation awards in accordance with Article VI
hereof, respectively to the extent permitted by applicable law.
5.1.24 Interest Rate Protection Agreement. Borrower, at its sole
cost and expense, shall maintain in full force and effect throughout the term of
the Loan an Interest Rate Protection Agreement with respect to Component B,
Component C, Component D and Component E, which Interest Rate Protection
Agreement shall be structured with LIBOR strike rates equal to the Maximum
Interest Rate minus the Spread applicable to such Component. Each Interest Rate
Protection Agreement can be retired, in part, in proportion to the outstanding
principal balance of the related Component. If the cap provider under the
Interest Rate Protection Agreement defaults in its obligations under the
Interest Rate Protection Agreement, if such cap provider's credit rating is
downgraded, qualified or withdrawn or if the Interest Rate Protection Agreement
is terminated for any reason, Borrower shall replace the Interest Rate
Protection Agreement with a new Interest Rate Protection Agreement which
satisfies the requirements of this Section 5.1.24 within five (5) Business Days
of such default, downgrade or termination and shall use any and all payments
made in connection with such default, downgrade or termination to purchase such
a new agreement. If Borrower fails to so replace the Interest Rate Protection
Agreement within such five (5) Business Day period, Lender may, at its option,
replace the Interest Rate Protection Agreement with a new Interest Rate
Protection Agreement that satisfies the requirements of this Section 5.1.24 and
all costs and expenses incurred by Lender in so replacing the Interest Rate
Protection Agreement shall be paid by Borrower to Lender upon demand and shall
constitute a part of the Debt secured by the Mortgages. Borrower shall execute
and deliver to Lender a Cap Assignment with respect to any Interest Rate
Protection Agreement obtained pursuant to this Section 5.1.24
5.1.25 Liquor/Hospitality Licenses. Borrower, at its sole cost and
expense shall obtain new liquor licenses or transfer, or cause to be
transferred, in accordance with all applicable law, the liquor licenses and the
hospitality licenses more particularly described on
57
Schedule VII hereto into the name of Borrower or the applicable Individual
Manager or other party described on Schedule VII hereto on or prior to the date
described on Schedule VII hereto.
5.1.26 Year 2000 Compliance. Borrower acknowledges awareness of the
potential effect of the problem generally known as "Year 2000 computer-related
dysfunction" ("Year 2000"). Borrower covenants and represents that it will take
all reasonable efforts so that all computers and computer-dependant systems of
Borrower, and such system used in or in connection with Improvements will be, on
or before December 31, 1999, able to function notwithstanding Year 2000.
Borrower will promptly notify Lender in the event Borrower discovers or
determines that any of the above-referenced computers or systems will not be
Year 2000 compliant prior to December 31, 1999. Borrower hereby covenants and
agrees that it will promptly commence and diligently prosecute the remediation
of any such Year 2000 dysfunction.
Section 5.2 Negative Covenants. From the date hereof until payment
and performance in full of all obligations of Borrower under the Loan Documents
or the earlier release of the Liens of all Mortgages encumbering the Properties
in accordance with the terms of this Agreement and the other Loan Documents,
Borrower covenants and agrees with Lender that it will not do, directly or
indirectly, any of the following:
5.2.1 Operation of Property.
Borrower shall not, without Lender's prior written consent:
(a) surrender, terminate, cancel, amend or modify any Franchise
Agreement or Management Agreement;
(b) reduce or consent to the reduction of the term of any Franchise
Agreement or Management Agreement;
(c) increase or consent to the increase of the amount of any charges
under any Franchise Agreement or any Management Agreement; or
(d) otherwise modify, change, supplement, alter or amend, or waive
or release any of its rights and remedies under, any Franchise Agreement or any
Management Agreement in any material respect.
5.2.2 Liens. Borrower shall not create, incur, assume or suffer to
exist any Lien on any portion of any Individual Property or permit any such
action to be taken, except:
(i) Permitted Encumbrances;
(ii) Liens created by or permitted pursuant to the Loan Documents;
and
(iii) Liens for Taxes or Other Charges not yet delinquent and other
inchoate Liens with respect to amounts not yet delinquent or which are
being contested in good faith in-accordance with the terms and conditions
of this Agreement.
58
5.2.3 Dissolution. No Individual Borrower shall (a) engage in any
dissolution, liquidation or consolidation or merger with or into any other
business entity, (b) engage in any business activity not related to the
ownership and operation of the Properties, (c) transfer, lease or sell, in one
transaction or any combination of transactions, the assets or all or
substantially all of the properties or assets of such Individual Borrower except
to the extent permitted by the Loan Documents, (d) modify, amend, waive or
terminate its organizational documents or its qualification and good standing in
any jurisdiction or (e) cause or permit its general partner or managing member,
as applicable, to (i) dissolve, wind up or liquidate or take any action, or omit
to take an action, as a result of which such general partner, manager or
managing member would be dissolved, wound up or liquidated in whole or in part,
or (ii) amend, modify, waive or terminate the certificate of incorporation or
bylaws of such general partner, manager or managing member, in each case,
without obtaining the prior written consent of Lender or Lender's designee and
the written confirmation of each of the Rating Agencies that such action
described in clause (i) or (ii) above, as applicable, will not, in and of
itself, result in a downgrade, qualification or withdrawal of the initial, or,
if higher, then current ratings assigned to the Securities, or any class
thereof.
5.2.4 Change In Business. Borrower shall not enter into any line of
business other than the ownership and operation of the Properties, or make any
material change in the scope or nature of its business objectives, purposes or
operations, or undertake or participate in activities other than the continuance
of its present business.
5.2.5 Debt Cancellation. Borrower shall not cancel or otherwise
forgive or release any claim or debt (other than termination of Leases in
accordance herewith) owed to Borrower by any Person, except for adequate
consideration and in the ordinary course of Borrower's business or otherwise if
such cancellation, release or forgiveness is prudent and commercially
reasonable.
5.2.6 Affiliate Transactions. Borrower shall not enter into, or be a
party to, any transaction with an Affiliate of Borrower or any of the partners
or members of Borrower except in the ordinary course of business and on terms
which are fully disclosed to Lender in advance and are no less favorable to
Borrower or such Affiliate than would be obtained in a comparable arm's-length
transaction with an unrelated third party.
5.2.7 Zoning. Borrower shall not initiate or consent to any zoning
reclassification of any portion of any Individual Property or seek any variance
under any existing zoning ordinance or use or permit the use of any portion of
any Individual Property in any manner that could result in such use becoming a
non-conforming use under any zoning ordinance or any other applicable land use
law, rule or regulation, without the prior consent of Lender, which consent
shall not be unreasonably withheld, conditioned or delayed.
5.2.8 Assets. Borrower shall not purchase or own any property other
than the Properties.
5.2.9 Debt. Borrower shall not create, incur or assume any
Indebtedness indirectly (through a pledge or assignment of interests in Borrower
or any partner or member of Borrower) or directly secured by any portion of any
Individual Property or otherwise, unless
59
such Indebtedness is expressly permitted hereby or pursuant to the other Loan
Documents, without the prior written consent of Lender and the written
confirmation of each of the Rating Agencies that such Indebtedness will not, in
and of itself, result in a downgrade or qualification, withdrawal of the
initial, or, if higher, then current ratings assigned to the Securities, or any
class thereof.
5.2.10 No Joint Assessment. Except as set forth on Schedule XVII
hereto, Borrower shall not suffer, permit or initiate the joint assessment of
any Individual Property with (a) any other real property constituting a tax lot
separate from such Individual Property, or (b) any portion of such Individual
Property which may be deemed to constitute personal property, or any other
procedure whereby the Lien of any taxes which may be levied against such
personal property shall be assessed or levied or charged to such Individual
Property.
5.2.11 Principal Place of Business. Borrower shall not change its
principal place of business set forth on the first page of this Agreement
without first giving Lender thirty (30) days prior written notice.
5.2.12 ERISA.
(a) Borrower shall not engage in any transaction which would cause
any obligation, or action taken or to be taken, hereunder (or the exercise by
Lender of any of its rights under the Note, this Agreement or the other Loan
Documents) to be a non-exempt (under a statutory or administrative class
exemption) prohibited transaction under ERISA.
(b) Borrower further covenants and agrees to deliver to Lender such
certifications or other evidence from time to time throughout the term of the
Loan, as requested by Lender in its sole discretion, that (A) Borrower is not
and does not maintain an "employee benefit plan" as defined in Section 3(3) of
ERISA, which is subject to Title I of ERISA, or a "governmental plan" within the
meaning of Section 3(3) of ERISA; (B) Borrower is not subject to state statutes
regulating investments and fiduciary obligations with respect to governmental
plans; and (C) one or more of the following circumstances is true:
(i) Equity interests in Borrower are publicly offered securities,
within the meaning of 29 C.F.R. Section 2510.3-101(b)(2);
(ii) Less than twenty-five percent (25%) of each outstanding class
of equity interests in Borrower are held by "benefit plan investors"
within the meaning of 29 C.F.R. Section 2510.3-101(f)(2); or
(iii) Borrower qualifies as an "operating company" or a "real estate
operating company" within the meaning of 29 C.F.R. Section 2510.3-101(c)
or (e).
5.2.13 Transfers.
(a) Without the prior written consent of Lender, no Individual
Borrower or any other Person having an ownership or beneficial interest, direct
or indirect, in any Individual Borrower or any partner, member or manager of any
Individual Borrower shall Transfer (as defined in the Mortgages) any Individual
Property or any part thereof or any interest therein
60
(including any ownership interest in Borrower or any such partner, member or
manager) or permit or suffer any Individual Property or any part thereof or any
interest therein to be Transferred other than as permitted pursuant to the terms
of this Section 5.2.13.
(b) Lender reserves the right to condition the consent required
hereunder upon (i) a modification of the terms hereof and of the Mortgages, the
Note or the other Loan Documents as Lender shall reasonably determine to be
necessary or advisable in order to reflect the transfer; (ii) with respect to a
direct transfer of one or more Individual Properties, an assumption of this
Agreement, the Note, the Mortgages and the other Loan Documents as so modified
by the proposed transferee, subject to the provisions of Section 9.3 of this
Agreement; (iii) payment of all of Lender's reasonable out-of-pocket expenses
incurred in connection with such transfer; (iv) the confirmation in writing by
the applicable Rating Agencies that the proposed transfer will not, in and of
itself, result in a downgrade, qualification or withdrawal of the initial, or,
if higher, then current ratings assigned in connection with any Securitization;
(v) the delivery of a nonconsolidation opinion reflecting the proposed transfer
satisfactory in form and substance to Lender; (vi) the proposed transferee's
continued compliance with the representations and covenants set forth in Section
4.1.30 and 5.2.12 of this Agreement; (vii) the delivery of evidence satisfactory
to Lender that the single purpose nature and bankruptcy remoteness of each
Individual Borrower, its shareholders, partners or members, as the case may be,
following such transfers are in accordance with the then current standards of
Lender and the Rating Agencies, or (viii) such other conditions as Lender shall
determine in its reasonable discretion to be necessary or advisable for the
protection of the interests of Lender, including, without limitation, the
creditworthiness, reputation and qualifications of the transferee with respect
to the Loan and the Properties. Lender shall not be required to demonstrate any
actual impairment of its security or any increased risk of default hereunder in
order to declare the Debt immediately due and payable upon Borrower's sale,
conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment, or
transfer of any Individual Property without Lender's consent. This provision
shall apply to every sale, conveyance, mortgage, grant, bargain, encumbrance,
pledge, assignment, or transfer of any Individual Property regardless of whether
voluntary or not, or whether or not Lender has consented to any previous sale,
conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment, or
transfer of any Individual Property.
(c) Notwithstanding anything to the contrary contained herein or in
the Mortgages, the following Transfers shall be permitted without Lender's
consent:
(i) the Transfer of an ownership or beneficial interest, direct or
indirect, in any Individual Borrower or any partner, member or manager of
any Individual Borrower, provided that such Transfer does not result in a
Change in Control of any Individual Borrower;
(ii) the merger or consolidation of Indemnitor with another Person,
provided that the Rating Agencies shall have confirmed in writing that
such merger or consolidation will not, in and of itself, result in a
downgrade, withdrawal or qualification of the initial, or if higher, then
current ratings of the Securities (or any class thereof);
61
(iii) the transfer of shares or ownership interests in any Person
that is a "publicly-traded" company through any recognized stock exchange
or "over-the-counter" market; or
(iv) the grant of easements, restrictions, reservations and rights
of way in the ordinary course of business for access, water and sewer
lines, telephones and telegraph lines, electric lines or other utilities
or for other similar purposes, provided that no such easement, restriction
or right-of-way shall materially impair the utility and operation of the
related Individual Property or materially and adversely affect the value
of such Individual Property or Borrower's ability to repay the Debt as it
becomes due.
For the purposes of this Section 5.2.13, "Change in Control" shall mean (A) a
transfer by which an aggregate of more than 49% of the equity interest of a
Person (including by way of the transfer of any direct or indirect legal or
beneficial interest in any constituent partner, member, manager or shareholder
of such Person) shall be vested in any other Person who does not, as of the date
hereof, own more than 49% of such Person, (B) a transfer of the power to direct
or cause the direction of management and policies of such Person through the
direct or indirect transfer of voting securities or other ownership interests,
by contract or otherwise or (C) the transfer, pledge or hypothecation of a
direct interest in any Individual Borrower or any general partner, managing
member or manager of any Individual Borrower.
(d) Notwithstanding anything to the contrary contained herein and in
addition to those Transfers permitted pursuant to clause (c) above, the
foreclosure or other acquisition (a "Pledged Interest Acquisition") by the
Pledgors' Creditor of indirect interests in any Individual Borrower and its
manager or general partner, as applicable (but not to include direct interests
in any Individual Borrower, any partner or member of any Individual Borrower or
any direct equity interest in any general partner, managing member or manager of
any Individual Borrower) (collectively, the "Pledge Entities"), pledged from
time to time pursuant to the terms of the Pledge Agreements (the "Pledged
Interests") in connection with an exercise of remedies pursuant to the terms of
the Pledge Agreements shall not be deemed to be a Transfer, provided, that, (a)
Borrower shall give Lender (i) notice of such Pledged Interest Acquisition not
less than sixty (60) days prior to the date of such Pledged Interest
Acquisition, and (ii) at the request of Lender, copies of all material
instruments and agreements to be utilized in effectuating such Pledged Interest
Acquisition not less than five (5) days prior to the date of such Pledged
Interest Acquisition, (b) after giving effect to the Pledged Interest
Acquisition, the single purpose nature and bankruptcy remoteness of each of the
Pledge Entities, as applicable, shall continue to comply with the requirements
set forth in the Loan Documents, (c) at the request of Lender, Borrower shall
deliver to Lender a non-consolidation opinion concerning the Borrower, the
Person acquiring such Pledged Interests in connection with the Pledged Interest
Acquisition (the "Pledge Transferee"), and/or their respective owners, which
non-consolidation opinion shall be reasonably acceptable to Lender and the
applicable Rating Agencies, (d) the Pledge Transferee shall be a Person (x) with
a net worth, as reasonably determined by Mortgagee, of $500,000,000 or more
after giving effect to the Pledged Interest Acquisition, and (y) with, in the
reasonable determination of the Lender, sufficient experience in the ownership
and management of properties similar to the Property, (e) the property manager
for the Property shall be Manager or a Qualified Manager, (f) (1) the Franchise
Agreement, if any, shall remain in full force and effect or, (2) Borrower shall
enter into a Replacement Franchise Agreement, which Replacement
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Franchise Agreement shall be in full force and effect on the date of the Pledged
Interest Acquisition, and (g) Lender shall have received payment of all
reasonable out-of-pocket costs and expenses incurred by Lender in connection
with such Pledged Interest Acquisition.
5.2.14 Deposits of Gross Income from Operations. Borrower shall in
no event permit any portion of the Gross Income from Operations (other than with
respect to the ▇▇▇▇ Property, the Schaumburg Property and the Phoenix Property)
for any calendar month constituting in excess of twelve percent (12%) of the
total Gross Income from Operations with respect to all of the Properties (other
than with respect to the ▇▇▇▇ Property, the ▇▇▇▇▇▇▇▇▇▇ Property and the Phoenix
Property) collected during such calendar month to be collected by one or more
Managers or Individual Borrowers rather than being deposited directly into the
Lockbox Account or the Cash Collateral Account.
VI. INSURANCE; CASUALTY; CONDEMNATION; REQUIRED REPAIRS
Section 6.1 Insurance.
(a) Borrower shall obtain and maintain, or cause to be maintained,
insurance for each Individual Borrower and for each Individual Property
providing at least the following coverages:
(i) comprehensive all risk insurance on the Improvements and the
Personal Property, including contingent liability from Operation of
Building Laws, Demolition Costs and Increased Cost of Construction
Endorsements, in each case (A) in an amount equal to one hundred percent
(100%) of the "Full Replacement Cost," which for' purposes of this
Agreement shall mean actual replacement value (exclusive of costs of
excavations, foundations, underground utilities and footings) with a
waiver of depreciation, but the amount shall in no event be less than the
outstanding principal balance of the Loan; (B) containing an agreed amount
endorsement with respect to the Improvements and Personal Property waiving
all co-insurance provisions; (C) providing for no deductible in excess of
Fifty Thousand and No/100 Dollars ($50,000) for all such insurance
coverage; (D) containing an "Ordinance or Law Coverage" or "Enforcement"
endorsement if any of the Improvements or the use of the Individual
Property shall at any time constitute legal non-conforming structures or
uses; and (E) coverages for liquor liability. In addition, Borrower shall
obtain: (x) if any portion of the Improvements is currently or at any time
in the future located in a federally designated "special flood hazard
area", flood hazard insurance in an amount equal to the lesser of (1) the
Release Amount of the related Individual Property or (2) the maximum
amount of such insurance available under the National Flood Insurance Act
of 1968, the Flood Disaster Protection Act of 1973 or the National Flood
Insurance Reform Act of 1994, as each may be amended or such greater
amount as Lender shall require; (y) coastal windstorm insurance in amounts
and in form and substance reasonably satisfactory to Lender in the event
the Individual Property is located in any coastal region; and (z)
earthquake insurance in amounts and in form and substance reasonably
satisfactory to Lender in the event the Individual Property is located in
an area with a high degree of seismic activity; provided
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that the insurance pursuant to clauses (x), (y) and (z) hereof shall be on
terms consistent with the comprehensive all risk insurance policy required
under this subsection (i).
(ii) commercial general liability insurance against claims for
personal injury, bodily injury, death or property damage occurring upon,
in or about the Individual Property, such insurance (A) to be on the
so-called "occurrence" form with a combined limit of not less than Three
Million and No/100 Dollars ($3,000,000) in the aggregate and Two Million
and No/100 Dollars ($2,000,000) per occurrence (and, if on a blanket
policy, containing an "Aggregate Per Location" endorsement); (B) to
continue at not less than the aforesaid limit until required to be changed
by Lender in writing by reason of changed economic conditions making such
protection inadequate; and (C) to cover at least the following hazards:
(1) premises and operations; (2) products and completed operations on an
"if any" basis; (3) independent contractors; (4) blanket contractual
liability for all legal contracts; and (5) contractual liability covering
the indemnities contained in Article 9 of the Mortgages to the extent the
same is available;
(iii) business income insurance (A) with loss payable to Lender; (B)
covering all risks required to be covered by the insurance provided for in
subsection (i) above; (C) containing an extended period of indemnity
endorsement which provides that after the physical loss to the
Improvements and Personal Property has been repaired, the continued loss
of income will be insured until such income either returns to the same
level it was at prior to the loss, or the expiration of twenty-four (24)
months from the date that the applicable Individual Property is repaired
or replaced and operations are resumed, whichever first occurs, and
notwithstanding that the policy may expire prior to the end of such
period; and (D) in an amount equal to one hundred percent (100%) of the
projected gross income from each Individual Property for a period of
twenty-four (24) months from the date that such Individual Property is
repaired or replaced and operations are resumed. The amount of such
business income insurance shall be determined prior to the date hereof and
at least once each year thereafter based on Borrower's reasonable estimate
of the gross income from each Individual Property for the succeeding
twenty-four (24) month period. All proceeds payable to Lender pursuant to
this subsection shall be held by Lender and shall be applied to the
obligations secured by the Loan Documents from time to time due and
payable hereunder and under the Note; provided, however, that nothing
herein contained shall be deemed to relieve Borrower of its obligations to
pay the obligations secured by the Loan Documents on the respective dates
of payment provided for in the Note and the other Loan Documents except to
the extent such amounts are actually paid out of the proceeds of such
business income insurance;
(iv) at all times during which structural construction, repairs or
alterations are being made with respect to the Improvements, and only if
the Individual Property coverage form does not otherwise apply, (A)
owner's contingent or protective liability insurance covering claims not
covered by or under the terms or provisions of the above mentioned
commercial general liability insurance policy; and (B) the insurance
provided for in subsection (i) above written in a so-called builder's risk
completed value form (1) on a non-reporting basis, (2) against all risks
insured against pursuant to subsection (i) above, (3) including permission
to occupy the Individual Property, and (4) with an agreed amount
endorsement waiving co-insurance provisions;
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(v) workers' compensation, subject to the statutory limits of the
State, and employer's liability insurance with a limit of at least One
Million and No/100 Dollars ($1,000,000) per accident and per disease per
employee, and One Million and No/100 Dollars ($1,000,000) for disease
aggregate in respect of any work or operations on or about the Individual
Property, or in connection with the Individual Property or its operation
(if applicable);
(vi) comprehensive boiler and machinery insurance, if applicable, in
amounts as shall be reasonably required by Lender on terms consistent with
the commercial property insurance policy required under subsection (i)
above;
(vii) umbrella liability insurance in an amount not less than One
Hundred Seventy-Five Million and No/100 Dollars ($175,000,000) per
occurrence on terms consistent with the commercial general liability
insurance policy required under subsection (ii) above;
(viii) motor vehicle liability coverage for all owned and non-owned
vehicles, including rented and leased vehicles containing minimum limits
per occurrence, including umbrella coverage, of Ten Million and No/100
Dollars ($10,000,000); and
(ix) upon sixty (60) days' written notice, such other reasonable
insurance and in such reasonable amounts as Lender from time to time may
reasonably request against such other insurable hazards which at the time
are commonly insured against for property similar to the Individual
Property located in or around the region in which the Individual Property
is located.
(b) All insurance provided for in Section 6.1 (a) shall be obtained
under valid and enforceable policies (collectively, the "Policies" or in the
singular, the "Policy"), and shall be subject to the approval of Lender as to
insurance companies, amounts (to the extent not specified in Section 6.1(a)),
deductibles, loss payees and insureds. The Policies shall be issued by
financially sound and responsible insurance companies authorized to do business
in the State and having a claims paying ability rating of "A" or better (and the
equivalent thereof) by the Rating Agencies. The Policies described in Section
6.1 (other than those strictly limited to liability protection) shall designate
Lender as an additional insured and loss payee. Not less than ten (10) days
prior to the expiration dates of the Policies theretofore furnished to Lender,
certificates of insurance evidencing the Policies accompanied by evidence
satisfactory to Lender of payment of the premiums due thereunder (the "Insurance
Premiums"), shall be delivered by Borrower to Lender.
(c) Any Policy that is a blanket insurance policy shall specifically
allocate to the Individual Property the amount of coverage from time to time
required hereunder and shall otherwise provide the same protection as would a
separate insurance policy insuring only the Individual Property in compliance
with the provisions of Section 6.1(a).
(d) All Policies provided for or contemplated by Section 6.1(a),
except for the Policy referenced in Section 6.1(a)(v), shall name Borrower or
the related Individual Borrower as the insured and Lender as the additional
insured, as its interests may appear, and in the case of
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property damage, boiler and machinery, flood and earthquake insurance, shall
contain a so-called New York standard non-contributing mortgagee clause in favor
of Lender providing that the loss thereunder shall be payable to Lender.
(e) All Policies provided for in Section 6.1(a)(v) shall contain
clauses or endorsements to the effect that:
(i) no act or negligence of Borrower, or anyone acting for Borrower,
or of any Tenant or other occupant, or failure to comply with the
provisions of any Policy, which might otherwise result in a forfeiture of
the insurance or any part thereof, shall in any way affect the validity or
enforceability of the insurance insofar as Lender is concerned;
(ii) the Policy shall not be materially changed (other than to
increase the coverage provided thereby) or canceled without at least
thirty (30) days' prior written notice to Lender and any other party named
therein as an additional insured;
(iii) the issuers thereof shall give written notice to Lender if the
Policy has not been renewed fifteen (15) days prior to its expiration; and
(iv) Lender shall not be liable for any Insurance Premiums thereon
or subject to any assessments thereunder.
(f) If at any time Lender is not in receipt of written evidence that
all insurance required hereunder is in full force and effect, Lender shall have
the right to take such action as Lender deems necessary to protect its interest
in the Properties, including, without limitation, the obtaining of such
insurance coverage as Lender in its sole discretion deems appropriate after five
(5) Business Days' notice to Borrower if prior to the date upon which any such
coverage will lapse or at any time Lender deems necessary (regardless of prior
notice to Borrower) to avoid the lapse of any such coverage. All premiums
incurred by Lender in connection with such action or in obtaining such insurance
and keeping it in effect shall be paid by Borrower to Lender upon demand and,
until paid, shall be secured by the Mortgages and shall bear interest at the
Default Rate.
Section 6.2 Casualty. If the Individual Property shall be damaged or
destroyed, in whole or in part, by fire or other casualty (a "Casualty"),
Borrower shall give prompt notice of such damage to Lender and shall promptly
commence and diligently prosecute the completion of the repair and restoration
of the Individual Property as nearly as possible to the condition the Individual
Property was in immediately prior to such fire or other casualty, with such
alterations as may be reasonably approved by Lender (a "Restoration") and
otherwise in accordance with Section 6.4; provided, that, commencement of a
Restoration (a) shall be subject to the preliminary settlement and adjustment of
any related insurance claim (but in no event later than ninety (90) days after
the Casualty occurs and (b) shall be deemed to have occurred upon Borrower
commissioning and obtaining designs and plans for such Restoration. Borrower
shall pay all costs of such Restoration whether or not such costs are covered by
insurance. Lender may, but shall not be obligated to make proof of loss if not
made promptly by Borrower.
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Section 6.3 Condemnation. Borrower shall promptly give Lender notice
of the actual or threatened commencement of any proceeding for the Condemnation
of any Individual Property and shall deliver to Lender copies of any and all
papers served in connection with such proceedings. Lender may participate in any
such proceedings, and Borrower shall from time to time deliver to Lender all
instruments requested by it to permit such participation. Borrower shall, at its
expense, diligently prosecute any such proceedings, and shall consult with
Lender, its attorneys and experts, and cooperate with them in the carrying on or
defense of any such proceedings. Notwithstanding any taking by any public or
quasi-public authority through Condemnation or otherwise (including but not
limited to any transfer made in lieu of or in anticipation of the exercise of
such taking), Borrower shall continue to pay the Debt at the time and in the
manner provided for its payment in the Note and in this Agreement and the Debt
shall not be reduced until any Award shall have been actually received and
applied by Lender, after the deduction of expenses of collection, to the
reduction or discharge of the Debt. Lender shall not be limited to the interest
paid on the Award by the condemning authority but shall be entitled to receive
out of the Award interest at the rate or rates provided herein or in the Note.
If any Individual Property or any portion thereof is taken by a condemning
authority, Borrower shall promptly commence and diligently prosecute the
Restoration of the applicable Individual Property and otherwise comply with the
provisions of Section 6.4. If any Individual Property is sold, through
foreclosure or otherwise, prior to the receipt by Lender of the Award, Lender
shall have the right, whether or not a deficiency judgment on the Note shall
have been sought, recovered or denied, to receive the Award, or a portion
thereof sufficient to pay the Debt.
Section 6.4 Restoration. The following provisions shall apply in
connection with the Restoration of any Individual Property:
(a) In the event that the projected Net Proceeds and the costs of
completing the Restoration are each less than an amount equal to four percent
(4%) of the Release Amount for the affected Individual Property, Borrower may
settle and adjust any claim without the consent of Lender and agree with the
insurance company or companies on the amount to be paid upon the loss; provided
that such adjustment is carried out in a competent and timely manner. Provided
that all of the conditions set forth in Section 6.4(b)(i) are met and Borrower
delivers to Lender a written undertaking to expeditiously commence and
satisfactorily complete with due diligence the Restoration in accordance with
the terms herein, Borrower is hereby authorized to collect and receive any such
insurance proceeds and apply them to the costs of Restoration.
(b) In the event that either the projected Net Proceeds or the costs
of completing the Restoration are either equal to or exceed an amount equal to
four percent (4%) of the Release Amount for the affected Individual Property,
Borrower may settle and adjust any claim with the prior written consent of
Lender, which consent shall not be unreasonably withheld or delayed, provided,
however that (i) if Borrower has not settled and adjusted such claim on a
preliminary basis (subject to final settlement and adjustment) within sixty (60)
days following the insured Casualty, Lender may do so in a reasonable manner,
subject to the prior approval of Borrower, not to be unreasonably withheld and
to be given or withheld within five (5) Business Days of request therefor (which
approval shall be deemed to have been granted in the event Borrower does not
grant or withhold such approval within such five (5) Business Day period); and
(ii) upon the occurrence and during the continuance of an Event of Default,
Lender may settle and adjust any claim without the consent of Borrower. In such
events, Borrower or
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Lender, as the case may be, may agree with the insurance company or companies on
the amount to be paid on the loss. The proceeds of any such policy shall be due
and payable solely to Lender, and provided no Event of Default has occurred and
is continuing, Lender shall make the Net Proceeds available for the Restoration
in accordance with this Section 6.4. The term "Net Proceeds" shall mean: (i) the
net amount of all insurance proceeds payable under insurance policies maintained
pursuant to Section 6.1 (other than Section 6.1(a)(iii)) as a result of such
damage or destruction after deduction of the reasonable costs and expenses of
Lender or Borrower, as applicable (including, but not limited to, reasonable
counsel fees), if any, in collecting same ("Insurance Proceeds") or (ii) the net
amount of the Award, after deduction of the reasonable costs and expenses of
Lender or Borrower, as applicable (including, but not limited to, reasonable
counsel fees), if any, in collecting same ("Condemnation Proceeds") whichever
the case may be.
(i) The Net Proceeds shall be made available to Borrower for
Restoration provided that each of the following conditions are met:
(A) no Event of Default shall have occurred and be continuing;
(B) (1) in the event the Net Proceeds are Insurance Proceeds,
the costs of completing the Restoration are less than twenty-five
percent (25%) of the Release Amount for the Individual Property
affected by fire or other casualty or (2) in the event the Net
Proceeds are Condemnation Proceeds, the costs of completing the
Restoration are less than ten percent (10%) of the Release Amount
for the Individual Property that is subject to the taking;
(C) Borrower shall commence (as determined pursuant to Section
6.2(b)) the Restoration as soon as reasonably practicable (subject,
in the case of a casualty, to the preliminary settlement and
adjustment of any related insurance claim, but in no event later
than one hundred twenty (120) days after such damage or destruction
or taking, whichever the case may be, occurs) and shall diligently
pursue the same to satisfactory completion;
(D) Lender shall be satisfied that any operating deficits,
including all scheduled payments of principal and interest under the
Note, which will be incurred with respect to the Individual Property
as a result of the occurrence of any such fire or other casualty or
taking, whichever the case may be, will be covered out of (1) the
Net Proceeds, (2) the insurance coverage referred to in Section
6.1(a)(iii), if applicable, or (3) by other funds of Borrower;
(E) Lender shall be satisfied that the Restoration will be
completed on or before the earliest to occur of (1) six (6) months
prior to the Maturity Date, (2) such time as may be required under
applicable zoning law, ordinance, rule or regulation in order to
repair and restore the applicable Individual Property to the
condition it was in immediately prior to such fire or other casualty
or to as nearly as possible the condition it was in immediately
prior to such taking, as applicable or (3) the expiration of the
insurance coverage referred to in Section 6.1(a)(iii);
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(F) the Individual Property and the use thereof after the
Restoration will be in compliance with and permitted under all
applicable zoning laws, ordinances, rules and regulations;
(G) the Restoration shall be done and completed by Borrower in
an expeditious and diligent fashion and in compliance with all
applicable governmental laws, rules and regulations (including,
without limitation, all applicable environmental laws);
(H) such fire or other casualty or taking, as applicable, does
not result in the loss of access to the Individual Property or the
related Improvements;
(I) (1) the Debt Service Coverage Ratio for the Properties for
the twelve (12) calendar months immediately prior to the occurrence
of such fire or other casualty or taking, as applicable, is equal to
or greater than the greater of (y) 1.98x and (z) the Debt Service
Coverage Ratio for the Properties for the twelve (12) calendar
months immediately prior to the occurrence of such fire or other
casualty or taking, as applicable, or (2) if clause (1) above is not
satisfied, the Debt Service Coverage Ratio for the affected
Individual Property for the twelve (12) calendar months immediately
prior to the occurrence of such fire or other casualty or taking is
equal to or greater than the greater of (y) the Debt Service
Coverage Ratio for such Individual Property as of the Bel Age
Closing Date, as set forth on Schedule I hereto and (z) the Debt
Service Coverage Ratio for such Individual Property for the twelve
(12) calendar months immediately prior to the occurrence of such
fire or other casualty or taking, as applicable;
(J) if the Net Proceeds or the cost of Restoration exceeds an
amount equal to four percent (4%) of the Release Amount for the
affected Individual Property, Borrower shall deliver, or cause to be
delivered, to Lender a signed detailed budget approved in writing by
Borrower's architect or engineer stating the entire cost of
completing the Restoration, which budget shall be acceptable to
Lender (which acceptance shall not be unreasonably withheld or
delayed) or if the Net Proceeds or the cost of Restoration equals or
is less than an amount equal to four percent (4%) of the Release
Amount for the affected Individual Property, Borrower shall deliver,
or cause to be delivered to Lender, for information purposes only, a
copy of the detailed budget for the Restoration; and
(K) the Net Proceeds together with any cash or cash equivalent
deposited by Borrower with Lender are sufficient in Lender's
discretion to cover the cost of the Restoration.
(ii) The Net Proceeds shall be held by Lender in an Eligible Account
and invested in Permitted Investments as directed by Lender in accordance
with Section 7.8 and, until disbursed in accordance with the provisions of
this Section 6.4(b), shall constitute additional security for the Debt and
other obligations under the Loan Documents. The Net Proceeds shall be
disbursed by Lender to, or as directed by, Borrower from time to time
during the course of the Restoration, upon receipt of
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evidence reasonably satisfactory to Lender that (A) all materials
installed and work and labor performed (except to the extent that they are
to be paid for out of the requested disbursement or retainage) in
connection with the Restoration have been paid for in full, and (B) there
exist no notices of pendency, stop orders, mechanic's or materialman's
liens or notices of intention to file same, or any other similar liens or
encumbrances on the Individual Property which have not either been fully
bonded to the reasonable satisfaction of Lender and discharged of record
or in the alternative fully insured to the reasonable satisfaction of
Lender by the title company issuing the Title Insurance Policy.
(iii) All plans and specifications required in connection with a
Restoration costing an amount equal to or in excess of four percent (4%)
of the Release Amount for the affected Individual Property shall be
subject to prior review and acceptance in all respects by Lender and by an
independent consulting engineer selected by Lender (the "Casualty
Consultant"). Lender shall have the use of the plans and specifications
and all permits, licenses and approvals required or obtained in connection
with a Restoration. The identity of the contractors, major subcontractors
and major materialmen engaged in a Restoration costing an amount equal to
or in excess of four percent (4%) of the Release Amount for the affected
Individual Property, as well as the contracts under which they have been
engaged, shall be subject to prior review and acceptance by Lender and the
Casualty Consultant, such acceptance not to be unreasonably withheld,
conditioned or delayed. All costs and expenses incurred by Lender in
connection with making the Net Proceeds available for the Restoration
including, without limitation, reasonable counsel fees and disbursements
and the Casualty Consultant's fees, shall be paid by Borrower. For
purposes of this Clause (v), the terms "major sub-contractor" and "major
materialman" shall mean any subcontractor or materialman receiving
payments in excess of fifteen percent (15%) of the total costs of the
Restoration.
(iv) In no event shall Lender be obligated to make disbursements of
the Net Proceeds in excess of an amount equal to the costs actually
incurred from time to time for work in place as part of the Restoration,
as certified by the Casualty Consultant, minus the Casualty Retainage. The
term "Casualty Retainage" shall mean an amount equal to ten percent (10%)
of the costs actually incurred for work in place as part of the
Restoration, as certified by the Casualty Consultant, until the
Restoration has been completed. The Casualty Retainage shall in no event,
and notwithstanding anything to the contrary set forth above in this
Section 6.4(b), be less than the amount actually held back by Borrower
from contractors, subcontractors and materialmen engaged in the
Restoration. The Casualty Retainage shall not be released until the
Casualty Consultant certifies to Lender that the Restoration has been
completed in accordance with the provisions of this Section 6.4(b) and
that all approvals necessary for the re-occupancy and use of the
Individual Property have been obtained from all appropriate governmental
and quasi-governmental authorities, and Lender receives evidence
reasonably satisfactory to Lender that the costs of the Restoration have
been paid in full or will be paid in full out of the Casualty Retainage;
provided, however, that Lender will release the portion of the Casualty
Retainage being held with respect to any contractor, subcontractor or
materialman engaged in the Restoration as of the date upon which the
Casualty Consultant certifies to Lender that the contractor, subcontractor
or materialman has satisfactorily completed all work and has supplied all
materials in accordance with the
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provisions of the contractor's, subcontractor's or materialman's contract,
the contractor, subcontractor or materialman delivers the lien waivers and
evidence of payment in full of (subject to receipt of the applicable
Casualty Retainage) all sums due to the contractor, subcontractor or
materialman as may be reasonably requested by Lender or by the title
company issuing the Title Insurance Policy, and Lender, upon its
reasonable request, receives an endorsement to the Title Insurance Policy
insuring the continued priority of the lien of the related Mortgage and
evidence of payment of any premium payable for such endorsement. If
required by Lender, the release of any such portion of the Casualty
Retainage shall be approved by the surety company, if any, which has
issued a payment or performance bond with respect to the contractor,
subcontractor or materialman.
(v) Lender shall not be obligated to make disbursements of the Net
Proceeds more frequently than once every calendar month.
(vi) If at any time the Net Proceeds or the undisbursed balance
thereof shall not, in the opinion of Lender in consultation with the
Casualty Consultant, be sufficient to pay in full the balance of the costs
which are estimated by the Casualty Consultant to be incurred in
connection with the completion of the Restoration, Borrower shall deposit
the amount of the deficiency (the "Net Proceeds Deficiency") with Lender,
or other assurances satisfactory to Lender that such funds are available,
before any further disbursement of the Net Proceeds shall be made. The Net
Proceeds Deficiency deposited with Lender shall be held by Lender and
shall be disbursed for costs actually incurred in connection with the
Restoration on the same conditions applicable to the disbursement of the
Net Proceeds, and until so disbursed pursuant to this Section 6.4(b) shall
constitute additional security for the Debt and other obligations under
the Loan Documents.
(vii) The excess, if any, of the Net Proceeds and the remaining
balance, if any, of the Net Proceeds Deficiency deposited with Lender
after the Casualty Consultant certifies to Lender that the Restoration has
been completed in accordance with the provisions of this Section 6.4(b),
and the receipt by Lender of evidence satisfactory to Lender that all
costs incurred in connection with the Restoration have been paid in full,
shall be remitted by Lender to Borrower, provided no Event of Default
shall have occurred and shall be continuing under the Note, this Agreement
or any of the other Loan Documents.
(c) All Net Proceeds not required (i) to be made available for the
Restoration or (ii) to be returned to Borrower as excess Net Proceeds pursuant
to Section 6.4(b)(vii) may be retained and applied by Lender toward the payment
of the Debt whether or not then due and payable in such order, priority and
proportions as Lender in its sole discretion shall deem proper, or, at the
discretion of Lender, the same may be paid, either in whole or in part, to
Borrower for such purposes as Lender shall designate, in its discretion.
(d) In the event of foreclosure of the Mortgage with respect to an
Individual Property, or other transfer of title to an Individual Property in
extinguishment in whole or in part of the Debt all right, title and interest of
Borrower in and to the Policies that are not blanket Policies then in force
concerning such Individual Property and all proceeds payable thereunder
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shall thereupon vest in the purchaser at such foreclosure or Lender or other
transferee in the event of such other transfer of title.
(e) If (i) the Net Proceeds are not made available for the
Restoration and are retained and applied by Lender to the Debt pursuant to this
Section 6.4 and (ii) the projected Debt Service Coverage Ratio (as reasonably
determined by Lender based upon projections reasonably acceptable to Borrower
and Lender) with respect to the affected Individual Property for the twelve (12)
calendar months immediately following the related fire or other casualty or
taking (taking into account the reduction of the Release Amount of such
Individual Property by the amount of the Net Proceeds as retained and applied by
Lender to the Debt) is no less than the greater of (A) the Debt Service Coverage
Ratio with respect to such Individual Property for the twelve (12) calendar
months immediately preceding the related fire or other casualty or taking, as
applicable, and (B) the Debt Service Coverage Ratio with respect to such
Individual Property as of the closing of the Loan set forth on Schedule I
hereto, then Borrower shall not be required to restore the affected Individual
Property to its previous value and utility, but shall only be required to raze
or dismantle, as applicable, the affected Improvements on such Individual
Property and to restore the affected portion of such Individual Property to a
safe, orderly condition, complying in all material respects with all Legal
Requirements, and to make all such repairs and improvements thereto as are
reasonably necessary to cause such affected portion of such Individual Property
to be in a condition consistent with the maintenance, use and operation of the
unaffected portion of such Individual Property.
VII. RESERVE FUNDS
Section 7.1 Required Repair Funds.
7.1.1 Deposits. Borrower shall perform the repairs, capital
improvements and replacements at the Properties, as more particularly set forth
on Schedule III hereto (such repairs hereinafter referred to as "Required
Repairs"). Subject to force majeure delays, Borrower shall complete the Required
Repairs on or before the required deadline for each repair as set forth on
Schedule III. It shall be an Event of Default under this Agreement if (i)
Borrower does not complete the Required Repairs at each Individual Property by
the required deadline for each repair as set forth on Schedule III, which
deadline shall be extended or a result of any force majeure delays and (ii)
Borrower does not satisfy each condition contained in Section 7.1.2 hereof. Upon
the occurrence of such an Event of Default, Lender, at its option, may withdraw
all Required Repair Funds from the Required Repair Account and Lender may apply
such funds either to completion of the Required Repairs at one or more of the
Properties or toward payment of the Debt in such order, proportion and priority
as Lender may determine in its sole discretion. Lender's right to withdraw and
apply Required Repair Funds shall be in addition to all other rights and
remedies provided to Lender under this Agreement and the other Loan Documents.
On the Closing Date, Borrower shall deposit with Lender the reserve amount with
respect to each Required Repair at each Individual Property as set forth on the
schedule of such reserve amounts forming a part of Schedule III hereto to be
applied to costs incurred in performing each such Required Repair as set forth
in this Section 7.1. Amounts so deposited with Lender shall be held by Lender
and invested in accordance with Section 7.8 hereof. Amounts so deposited shall
hereinafter be referred to as Borrower's "Required Repair Fund" and the account
in which
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such amounts are held shall hereinafter be referred to as Borrower's "Required
Repair Account".
7.1.2 Release of Required Repair Funds. Lender shall disburse to
Borrower the Required Repair Funds from the Required Repair Account from time to
time as work progresses on such Required Repairs upon satisfaction by Borrower
of each of the following conditions: (i) Borrower shall submit a written request
for payment to Lender at least fifteen (15) days prior to the date on which
Borrower requests such payment be made and specify the work with respect to the
Required Repairs to be paid, (ii) on the date such request is received by Lender
and on the date such payment is to be made, no Event of Default shall exist and
remain uncured, (iii) Lender shall have received a certificate from Borrower (A)
stating that all work with respect to the Required Repairs or the portion
thereof at the applicable Individual Property to be funded by the requested
disbursement have been completed in good and workmanlike manner and in
accordance with all Legal Requirements, such certificate to be accompanied by a
copy of any license, permit or other approval by any Governmental Authority
required to commence and/or complete the Required Repairs, (B) identifying each
general contractor and each major subcontractor and major materialman that
supplied materials or labor in connection with the Required Repairs performed at
such Individual Property to be funded by the requested disbursement, and (C)
stating that each Person that supplied materials or labor in connection with the
Required Repairs to be funded by the requested disbursement has been paid in
full or will be paid in full upon such disbursement, such certificate to be
accompanied by lien waivers or other evidence of payment of all sums then due,
reasonably satisfactory to Lender, (iv) at Lender's option, a title search for
such Individual Property indicating that such Individual Property is free from
all Liens, claims and other encumbrances not (a) previously approved by Lender
or (b) satisfactorily bonded or insured against by the Title Insurance Policy in
the reasonable discretion of Lender and (v) Lender shall have received such
other evidence as Lender shall reasonably request that the work with respect to
the Required Repairs or portion thereof at such Individual Property to be funded
by the requested disbursement has been completed (or any materials to be funded
by the requested disbursement are on site at the applicable Individual Property
or in a bonded warehouse reasonably acceptable to Lender and are properly
secured or have been installed in such Individual Property) and is paid for or
will be paid upon such disbursement to Borrower. Lender shall not be required to
make disbursements from the Required Repair Account with respect to any
Individual Property unless such requested disbursement is in an amount greater
than Twenty-Five Thousand and No/100 Dollars ($25,000) (or a lesser amount if
the total amount in the Required Repair Account is less than Twenty-Five
Thousand and No/100 dollars ($25,000), in which case only one disbursement of
the amount remaining in the account shall be made) and such disbursement shall
be made only upon satisfaction of each condition contained in this Section
7.1.2. Any funds remaining in the Required Repairs Account after completion of
all Required Repairs and the delivery of evidence in accordance with the terms
and conditions of this Agreement will be disbursed to Borrower, provided that no
Event of Default has occurred and is continuing.
Section 7.2 Tax and Insurance Escrow Fund. Borrower shall pay to
Lender (a) on each Payment Date one-twelfth of the Taxes and Other Charges with
respect to the Properties that Lender estimates will be payable during the next
ensuing twelve (12) months in order to accumulate with Lender sufficient funds
to pay all such Taxes and Other Charges with respect to the Properties at least
thirty (30) days prior to their respective due dates, and (b) on the date
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hereof, an amount equal to fifteen percent (15%) of the annual Insurance
premiums payable for the coverage afforded by the Policies with respect to, and
allocable to, the Properties and thereafter shall pay to Lender on each Payment
Date an amount equal to one-twelfth of the annual Insurance Premiums payable for
the coverage afforded by the Policies with respect to, and allocable to, the
Properties, or such other or additional payment that Lender reasonably estimates
to be necessary in order to accumulate with Lender sufficient funds to pay all
such Insurance Premiums with respect to, and allocable to, the Properties prior
to the date when due and at least thirty (30) days prior to the expiration of
the Policies (the monthly amounts payable pursuant to clauses (a) and (b) above
on each Payment Date being hereinafter referred to as the "Monthly Tax and
Insurance Deposit" and all such amounts paid to Lender being hereinafter
referred to collectively as the "Tax and Insurance Escrow Fund"). The Tax and
Insurance Escrow Fund and the payments of interest or principal or both, payable
pursuant to the Note, shall be added together and shall be paid as an aggregate
sum by Borrower to Lender. Lender will apply the Tax and Insurance Escrow Fund
to payments of Taxes, Other Charges and Insurance Premiums required to be made
by Borrower pursuant to Section 5.1.2 and Section 6.1 hereof and under the
Mortgages. In making any payment relating to the Tax and Insurance Escrow Fund,
Lender may do so according to any ▇▇▇▇, statement or estimate procured from the
appropriate public office (with respect to Taxes and Other Charges) or insurer
or agent (with respect to Insurance Premiums), without inquiry into the accuracy
of such ▇▇▇▇, statement or estimate or into the validity of any tax, assessment,
sale, forfeiture, tax lien or title or claim thereof. If the amount of the Tax
and Insurance Escrow Fund shall exceed the amounts due for Taxes, Other Charges
and Insurance Premiums pursuant to Section 5.1.2 and Section 6.1 hereof, Lender
shall, in its sole discretion, return any excess to Borrower or credit such
excess against future payments to be made to the Tax and Insurance Escrow Fund.
Amounts deposited in the Tax and Insurance Escrow Fund for the payment of Taxes
and Other Charges with respect to the Individual Property known as the Hilton
Newark Gateway will be released to Borrower upon Lender's receipt of evidence
(in accordance with Section 5.1.2) that the Taxes and Other Charges with respect
to which such amounts were deposited were not payable or were off-set pursuant
to the applicable tax laws and regulations, provided that no Event of Default
has occurred and is continuing. Amounts deposited in the Tax and Insurance
Escrow Fund for the payment of Taxes, Other Charges and/or Insurance Premiums
with respect to, and allocable to, the ▇▇▇▇ Property, the Phoenix Property or
the Schaumburg Property will be released to Borrower upon Lender's receipt of
evidence (in accordance with Section 5.1.2 with respect to Taxes and Other
Charges and in accordance with Section 6.1 (b) with respect to Insurance
Premiums) that the Taxes, Other Charges and/or Insurance Premiums with respect
to which such amounts were deposited were paid by the applicable Manager or by
the Borrower, provided that no Event of Default has occurred and is continuing.
Without limiting Borrower's obligations under Sections 5.1.2 or 6.1 (b),
Borrower may request that Lender make payments of Taxes, Other Charges and/or
Insurance Premiums with respect to the ▇▇▇▇ Property, the Phoenix Property or
the Schaumburg Property to the appropriate authorities on behalf of Borrower,
provided that (i) amounts for the payment of such Taxes, Other Charges and/or
Insurance Premiums have been deposited in the Tax and Insurance Escrow Fund and
such amounts are sufficient to pay the Taxes, Other Charges and/or Insurance
Premiums that are the subject of Borrower's request; (ii) Lender receives
written notice from Borrower and Manager no less than fifteen (15) days prior to
(A) with respect to Taxes or Other Charges, the earlier of the date on which
such Taxes or Other Charges are delinquent or the date on which any penalty or
interest for non-payment when due
74
would start to accrue with respect thereto or (B) with respect to Insurance
Premiums, the date on which such Insurance Premiums are due and payable, as
applicable, directing Lender to make the applicable payment on behalf of
Borrower and setting forth the amounts to be paid, the name of the authorities
which are to receive such payments and the addresses to which such payments
should be directed; (iii) no Event of Default has occurred and is continuing;
and (iv) Borrower shall be liable for any fees which may be assessed by Servicer
or any expenses which may be incurred by Lender in connection with paying Taxes,
Other Charges or Insurance Premiums on behalf of Borrower as described in this
sentence. Any amount remaining in the Tax and Insurance Escrow Fund after the
Debt has been paid in full shall be returned to Borrower. In allocating such
excess, Lender may deal with the Person shown on the records of Lender to be the
owner of the Properties. If at any time Lender reasonably determines that the
Tax and Insurance Escrow Fund is not or will not be sufficient to pay Taxes,
Other Charges and/or Insurance Premiums by the dates set forth in (a) and (b)
above, Lender shall notify Borrower of such determination and Borrower shall
increase its monthly payments to Lender by the amount that Lender estimates is
sufficient to make up the deficiency at least thirty (30) days prior to
delinquency of the Taxes or Other Charges and/or thirty (30) days prior to
expiration of the Policies, as the case may be. Amounts deposited with Lender in
the Tax and Insurance Escrow Fund shall be held by Lender and invested in
accordance with Section 7.8 hereof.
Section 7.3 Replacements and Replacement Reserve.
7.3.1 Replacement Reserve Fund. Borrower shall pay to Lender on each
Payment Date an amount equal to four percent (4%) of annual "Gross Income from
Operations" for each Individual Property (with the exception of the ▇▇▇▇
Property, the Schaumburg Property and the Phoenix Property) for the month which
is the second month preceding the month in which such payment is due (e.g., if
such payment is due on March 1, Gross Income from Operations for the month of
January shall be used to determine the amount of such payment) (the "Replacement
Reserve Monthly Deposit"), for fixtures, furniture and equipment and other
replacements and repairs required to be made to the Properties during the
calendar year (collectively, the "Replacements"). Amounts so deposited shall
hereinafter be referred to as Borrower's "Replacement Reserve Fund" and the
account in which such amounts are held shall hereinafter be referred to as
Borrower's "Replacement Reserve Account". Any amount held in the Replacement
Reserve Account and allocated for an Individual Property shall be released to
Borrower in the event such Individual Property is released from the Lien of its
related Mortgage in accordance with Section 2.4 hereof. If, for any reason, the
Manager of the ▇▇▇▇ Property, the Schaumburg Property or the Phoenix Property
shall discontinue reserving for Replacements for the applicable Individual
Property, Borrower shall commence making deposits to the Replacement Reserve
Fund with respect to such Individual Property in accordance with this Section
7.3.1 and such Individual Property shall remain subject to this Section 7.3
until the related Manager resumes reserving for Replacements for such Individual
Property.
7.3.2 Disbursements from Replacement Reserve Account.
(a) Lender shall make disbursements from the Replacement Reserve
Account to pay Borrower only for the costs of the Replacements. Lender shall not
be obligated to make disbursements from the Replacement Reserve Account to
reimburse Borrower for the costs of
75
routine maintenance to an Individual Property, for replacements of inventory or
for costs which are to be reimbursed from the Required Repair Fund.
(b) Lender shall, upon written request from Borrower and
satisfaction of the requirements set forth in this Section 7.3.2, disburse to
Borrower amounts from the Replacement Reserve Account necessary to pay for the
costs of Replacements or to reimburse Borrower therefor, upon completion of such
Replacements (or, upon partial completion in the case of Replacements made
pursuant to Section 7.3.2(f)) as reasonably determined by Lender. In no event
shall Lender be obligated to disburse funds from the Replacement Reserve Account
if a Default that is susceptible to being cured by the payment of Money or an
Event of Default exists.
(c) Each request for disbursement from the Replacement Reserve
Account shall be in a form reasonably specified or approved by Lender and shall
specify (i) the specific Replacements for which the disbursement is requested,
(ii) the quantity and price of each item to be purchased, if the Replacement
includes the purchase or replacement of specific items, (iii) the price of all
materials (grouped by type or category) to be used in any Replacement other than
the purchase or replacement of specific items, and (iv) the cost of all
contracted labor or other services applicable to each Replacement for which such
request for disbursement is made. With each request Borrower shall certify that
all Replacements that have been the subject of prior disbursement requests have
been made in all material respects in accordance with all Legal Requirements.
Each request for disbursement shall include copies of invoices for all items or
materials purchased and all contracted labor or services provided that were the
subject of the immediately preceding request for disbursement and evidence
reasonably satisfactory to Lender of payment of all such amounts. Borrower shall
provide Lender evidence of completion of any Replacement that was the subject of
the immediately preceding disbursement, which evidence may include an Officer's
Certificate and shall be satisfactory to Lender in its reasonable judgment.
(d) Lender will disburse amounts to Borrower for payment of (or will
issue checks payable to) each contractor, supplier, materialman, mechanic,
subcontractor or other party to whom payment is due in connection with a
Replacement as directed by Borrower in the request for disbursement. In
addition, as a condition to any disbursement, Lender may require Borrower to
obtain lien waivers from each contractor, supplier, materialman, mechanic or
subcontractor who was to receive one or more payments in a total amount equal to
or greater than Fifty Thousand and No/100 Dollars ($50,000) for completion of
its work or delivery of its materials pursuant to the immediately preceding
disbursement. Any lien waiver delivered hereunder shall conform to the
requirements of applicable law and shall cover all work performed and materials
supplied (including equipment and fixtures but excluding retainage) for the
applicable Individual Property by that contractor, supplier, subcontractor,
mechanic or materialman through the date covered by the applicable disbursement
request.
(e) Lender will make disbursements from the Replacement Reserve
Account to pay for work constituting a portion of the work of a contractor or
supplier (rather than the completed work of such contractor or supplier) only if
the contract pursuant to which such work is being performed or supplied requires
payment upon completion of such portion of the work, (B) all other conditions in
this Agreement for disbursement have been satisfied, and (C) funds remaining in
the Replacement Reserve Account together with other funds or assurances
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reasonably satisfactory to Lender deposited or to be deposited with Lender and
available for such Replacements are, in Lender's reasonable judgment, sufficient
to complete such Replacement and other Replacements in progress when required.
(f) Borrower shall not make a request for disbursement from the
Replacement Reserve Account more frequently than twice in any calendar month and
(except in connection with the final disbursement) the total cost of all
Replacements in any request shall not be less than Twenty-Five Thousand and
No/100 Dollars ($25,000).
7.3.3 Performance of Replacements.
(a) Borrower shall make Replacements when required in order to keep
each Individual Property in condition and repair consistent with other first
class, full service hotel properties in the same market segment and under the
same franchisor in the metropolitan area in which the respective Individual
Property is located, as may be required from time to time by the applicable
Franchisor pursuant to the applicable Franchise Agreement, and to keep each
Individual Property or any portion thereof from deteriorating. Borrower shall
complete all Replacements in a good and workmanlike manner as soon as
practicable following the commencement of making each such Replacement.
(b) Lender reserves the right, at its option, to approve each
contract or work order with materialmen, mechanics, suppliers, subcontractors,
contractors or other parties providing labor or materials in connection with the
Replacements if amounts payable under each such contract or work order exceeds
$75,000. Upon Lender's request, Borrower shall assign any contract or
subcontract to Lender.
(c) Upon the occurrence and during the continuance of an Event of
Default, Lender shall have the option to withhold disbursement for such
unsatisfactory Replacement and to proceed under existing contracts or to
contract with third parties to complete such Replacement and to apply the
Replacement Reserve Fund toward the labor and materials necessary to complete
such Replacement, without providing any prior notice to Borrower and to exercise
any and all other remedies available to Lender upon an Event of Default
hereunder.
(d) In order to facilitate Lender's completion or making of the
Replacements pursuant to Section 7.3.3(c) above, Borrower grants Lender the
right, upon the occurrence and during the continuance of an Event of Default, to
enter onto any Individual Property and perform any and all work and labor
necessary to complete or make the Replacements and/or employ watchmen to protect
such Individual Property from damage. All sums so expended by Lender, to the
extent not from the Replacement Reserve Fund, shall be deemed to have been
advanced under the Loan to Borrower and secured by the Mortgages. For this
purpose Borrower constitutes and appoints Lender its true and lawful
attorney-in-fact with full power of substitution to complete or undertake the
Replacements in the name of Borrower. Such power of attorney shall be deemed to
be a power coupled with an interest and cannot be revoked; provided, that,
Lender shall not exercise such power of attorney until the expiration of fifteen
(15) days after Lender notifies Borrower of its intention to so exercise such
power of attorney. Borrower empowers said attorney-in-fact as follows: (i) to
use any funds in the Replacement Reserve Account for the purpose of making or
completing the Replacements; (ii) to make such
77
additions, changes and corrections to the Replacements as shall be necessary or
desirable to complete the Replacements; (iii) to employ such contractors,
subcontractors, agents, architects and inspectors as shall be required for such
purposes; (iv) to pay, settle or compromise all existing bills and claims which
are or may become Liens against any Individual Property, or as may be necessary
or desirable for the completion of the Replacements, or for clearance of title;
(v) to execute all applications and certificates in the name of Borrower which
may be required by any of the contract documents; (vi) to prosecute and defend
all actions or proceedings in connection with any Individual Property or the
rehabilitation and repair of any Individual Property; and (vii) to do any and
every act which Borrower might do in its own behalf to fulfill the terms of this
Agreement.
(e) Nothing in this Section 7.3.3 shall: (i) make Lender responsible
for making or completing the Replacements; (ii) require Lender to expend funds
in addition to the Replacement Reserve Fund to make or complete any Replacement;
(iii) obligate Lender to proceed with the Replacements; or (iv) obligate Lender
to demand from Borrower additional sums to make or complete any Replacement.
(f) Borrower shall permit Lender and Lender's agents and
representatives (including, without limitation, Lender's engineer, architect, or
inspector) or third parties making Replacements pursuant to this Section 7.3.3
to enter onto each Individual Property during normal business hours (subject to
the rights of tenants under their Leases and of hotel patrons) to inspect the
progress of any Replacements and all materials being used in connection
therewith, to examine all plans and shop drawings relating to such Replacements
which are or may be kept at each Individual Property, and, subject to the terms
and conditions set forth in Section 7.3.3(d), to complete any Replacements made
pursuant to this Section 7.3.3. Borrower shall cause all contractors and
subcontractors to cooperate with Lender or Lender's representatives or such
other Persons described above in connection with inspections described in this
Section 7.3.3(f) or the completion of Replacements pursuant to this Section
7.3.3.
(g) Lender may require an inspection of the Individual Property at
Borrower's expense prior to making a disbursement from the Replacement Reserve
Account in excess of $250,000 in order to verify the work performed in
connection with the Replacements for which reimbursement is sought. Lender may
require that such inspection be conducted by an appropriate independent
qualified professional selected by Lender and/or may require a copy of a
certificate of work performed by an independent qualified professional
acceptable to Lender prior to the disbursement of any amounts from the
Replacement Reserve Account. Borrower shall pay the expense of the inspection as
required hereunder, whether such inspection is conducted by Lender or by an
independent qualified professional.
(h) The Replacements and all materials, equipment, fixtures, or any
other item comprising a part of any Replacement shall be constructed, installed
or completed, as applicable, free and clear of all mechanic's, materialman's or
other liens (except for those Liens existing on the date of this Agreement which
have been approved in writing by Lender and those Liens being contested by
Borrowers in accordance with the terms and conditions of the Loan Documents).
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(i) All Replacements shall comply with all applicable Legal
Requirements of all Governmental Authorities having jurisdiction over the
applicable Individual Property and applicable insurance requirements including,
without limitation, applicable building codes, special use permits,
environmental regulations, and requirements of insurance underwriters.
(j) In addition to any insurance required under the Loan Documents,
Borrower shall provide or cause to be provided workmen's compensation insurance,
builder's risk, and public liability insurance and other insurance to the extent
required under applicable law in connection with a particular Replacement and
not provided by Borrower's existing insurance coverage. All such policies shall
be in form and amount reasonably satisfactory to Lender. All such policies which
can be endorsed with standard mortgagee clauses making losses payable to Lender
or its assigns shall be so endorsed. Certified copies of such policies shall be
delivered to Lender.
7.3.4 Failure to Make Replacements.
(a) Upon the occurrence of an Event of Default, Lender may use the
Replacement Reserve Fund (or any portion thereof) for any purpose, including but
not limited to completion of the Replacements as provided in Section 7.3.3, or
for any other repair or replacement to any Individual Property or toward payment
of the Debt in such order, proportion and priority as Lender may determine in
its sole discretion. Lender's right to withdraw and apply the Replacement
Reserve Funds shall be in addition to all other rights and remedies provided to
Lender under this Agreement and the other Loan Documents.
(b) Nothing in this Agreement shall obligate Lender to apply all or
any portion of the Replacement Reserve Fund on account of an Event of Default to
payment of the Debt or in any specific order or priority.
7.3.5 Balance in the Replacement Reserve Account. The insufficiency
of any balance in the Replacement Reserve Account shall not relieve Borrower
from its obligation to fulfill all preservation and maintenance covenants in the
Loan Documents.
7.3.6 Indemnification. Borrower shall indemnify Lender and hold
Lender harmless from and against any and all actions, suits, claims, demands,
liabilities, losses, damages, obligations and costs and expenses (including
litigation costs and reasonable attorneys fees and expenses) arising from or in
any way connected with the performance of the Replacements except to the extent
arising from the fraud, gross negligence, illegal acts or willful misconduct of
Lender, its agents, employees or contractors. Borrower shall assign to Lender
all rights and claims Borrower may have against all persons or entities
supplying labor or materials in connection with the Replacements; provided,
however, that Lender may not pursue any such right or claim unless an Event of
Default has occurred and remains uncured.
Section 7.4 Ground Lease Escrow Fund. On the date hereof Borrower is
depositing with Lender an amount equal to $67,000 and thereafter Borrower shall
pay to Lender, together with the scheduled payment of interest under the Loan
each month, an amount that is estimated by Lender to be due and payable by
Borrower under the Ground Leases for all rent and any and all other charges
which may be due by Borrower under the Ground Leases in order to
79
accumulate with Lender sufficient funds to pay all sums payable under the Ground
Leases at least ten (10) Business Days prior to the dates due (said amounts,
hereinafter called the "Ground Lease Escrow Fund"). Lender will apply the Ground
Lease Escrow Fund to payments of rent due under the Ground Leases prior to the
delinquency thereof. Such deposit may be increased by Lender in the amount
Lender deems is necessary in its reasonable discretion based on any increases in
the rent due under any of the Ground Leases.
Section 7.5 Management Agreement Escrow. On the date hereof,
Borrower shall deposit with Lender an amount equal to Lender's reasonable
estimate of Debt Service for the Release Amounts attributable to the ▇▇▇▇
Property, the Schaumburg Property and the Phoenix Property (assuming the
Applicable Interest Rate for all Components is the Maximum Interest Rate) for
two (2) months (the "Management Agreement Escrow Fund"). The amount of the
Management Escrow Fund shall be adjusted annually on the anniversary of the date
hereof to reflect the then current Applicable Interest Rate and amounts payable
to the Reserve Funds. Lender shall be entitled to apply any amounts then on
deposit in the Management Agreement Escrow Fund to cure any Default with respect
to the payment of regularly scheduled monthly payments of principal or interest
due under the Note and monthly deposits to the Reserve Funds hereunder (Lender's
application of such funds to cure a monetary default hereinafter referred to as
a "Monetary Default Cure"). Borrower shall, within five (5) Business Days after
receiving notice from Lender that Lender has exercised a Monetary Default Cure,
deposit into the Management Agreement Escrow Fund an amount equal to the amount
of funds applied by Lender in connection with the Monetary Default Cure.
Section 7.6 Parking Escrow Fund. In the event that (a) the licensee
under the license for the use of certain parking facilities in connection with
the Individual Property known as Wyndham Buttes (the "Buttes Parking
Facilities") or (b) the lessor under the lease of certain parking facilities
adjacent to the Individual Property known as Wyndham Emerald Plaza (the "Emerald
Parking Facilities") shall exercise its right thereunder to terminate such
lease, then the applicable Individual Borrower shall (i) promptly notify Lender
of such event; (ii) secure any alternative parking arrangements necessary to
ensure the continued compliance of the Individual Property with all Legal
Requirements and (iii) deposit with Lender on each Payment Date after the
receipt by the applicable Individual Borrower of notice of the exercise of such
right an amount equal to Lender's reasonable estimate of the market rate monthly
rental necessary to secure alternative parking facilities in replacement of the
Buttes Parking Facilities or the Emerald Parking Facilities, as applicable (such
amounts being hereinafter referred to as the "Parking Escrow Fund"). Lender will
apply the Parking Escrow Fund to the payments of rent for the alternative
parking arrangements described in clause (ii) above and will release to Borrower
all amounts remaining on deposit with Lender as part of the Parking Escrow Fund
applicable to such Individual Property upon Borrower's submission to Lender of
(y) evidence reasonably satisfactory to Lender that sufficient alternative
parking has been secured (by lease, purchase or otherwise) to ensure that such
Individual Property will continue to have the parking required to satisfy all
Legal Requirements without the Buttes Parking Facilities or the Emerald Parking
Facilities, as applicable, and (z) shall execute and deliver to Lender such
documents and instruments and take such other actions as Lender shall determine
to be necessary or advisable to grant Lender a perfected first priority Lien
and/or first priority security interest (as applicable) in the documents or
instruments with respect to such alternative parking.
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Section 7.7 Reserve Funds, Generally.
(a) Borrower grants to Lender a first-priority perfected security
interest in each of the Reserve Funds and any and all monies now or hereafter
deposited in each Reserve Fund as additional security for payment of the Debt.
Until expended or applied or distributed in accordance herewith, the Reserve
Funds shall constitute additional security for the Debt.
(b) Upon the occurrence and during the continuance of an Event of
Default, Lender may, in addition to any and all other rights and remedies
available to Lender, apply any sums then present in any or all of the Reserve
Funds to the payment of the Debt in any order in its sole discretion.
(c) The Reserve Funds shall not constitute trust funds.
(d) Borrower shall not, without obtaining the prior written consent
of Lender, further pledge, assign or grant any security interest in any Reserve
Fund or the monies deposited therein or permit any lien or encumbrance to attach
thereto, or any levy to be made thereon, or any UCC-1 Financing Statements,
except those naming Lender as the secured party, to be filed with respect
thereto.
(e) Lender shall not be liable for any loss sustained on the
investment of any funds constituting the Replacement Reserve Fund in one or more
Permitted Investments.
Section 7.8 Permitted Investments. Sums on deposit in the Reserve
Funds shall not be invested except in Permitted Investments. Borrower shall have
the right from time to time to direct Lender to invest sums on deposit in the
Reserve Funds and amounts held by Lender as Net Proceeds pursuant to Section
6.4(b)(ii) hereof or as Casualty Retainage pursuant to Section 6.4(b)(iv) hereof
in Permitted Investments; provided, however, in no event shall Borrower direct
Lender to make a Permitted Investment if the maturity date of that Permitted
Investment is later than the date on which the invested sums are required for
payment of an obligation for which the Reserve Funds were created or the Net
Proceeds or the Casualty Retainage are needed, as the case may be. Absent
express investment direction from Borrower, account balances shall be uninvested
and maintained as cash. Borrower hereby irrevocably authorizes and directs
Lender to apply any income earned from Permitted Investments to the respective
Reserve Funds, Net Proceeds or Casualty Retainage, as applicable. Any actual
losses or principal sustained on a liquidation of a Permitted Investment shall
be deposited into the respective Reserve Fund or as Casualty Retainage by
Borrower no later than three (3) Business Days following such liquidation.
Borrower shall be responsible for payment of any federal, state or local income
or other tax applicable to income earned from Permitted Investments.
VIII. DEFAULTS
Section 8.1 Event of Default.
(a) Each of the following events shall constitute an event of
default hereunder (an "Event of Default"):
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(i) subject to the terms and provisions of Section 2.5.3. hereof, if
(A) the Debt is not paid in full on the Maturity Date, (B) if any
regularly scheduled monthly payment of principal or interest due under the
Note or deposits to the Tax Insurance Escrow Fund, the Ground Lease Escrow
Fund, the Replacement Reserve Fund or the Parking Escrow Fund are not paid
in full on or before the related Payment Date, (C) any amounts to be
deposited by Borrower into the Management Agreement Escrow Fund pursuant
to Section 7.5 are not so deposited within five (5) Business Days after
receiving notice from Lender that Lender has exercised a Monetary Default
Cure or Lender exercises a Monetary Default Cure more than twice in any
twelve (12) month period, or (D) any other portion of the Debt is not paid
within ten (10) days after Borrower's receipt of written notice of
non-payment from Lender;
(ii) subject to the terms and provisions of Section 2.5.3. hereof,
if any of the Taxes or Other Charges are not paid when the same are due
and payable;
(iii) if the Policies are not kept in full force and effect, or if
certified copies of the Policies are not delivered to Lender upon request;
(iv) except as specifically permitted hereunder, if Borrower
transfers or encumbers any portion of the Properties without Lender's
prior written consent or otherwise violates the provisions Section 5.2.13
hereof or of Article 6 of any Mortgage;
(v) if any representation or warranty made by Borrower herein or in
any other Loan Document, or in any report, certificate, financial
statement or other instrument, agreement or document furnished to Lender
shall have been false or misleading in any material respect as of the date
the representation or warranty was made; provided, however, if such untrue
representation or warranty is susceptible of being cured, Borrower shall
have the right to cure such representation or warranty within thirty (30)
days of receipt of notice from Lender; or in the case of any such
representation or warranty that is susceptible of cure but cannot
reasonably be cured within such 30-day period and Borrower shall have (A)
commenced to cure or cause to be cured such representation or warranty
within such 30-day period, (B) submitted to Lender an Officer's
Certificate setting forth an explanation of the inability to cure such
Default within such 30-day period and describing Borrower's past and
intended efforts to cure such Default and (C) thereafter diligently and
expeditiously proceeds to cure the same, such 30-day period shall be
extended for up to an additional ninety (90) days;
(vi) if any Individual Borrower, Indemnitor or any guarantor under
any guaranty issued in connection with the Loan shall make an assignment
for the benefit of creditors;
(vii) if a receiver, liquidator or trustee shall be appointed for
any Individual Borrower or Indemnitor or if any Individual Borrower or
Indemnitor shall be adjudicated a bankrupt or insolvent, or if any
petition for bankruptcy, reorganization or arrangement pursuant to federal
bankruptcy law, or any similar federal or state law, shall be filed by or
against, consented to, or acquiesced in by, such Individual Borrower or
Indemnitor, or if any proceeding for the dissolution or liquidation of
such Individual Borrower or
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Indemnitor shall be instituted; provided, however, if such appointment,
adjudication, petition or proceeding was involuntary and not consented to
by such Individual Borrower or Indemnitor, upon the same not being
discharged, stayed or dismissed within sixty (60) days;
(viii) if Borrower attempts to assign its rights under this
Agreement or any of the other Loan Documents or any interest herein or
therein in contravention of the Loan Documents;
(ix) if Borrower breaches any of its respective negative covenants
contained in Section 5.2 or any covenant contained in Section 4.1.30
hereof;
(x) with respect to any term, covenant or provision set forth
herein, or in any other Loan Document, which specifically contains a
notice requirement or grace period, if Borrower or Indemnitor shall be in
default under such term, covenant or condition after the giving of such
notice or the expiration of such grace period;
(xi) if any of the assumptions contained in the Insolvency Opinion,
or in any other "non-consolidation" opinion delivered to Lender in
connection with the Loan, or in any other "non-consolidation" opinion
delivered subsequent to the closing of the Loan, is or shall become untrue
in any material respect;
(xii) except as expressly permitted pursuant to the terms and
conditions of the Loan Documents, if without Lender's prior written
consent, (A) any Manager that is an Affiliate of Borrower resigns or any
Manager is removed, or (B) the ownership, management or control of any
Manager that is an Affiliate of Borrower is transferred (other than
pursuant to Transfers which do not result in a Change in Control of such
Manager) or Transfers with respect to any such Manager that are permitted
with respect to an Individual Borrower pursuant to Section 5.2.13(ii) and
(iii) or (d) hereof, or (C) there is any material adverse change in the
terms and provisions of any Management Agreement (or any successor
management agreement);
(xiii) if a material default has occurred and continues beyond any
applicable cure period under any Management Agreement (or any successor
management agreement) if such default permits the Manager thereunder to
terminate or cancel such Management Agreement (or any successor management
agreement);
(xiv) except as expressly permitted pursuant to the terms and
conditions of the Loan Documents, if without Lender's prior consent, there
is any material adverse change in the terms and provisions of any
Franchise Agreement (or any successor franchise agreement);
(xv) if a material default has occurred and continues beyond any
applicable cure period under any Franchise Agreement (or any successor
franchise agreement) if such default permits the Franchisor thereunder to
terminate or cancel such Franchise Agreement (or any successor Franchise
Agreement);
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(xvi) if Borrower ceases to do business as a hotel at any Individual
Property or terminates such business for any reason whatsoever (other than
temporary cessation in connection with any continuous and diligent
renovation or restoration of such Individual Property following a
casualty, condemnation or other event beyond the reasonable control of
Borrower);
(xvii) if Borrower shall fail to complete the capital improvements
in accordance with the 1999-2000 Capital Plan set forth on Schedule VI
hereto within the applicable calendar years (subject to delay due to force
majeure); or
(xviii) if Borrower or Indemnitor shall continue to be in Default
under any of the other terms, covenants or conditions of this Agreement or
any other Loan Document not specified in subsections (i) to (xvii) above,
for ten (10) days after notice to Borrower from Lender, in the case of any
Default which can be cured by the payment of a sum of money, or for thirty
(30) days after notice from Lender in the case of any other Default;
provided, however, that if such non-monetary Default is susceptible of
cure but cannot reasonably be cured within such 30-day period and provided
further that Borrower shall have provided Lender with an Officer's
Certificate setting forth an explanation of the inability to cure such
Default within such 30-day period and describing Borrower's past and
intended efforts to cure such Default and Borrower shall have commenced to
cure such Default within such 30-day period and thereafter diligently and
expeditiously proceeds to cure the same, such 30-day period shall be
extended for such time as is reasonably necessary for Borrower in the
exercise of due diligence to cure such Default, such additional period not
to exceed ninety (90) days.
(b) Upon the occurrence of and during the continuance of an Event of
Default (other than an Event of Default described in clauses (vi) or (vii) and
at any time thereafter Lender may, in addition to any other rights or remedies
available to it pursuant to this Agreement and the other Loan Documents or at
law or in equity, Lender may take such action, without notice or demand, that
Lender deems advisable to protect and enforce its rights against Borrower and in
and to all or any Individual Property, including, without limitation, declaring
the Debt to be immediately due and payable, and Lender may enforce or avail
itself of any or all rights or remedies provided in the Loan Documents against
Borrower and any or all of the Properties, including, without limitation, all
rights or remedies available at law or in equity; and upon any Event of Default
described in clauses (vi) or (vii) above, the Debt and all other obligations of
Borrower hereunder and under the other Loan Documents shall immediately and
automatically become due and payable, without notice or demand, and Borrower
hereby expressly waives any such notice or demand, anything contained herein or
in any other Loan Document to the contrary notwithstanding.
Section 8.2 Remedies.
(a) Upon the occurrence and during the continuance of an Event of
Default, all or any one or more of the rights, powers, privileges and other
remedies available to Lender against Borrower under this Agreement or any of the
other Loan Documents executed and delivered by, or applicable to, Borrower or at
law or in equity may be exercised by Lender at any time and from time to time,
whether or not all or any of the Debt shall be declared due and
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payable, and whether or not Lender shall have commenced any foreclosure
proceeding or other action for the enforcement of its rights and remedies under
any of the Loan Documents with respect to all of the Properties or any
Individual Property. Any such actions taken by Lender shall be cumulative and
concurrent and may be pursued independently, singly, successively, together or
otherwise, at such time and in such order as Lender may determine in its sole
discretion, to the fullest extent permitted by law, without impairing or
otherwise affecting the other rights and remedies of Lender permitted by law,
equity or contract or as set forth herein or in the other Loan Documents.
Without limiting the generality of the foregoing, Borrower agrees that if an
Event of Default is continuing to the extent permitted by applicable law, (i)
Lender is not subject to any "one action" or "election of remedies" law or rule,
and (ii) all liens and other rights, remedies or privileges provided to Lender
shall remain in full force and effect until Lender has exhausted all of its
remedies against the Properties and each Mortgage has been foreclosed, sold
and/or otherwise realized upon in satisfaction of the Debt or the Debt has been
paid in full.
(b) With respect to Borrower and the Properties, nothing contained
herein or in any other Loan Document shall be construed as requiring Lender to
resort to any Individual Property for the satisfaction of any of the Debt in
preference or priority to any other Individual Property, and Lender may seek
satisfaction out of all of the Properties or any part thereof, in its absolute
discretion in respect of the Properties of the Debt. In addition, to the extent
permitted by applicable law, Lender shall have the right from time to time to
partially foreclose the Mortgages in any manner and for any amounts secured by
the Mortgages then due and payable as determined by Lender in its sole
discretion including, without limitation, the following circumstances: (i) in
the event Borrower defaults beyond any applicable grace period in the payment of
one or more scheduled payments of principal and interest, Lender may foreclose
one or more of the Mortgages to recover such delinquent payments, or (ii) in the
event Lender elects to accelerate less than the entire outstanding principal
balance of the Loan, Lender may foreclose one or more of the Mortgages to
recover so much of the principal balance of the Loan as Lender may accelerate
and such other sums secured by one or more of the Mortgages as Lender may elect.
Notwithstanding one or more partial foreclosures, the Properties shall remain
subject to the Mortgages to secure payment of sums secured by the Mortgages and
not previously recovered.
(c) Lender shall have the right from time to time to sever the Note
and the other Loan Documents into two or more separate notes, mortgages and
other security documents (the "Severed Loan Documents") in such denominations as
Lender shall determine in its sole discretion for purposes of evidencing and
enforcing its rights and remedies provided hereunder. Borrower shall execute and
deliver to Lender from time to time, promptly after the request of Lender, a
severance agreement and such other documents as Lender shall request in order to
effect the severance described in the preceding sentence, all in form and
substance reasonably satisfactory to Lender. Borrower hereby absolutely and
irrevocably appoints Lender as its true and lawful attorney, coupled with an
interest, in its name and stead to make and execute all documents necessary or
desirable to effect the aforesaid severance, Borrower ratifying all that its
said attorney shall do by virtue thereof; provided, however, Lender shall not
make or execute any such documents under such power until three (3) days after
notice has been given to Borrower by Lender of Lender's intent to exercise its
rights under such power. Except as may be required in connection with a
securitization pursuant to Section 9.1 hereof, (i) Borrower shall not be
85
obligated to pay any costs or expenses incurred in connection with the
preparation, execution, recording or filing of the Severed Loan Documents, and
(ii) the Severed Loan Documents shall not contain any representations,
warranties or covenants not contained in the Loan Documents and any such
representations and warranties contained in the Severed Loan Documents will be
given by Borrower only as of the Closing Date.
Section 8.3 Remedies Cumulative; Waivers. The rights, powers and
remedies of Lender under this Agreement shall be cumulative and not exclusive of
any other right, power or remedy which Lender may have against Borrower pursuant
to this Agreement or the other Loan Documents, or existing at law or in equity
or otherwise. Lender's rights, powers and remedies may be pursued singly,
concurrently or otherwise, at such time and in such order as Lender may
determine in Lender's sole discretion. No delay or omission to exercise any
remedy, right or power accruing upon an Event of Default shall impair any such
remedy, right or power or shall be construed as a waiver thereof, but any such
remedy, right or power may be exercised from time to time and as often as may be
deemed expedient. A waiver of one Default or Event of Default with respect to
Borrower shall not be construed to be a waiver of any subsequent Default or
Event of Default by Borrower or to impair any remedy, right or power consequent
thereon.
IX. SPECIAL PROVISIONS
Section 9.1 Sale of Notes and Securitization. At the request of the
holder of the Note and, to the extent not already required to be provided by
Borrower under this Agreement, Borrower shall use reasonable efforts to satisfy
the market standards to which the holder of the Note customarily adheres or
which may be reasonably required in the marketplace or by the Rating Agencies in
connection with the sale of the Note or participations therein or the first
successful securitization (such sale and/or securitization, the
"Securitization") of rated single or multi-class securities (the "Securities")
secured by or evidencing ownership interests in the Note and the Mortgages,
including, without limitation, to:
(a) (i) provide such financial and other information with respect to
the Properties, Borrower, Indemnitor and the Managers, (ii) provide all budgets
relating to the Properties and (iii) to permit such site inspections,
appraisals, market studies, environmental reviews and reports (Phase I reports
and, if appropriate, Phase II reports), engineering reports and other due
diligence investigations of the Properties, as may be reasonably requested by
the holder of the Note or the Rating Agencies or as may be necessary or
appropriate in connection with the Securitization (the "Provided Information"),
provided, however, that Phase II reports and other invasive testing may not be
performed at the Properties until Borrower has received reasonably appropriate
indemnifications and evidence of insurance for any Person preparing such report
or performing such testing, together, if customary, with appropriate
verification and/or consents of the Provided Information through letters of
auditors or opinions of counsel of independent attorneys acceptable to Lender
and the Rating Agencies;
(b) if requested by the holder of the Note or the Rating Agencies,
cause counsel to render updated opinions, which may be relied upon by the holder
of the Note, the Rating Agencies and their respective counsel, agents and
representatives, as to non-consolidation or any other opinion customary in
securitization transactions, which counsel shall be Akin,
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Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P. or such other counsel reasonably
satisfactory to the holder of the Note and the Rating Agencies, and which
opinions or updates shall be reasonably satisfactory to-the holder of the Note
and the Rating Agencies;
(c) update the representations and warranties made in the Loan
Documents as of the closing date of the Securitization with respect to the
Properties, Borrower, Indemnitor and the Loan Documents as may be reasonably
requested by the holder of the Note or the Rating Agencies and consistent with
the facts covered by such representations and warranties as they exist on the
date thereof; and
(d) execute such amendments to the Loan Documents and organizational
documents as may be requested by the holder of the Note or the Rating Agencies
or otherwise to effect the Securitization (including, without limitation, such
amendments to Loan Documents as shall be necessary or advisable to re-allocate
the principal amount of each of the Components to correspond to the related
classes of Securities); provided, however, that Borrower shall not be required
to modify or amend any Loan Document or organizational document of Borrower or
its Affiliates if such modification or amendment would (i) have a material
adverse economic effect on Borrower or its Affiliates or (ii) alter or modify
any financial term of the Loan (including interest rate, term and principal
amount) or materially increase Borrower's obligations or the obligations of
Borrower's Affiliates or materially decrease the rights of Borrower or
Borrower's Affiliates thereunder.
Borrower shall not be responsible for any costs and expenses
incurred in connection with the Securitization other than the fees and
disbursements of Borrower's counsel.
Section 9.2 Securitization Indemnification.
(a) Borrower and Indemnitor understand that certain of the Provided
Information may be included in disclosure documents in connection with the
Securitization, including, without limitation, a prospectus, prospectus
supplement or private placement memorandum (each, a "Disclosure Document") and
may also be included in filings with the Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended (the "Securities Act"), or
the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), or
provided or made available to investors or prospective investors in the
Securities, the Rating Agencies, and service providers relating to the
Securitization. In the event that the Disclosure Document is required to be
revised prior to the sale of all Securities, Borrower and Indemnitor will
cooperate with the holder of the Note in updating the Disclosure Document by
providing all current information necessary to keep the Disclosure Document
accurate and complete in all material respects.
(b) Borrower and Indemnitor agree to provide in connection with each
of (i) a preliminary and a final private placement memorandum, (ii) a
preliminary and final prospectus or prospectus supplement or (iii) such other
offering materials as may be used for the securitization of the Loan (such
materials described in clauses (i), (ii) or (iii), as applicable, being herein
after referred to collectively as the "Offering Materials") an indemnification
certificate (A) certifying that Borrower and Indemnitor have carefully examined
the Offering Materials, including without limitation, the sections entitled
"Summary of Offering Memorandum", "Risks
87
Relating to the Mortgage Loan and the Mortgaged Properties", "Risks Relating to
Real Estate Investments", "Description of the Mortgaged Properties", "Property
and Loan Characteristics", "Property Operating Information", "Description of the
Mortgage Loan", "Description of the Mortgagors", "Description of the Managers
and the Management Agreements", "Description of the Franchise Licenses",
"Description of Assignment of Management Agreements and Subordination of
Management Fees", "Description of Consent and Assignment of Agreements for
Non-Affiliate Managers", "Description of Interest Rate Cap Agreement", "Wyndham
International, Inc.", and "Certain Legal Aspects of the Mortgage Loan", to the
extent such Offering Materials and such sections in any manner relate to the
Loan, the Loan Documents, Borrower, Indemnitor, any Affiliates of Borrower or
Indemnitor, any other parties to any of the Loan Documents other than Lender,
Servicer or any Affiliates thereof, the Properties or any other collateral for
the Loan, any Franchisor (or Affiliates thereof) or Franchise Agreement, or any
Manager (or Affiliates thereof) or Management Agreement and such sections (and
any other sections reasonably requested) do not (and with respect to any
portions of such Offering Materials prepared in reliance upon the reports of
third parties to the Best Knowledge (hereinafter defined) of Borrower and
Indemnitor do not) contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements made, in the
light of the circumstances under which they were made, not misleading, (B)
indemnifying Lender, each other Indemnified Person (as defined herein), Bear,
▇▇▇▇▇▇▇ & Co. Inc. ("BS & Co."), Bear ▇▇▇▇▇▇▇ Commercial Mortgage Inc. ("BSCM"),
Bear ▇▇▇▇▇▇▇ Commercial Mortgage Securities Inc. ("BSCMS"), Bear ▇▇▇▇▇▇▇ Real
Estate Group, Inc. ("BSREG"), Bear ▇▇▇▇▇▇▇ International Limited ("BSIL"), the
affiliate of Lender that has filed the registration statement relating to the
securitization (the "Registration Statement'), each of its directors, each of
its officers who have signed the Registration Statement and each person or
entity who controls the affiliate within the meaning of Section 15 of the
Securities Act, or Section 20 of the Exchange Act (Lender, such other
Indemnified Persons, BS & Co., BSCM, BSIL, BSCMS, BSREG, and such affiliates,
directors, officers, person or entity being hereinafter referred to collectively
as the "Bear ▇▇▇▇▇▇▇ Group"), and Lender, each of its directors and each person
or entity who controls Lender within the meaning of Section 15 of the Securities
Act and Section 20 of the Exchange Act (collectively, the "Underwriter Group")
for any losses, claims, damages or liabilities (collectively, the "Liabilities")
to which Lender, the Bear ▇▇▇▇▇▇▇ Group or the Underwriter Group may become
subject insofar as the Liabilities arise out of or are based upon any untrue
statement or misstatement or alleged untrue statement or misstatement of any
material fact contained in such sections (other than any such statement or
misstatement made in reliance upon the reports of third parties that do not to
the Best Knowledge of Borrower or Indemnitor, contain any untrue statement or
misstatement of a material fact or omit to state a material fact necessary in
order to make the statements made, in light of the circumstances under which
they were made, not misleading) or arise out of or are based upon the omission
or alleged omission to state therein a material fact that is known to Borrower
or Indemnitor or that, with the exercise of customary, reasonable efforts,
should be known to Borrower or Indemnitor, which fact is required to be stated
in such sections or necessary in order to make the statements in such sections,
in light of the circumstances under which they were made, not misleading and (C)
agreeing to reimburse Lender, the Bear ▇▇▇▇▇▇▇ Group and the Underwriter Group
for any legal or other expenses reasonably incurred by Lender, the Bear ▇▇▇▇▇▇▇
Group or the Underwriter Group in connection with investigating or defending the
Liabilities; provided, however, that Borrower and Indemnitor will be liable in
any such case under clauses (B) or (C) above only to the extent that any such
88
loss, claim, damage or liability arises out of or is based upon any such untrue
statement, misstatement or omission made therein in reliance upon and in
conformity with information furnished to Lender by or on behalf of PAH,
Indemnitor or Borrower in connection with the preparation of the Offering
Materials (including, without limitation, financial statements of PAH,
Indemnitor or Borrower, operating statements, rent rolls, environmental site
assessment reports and property condition reports with respect to the Properties
but excluding any projections made in good faith by PAH, Indemnitor or
Borrower); and provided further that this Section 9.2 shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement, misstatement or omission or alleged untrue statement,
misstatement or omission made in reliance upon and in conformity with written
information furnished to the Borrower, Indemnitor or PAH by Lender, any member
of the Bear ▇▇▇▇▇▇▇ Group or any member of the Underwriter Group expressly for
use in the Offering Materials unless Borrower or Indemnitor fails to correct any
such untrue statement, misstatement or omission with respect to PAH, Indemnitor,
Borrower or any of the Properties that is known to Borrower or Indemnitor or
that, with the exercise of customary, reasonable efforts, should be known to
Borrower or Indemnitor. The foregoing indemnity with respect to any untrue
statement or misstatement contained in or omission from preliminary Offering
Materials shall not inure to the benefit of any member of the Bear ▇▇▇▇▇▇▇ Group
or the Underwriting Group (or any person controlling such member of the Bear
▇▇▇▇▇▇▇ Group or the Underwriting Group) from whom the person asserting any such
loss, liability, claim, damage or expense purchased any of the securities which
are the subject thereof if the Borrower or Indemnitor shall sustain the burden
of proving that any such loss, liability, claim, damage or expense resulted from
the fact that such person was not provided with a copy of the final Offering
Materials at or prior to the written confirmation of the sale of such securities
to such person and the loss, liability, claim, damage or expense resulted from
an untrue statement or misstatement contained in, or omission from, preliminary
Offering Materials that was corrected in the final Offering Materials. The
liability of Borrower and Indemnitor under the indemnification provided for in
clauses (B) and (C) above will be in addition to any liability which Borrower or
Indemnitor may otherwise have. Moreover, the indemnification provided for in
clauses (B) and (C) above shall be effective if Borrower and Indemnitor, (i)
fail to deliver an indemnification certificate described in clause (A) above
within a reasonable time after delivery of the applicable Offering Materials to
Borrower and Indemnitor for review upon the request for the indemnification
certificate and shall be applicable based on information previously provided by
PAH, Indemnitor, Borrower or Affiliates, as updated and corrected, (ii) do not
provide the indemnification certificate, unless the failure to deliver the
indemnification certificate, without exceptions thereto is due to any member of
the Bear ▇▇▇▇▇▇▇ Group or Underwriter Group failing to correct any actual or
potential untrue statement, misstatement or omission identified by Borrower or
Indemnitor prior to the delivery of the final Offering Materials to investors
and Borrower and Indemnitor shall have delivered the indemnification certificate
excepting therefrom any such untrue statement, misstatement or omission. For
purposes of this Section 9.2 only, the term "Best Knowledge" shall mean that (1)
Borrower and Indemnitor have examined the applicable third party report, (2) the
reliance by Borrower and Indemnitor on such reports is consistent with the
standard of care exercised by owners and managers of properties similar to the
Properties, and (3) Borrower and Indemnitor have no knowledge of any facts or
circumstances which would render the reliance thereon unjustified.
(c) In connection with filings under the Exchange Act, Borrower and
Indemnitor agree to (i) indemnify the Bear ▇▇▇▇▇▇▇ Group and the Underwriter
Group for
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Liabilities to which Lender, the Bear ▇▇▇▇▇▇▇ Group or the Underwriter Group may
become subject insofar as the Liabilities arise out of or are based upon any
untrue statement or misstatement or alleged untrue statement or misstatement of
any material fact that is known to Borrower or Indemnitor or that, with the
exercise of customary, reasonable efforts, should be known to Borrower or
Indemnitor, which fact is required to be stated in the Provided Information in
order to make the statements in the Provided Information, in light of the
circumstances under which they were made not misleading or arise out of or are
based upon the omission or alleged omission to state in the Provided Information
a material fact that is known to Borrower or Indemnitor or that, with the
exercise of customary, reasonable efforts, should be known to Borrower or
Indemnitor, which fact is required to be stated in the Provided Information in
order to make the statements in the Provided Information, in light of the
circumstances under which they were made, not misleading (other than any such
statement, misstatement or omission made in reliance upon the reports of third
parties that do not, to the Best Knowledge of Borrower and Indemnitor, contain
any untrue statement or misstatement of a material fact or omit to state a
material fact necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading) and (ii) reimburse the
Bear ▇▇▇▇▇▇▇ Group or the Underwriter Group for any legal or other expenses
reasonably incurred by Lender, the Bear ▇▇▇▇▇▇▇ Group or the Underwriter Group
in connection with defending or investigating the Liabilities.
(d) The foregoing indemnity shall not apply with respect to any
Liabilities that arise out of or are based upon any untrue statement,
misstatement or omission or any alleged untrue statement, misstatement or
omission to state in the Provided Information a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, if such untrue
statement, misstatement or omission or alleged untrue statement, misstatement or
omission related to statements or information that do not accurately reflect
Provided Information or any corrections or updates to Provided Information which
were provided prior to the delivery of the final Offering Materials to investors
and neither Borrower nor Indemnitor has been given reasonable opportunity to
review the proposed filing under the Exchange Act and to correct such untrue
statement, misstatement or omission. In no event shall the indemnification,
contribution or reimbursement obligations of Borrower or Indemnitor under this
Section 9.2 apply to any filings made under the Exchange Act after the initial
filings, if any, are made.
(e) Borrower and Indemnitor also agree that no Indemnified Person
shall have any liability to Borrower or Indemnitor for or in connection with the
Loans unless and to the extent that it is finally judicially determined that
liability for losses, claims, damages, liabilities or expenses incurred by
Borrower or Indemnitor resulted directly from the fraud, illegal acts, gross
negligence or willful misconduct of such Indemnified Person.
(f) Promptly after receipt by an Indemnified Person of notice of any
claim or the commencement of any action, the Indemnified Person shall, if a
claim in respect thereof is to be made against Borrower or Indemnitor notify
such entity in writing of the claim or the commencement of that action;
provided, however, that the failure to notify Borrower or Indemnitor (as
applicable) shall not relieve it from any liability which it may have under the
indemnification provisions of this Section 9.2 except to the extent that it has
been materially prejudiced by such failure and, provided further that the
failure to notify Borrower or Indemnitor
90
(as applicable) shall not relieve it from any liability which it may have to an
Indemnified Person otherwise than under the provisions of this Section 9.2. If
any such claim or action shall be brought against an Indemnified Person, and it
shall notify Borrower or Indemnitor (as applicable) thereof, Borrower or
Indemnitor (as applicable) shall be entitled to participate therein and, to the
extent that it wishes, assume the defense thereof with counsel reasonably
satisfactory to the Indemnified Person. After notice from Borrower or Indemnitor
(as applicable) to the Indemnified Person of its election to assume the defense
of such claim or action, such entity shall not be liable to the Indemnified
Person for any legal or other expenses subsequently incurred by the Indemnified
Person in connection with the defense thereof except as provided in the
following sentence. The Indemnified Person shall have the right to employ
separate counsel in any such action and to participate in the defense thereof
but the fees and expenses of such counsel shall be at the expense of such
Indemnified Person unless: (i) the employment thereof has been specifically
authorized by Borrower or Indemnitor (as applicable) in writing; or (ii) in such
claims or action there is, in the reasonable opinion of independent counsel, a
conflict concerning any material issue between the position of Borrower or
Indemnitor (as applicable) and such Indemnified Person, in which case if such
Indemnified Person notifies Borrower or Indemnitor (as applicable) in writing
that it elects to employ separate counsel at the expense of such entity, then
such entity shall not have the right to assume the defense of such action on
behalf of such Indemnified Person; provided, however, that unless, in the
reasonable opinion of independent counsel, an actual or potential conflict
exists between two or more Indemnified Persons, Borrower or Indemnitor (as
applicable) shall not be required to pay the fees and disbursements of more than
one separate counsel for all Indemnified Persons. Nothing set forth herein is
intended to or shall impair the right of any Indemnified Person to retain
separate counsel at its own expense.
(g) Without the prior written consent of Lender (which consent shall
not be unreasonably withheld or delayed), neither Borrower nor Indemnitor will
settle or compromise or consent to the entry of any judgment in any pending or
threatened claim, action, suit or proceeding in respect of which indemnification
may be sought hereunder (whether or not any Indemnified Person is an actual or
potential party to such claim, action, suit or proceeding) unless (a) Borrower
or Indemnitor (as applicable) shall have given Lender reasonable prior written
notice thereof and shall have obtained an unconditional release of Lender and
each other Indemnified Person hereunder from all liability arising out of such
claim, action, suit or proceedings, or (b) Borrower or Indemnitor (as
applicable) reaffirms in writing its indemnity and contribution obligations
hereunder regardless of any common, federal or state statutory law to the
contrary. As long as Borrower or Indemnitor (as applicable) has complied with
its obligations to defend and indemnify hereunder, Borrower or Indemnitor (as
applicable) shall not be liable for any settlement made by Lender or any other
Indemnified Person without the consent of Borrower or Indemnitor (as applicable)
(which consent shall not be unreasonably withheld or delayed).
(h) Borrower and Indemnitor agree that if any indemnification or
reimbursement sought pursuant to this Section 9.2 is finally judicially
determined to be unavailable for a reason other than the fraud, illegal acts,
gross negligence or willful misconduct of an Indemnified Person or is
insufficient to hold an Indemnified Person harmless (with respect only to the
losses, claims, damages, liabilities or expenses that are the subject of this
Section 9.2), then Borrower or Indemnitor (as applicable) and such Indemnified
Person shall contribute
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to the losses, claims, damages, liabilities and expenses for which such
indemnification or reimbursement is held unavailable or is insufficient: (x) in
such proportion as is appropriate to reflect the relative benefits to Borrower
or Indemnitor (as applicable) on the one hand, and such Indemnified Person on
the other hand, from the transactions to which such indemnification or
reimbursement relates; or (y) if the allocation provided by clause (x) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (x) but also the relative
faults of Borrower or Indemnitor (as applicable) on the one hand, and all
Indemnified Persons on the other hand, as well as any other equitable
considerations. Notwithstanding the provisions of this Section 9.2, (A) no party
found liable for a fraudulent misrepresentation shall be entitled to
contribution from any other party who is not also found liable for such
fraudulent misrepresentation, and (B) Borrower, Indemnitor and Lender agree that
in no event shall the amount to be contributed by Lender pursuant to this
paragraph exceed the amount of the fees (by underwriting discount or otherwise)
actually received by the Bear ▇▇▇▇▇▇▇ Group in connection with the closing of
the Loan or the securitization or other secondary market sale of the Loan.
(i) Borrower and Indemnitor agree that the indemnification,
contribution and reimbursement obligations set forth in this Section 9.2 shall
apply whether or not Lender, any other Indemnified Person, the Bear ▇▇▇▇▇▇▇
Group or the Underwriter Group is a formal party to any such lawsuits, claims or
other proceedings, and that such obligations shall extend upon the terms set
forth in this Section 9.2 to any controlling person, director, partner, officer,
employee, representative or agent of Lender (each, an "Indemnified Person"), the
Bear ▇▇▇▇▇▇▇ Group and the Underwriter Group. Borrower and Indemnitor further
agree that their indemnification, contribution and reimbursement obligations
shall be in addition to any liability which they may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
any Indemnified Persons within the meaning of the Securities Act.
(j) The liabilities and obligations of Borrower, Indemnitor and
Lender under this Section 9.2 shall survive the termination of this Agreement
and the satisfaction and discharge of the Debt.
Section 9.3 Exculpation. Subject to the qualifications below, Lender
shall not enforce the liability and obligation of Borrower, with respect to the
representations, warranties, covenants and obligations contained in the Note,
this Agreement, the Mortgages or the other Loan Documents by any action or
proceeding wherein a money judgment shall be sought against Borrower, except
that Lender may bring a foreclosure action, an action for specific performance
or any other appropriate action or proceeding to enable Lender to enforce and
realize upon its interest under the Note, this Agreement, the Mortgages and the
other Loan Documents, or in the Properties, the Rents, or any other collateral
given to Lender pursuant to the Loan Documents; provided, however, that, except
as specifically provided herein, any judgment in any such action or proceeding
shall be enforceable against Borrower only to the extent of Borrower's interest
in the Properties, in the Rents and in any other collateral given to Lender, and
Lender, by accepting the Note, this Agreement, the Mortgages and the other Loan
Documents, agrees that it shall not ▇▇▇ for, seek or demand any deficiency
judgment against Borrower in any such action or proceeding under or by reason of
or under or in connection with the Note, this Agreement, the Mortgages or the
other Loan Documents. The provisions of this Section shall not, however, (a)
constitute a waiver, release or impairment of any obligation evidenced or
secured by any of the
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Loan Documents; (b) impair the right of Lender to name Borrower as a party
defendant in any action or suit for foreclosure and sale under any of the
Mortgages; (c) affect the validity or enforceability of the Indemnity Agreement
or any guaranty made in connection with the Loan or any of the rights and
remedies of Lender thereunder; (d) impair the right of Lender to obtain the
appointment of a receiver; (e) impair the enforcement of any of the Assignments
of Leases; (f) constitute a prohibition against Lender to seek a deficiency
judgment against Borrower in order to fully realize the security granted by each
of the Mortgages or to commence any other appropriate action or proceeding in
order for Lender to exercise its remedies against all of the Properties; or (g)
constitute a waiver of the right of Lender to enforce the liability and
obligation of Borrower, by money judgment against any of the assets of Borrower
or otherwise, to the extent of any direct actual loss, damage, cost, expense,
liability, claim or other direct obligation actually incurred by Lender
(including attorneys' fees and costs reasonably incurred) resulting from the
following:
(i) fraud committed by Borrower or Indemnitor in connection with the
Loan;
(ii) the willful misconduct of Borrower which causes waste, damage
or destruction to any Individual Property;
(iii) the breach of any representation, warranty, covenant or
indemnification provision in the Environmental Indemnity or in the
Mortgages concerning environmental laws, hazardous substances and asbestos
and any indemnification of Lender with respect thereto in either document;
(iv) the removal or disposal of any portion of the Properties after
Borrower or Indemnitor has knowledge of the occurrence of an Event of
Default and during the continuance thereof;
(v) the misappropriation or conversion by Borrower of (A) any
insurance proceeds paid by reason of any loss, damage or destruction to
the Properties, (B) any awards or other amounts received in connection
with the condemnation of all or a portion of the Properties, or (C) any
Rent after Borrower or Indemnitor has knowledge of the occurrence of an
Event of Default and during the continuance thereof;
(vi) Borrower fails to obtain Lender's prior written consent to any
subordinate financing or other voluntary Lien encumbering any Individual
Property other than as expressly permitted in the Loan Documents;
(vii) any security deposits, advance deposits or any other deposits
collected by Borrower or any Affiliate or agent of Borrower with respect
to the Properties which are not delivered to Lender upon a foreclosure of
the Properties or conveyance in lieu thereof, except to the extent any
such security deposits were applied in accordance with the terms and
conditions of any of the Leases or other agreements pursuant to which the
deposits were made;
(viii) Borrower fails to obtain Lender's prior written consent to
any assignment, transfer, or conveyance of any Individual Property or any
interest therein if and as required by the Mortgages or hereunder; and
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(ix) the indemnification of Pricewaterhouse Coopers by Lender
pursuant to those certain engagement letters entered into in connection
with the Loan.
(x) the breach of the representation of Borrower set forth in
Section 11.1(i) hereof.
Notwithstanding anything to the contrary in this Agreement, the Note
or any of the Loan Documents, Lender shall not be deemed to have waived any
right which Lender may have under Section 506(a), 506(b), 1111 (b) or any other
provisions of the U.S. Bankruptcy Code to file a claim for the full amount of
the Debt secured by the Mortgages or to require that all collateral shall
continue to secure all of the Debt owing to Lender in accordance with the Loan
Documents.
Section 9.4 Termination of Manager. Borrower shall, at the request
of Lender, terminate any Management Agreement designated by Lender (a) for
cause, (b) upon the insolvency or voluntary or involuntary bankruptcy of any
Individual Borrower, (c) upon the insolvency or voluntary or involuntary
bankruptcy of the related Manager or (d) upon the occurrence and continuance of
an Event of Default; provided, however, that (i) any Management Agreement with a
Manager that is not an Affiliate of Borrower shall not be subject to termination
upon the occurrence and continuance of an Event of Default or upon the
insolvency or voluntary or involuntary bankruptcy of any Individual Borrower
unless and until title to the applicable Individual Property has been conveyed
to Lender, Lender's designee or another purchaser pursuant to a foreclosure
action or other exercise of Lender's remedies under the Loan Documents or a deed
in lieu of foreclosure if such Management Agreement conditions termination upon
such conveyance and (ii) in the event of any such termination (other than for
cause), the related Manager shall not be obligated to continue to perform its
obligations under such Management Agreement unless such Manager is paid all
management fees and other sums payable to such Manager under the terms of the
related Management Agreement. If any Management Agreement is so terminated,
Borrower shall enter into a Replacement Management Agreement with a Qualified
Manager, it being understood and agreed that the management fee for such
replacement manager shall not exceed then prevailing market rates. It is
understood and agreed that no Manager shall be required to continue to manage
the related Individual Property pursuant to the related Management Agreement if
such Manager is not paid the management fees and other sums to which such
Manager is entitled pursuant to such Management Agreement.
Section 9.5 Servicer. At the option of Lender, the Loan may be
serviced by a servicer/trustee (the "Servicer") selected by Lender and Lender
may delegate all or any portion of its responsibilities under this Agreement and
the other Loan Documents to the Servicer pursuant to a servicing agreement (the
"Servicing Agreement") between Lender and Servicer. Lender shall be responsible
for any reasonable set-up fees or any other initial costs relating to or arising
under the Servicing Agreement and the monthly servicing fee due to the Servicer
under the Servicing Agreement will be paid from the interest paid by Borrower
under the Loan.
X. MISCELLANEOUS
Section 10.1 Survival. This Agreement and all covenants, agreements,
representations and warranties made herein and in the certificates delivered
pursuant hereto shall
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survive the making by Lender of the Loan and the execution and delivery to
Lender of the Note, and shall continue in full force and effect so long as all
or any of the Debt is outstanding and unpaid unless a longer period is expressly
set forth herein or in the other Loan Documents. Whenever in this Agreement any
of the parties hereto is referred to, such reference shall be deemed to include
the legal representatives, successors and assigns of such party. All covenants,
promises and agreements in this Agreement, by or on behalf of Borrower, shall
inure to the benefit of the legal representatives, successors and assigns of
Lender.
Section 10.2 Lender's Discretion. Except as otherwise explicitly set
forth in this Agreement, whenever pursuant to this Agreement, (a) Lender
exercises any right given to it to approve or disapprove or to exercise or
refrain from exercising any option hereunder, (b) any arrangement or term is to
be satisfactory to Lender or (c) any other decision or determination is to be
made by Lender, the decision of Lender to approve or disapprove, or to exercise
or refrain from exercising any option, all decisions that arrangements or terms
are satisfactory or not satisfactory and all other decisions and determinations
made by Lender shall be in the sole and absolute but good faith discretion of
Lender and shall be final and conclusive if made in good faith.
Section 10.3 Governing Law.
(A) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, THE LOAN
WAS MADE BY LENDER AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK, AND THE
PROCEEDS OF THE NOTE DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE STATE OF
NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE
PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS,
INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS
ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH
STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS) AND ANY APPLICABLE LAW
OF THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE
CREATION, PERFECTION, AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS
CREATED PURSUANT HERETO AND PURSUANT TO THE OTHER LOAN DOCUMENTS SHALL BE
GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE
APPLICABLE INDIVIDUAL PROPERTY IS LOCATED, IT BEING UNDERSTOOD THAT, TO THE
FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW
YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF ALL LOAN
DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO THE
FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY
WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS
AGREEMENT AND THE NOTE, AND THIS AGREEMENT AND THE NOTE SHALL BE GOVERNED BY AND
CONSTRUED IN
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ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW.
(B) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY LEGAL SUIT,
ACTION OR PROCEEDING AGAINST LENDER OR BORROWER ARISING OUT OF OR RELATING TO
THIS AGREEMENT MAY AT LENDER'S OPTION BE INSTITUTED IN ANY FEDERAL OR STATE
COURT IN ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, PURSUANT TO SECTION 5-1402 OF
THE NEW YORK GENERAL OBLIGATIONS LAW AND BORROWER WAIVES ANY OBJECTIONS WHICH IT
MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH
SUIT, ACTION OR PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES
HEREBY DESIGNATE AND APPOINT:
CSC The United States
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY
AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN
ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF
PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE
MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH SUIT,
ACTION OR PROCEEDING IN THE STATE OF NEW YORK. LENDER SHALL MAIL OR DELIVER IN
THE MANNER PROVIDED ABOVE COURTESY COPIES OF ANY SUCH SERVICE UPON BORROWERS TO
(I) WYNDHAM INTERNATIONAL AT ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇ ATTN: GENERAL COUNSEL AND (II) AKIN, GUMP, STRAUSS, ▇▇▇▇▇ & ▇▇▇▇ AT ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ATTN: ▇▇▇▇ ▇. ▇▇▇, ESQ.;
PROVIDED, HOWEVER, THAT THE FAILURE OF DELIVERY AND/OR RECEIPT OF SUCH COURTESY
COPIES SHALL NOT IMPAIR THE EFFECTIVENESS OF ANY SUCH SERVICE. BORROWER (I)
SHALL GIVE PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED
AGENT HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A
SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH
SUBSTITUTE AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR
SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS
AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED
WITHOUT LEAVING A SUCCESSOR.
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Section 10.4 Modification, Waiver in Writing.
(a) No modification, amendment, extension, discharge, termination or
waiver of any provision of this Agreement, or of the Note, or of any other Loan
Document, nor consent to any departure by Borrower therefrom, shall in any event
be effective unless the same shall be in a writing signed by the party against
whom enforcement is sought, and then such waiver or consent shall be effective
only in the specific instance, and for the purpose, for which given. Except as
otherwise expressly provided herein, no notice to, or demand on Borrower, shall
entitle Borrower to any other or future notice or demand in the same, similar or
other circumstances.
(b) Except as expressly amended, modified and supplemented hereby,
the terms and provisions of each of the Loan Documents are and shall remain
unmodified and in full force and effect. As used in the Loan Documents other
than this Agreement, the term "Loan Agreement" shall mean this Amended and
Restated Loan Agreement as the same may be further modified, amended, extended,
consolidated, renewed, supplemented or replaced. As used in the Indemnity
Agreement, the term "this Agreement" shall mean the Indemnity Agreement as
modified by this Agreement and as the same may be further modified, amended,
extended, consolidated, renewed, supplemented or replaced. As used in the Loan
Documents other than the Indemnity Agreement, the term "Indemnity Agreement" or
the term "Indemnity" shall mean the Indemnity Agreement, as modified by this
Agreement and as the same may be further modified, amended, extended,
consolidated, renewed, supplemented or replaced.
Section 10.5 Delay Not a Waiver. Neither any failure nor any delay
on the part of Lender in insisting upon strict performance of any term,
condition, covenant or agreement, or exercising any right, power, remedy or
privilege hereunder, or under the Note or under any other Loan Document, or any
other instrument given as security therefor, shall operate as or constitute a
waiver thereof, nor shall a single or partial exercise thereof preclude any
other future exercise, or the exercise of any other right, power, remedy or
privilege. In particular, and not by way of limitation, by accepting payment
after the due date of any amount payable under this Agreement, the Note or any
other Loan Document, Lender shall not be deemed to have waived any right either
to require prompt payment when due of all other amounts due under this
Agreement, the Note or the other Loan Documents, or to declare a default for
failure to effect prompt payment of any such other amount.
Section 10.6 Notices. All notices, consents, approvals and requests
required or permitted hereunder or under any other Loan Document shall be given
in writing and shall be effective for all purposes if hand delivered or sent by
(a) certified or registered United States mail, postage prepaid, return receipt
requested or (b) expedited prepaid delivery service, either commercial or United
States Postal Service, with proof of attempted delivery, and by telecopier (with
answer back acknowledged), addressed as follows (or at such other address and
Person as shall be designated from time to time by any party hereto, as the case
may be, in a written notice to the other parties hereto in the manner provided
for in this Section):
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If to Lender: Bear, ▇▇▇▇▇▇▇ Funding, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Executive Vice President
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
If to Borrower: Care of Wyndham International, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Facsimile No.(▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Care of Wyndham International, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile No.(▇▇▇) ▇▇▇-▇▇▇▇
A notice shall be deemed to have been given: in the case of hand delivery, at
the time of delivery; in the case of registered or certified mail, when
delivered or the first attempted delivery on a Business Day; or in the case of
expedited prepaid delivery and telecopy, upon the first attempted delivery on a
Business Day.
Section 10.7 Trial by Jury.
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWER HEREBY
AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND
WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL
NOW OR HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM,
COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF
RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER, AND IS
INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE
RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED TO
FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS
WAIVER BY BORROWER.
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Section 10.8 Headings. The Article and/or Section headings and the
Table of Contents in this Agreement are included herein for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose.
Section 10.9 Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
Section 10.10 Preferences. Lender shall have the continuing and
exclusive right to apply or reverse and reapply any and all payments by Borrower
to any portion of the obligations of Borrower hereunder. To the extent Borrower
makes a payment or payments to Lender, which payment or proceeds or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside or required to be repaid to a trustee, receiver or any other party
under any bankruptcy law, state or federal law, common law or equitable cause,
then, to the extent of such payment or proceeds received, the obligations
hereunder or part thereof intended to be satisfied shall be revived and continue
in full force and effect, as if such payment or proceeds had not been received
by Lender.
Section 10.11 Waiver of Notice. Borrower shall not be entitled to
any notices of any nature whatsoever from Lender except with respect to matters
for which this Agreement or the other Loan Documents specifically and expressly
provide for the giving of notice by Lender to Borrower and except with respect
to matters for which Borrower is not, pursuant to applicable Legal Requirements,
permitted to waive the giving of notice. To the extent permitted by applicable
law, Borrower hereby expressly waives the right to receive any notice from
Lender with respect to any matter for which this Agreement or the other Loan
Documents do not specifically and expressly provide for the giving of notice by
Lender to Borrower.
Section 10.12 Remedies of Borrower. In the event that a claim or
adjudication is made that Lender or its agents have acted unreasonably or
unreasonably delayed acting in any case where by law or under this Agreement or
the other Loan Documents, Lender or such agent, as the case may be, has an
obligation to act reasonably or promptly, Borrower agrees that neither Lender
nor its agents shall be liable for any monetary damages, and Borrower's sole
remedies shall be limited to commencing an action seeking injunctive relief or
declaratory judgment. The parties hereto agree that any action or proceeding to
determine whether Lender has acted reasonably shall be determined by an action
seeking declaratory judgment or injunctive relief.
Section 10.13 Expenses; Indemnity.
(a) Except as otherwise expressly provided herein or in the other
Loan Documents, Borrower covenants and agrees to pay or, if Borrower fails to
pay, to reimburse, Lender upon receipt of written notice from Lender for all
reasonable costs and expenses (including reasonable attorneys' fees and
disbursements) incurred by Lender in connection with (i) the preparation,
negotiation, execution and delivery of this Agreement and the other Loan
Documents and the consummation of the transactions contemplated hereby and
thereby and all the costs of furnishing all opinions by counsel for Borrower
(including without limitation any
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opinions requested by Lender as to any legal matters arising under this
Agreement or the other Loan Documents with respect to the Properties); (ii)
Borrower's ongoing performance of and compliance with Borrower's respective
agreements and covenants contained in this Agreement and the other Loan
Documents on its part to be performed or complied with after the Closing Date,
including, without limitation, confirming compliance with environmental and
insurance requirements; (iii) the negotiation, preparation, execution, delivery
and administration of any consents, amendments, waivers or other modifications
to this Agreement and the other Loan Documents and any other documents or
matters requested by Borrower; (iv) securing Borrower's compliance with any
requests made pursuant to the provisions of this Agreement if Borrower fails to
comply with such request as required by this Agreement; (v) the filing and
recording fees and expenses, title insurance and reasonable fees and expenses of
counsel for providing to Lender all required legal opinions, and other similar
expenses incurred in creating and perfecting the Liens in favor of Lender
pursuant to this Agreement and the other Loan Documents; (vi) enforcing or
preserving any rights, in response to third party claims or the prosecuting or
defending of any action or proceeding or other litigation, in each case against,
under or affecting Borrower, this Agreement, the other Loan Documents, the
Properties, or any other security given for the Loan; (vii) obtaining any Rating
Agency confirmations as may be required hereunder or under any other Loan
Document stating that a given action will not result in a downgrade,
qualification or withdrawal of the ratings assigned to the Securities; and
(viii) enforcing any obligations of or collecting any payments due from Borrower
under this Agreement, the other Loan Documents or with respect to the Properties
or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a "work-out" or of
any insolvency or bankruptcy proceedings; provided, however, that Borrower shall
not be liable for the payment of any such costs and expenses to the extent the
same arise by reason of the gross negligence, illegal acts, fraud or willful
misconduct of Lender, its agents, contractors or employees. Any cost and
expenses due and payable to Lender may be paid from any amounts in the Lockbox
Account or the Cash Collateral Account.
(b) Borrower shall indemnify, defend and hold harmless Lender from
and against any and all other direct actual liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs, expenses and
disbursements of any kind or nature whatsoever (including, without limitation,
the reasonable fees and disbursements of counsel for Lender in connection with
any investigative, administrative or judicial proceeding commenced or
threatened, whether or not Lender shall be designated a party thereto), that may
be actually imposed on, incurred by, or asserted against Lender in any manner
directly arising out of (i) any breach by Borrower of its obligations under, or
any material misrepresentation by Borrower contained in, this Agreement or the
other Loan Documents, or (ii) the use or intended use of the proceeds of the
Loan (collectively, the "Indemnified Liabilities"); provided, however, that
Borrower shall not have any obligation to Lender hereunder to the extent that
such Indemnified Liabilities arise from the gross negligence, illegal acts,
fraud or willful misconduct of Lender, its agents, employees or contractors. To
the extent that the undertaking to indemnify, defend and hold harmless set forth
in the preceding sentence may be unenforceable because it violates any law or
public policy, Borrower shall pay the maximum portion that it is permitted to
pay and satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by Lender.
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(c) With respect to any claim, action, suit or proceeding in respect
of which indemnification may be sought under the terms and provisions of Section
10.13(b) or (unless expressly provided to the contrary pursuant to the terms and
provisions of this Agreement or any other Loan Document) any other provision for
indemnification contained herein or in any other Loan Document, the following
terms and provisions shall apply:
(i) Promptly after receipt by the indemnified party of notice of any
claim or the commencement of any action, the indemnified party shall, if a
claim in respect thereof is to be made against Borrower or any other
applicable indemnitor notify such entity in writing of the claim for
indemnification or the commencement of that action; provided, however,
that the failure to notify Borrower or such other indemnitor shall not
relieve Borrower or such other indemnitor from any liability which
Borrower or such other indemnitor may have under the applicable
indemnification provisions except to the extent that it has been
materially prejudiced by such failure and, provided further that the
failure to notify Borrower or such other indemnitor shall not relieve it
from any liability which it may have to the indemnified party or
otherwise. If any such claim or action shall be brought against an
indemnified party, and it shall notify Borrower or such other indemnitor
thereof, Borrower or such other indemnitor shall be entitled to
participate therein and, to the extent that it wishes, assume the defense
thereof with counsel reasonably satisfactory to the indemnified party.
After notice from Borrower or such other indemnitor to the indemnified
party of its election to assume the defense of such claim or action, such
entity shall not be liable to the indemnified party for any legal or other
expenses subsequently incurred by the indemnified party in connection with
the defense thereof except as provided in the following sentence. The
indemnified party shall have the right to employ separate counsel in any
such action and to participate in the defense thereof but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless: (i) the employment thereof has been specifically authorized by
Borrower or such other indemnitor in writing; or (ii) in such claims or
action there is, in the reasonable opinion of independent counsel, a
conflict concerning any material issue between the position of Borrower or
such other indemnitor and such indemnified party, in which case if such
indemnified party notifies Borrower or such other indemnitor in writing
that it elects to employ separate counsel at the expense of such entity,
then such entity shall not have the right to assume the defense of such
action on behalf of such indemnified party; provided, however, that
unless, in the reasonable opinion of independent counsel, an actual or
potential conflict exists between two or more indemnified parties,
Borrower or such other indemnitor shall not be required to pay the fees
and disbursements of more than one separate counsel for all indemnified
parties. Nothing set forth herein is intended to or shall impair the right
of any indemnified party to retain separate counsel at its own expense.
(ii) Without the prior written consent of the indemnified party
(which consent shall not be unreasonably withheld or delayed), Borrower or
such other indemnitor will not settle or compromise or consent to the
entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought (whether or
not any indemnified party is an actual or potential party to such claim,
action, suit or proceeding) unless (a) Borrower or such other indemnitor
shall have given the indemnified party reasonable prior written notice
thereof and shall have obtained an
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unconditional release of the indemnified party from all liability arising
out of such claim, action, suit or proceedings, or (b) Borrower or such
other indemnitor reaffirms in writing its indemnity and contribution
obligations under the applicable provisions of the Loan Documents
regardless of any common, federal or state statutory law to the contrary.
As long as Borrower or such other indemnitor has complied with its
obligations to defend and indemnify, Borrower or such other indemnitor
shall not be liable for any settlement made by the indemnified party
without the consent of Borrower or such other indemnitor (which consent
shall not be unreasonably withheld or delayed).
Section 10.14 Schedules Incorporated. The Schedules annexed hereto
are hereby incorporated herein as a part of this Agreement with the same effect
as if set forth in the body hereof.
Section 10.15 Offsets, Counterclaims and Defenses. Any assignee of
Lender's interest in and to this Agreement, the Note and the other Loan
Documents shall take the same free and clear of all offsets, counterclaims or
defenses which are unrelated to such documents which Borrower may otherwise have
against any assignor of such documents, and no such unrelated counterclaim or
defense shall be interposed or asserted by Borrower in any action or proceeding
brought by any such assignee upon such documents and any such right to interpose
or assert any such unrelated offset, counterclaim or defense in any such action
or proceeding is hereby expressly waived by Borrower.
Section 10.16 No Joint Venture or Partnership; No Third Party
Beneficiaries.
(a) Borrower and Lender intend that the relationships created
hereunder and under the other Loan Documents be solely that of borrower and
lender. Nothing herein or therein is intended to create a joint venture,
partnership, tenancy-in-common, or joint tenancy relationship between Borrower
and Lender nor to grant Lender any interest in the Properties other than that of
mortgagee, beneficiary or lender.
(b) This Agreement and the other Loan Documents are solely for the
benefit of Lender and Borrower and nothing contained in this Agreement or the
other Loan Documents shall be deemed to confer upon anyone other than Lender and
Borrower (and Indemnitor, as applicable) any right to insist upon or to enforce
the performance or observance of any of the obligations contained herein or
therein. All conditions to the obligations of Lender to make the Loan hereunder
are imposed solely and exclusively for the benefit of Lender and no other Person
shall have standing to require satisfaction of such conditions in accordance
with their terms or be entitled to assume that Lender will refuse to make the
Loan in the absence of strict compliance with any or all thereof and no other
Person shall under any circumstances be deemed to be a beneficiary of such
conditions, any or all of which may be freely waived in whole or in part by
Lender if, in Lender's sole discretion, Lender deems it advisable or desirable
to do so.
Section 10.17 Publicity. Except as required by applicable law or the
requirement of any national security exchange, all news releases, publicity or
advertising by Borrower or their Affiliates through any media intended to reach
the general public which refers to the Loan Documents or the financing evidenced
by the Loan Documents, to Lender, Bear
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▇▇▇▇▇▇▇, or any of their Affiliates shall be subject to the prior written
approval of Lender and Borrower, which approval shall not be unreasonably
withheld, conditioned or delayed; provided, however, that the approval of
Borrower shall not be required with respect to Lender's marketing or promotional
activities in connection with the Securitization.
Section 10.18 Cross-Default; Cross-Collateralization; Waiver of
Marshalling of Assets.
(a) Borrower acknowledges that Lender has made the Loan to Borrower
upon the security of its collective interest in the Properties and in reliance
upon the aggregate of the Properties taken together being of greater value as
collateral security than the sum of each Individual Property taken separately.
Borrower agrees that the Mortgages are and will be cross-collateralized and
cross-defaulted with each other so that (i) an Event of Default under any of the
Mortgages shall constitute an Event of Default under each of the other Mortgages
which secure the Note; (ii) an Event of Default under the Note or this Agreement
shall constitute an Event of Default under each Mortgage; (iii) each Mortgage
shall constitute security for the Note as if a single blanket lien were placed
on all of the Properties as security for the Note and (iv) such
cross-collateralization shall in no event be deemed to constitute a fraudulent
conveyance.
(b) To the fullest extent permitted by law, Borrower, for itself and
its successors and assigns, waives all rights to a marshalling of the assets of
Borrower, Borrower's partners and others with interests in Borrower, and of the
Properties, or to a sale in inverse order of alienation in the event of
foreclosure of all or any of the Mortgages, and agrees not to assert any right
under any laws pertaining to the marshalling of assets, the sale in inverse
order of alienation, homestead exemption, the administration of estates of
decedents, or any other matters whatsoever to defeat, reduce or affect the right
of Lender under the Loan Documents to a sale of the Properties for the
collection of the Debt without any prior or different resort for collection or
of the right of Lender to the payment of the Debt out of the net proceeds of the
Properties in preference to every other claimant whatsoever. In addition, to the
fullest extent permitted by law, Borrower, for itself and its successors and
assigns, waives in the event of foreclosure of any or all of the Mortgages, any
equitable right otherwise available to Borrower which would require the separate
sale of the Properties or require Lender to exhaust its remedies against any
Individual Property or any combination of the Properties before proceeding
against any other Individual Property or combination of Properties; and further
in the event of such foreclosure Borrower does hereby expressly consents to and
authorizes, at the option of Lender, the foreclosure and sale either separately
or together of any combination of the Properties.
(c) To the extent any of the obligations of any Individual Borrower
or Indemnitor under the Loan, this Agreement or any other Loan Document are
deemed to constitute a guaranty, such Individual Borrower or Indemnitor waives
all rights and defenses that such Individual Borrower or Indemnitor may have
because the Debt is secured by real property. This means, among other things:
(1) Lender may collect from such Individual Borrower or Indemnitor with respect
to such obligation without first foreclosing on any real or personal property
collateral pledged by Borrower; (ii) if Lender forecloses on any real property
collateral pledged by any such Individual Borrower: (y) the amount of the Debt
may be reduced only by the price for which such real property collateral is sold
at the foreclosure sale, even if such real property collateral is worth more
than the sale price and (z) Lender may collect from such
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Individual Borrower or Indemnitor with respect to such obligation even if
Lender, by foreclosing on such real property collateral, has destroyed any right
such Individual Borrower or Indemnitor may have to collect from Borrower or any
other Individual Borrower. This is an unconditional and irrevocable waiver of
any rights and defenses any Individual Borrower or Indemnitor may have to any of
the obligations of such Individual Borrower or Indemnitor in the nature of a
guaranty under the Loan, this Agreement or any other Loan Document because the
Debt is secured by real property. These rights and defenses include, but are not
limited to, any rights or defenses based upon Sections 580a, 580b, 580d or 726
of the California Code of Civil Procedure. Each Individual Borrower and
Indemnitor waives all rights and defenses arising out of an election of remedies
by Lender, even though that elections of remedies, such as a nonjudicial
foreclosure with respect to security for a guaranteed obligation, has destroyed
such Individual Borrower's or Indemnitor's rights of subrogation and
reimbursement against the principal by the operation of Section 580d of the
California Code of Civil Procedure or otherwise.
Section 10.19 Waiver of Counterclaim. Borrower hereby waives the
right to assert a counterclaim, other than a compulsory counterclaim, in any
action or proceeding brought against it by Lender or its agents, but Borrower
does not waive its right to assert any such claim in a separate action, provided
that such separate action does not prevent the application of payments to the
Debt.
Section 10.20 Conflict; Construction of Documents; Reliance. In the
event of any conflict between the provisions of this Loan Agreement and any of
the other Loan Documents, the provisions of this Loan Agreement shall control.
The parties hereto acknowledge that they were represented by competent counsel
in connection with the negotiation, drafting and execution of the Loan Documents
and that such Loan Documents shall not be subject to the principle of construing
their meaning against the party which drafted same. Borrower acknowledges that,
with respect to the Loan, Borrower shall rely solely on its own judgment and
advisors in entering into the Loan without relying in any manner on any
statements, representations or recommendations of Lender or any parent,
subsidiary or Affiliate of Lender. Lender shall not be subject to any limitation
whatsoever in the exercise of any rights or remedies available to it under any
of the Loan Documents or any other agreements or instruments which govern the
Loan by virtue of the ownership by it or any parent, subsidiary or Affiliate of
Lender of any equity interest any of them may acquire in Borrower, and Borrower
hereby irrevocably waives the right to raise any defense or take any action on
the basis of the foregoing with respect to Lender's exercise of any such rights
or remedies. Borrower acknowledges that Lender engages in the business of real
estate financings and other real estate transactions and investments which may
be viewed as adverse to or competitive with the business of Borrower or its
Affiliates.
Section 10.21 Brokers and Financial Advisors. Subject to Lender's
representation contained in this Section 10.21, Borrower agrees to pay, and to
indemnify, defend and hold Lender harmless from any and all loss, cost or
expense arising from, the claims of any brokers or anyone claiming a right to
any fees in connection with the financing of the Properties. Borrower represents
to Lender that it has not contracted with, nor does it know of, any broker who
has participated in the application for the Loan or the transactions
contemplated by this Agreement. Lender represents to Borrower that it has not
contracted with, nor does it know of,
104
any broker who has participated in the application for the Loan or the
transactions contemplated by this Agreement.
Section 10.22 Prior Agreements. This Agreement and the other Loan
Documents contain the entire agreement of the parties hereto and thereto in
respect of the transactions contemplated hereby and thereby, and all prior
agreements among or between such parties, whether oral or written, including,
without limitation, the Commitment Letter dated June 10, 1999 (as amended)
between Borrower and Lender are superseded by the terms of this Agreement and
the other Loan Documents.
Section 10.23 Joint and Several. The obligations and representations
of each of the Individual Borrowers hereunder are joint and several. Each
Individual Borrower hereby jointly and severally waives presentment, demand,
notice, protest and all other suretyship defenses generally and agrees that (a)
any renewal, extension or postponement of the time of payment or any other
indulgence, (b) any modification, supplement or alteration of any of the
obligations of any Individual Borrower hereunder, or (c) any substitution,
exchange or release of collateral or the addition or release of any Person
primarily or secondarily liable hereunder, may be effected without notice to
such Individual Borrower, and without releasing such Individual Borrower from
any liability hereunder.
Section 10.24 Ratification of Note. The Note is hereby ratified and
confirmed in all respects by Borrower. All principal, interest and other sums of
any nature that may or shall become due and payable pursuant to the provisions
of the Note shall constitute part of the Debt secured by the Mortgage. Section
10.25 No Release or Novation. This Agreement constitutes an amendment and
restatement of the Original Loan Agreement and is not intended to and shall not
extinguish any of the indebtedness of Borrower under the Note or any other Loan
Document in such a manner as would constitute a release or novation of the
original indebtedness or obligations of Borrower under the Note, nor shall this
Agreement affect or impair the priority of any liens created thereby, it being
the intention of the parties hereto to preserve all liens and security interests
securing payment of the Note, which liens and security interests are
acknowledged by Borrower to be valid and subsisting against the Properties and
any other security or collateral for the Debt.
Section 10.26 Effective Date. This Agreement shall be effective as
of June 29, 1999, except with respect to the Bel Age Property and the Bel Age
Borrower, in which case this Agreement shall be effective as of the Bel Age
Closing Date. All references to "the date hereof' and "Closing Date" shall refer
to June 29, 1999, except with respect to the Bel Age Property and the Bel Age
Borrower, in which case references to "the date hereof' and "Closing Date" shall
refer to the Bel Age Closing Date.
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XI. ADDITIONAL MODIFICATIONS TO ORIGINAL LOAN AGREEMENT
Section 11.1 Removal of Commerce Property and Addition of Bel Age
Property.
(a) Addition of W-Bel Age, LLC as an Individual Borrower and the
Addition of the Wyndham Bel Age Hotel as an Individual Property. The parties
hereto hereby agree and confirm that as of the Bel Age Closing Date, (i) the Bel
Age Borrower has been added as an Individual Borrower under each of the Loan
Documents (including, without limitation, the Contribution Agreement), and (ii)
the Bel Age Property has been added as an Individual Property under the each of
the other Loan Documents.
(b) Assumption of Loan and Loan Documents by Bel Age Borrower. The
Bel Age Borrower hereby agrees and confirms that as of the Bel Age Closing Date,
it has assumed all of the obligations of an Individual Borrower under each of
the Loan Documents.
(c) Removal of W-Commerce, LLC as an Individual Borrower and the
Removal of Wyndham Garden LA Commerce as an Individual Property. The parties
hereto hereby agree and confirm that as of the Bel Age Closing Date, (i) The
Commerce Borrower has been removed as an Individual Borrower under each of the
Loan Documents and released from its obligations thereunder and (ii) the
Commerce Property has been removed as an Individual Property under each of the
Loan Documents and any Lien encumbering the Commerce Property or any other
property of the Commerce Borrower has been released with respect to the Commerce
Property or the Commerce Borrower, as applicable.
(d) Schedule 1 to the Note. The text of Schedule 1 to the Note is
hereby replaced with the text of Exhibit A hereto.
(e) Schedule A to the Contribution Agreement. The text of Schedule A
to the Contribution Agreement is hereby replaced with the text of Exhibit A
hereto.
(f) Schedule 1 to the Indemnity Agreement. The text of Schedule 1 to
the Indemnity Agreement is hereby replaced with the text of Exhibit A hereto.
(g) Contribution to Required Repair Account for the Bel Age
Property. The parties hereto hereby agree and confirm that as of the Bel Age
Closing Date, Borrower has deposited into the Required Repair Account the
additional amount of $386,063.00 in connection with the addition of the Bel Age
Property as an Individual Property under each of the Loan Documents.
(h) Direction by Lender to Certain Individual Borrowers. The parties
hereto hereby agree and confirm that as of the Bel Age Closing Date, (i) as an
inducement for Lender to have released the Commerce Borrower and the Commerce
Property from the Loan and the Loan Documents, and in connection with (A) the
addition of the Bel Age Borrower as an Individual Borrower under the Loan
Documents and (B) the addition of the Bel Age Property as an Individual Property
under the Loan Documents, Lender has directed the Commerce Borrower to pay to
the Bel Age Borrower an amount equal to the Release Amount for the Commerce
106
Property immediately prior to the Bel Age Closing Date and (ii) as an inducement
for Lender to (A) have reallocated certain Release Amounts, the results of which
reallocation are reflected on Schedule I hereto, (B) have added the Bel Age
Borrower as an Individual Borrower under the Loan Documents and (C) have added
the Bel Age Property as an Individual Property under the Loan Documents, Lender
has directed each of the Individual Borrowers known as H-▇▇▇▇▇▇, LLC, H-Gateway,
LLC, H-Cleveland, LLC, DT-Des Plaines LLC, ES Schaumburg, LLC, DT-Denver, LLC,
DT-Tallahassee, L.P., and DT-Miami, L.P. to pay to the Bel Age Borrower an
amount equal to the amount by which the Release Amount of the Individual
Property owned by each such Individual Borrower has been reduced as reflected on
Schedule I hereto.
(i) Representation of Borrower Regarding Payments to Bel Age
Borrower. Borrower hereby agrees and confirms that on the Bel Age Closing Date,
(i) each of the Commerce Borrower, H-▇▇▇▇▇▇, LLC, H-Gateway, LLC, H-Cleveland,
LLC, DT-Des Plaines LLC, ES Schaumburg, LLC, DT-Denver, LLC, DT-Tallahassee,
L.P., and DT-Miami, L.P. made the payments to the Bel Age Borrower as directed
by Lender pursuant to clause (h) above and (ii) the Bel Age Borrower received
such payments. Borrower hereby agrees and confirms that, Lender relied upon the
representation of Borrower set forth in this clause (j) in releasing the
Commerce Borrower and the Commerce Property from the Loan and the Loan
Documents, adding the Bel Age Borrower as an Individual Borrower under the Loan
Documents, adding the Bel Age Property as an Individual Property under the Loan
Documents, and taking any other action described in clause (h) above.
(j) Breach of Representation of Borrower Regarding Payments to Bel
Age Borrower. The following shall be added as clause (k) of Section 1.01 of the
Indemnity Agreement:
"the breach of the representation of Borrower set forth in Section
11.1(i) of the Loan Agreement."
Section 11.2 Modification of Indemnity Agreement. Clause (b) of
Section 1.23 of the Indemnity Agreement is hereby deleted in its entirety.
Section 11.3 Confirmation of Wyndham International, Inc.
Wyndham International, Inc. hereby agrees and confirms that the
amendment and restatement of the Original Loan Agreement and the modification of
the other Loan Documents pursuant to this Agreement shall in no manner affect or
modify its obligations as Indemnitor hereunder or as indemnitor pursuant to the
terms and provisions of the Indemnity Agreement, except as modified by Section
11.1 (f) and (j) and Section 11.2 hereof.
Section 11.4 References to Schedule 1 of Loan Agreement. Any
references in the Loan Documents other than this Agreement to "Schedule 1" of
the Loan Agreement shall be deemed to refer to Exhibit A of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Loan Agreement to be duly executed by their duly authorized
representatives, all as of the day and year first above written.
LENDER:
BEAR, ▇▇▇▇▇▇▇ FUNDING, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
BORROWER:
RAVINIA, LLC, a Delaware limited liability
company
By: Ravinia Manager Corp., a Delaware
corporation, Manager
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
DT-DES PLAINES, LLC, a Delaware limited
liability company
By: DT-Des Plaines Manager Corp., a
Delaware corporation, manager
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
DT-DENVER, LLC, a Delaware limited liability
company
By: DT-Denver Manager Corp., a
Delaware Corporation, Manager
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
DT-MIAMI, LP, a Delaware limited partnership
By: DT-Miami GP, LLC, a Delaware limited
liability company, General Partner
By: DT-Miami GP Manager Corp., a
Delaware corporation, Manager
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
DT-TALLAHASSEE, L.P., a Delaware limited
partnership
By: DT-Tallahassee GP, LLC., a
Delaware limited liability company,
General Partner
By: DT-Tallahassee GP Manager Corp., a
Delaware corporation, Manager
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
ES PHOENIX, LLC, a Delaware limited liability
company
By: ES Phoenix Manager Corp., a
Delaware corporation, Manager
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
▇▇ ▇▇▇▇▇▇▇▇▇▇, LLC, a Delaware limited
liability company
By: ES Schaumburg Manager Corp., a
Delaware corporation, Manager
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
H-COLUMBUS, LLC, a Delaware limited liability
company
By: H-Columbus Manager Corp., a
Delaware corporation, Manager
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
H-DELMAR, LLC, a Delaware limited liability
company
By: H-Delmar Manager Corp., a
Delaware corporation, Manager
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
H-CLEVELAND, LLC, a Delaware limited liability
company
By: H-Cleveland Manager Corp., a
Delaware corporation, Manager
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇-▇▇▇▇, LLC, a Delaware limited liability
company
By: ▇▇▇▇-▇▇▇▇ Manager Corp., a
Delaware corporation, Manager
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
H-GATEWAY, LLC, a Delaware limited liability
company
By: H-Gateway Manager Corp., a
Delaware corporation, Manager
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
R-HOUSTON, L.P., a Delaware limited partnership
By: R-Houston GP, LLC, a Delaware
limited liability company,
General Partner
By: R-Houston GP Manager Corp., a
Delaware corporation, Manager
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
MAR-TY, LLC, a Delaware limited liability
company
By: Mar-Ty Manager Corp., a Delaware
corporation, Manager
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
W-BUTTES, LLC, a Delaware limited liability
company
By: W-Buttes Manager Corp., a
Delaware corporation, Manager
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
W-EMERALD, LLC, a Delaware limited liability
company
By: W-Emerald Manager Corp., a
Delaware corporation, Manager
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
W-▇▇▇▇▇▇▇▇, ▇.▇., a Delaware limited
partnership
By: W-▇▇▇▇▇▇▇▇ ▇▇, LLC, a Delaware
limited liability company,
General Partner
By: W-▇▇▇▇▇▇▇▇ ▇▇ Manager Corp., a
Delaware corporation, Manager
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
W-INDIANA, LLC, a Delaware limited liability
company
By: W-Indiana Manager Corp., a
Delaware corporation, Manager
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
W-COLINAS, L.P., a Delaware limited partnership
By: W-Colinas GP, LLC, a Delaware
limited liability company,
General Partner
By: W-Colinas GP Manager Corp., a
Delaware corporation, Manager
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
W-NOVI, LLC, a Delaware limited liability
company
By: W-Novi Manager Corp., a Delaware
corporation, Manager
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
W-PLEASANTON, LLC, a Delaware limited
liability company
By: W-Pleasanton Manager Corp., a
Delaware corporation, Manager
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
W-▇▇▇▇▇▇▇▇▇▇, ▇.▇., a Delaware limited
partnership
By: W-▇▇▇▇▇▇▇▇▇▇ ▇▇ Corp., a Delaware
corporation, General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
W-SCHAUMBURG, LLC, a Delaware limited
liability company
By: W-Schaumburg Manager Corp., a
Delaware corporation, Manager
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
W-WOOD ▇▇▇▇, LLC, a Delaware limited
liability company
By: W-Wood ▇▇▇▇ Manager Corp., a
Delaware corporation, Manager
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
W-BEL AGE, LLC, a Delaware limited liability
company
By: W-Bel Age Manager Corp., a
Delaware corporation, Manager
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
INDEMNITOR:
WYNDHAM INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
COMMERCE BORROWER:
W-COMMERCE, LLC, a Delaware limited liability
company
By: W-Commerce Manager Corp., a
Delaware corporation, Manager
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President